Interview: How Rally Rd. Is Reinventing Car Investment For A Sharing Economy
The auto investment platform's co-founder Rob Petrozzo speaks to PSFK about investment equity where it concerns classic cars and other high-ticket items, as well as why the future car experience will be about sharing, not owning
The sharing economy arguably has affected the automotive space more than any other, with the consumer need to have complete—or even partial—ownership over a method of transport becoming increasingly antiquated. When it comes to classic cars, however, Rally Rd. co-founder Rob Petrozzo perceived an opportunity to apply the sharing mindset to financial investment, encouraging consumers to rally investments together rather than require one large source of capital.
Ahead of his appearance on the New York Fintech Week panel ‘Democratizing Finance,' hosted by Anomaly, Hacking Finance and PSFK, Petrozzo spoke to us about the platform's mission to democratize alternative investments, providing access, liquidity and transparency to markets that have traditionally only been available to a select group. Furthermore, Petrozzo explains how Rally Rd. supports the future of car buying and owning, which he believes will be less about a personal ownership and more about communal experiences.
What are some of the trends you’ve noticed in the finance space, where innovation is heading and what consumers are demanding for their experience?
Winning the battle for attention has become really important in finance recently. It’s something that was once only associated with the likes of Netflix and Instagram, but you need the eyeballs and you don’t have a lot of time to get them. The new investor isn’t interested in the standard dashboard-style list of information and stats. They care about the underlying opportunity. They need a short, concise, shareable story.
The headline or the image of a platform has to make its way into a consumers' group chat. What we’ve seen and what I think we will continue to see is financial platforms focusing on the creation of some really compelling content to accompany product, a prioritized focus on design & experience, and allowing a user’s decision-making process to happen organically once they have their attention.
As obvious as it sounds, a renewed focus on establishing trust has been one of the most welcome trends. Building trust for a financial product is the most successful growth-hack. A 25 year old today is far more savvy than the traditional banks give them credit for. Those investors are super open to investing through a new well-designed mobile platform, but the traditional outlets aren’t as meaningful anymore.
The most successful conversion funnel starts from word of mouth from a friend or someone consumers trust on twitter, then is reinforced with great content and engagement, and allowing that consumer a lane for direct communication with the company. That circle of great design, thoughtful and engaging content, and trust through positive word-of-mouth has really become far stronger than any stamp of approval from a Wall Street analyst.
What does democratizing finance mean to you?
It’s removing access layers in between people and the places they want to invest their money. There’s a very small group that owns the majority of the most meaningful investment-grade assets, and they’re able to pick and choose who gets access to those investments.
What we’re trying to do at Rally Rd. is remove the access layer by acquiring the best quality investments on behalf of a large group of retail investors, remove the 2/20 models that standard funds have been working with for a long time, and add real liquidity and transparency that has traditionally been opaque. That to use feels like a way more democratic investing platform than what currently exists in the market.
What role does design play in the realm of finances, and particularly in the consumer experience? What, ideally, should good design do in transforming and improving that experience?
Great design regardless of the medium has always been about eliminating the noise. We still have a lot of our members say “this doesn’t feel like a stock market app,” which is what we want to hear. Our initial goal when we started designing this app was to shrink the decision-making process down to a yes/no proposition. That involved isolating the most important elements of an investment story into bite-size pieces, then allowing potential investors to do a deep-dive if they want all of the details. The ”gamification” of finance had a moment a couple of years ago where it felt like that was going to be the future, but to me, it really feels like the ability to shrink the information down to “most-relevant” and allow for a quick and transparent purchase process is the “right now,” and that will continue to dominate in the near future.
Could you explain what motivated you to start Rally Rd.? How did the founding of the platform intersect with the above question(s)?
It’s still pretty shocking to us that the concept hadn’t been explored before we did, because the delta between this huge group of people who wanted a product like ours and the small group who actually had access to the investments we brought to the market was so dramatic. We looked at the investment apps that were out in the market, and we saw that the alternative investment landscape hadn’t been approached the right way. Everything was institutional, and felt institutional.
We also made a decision in some of the earliest whiteboard sessions that we would be a design-first company. Product was always going to lead, so that we could ensure that we not only had a great selection of assets to invest in, but that we were always pushing ourselves to have the most intuitive and well-designed product in the space. That, to us, would be our best chance at success and to truly effect change.
Could you explain how Rally Rd. works?
Rally Rd. is a stock market for high value alternative assets, like premium collector cars. The cars we list in the app are extremely rare, and in many cases, one of only a handful in the world in investment-grade condition. They have also shown outsized returns for those with deep enough pockets and the access needed to acquire and maintain them.
Each asset is registered with the SEC, and turned into stock that can be purchased by investors of all income levels starting at around $40 per share in our app. We tell the story of the vehicle—what makes it unique, all the specs on mileage & provenance, display all the records and historical documentation, photo & video of every angle of the car, and include an interactive timeline from the moment it left the factory up to present day.
We also allow for bid/ask trading of shares through registered broker dealers all within the interface, so we’ve really tried to design a platform that makes trading these super valuable tangible pieces of automative art feel as seamless as trading equities.
PSFK recently launched an in-depth report on the new automotive buying and owning experience, which caters to a mobile-first and fully digitally integrated audience. How does Rally Rd. embrace the new automotive retail landscape?
I think a lot of those findings when it comes to consumers' expectations for purchasing a car are right in-line with the experience of consumer investing, whether that be investing in a classic car or any stock. What the sharing economy has done to the automative industry has had ripple effects in every industry. For us, it’s no different. The need to own an “entire” anything is becoming antiquated.
We built this company, even from the name, around the idea that we could rally people together to create a new lane for investing where it had previously required one source with a lot of capital. In terms of the actual investments on the platform, people are now realizing that the driving experience as we know it is going to be remarkably different in the very near future. The most important vehicles with the most important stories are going to become museum pieces. The assembled-by-hand Ferraris and Lamborghinis that were once a symbol of wealth & excess are now triple their original sticker price. Thats not because they are being driven around the streets of Manhattan, but because they are being looked at as art. They are important pieces in the lineage of transportation and design, and will eventually be the only relics left of a time when driving was a more personal experience.
Could you explain the social aspect of Rally Rd.—for instance, the chat feature in the app experience. Why was this important to include?
Communication directly with our consumer base and within our consumer base is an extremely important element in our product roadmap. In 2018, our goal was to build out the investment products, and to build an eclectic collection of incredible vehicles for investors. In 2019, our focus is on expanding into other offerings and building the community. That starts with things like Chat within the asset streams, adding sentiment and the fantasy components that allow for education before investing, and expanding out footprint further into brick and mortar to add that tactile experience to the investment landscape.
Our first retail store opened in February, where we display some of our most notable vehicles and curate conversations with investors and potential investors. We look at spaces like that as an extension of the product. Our slack channel that we use as a means of communicating with our most engaged consumers is an extension of the product. Everything we are building outside of the app and inside the app is about bringing the community together to create the best possible experience, on the investment side and the education side.
What are some of the key points you hope to share on the upcoming Democratizing Finance panel?
A $100 investment today is far more powerful than it was even just 10 years ago, and the success of the platforms doing it well is so deeply tied to design. The tools available to the average person to learn, build and invest have never been more accessible. People aren’t tied down to one strategy or one plan anymore.
I think everyone should be taking advantage of the ability to make decisions on a small scale as away of learning a new space. Likewise, on the creation side, there has never been a better time to design something new. Great design & experience can build so much trust and cut through the noise. The bridges to entry in terms of software development and experience-design have never been more accessible.
What's next for Rally Rd, say 1-2 years out? Any innovations you can share, or any trends you see taking off in the space?
Classic cars will always be one of the anchors of our platform, but we’ll be moving into a bunch of other asset classes this year including high-end collectibles, wine and whisky and watches to name a few. We are also starting the process of securitizing intangibles, which is a huge space without enough well-designed access points.
The way we think about things like education and medicine is changing rapidly. Platforms like Lambda School, Say and so many others coming to market are putting together the full round trip of education, investing in your future and a consumer voice that should be heard along the way. Those are the themes we’ll be focused on for the foreseeable future.
For more from Rob, come hear him speak on a panel of finance pioneers, hosted by Anomaly, Hacking Finance and PSFK as part of New York Fintech Week. The conversation will feature startups and thinkers designing solutions to make finance fairer, more accessible and more inclusive and will take place this upcoming April 2 at Anomaly, tickets are free!