by Mark Carter
Posted 12/5/2011 12:00 am
Updated 2 years ago
Fayetteville startup TTAGG has created a method of tracking consumer spending trends in real time through social media like Twitter that predicts future earnings and market shares based on that data.
Innovate Arkansas adviser Jeff Amerine thinks TTAGG (pronounced "tag") is on to something big, and Forbes.com agrees.
Forbes.com contributor Peter Cohan looked at TTAGG's investment tool product this fall, and said it proved better than Wall Street forecasts.
In a blog post dated Oct. 18, he wrote: "One of my Babson College students who works with TTAGG showed me a graph of daily trends in TTAGG's index of purchases of a publicly-traded retailers' products and compared it to its daily stock price.
"What got my attention is that the rise and fall of the TTAGG index nicely preceded changes in that retailer's stock price by a few weeks. Moreover, the TTAGG index was more accurate than Wall Street earnings forecasts."
Currently raising capital and signing up customers, TTAGG is launching a new product that will provide market data for the Dow Jones, S&P 500, Nasdaq and New York Stock Exchange and the more than 8,000 companies they represent.
Co-founder and CEO Ryan Frazier is a 2010 University of Arkansas graduate and already a seasoned entrepreneur at age 23 having designed and sold the Ekocase, an iPad product. He's bullish on TTAGG's potential (clients saw an ROI of more than 160 percent in 2011).
"TTAGG has by far the most potential of any venture I've been involved with, and I've never been a part of a better team," Frazier said. "More data is created in 48 hours now than ever existed when Google IPO'd in 2004. We're solving the problem of making sense of all of that data.
"Our secret sauce is in how we get valuable information and how we make sense of it. The tool has produced exciting returns over the last 12 months and our customers have made thousands."
Frazier said he could see TTAGG's software being adapted for business intelligence and competitive analysis.
"We could forecast the popularity of new product launches and recognize viral products across industry competitors in real time," he said. "So you could see us working with inventory control or real-time customer research."
Frazier and co-founders Kenny Cason and Britt Cagnina live and work together in a house just off campus. They employ three other full-time workers and plan for growth, of course, though Frazier said the firm wants to stay "lean" as it becomes profitable.
"These are fun times at TTAGG," he said. "We all work out of our living room, both for efficiency and necessity, and being together constantly allows us to develop exponentially faster."
Frazier said his observational approach was developed as a boy when his uncle would challenge him to identify the "next big thing" among kids at school.
"After that, observational research always played a large role in my investing strategy," Frazier said. "And last winter when picking Christmas stocks, I decided to extend my observational research to social networks. The results were unbelievable."
Frazier wonders if TTAGG is the next big thing - perhaps, more appropriately, the next BBIGG thing - and folks who cover Wall Street seem to agree that it could be.