I‘m Julien Brault and on the show today, how Maxwell Nicholson, CEO and co-founder of Blossom Social, built a social network for investors with over 160,000 monthly active users, 3.8 million dollars in annual revenue and a weekly newsletter that generates 500,000 dollars per year. Maxwell was making $120,000 a year at McKinsey with a clear path to double that within a few years, but he couldn't shake the feeling that he was meant for something else. He grew up in a small Canadian town called Grand Forks in British Columbia. His dad was a welder and his mom a stay-at-home mom. He and his brother were the first in their family to graduate university. So, when he landed a job at McKinsey, his grandma thought he was crazy to even consider leaving. But in 2021, at the height of the pandemic investing craze, Maxwell walked away to build a social stock trading app for Canadian investors. Maxwell Nicholson: I knew that I wanted to leave, so it wasn't too difficult of a decision for me. The senior partner of the McKinsey Vancouver office was actually one of our early investors. So I owe a lot to McKinsey and I loved my time there. Julien Brault: In 2022, you raised a pre-seed of $750,000 and it included two Canadian stock market YouTubers, Brandon Beavis, who's now a co-founder, and Shay Huang. How did you find them? Because at the time Blossom was not a household name. I don't even know if they had heard about it. So how did you convince people or did they reach out to you? I'm just curious because I do think raising from influencers can create leverage. So I'm curious to hear about that. MN: Well, Brandon joining the company was a huge turning point for us. I think at that point we had less than a thousand users, maybe less than 10,000. Brandon was really the one that has driven all of our growth to this point. We had reached out to him on LinkedIn because we were just looking for anyone who had investing in their bio on Instagram or LinkedIn and just cold DMing them. So we cold DMed Brandon. He hopped on a call with us and then he told us his rates to sponsor a video. We were like, "Wow, we can't afford that. We definitely don't have the money." Then I had another opportunity where a friend of a friend invited me to a barbecue that he was going to be at. I built a more personal relationship with him and sold the vision. JB: Did he just say, "Okay, I'll do $100,000 worth of media, influencing videos, and you just give me stock?" Or did he actually sign a check? MN: We were raising our pre-seed round, so Brandon invested $50,000 of his own money. He invested and we granted advisory shares. Over the course of the year, he started driving immense value. I think a lot of times a startup might see someone driving all this value and think, "We got him for so cheap, we barely gave him any equity. That's great for us." But for me, I was like, "Wow, there's a huge mismatch in the value he's driving and the equity he received." So I actually had a meeting with him and said, "Hey, we're going to double your equity from the advisory agreement." He just continued to deliver incredible value and we kept increasing it. Eventually the three co-founders had a conversation and said, "Hey, Brandon's basically operating like a co-founder. Let's officially make him one." We had a few beers and I put my arm around him and said, "Brandon, we got to have you on as a co-founder." And he's like, "You better not just be saying this because you're drunk, man." We had a few beers and I put my arm around him and said, “Brandon, we got to have you on as a co-founder.” JB: When was that? When did he join full-time as a co-founder? MN: I think it was pretty early. It was either a year in or a year and a half in. It was probably like six months after that press release you mentioned in 2022. And I'll touch quickly on Shay, the Humble Trader, who's another incredible YouTuber. The only reason she invested was because Brandon invested. So Brandon and her had sushi together. Right off the bat, day one, Brandon brought in an incredible investor. If that doesn't speak to the early signals of him being an incredible value add to the team, I don't know what does. JB: You initially started with the social component, a little bit like Robinhood. A lot of people don't know, but Robinhood launched a non-trading app at the very beginning. The plan was eventually to launch a brokerage, a little bit like what Dub is doing. Then later on you announced that you're happy to be a social network and you don't want the regulatory hurdles of operating a brokerage. So what changed? Because today it's probably easier than ever. There are players like white label, API-driven players like Alpaca that would allow you to basically add this without getting an introducing broker license. So what made you change your mind about allowing trades? MN: I believe at the time, and maybe it's different now, Alpaca didn't even support Canadian stock trading. So that was a no-go if you're targeting the Canadian market. We sat down and looked at the numbers. If you look at Robinhood's public financial statements, where brokerages make most of their money isn't on equity trading. Equity trading has almost become a loss leader for them at zero dollar commission. They make most of their money on options trading and crypto trading. So even if you can get over the hurdle of the brokerage license, which is maybe a two to three year journey, now you're entering a competitive market with Wealthsimple and Questrade. Wealthsimple is an incredible product, by the way. Our only differentiation that we really had was that we were going to be a social broker, which in hindsight, I don't think is a true differentiation point to switch someone from Wealthsimple. There's no way in our initial version we're going to be as seamless and simple as they are. I had told all our investors that we're going to be a brokerage. So pivoting was very hard. I remember calling our investors and saying, "Hey, I don't think this brokerage path is the right path." And they said, "Okay, well, how are you going to make money then?" And I was like, "Well, I don't really know." I remember calling our investors and saying, “Hey, I don’t think this brokerage path is the right path.” And they said, “Okay, well, how are you going to make money then?” And I was like, “Well, I don’t really know.” Now, we make a lot of our money through advertising and ETF partnerships. We had some early indications of that, but not enough where I could confidently say, "Hey, we're going to grow from $300,000 to $4 million in two years," like we've done. When we pivoted, that was very unclear. So it was in a sense a very risky pivot. JB: When you were mentioning the competitive landscape, you mainly mentioned Canadian players. What's the share of your users in Canada versus the US? MN: At the time we were fully focused on Canada. Then when we pivoted away from the brokerage path and went to be a pure play social network, we were like, "Okay, now we can actually be a truly global company." Within six months or so, our audience was 60-40. But I think we're getting closer to 50-50 now. Canada has always been our core market, but we see the US as the next frontier. Obviously there's a way bigger opportunity in the US and that's been a big focus for us over this year and will continue to be over next year. JB: You raised $7 million with a substantial portion of it coming from equity crowdfunding. I actually had a similar experience with my own fintech and I know for a fact it's not an easy path. Did raising money from the crowd become a hurdle or did it actually end up being an advantage? MN: Having a community of 2,000 super fans is massive. I will send out emails like, "Go upload or repost this LinkedIn post." When we got featured in Forbes, I sent out an email to help boost that. But I think the biggest example of it was our events. So we held an event at the Rogers Center where we had over 1,400 people come out. Probably a good third of those people who came out were shareholders. When you're a shareholder of this company, our event almost has a dual purpose: it's like a conference as well as almost like a shareholder meetup. JB: Were you charging for the event or was it just for making money? MN: The event itself was break even. In fact, I think we lost a little bit of money on it. But we charged $60 for the event to cover the cost. Obviously Rogers Center, for context, I think cost us $250,000 to book out. I think they're telling us we might have to pay more next year if we do it there again next year. But yeah, that was epic. JB: In a recent LinkedIn post, you mentioned that the Blossom newsletter, The Weekly Buzz, is generating over $500,000 in annual revenue on its own. Most fintechs actually have a newsletter, but it's mostly for product updates and re-engaging existing users. How did it become an actual profit center? Can you tell me the story behind this? MN: The story behind it was two years ago I remember seeing in the news that The Peak sold for $6 million to Zoomer. I remember seeing that and I had seen The Peak's media kit because we had considered advertising in them. So I knew how many emails they had and I was like, "Wait, we have almost that many emails from our users who obviously joined our mailing list and everything." So I was like, "Maybe we can do something like that." And obviously we took inspiration from Wealthsimple TLDR and some of these other great newsletters. So we started really putting time into it, giving a weekly recap of the markets. Since a lot of our business comes from advertising and partnerships with ETF providers in the app, it was very easy for us to add in newsletter advertising as part of those packages. So I think we do have it easier than other companies, because obviously the sales side of it is the complicated side. If you're just a random fintech, you're not really going to
