What is your money doing right now? In the last decade, certificate of deposit (CD) rates have declined from around 2 percent to just a fraction of a percent. Meanwhile, inflation has hovered between one and two percent, eroding the long-term value of any cash savings you hold in retail banks. Unless you invest your money, you lose buying power with each passing year.
This isn’t new and perhaps won’t surprise you. However, it does help explain the rapid rise of retail investing across the world. The pandemic has forced people to think differently about wealth. In 2020, over 20 percent of equities trading were retail investors, double that of 2019. While meme stocks grab headlines, the bigger message is that ordinary people want their slice of the pie.
Building wealth, however, requires prudence, and social media has made everyone a pundit. The market is rife with scams and misinformation, where YOLOing your life savings on the latest hot tip risks bankruptcy (SQUID Game, anyone?). Sensible investing can seem daunting to those who’ve never read a company report, but Sean Tepper of Tykr wants to change that.
A former angel investor, Sean turned to public markets for better gains. He knew people like Charlie Munger and Warren Buffet weren’t gamblers, so how did they succeed year after year? Sean spent months reading about investing, pulling together concrete mathematical principles from an ocean of get-rich-quick fantasies that sold books but seldom created wealth.
“Phil Town had a huge impact on me,” Sean said. “His books went deep into the math that goes into analyzing stocks, and how to discern a good stock from a bad stock, the equations to use, and so on. I started putting these equations into Excel, started picking stocks, and then began making money that beat the markets. Every year I made between 15 and 50 percent.”
In 2020, Sean turned his Excel spreadsheet into a stock screening and education platform called Tykr. He continues to follow the mathematical principles of investor-author Phil Town, and the screening algorithm is open-source, for all to see. Sean’s no-nonsense, practical approach has attracted over 3,000 customers, and Tykr is on track for $200,000 in ARR in 2021.
From Building Houses to Building Companies
Sean was an average student who always preferred the workroom to the classroom. At his parent’s insistence, however, he dutifully earned those Bs and Cs until he fell in love with architecture in high school. Here, Sean’s classwork had real-world applications, and as he rose to the top of the class, his teacher handed his first assignment: build a home.
“I loved how hands-on it was, building blueprints and doing things that resulted in tangible, real-world, translatable skills,” Sean said. “One day, a home builder approached my teacher and said, ‘Hey, I’m building a house for myself and I don’t want to hire an architect. Do you have a student that’s up for the job?’ Right away, they put me on it.”
Sean couldn’t believe his luck. During the last semester of high school, he worked closely with his first (non-paid) client to build their dream home: an eight-bedroom, nine-bathroom mansion. To this day, Sean keeps the blueprint as a reminder of a turning point in his life: when he realized he had the drive, attitude, and skillset to build something from nothing.
“It was a very iterative process,” Sean said. “I would do the architectural blueprints, visit him every week, and revise them accordingly. He pretty much got free labor, but I got real-world experience of building a home. And it was amazing. I found something I was good at and something applicable to the real world, and I was hooked.”
Sean immediately signed up to study architecture at the University of Wisconsin-Milwaukee. Just a few days into his course, however, Sean got a nasty surprise. It was all theory. You had to draw and build models. No CAD classes, no technical classes, no computers. Sean’s dreams of becoming an architect crumbled faster than the Plaster-of-Paris models he’d been forced to make.
“I remember walking into this long hall where everybody had a pedestal to display their first model,” Sean said. “I saw the White House and the Taj Mahal but mine was just a regular house. I didn’t have the patience for building models, nor could I draw. The teachers announced only the top 10 percent of students in the course would become architects, and I didn’t like those odds.”
None of it made sense to Sean. In the real world, you don’t have time to draw or build models since time is money and it would be inefficient. Instead, you’d do everything on computers just as he’d done with his first client. The lack of foresight seemed elitist and impractical, so Sean switched majors to Fine Arts, realizing he could always work in the advertising industry as a fallback.
Years later, an old architecture classmate of Sean’s confided that he’d never drawn a blueprint or built a model once since graduating and becoming an architect. Sean laughs about it now and is glad to have gotten out when he did. After graduating with a Bachelor’s in Fine Arts, he joined a media agency and began analyzing how they operated and whether he could replicate it.
“I spent those early years learning the business, not the job,” Sean said. “How do they sell? How do they market? How do they make money? What do their contracts look like? What do their contract terms look like? I scrutinized the business model. I might’ve failed as an architect, but I had in mind something else to build: my own business.”
Recession Bites and Early Exits
In 2006, Sean launched a media agency that he ran for four years, servicing over 400 small-to-medium enterprises (SMEs) before exiting in a merger in 2010. It was a tough time. A recession had tightened the purse strings for many of his clients, and Sean never managed to take much of a salary despite hiring five full-time staff to help service his customers.
“I was building a service business through the recession in the States,” Sean said. “Budgets for websites, video, and ad campaigns shrunk. And it was just constant networking. It was pre-COVID, and I shook as many hands as I could to bring in more contracts. I took a salary but it was really low. Enough to pay the bills but not to put anything aside for savings.”
The merger wasn’t life-changing either. The proceeds from the acquisition were enough to pay off the agency’s outstanding debts and liabilities but little else. Nevertheless, Sean is happy to have had that early entrepreneurial experience as it exposed him to 100s of companies and business models. It taught him what worked and what didn’t.
“I worked with so many businesses and analyzed their marketing, sales, and operations, put together proposals, and then executed projects,” Sean said. “I analyzed lots of different business models. What was the ideal business if I were to start one? All of this experience meant I could quickly discern whether a business was going to be scalable.”
By the time the merger happened, Sean knew he wanted to build a SaaS company. The only problem is he didn’t have an idea. Instead, he began contracting for bigger businesses, managing projects for the likes of GE and Kohler over the best part of a decade. As project manager, he again delved deep into how those companies ran, which would later prove invaluable when he launched Tykr.
“If you’re good at what you do, you have some autonomy in how you run the business,” Sean said. “You’re managing budgets, stakeholders, and working with customers, and it allows you to learn a lot about business. How is big business run? How do they scale? Again, I didn’t want to learn the job, but learn the business, which is why I started to dabble in angel investing.”
Angel Investor to Public Markets
Sean is a naturally curious person, as you’ve probably learned already. From the moment he left college, he’d been on an educational journey through entrepreneurship, absorbing and compiling data from diverse companies, and using that knowledge to spot those that had long-term potential and those that didn’t. Why not put that toward building wealth?
“Most project managers didn’t ask as many questions,” Sean said. “But I worked on a lot of good projects that eventually led me to think I was experienced enough to invest in private businesses like a venture capitalist. I did that until 2015, but I never found my rocket. I never got in on the ground floor of Facebook or Tesla or something like that.”
Sean had a decision to make: He could continue swinging for the fences with those risky angel investments or invest in established companies. He chose the latter, believing that if Warren Buffet et al could do it consistently, there must have been a logical, mathematical foundation to their success. Again, Sean dove into the subject and read everything he could.
If this were a movie, this would be the point to insert a training montage of Sean poring over stacks of books with a pen in his mouth. In reality, he spent most of his time inputting numbers and formulae into Excel. The spreadsheet was a time-saver, to begin with, but after producing consistent gains, it became his go-to investment advisor, screening the noise from news outlets and social media to find stocks that projected serious, evidenced-based returns over time.
“I was using this Excel sheet to save time and cut through the clutter,” Sean said. “There’s a lot of bad advice on Twitter, Reddit, and other social media. If I listened to a podcast, for example, and somebody recommended a stock, I’d go to the Excel sheet, enter the data, and instantly know if it was the right move or not. In most cases, people were wrong.”
If you’re wondering what magic goes into Sean’s spreadsheet, I’m sorry to disappoint you. It’s all simple stuff: Are revenues increasing quarter over quarter? Is net income increasing quarter over quarter? What is the earnings per share (EPS)? Are there increasing debts? And so on. All of this information is publicly available. Sean just compiled and acted upon it.
“It comes back to working smarter, not harder,” Sean said. “A lot of these pundits, whether they’re on CNBC or MSN Finance or Twitter, describe all this complicated theory and analysis, but all you need to do is read a few financial reports. And this is much easier than you think. Anybody can do what Tykr does: It looks at the growth rates of basic metrics in the business.”
After four years of positive, market-beating gains, he decided to share his spreadsheet with investment professionals to get their opinion. Immediately, they advised him to share it with others. Sean had a potential winner on his hands, but another dilemma: should he share the calculations as a SaaS project or manage people’s money for them (like a hedge fund)?
“I didn’t want to go back to a service business,” Sean said. “Hedge funds are stressful. You’re managing big money for a lot of clients. If the market falls, word travels fast, and just one bad review can tank a hedge fund. They have a lifespan of about three years. I didn’t want that. I love investing and wanted to help the retail investor and be their ambassador.”
In 2020, a decade after deciding he wanted to start a SaaS business, Sean had his idea and Tykr was born. He would build his spreadsheet into a subscription platform that screened stocks and educated retail investors. It took a year to build the initial software, and until recently, Sean did everything from tech to marketing. Exhausted and wanting some life back, he needed help.
Early Challenges and Helping Hands
Sean knows his strength is operations. If a business is already making money, he can squeeze more profit out of it. But when it comes to marketing a new business, he’s a little too analytical to tap into the human emotions needed to induce action. He’s no copywriter or brand creative, so it took him a few months and some freelance help to earn his first few dollars.
“It was frustrating,” Sean said. “I had this amazing tool but no one wanted to use it. I hired some contractors to help tweak the copy on the home and landing pages to touch on the emotions and not so much on the logic. That’s something I always have to lean into with others. Now the tool is growing, which is great, but it’s still a little immature.”
Sean invested $30,000 into building the Tykr MVP but wasn’t acquiring enough customers to finance additional development. Some customers even left the platform due to a lack of features, but Sean has always asked for and listened carefully to their feedback. Over the last six months, and with the help of a very special customer, he’s turned Tykr’s fortunes around.
“A customer named Elgar approached me in February of this year,” Sean said. “He said, ‘You’ve got a great tool here, but it’s a little clunky. It’s built on an old tech stack from the early 2000s and could use a revamp.’ He gave me a bunch of ideas, and I eventually hired him as CTO. He’s based out of the Netherlands and we only met in person for the first time in October.”
Summer 2021, Sean and Elgar launched Tykr version 2.0, and it’s been insanely popular. It’s still just the two of them, but they hire contractors whenever the workload gets too much. Today, SEO, content marketing, and finance influencers bring in the most business, but they’re also testing paid social media campaigns. The focus remains, Sean stresses, on educating retail investors to help them build wealth over time.
“Education makes us different,” Sean said. “When you join, you get a 21-day email sequence with a new investing tip every day. How to invest your first thousand? How do you know when to buy? How do you know when to sell? How do you reduce risk? We’re all about trust. All the mathematical equations are open-source, too. You can also view and copy my portfolio.”
Exit Opportunities and Living Life
It’s still early days for Tykr, but Sean and Elgar both see an exit opportunity in the future. Right now, the business is relatively low-maintenance, which aligns with Sean’s views on company culture. Having witnessed the cruelty of poor management and demanding conditions in many workplaces, he’s all too aware of how easy it is to let numbers, targets, and timesheets rule like a tyrant.
“You find a lot of managers in corporate America but not many leaders,” Sean said. “This is why I love investing. Don’t work for money, but let it work for you. We’re all about living and enjoying life. I’ve got a lot of hobbies here in Wisconsin. I’m mountain biking, golfing, hiking, and I’m on a boat during the summer fishing. I don’t enjoy sitting at a computer all day.”
I was surprised to learn that Sean and Elgar still work full-time jobs. Tykr is, technically, still a side project. But not for long. If growth continues to accelerate, they’re more than happy to jump in full-time. Sean loves investing and it’s the one thing he can talk about for hours. And if they ever sell, it’s got to be to people who want to continue his mission not abuse the algorithm.
“If we got acquired by a hedge fund they’d probably just take the algorithm and shut down the platform,” Sean said. “They’d say, ‘If you want to use it, you have to let us manage your money.’ I’d never allow that to happen. I don’t want to go back to corporate America. Maybe Tykr will be acquired someday, but if not, it’s going to be a pretty cool business for a lot of people to work for globally.”
Tykr is riding a tidal wave of retail investor activity that shows no sign of slowing. While influencers and old-school media battle it out for the public’s dollars, platforms like Tykr empower a new generation of investors to cut through the noise and build serious wealth over the long term. Whatever happens, I hope Sean stays part of the movement that Tykr began.
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