Tag Archives: social

Social Trading: A new way to invest

Have you ever wanted to get into trading but don’t know where to get started? Trading and investing in stocks, currencies, indices and commodities offer a high potential payoff, however can be hard to get in to. Often people don’t know how and where to get started, and end up making poor choices due to the steep learning curve. In the past, people have looked to their brokers or third parties for advice and guidance in trading, however with the rise of social and crowd platforms, a new style of trading has emerged.

What is Etoro and how does social trading work?

Etoro is a social trading platform where people can trade using ‘the wisdom of the crowds’ principle. The platform offers free trading advice, tutorials, a trading simulator, and an integrated social trading platform. On the social trading platform experienced investors can make market predictions, share information, and show their current and past trades through their public profile.  The aggregate of the current trade actions is made visible for each stock, currency pair, and commodity, so users know what the crowd is doing. Users can also select individual investors based on their past trading success, subscribe to their profile (via which they can receive advice or information), and even select to automatically copy their trades. This adds a new element to investing as users can track all trades made by their favorite investors, and automatically execute those exact same trades.


Investors can moreover benefit from being a ‘popular investor’, through which they can earn payments and other benefits relating to their popularity within the platform. Etoro charges users with a transaction fee for each trade as well as a general fee when withdrawing funds (relating to the size of the amount withdrawn).

Efficiency Criteria

In essence, the platform is split into two distinct sides that interact to create value together. Experienced investors join the platform with the intention of sharing their knowledge and trades in order to build up a reputation, and benefit from the rewards and payments that come with being a ‘popular’ investor. Meanwhile, new investors join the platform with the intention of benefiting from the crowd’s collective knowledge and copying experienced investors. Through this, new investors can start building a portfolio while learning from the advice and behaviors of experienced traders. As such, the value derived on both sides of the platform is maximized by the combined knowledge and interaction of the crowd.

Etoro itself also greatly benefits from this network effect. The more experienced traders join the platform, the more useful content will be available to new users, thereby making the platform more attractive to join. Additionally, the more trades are executed by users, the higher the profit generated by the company. Etoro further encourages sign ups using a referral program in which users can gain rewards for each new person that signs up through their referral link. This serves to further enhance the network effect by bringing more users to both sides of the platform.

The business model itself is not specifically adapted to the political, social or legal regulations of each individual country in which it operates, but rather is static across all regions. As such, a country’s legal environment poses the greatest threat to the survival of the company. Due to the strict regulations that come with operating in the financial sector, Etoro’s business model has not yet been approved in all countries. Currently, the USA, Iran and Cuba are among a few countries that have not yet allowed Etoro to operate under its current business model. This is understandable since social trading and the concept of copying trades can bring about many negative consequences. For example, a user could instantly lose all their equity by forgetting they are ‘copying’ an investor who might have executed a (failed) high-leverage trade.

Etoro. (2017). Retrieved from https://www.etoro.com/


UNITED WARDROBE An Infinite Closet in Your Pocket

Imagine you bought a pair of sneakers. After wearing them a few times you realize they don’t fit properly. Even though they are as good as new, you are not able to return them. You could try to resell them online on Facebook or Marktplaats, but you have some uncertainties about safety and security. This is where United Wardrobe comes in: a hip, social and safe fashion platform.

United Wardrobe is an online platform for buying and selling second hand fashion. The key aspects of the platform are safety, sustainability and service. But United Wardrobe is more than just a marketplace platform, it is a community where you can chat with other fashion lovers, follow users and favorite each other’s products. These social functions empower users to become co-creators of value.

How does it work?
A user can create a profile and upload products for sale. The moment a buyer has paid for a product, the seller receives their contact details. As soon as the package has been received, United Wardrobe transfers the money within 14 days to the seller (United Wardrobe, 2017). This relates to what Carson et al. (1999) define as institutional arrangements, the formal and informal rules of exchange created by specific parties to a specific exchange, in this case the exchange of fashion.

The institutional arrangements of United Wardrobe meet three criteria set by Carson et al. (1999). Firstly, they are efficient in a sense that they enable joint profitability and create incentives for users to contribute. Next to this, they are feasible given the characteristics of the exchange of products. Finally, they are achievable in a sense that United Wardrobe has succeeded in growing the platform and community. These institutional arrangements allow United Wardrobe to tackle safety and security issues such as scamming, which no other marketplace platform has succeeded to do.

Users are an important part of United Wardrobe’s business model and enable more creation of value than the company could create on its own. In fact, without its users, the company would not even exist. This is the essence of value co-creation, where new ways are identified to support either the customer’s or the firm’s value-creating process (Saarijärvi et al., 2013). An interesting feature on the website is a page where you can see what the most popular search terms are. This reflects a customer value co-creation mechanism where the firm has refined user data and returned it to the users (Saarijärvi et al., 2013). United Wardrobe has won several prizes with its concept including Dutch Online Retail Experience Award 2015 and the public award of Accenture’s Innovation Awards in 2014.

From my own experience with the platform I can assure you that it is a fun and easy way to sell some clothes. Everyone has clothing at the back of their closet they never wear. A pair of trousers that you might hate another might love, so get up and make that extra money. From an environmental perspective I think this business model is a great step towards a better planet by recycling fashion.

Carson, S. J., Devinney, T. M., Dowling, G. R., & John, G. (1999). Understanding institutional designs within marketing value systems. Journal of Marketing, 115-130.

Saarijärvi, H., Kannan, P. K., & Kuusela, H. (2013). Value co-creation: theoretical approaches and practical implications. European Business Review, 25(1), 6-19.

United Wardrobe (2017) unitedwardrobe.com. Available at: https://unitedwardrobe.com/en/about Accessed on 15/02/2017

Crowdfunding getting personal.

This week the multinational Philips announced to stop sponsoring the shirts of football club PSV after being there main sponsor for 34 years. PSV and Philips had the longest sponsor relationship in world history. Philips will only step down from their title as main sponsor and  will continue to sponsor the club on other fronts and the PSV stadion will still be called the Philips Stadion. However, for a lot of fans this news came as a shock. Philips has always been the main sponsor of the club and has caused for a lot of brand awareness as well. A great amount of fans were extremely disappointed but also concerned that no one at this point will provide the club with decent shirts.

As a response a group of PSV-supporters decided to try to become head sponsor of the club, simply through crowdfunding. The group of fans tries to include as many other fans as possible. They are currently verifying if the demand for the idea is sufficient. If it is they will further work out there plans.

For the football industry this might actually be a radical innovative idea. If the crowdfunding idea works out it creates opportunities within other football clubs world-wide.

Currently, the group of fans would need about 600.000 fans to spend 10 euros each in order to collect a sufficient amount for the head sponsorship.

Crowdfunding is becoming more and more of a solution nowadays. Another great example of this is the crowdfunding campaign: Scusa Roma.  A woman from the Netherlands that lives in Toscane decided to set up a crowdfunding campaign to raise money for the damage that was done in Rome by football hooligans. As a response other people started campaigns for the same cause.

The following graph shows the development of crowdfunding volume on crowdfunding platforms since 2009. We see an extreme growth since then as people become increasingly interested in alternative forms of investment capital.


(Statista, 2015)

The examples in the football field are merely two out of a huge amount of examples for what people use crowdfunding nowadays. The most commonly known example is startups that need funding for development of their products. However, as in the Scusa Roma example, there are loads of people that also use crowdfunding platforms for a good cause. Another example is the Hakiki – Fight poverty through social enterprises – project. A group of students want to help villages in Tanzania with developing  and decided to run a lot of events as for instance dinners, parties or benefit nights. However, to double the amount they have already raised they decided to start a campaign on Indiegogo.

These examples show that crowdfunding is not only for actual companies or start-ups anymore and not solely focused on investment. In contrast, they are getting closer and closer to our personal lives.










Corona Light on Facebook

A few years ago the mexican company “Crown Import” hired the advertising agency Pereira O’Dell for the “Corona Light “Most Liked” on Facebook” campaign. Targeting young consumers the brand raised awareness through showing user submitted photos on a billboard on Times Square in New York. After liking Corona’s Facebook page users are allowed to upload their photo and afterwards the photo will be displayed on the billboard. It is a very smart way to involve your customers. Combining offline and online technics, the integrated markting campaign succeed to increase the fans of the Facebook page up to 6000% just for 2 months. This marketing activity creates value for the two parties – consumers take part into something excitement and “Corona Light” increases the brand awareness. Instead of designing expensive billboards with expensive endorsers for example, the company decided to promote their product with the faces of their customers and fans.

Social Media & Higher Education

I’ve found this pretty interesting infographic about Social Media use within higher education on openuniveristies.com‘s blog. As known, schools aren’t that much in touch with emerging technologies and trends. But the infographic below shows us that these organizations are catching up with regard to Social Media usage. Since their students are well represented wihin Social Media, this might, and probably is, a good progression. How do you guys think our own university is doing with the usage of Social Media?



[see the infographic below]

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