Trefis: Bringing Bankers down to Earth

January 24, 2011

A team of ex-investment bankers quits and forms a startup.
The result: Trefis.com

The team at trefis has been building robust financial models for a wide variety of companies (initially tech focused but has been built out to many verticals). The twist here is that the mdels are built around products and are operated in a visual manner.

Both are key reasons why this project will suceed. By building around products (i.e. each companies valuation is the sum of the value assigned to each of its key product categories. These valuations are driven by a number of assumptions which can be manipulated by a user. Visitors to the site drag trend lines up or down based on their view vs. Trefis’ analysts. The variables are easy to understand ex. how many apps will Apple sell, what will be Google’s click through rate etc…

By building around products, unlike most research which tends to be built top down, Trefis is more accessible and understandable than most research.

These guys are taking what research analyst do and demistifying it by hiding the financial plumbing and prominently displaying the assumptions whereas most analysts do the exact opposite.

This seems like it would be very valuable to one of the larger financial data supplier like S&P (which owns CapIQ) or Bloomberg or Thomson etc…

The site also has substantial community features so that a user can compare and contrast their own estimates vs. the crowd.

Finally, does this service make anyone a better investor? On its own no. That still requires having a view of the future that turns out to be accurate but trefis does let you easily test those ideas and see what the valuation impact would be.

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