Say "Indie" and you think of independent film producers. Or a record

label outside the mainstream. Or a small radio station.

Bill Martin applies the term to the name of his financial information

firm that flourishes on Witherspoon Street. He and his partner, Rusty

Szerek, founded Indie Research in 2002, and now it has 16 full-time

employees, has just cut deals with Bloomberg and Yahoo Finance, and

plans to grow to at least $3 million this year.

Yet to gain this success, Martin has taken the maverick’s path. In

grade school, he played hooky to attend bank stockholders’ meetings.

In college, he dropped out of the University of Virginia to grow his

wildly successful financial dotcom, Raging Bull. As he takes Indie

Research to the next level, Martin hopes his untraditional approach

will help him, once again, to take on the big guys.

"I am self driven," says Martin, "have always been my own boss, and I

don’t like somebody telling me what to do." Martin, age 28, deserves

his "wunderkind" reputation. For anyone with more than a passing

knowledge of Wall Street, the Raging Bull name represents the website,

not the Martin Scorcese/Robert De Niro movie. In the days before

blogs, Raging Bull users could trade tips yet filter out annoying

comments. The site was free, and it competed with Yahoo, Silicon

Investor, and Motley Fool.

In 1997, at the birth of Raging Bull, Martin and his then partner,

high school buddy Greg Wright, were just 19 years old. Joined by

Szerek, they rode the crest of the dotcom market and sold it in 1998

just before the downturn. Though they took most of their profits in

stock, which then plummeted in value, they did walk away with some

cash.

At age 21 Martin became an angel, investing in other companies. He

also joined a company called BankRate, a publicly traded mortgage data

firm, and at age 24 he and Szerek started over again with Indie

Research, working first out of Martin’s home on Witherspoon Street,

then expanding to another Witherspoon Street office.

"With Raging Bull we were young and naive," says Martin. "The naive

part actually helped us. We did crazy things, like thinking that with

20 grand we could build the business in four months, without thinking

how that would affect our education. From there – everything from

negotiating with venture capitalists to hiring people 20 years older

than we are – we have done this before. I have been meeting payroll

every two weeks for nine years now."

Martin and Szerek based Indie Research LLC on what they knew their

cohorts needed. "We are power users of stock market products," says

Martin. "We know what this market wants."

They started with one newsletter. Martin picks stocks for aggressive

long-term investors for Findprofit.com, one of the firm’s three

newsletters costing from $200 to $300 per year for 8,000 subscribers,

mostly individual investors. A second newsletter (www.nextinning.com)

covers semiconductor and technology stocks, and the third

(www.bullmarket.com) is for very long-term investments.

Now Indie Research has moved into the big time: Selling the

newsletters to Yahoo and Bloomberg and selling data intelligence to

institutional investors, hedge funds, brokers, and money managers.

Indie’s newsletters started to show up on Yahoo Finance in June and

are set to appear on Bloomberg in September. "Being small, it takes

time. We’re pretty excited. We went live two months ago on Yahoo, but

it took a year to do the deal," says Martin.

As for the data intelligence, Indie Research has a niche: insider

stock trading information, using proprietary algorithms in an engine

built by a three-person team.

Anyone can get the filings but, says Martin, "for institutional

investors there is a lot of noise. How do you serve up the most

important information? We spent two to three years on a scoring

system, using two dozen different variables, to filter the

information."

Every transaction gets ranked on how notable it is. For instance, what

type of insider is selling or buying? Is the CFO selling when the

stock is going down? Is the CEO buying when the stock is going up?

Buying, they have found, is more predictive of future stock

performance than selling.

Indie staffers also clean up the insider training data, which is rife

with errors and inconsistencies. "We spent a lot of time building

software to clean it up automatically, and we have a team of data

integrity folks to review the contents," says Szerek. "We have created

a data base with very clean data."

InsiderScore.com went live in June, 2005, and in the first six months

it had $400,000 in sales. Martin says he has nearly 250 clients who

are willing to shell out $5,000 to $10,000 per copy and that the

company is on track to gross $1.4 million for this product.

InsiderScore’s platform could accommodate up to 1,500 clients.

"Every two or three months we do a significant product upgrade and

increase use by 50 percent," says Martin. He is optimistic that he can

continue to "push price" (raise the price for current clients). "It is

a fairly `sticky’ product. The hard part is getting the money managers

on the phone. If they need it, they will get it."

This database product has no small competitors, only large ones, like

Bloomberg and Thomson. "Bloomberg does organize the data," says

Martin, and another company does some filtering. "But we are the only

ones that filter and organize the data and put a layer on top."

Because Indie Research is new, says Martin, it was able to leverage

recent web technologies, whereas its competitors’ solutions are based

on legacy technologies.

By adding the income from InsiderScore to the current newsletter

business, which can be counted on to bring in $1.5 million, Martin

figures he can build the business to $3 million to $5 million over the

next three to six months. But that depends on getting good sales

people for InsiderScore.

He and Szerek have hired a vice president of sales, Robert

Fairbrother, from Thomson, and of the five sales people, one came from

Merrill Lynch and another from TD Waterhouse. But there is turnover,

and he is on the hunt for more Princeton-based hires. "One of the

great advantages of being in Princeton," says Martin, "is that there

is a lot of intellectual property walking around."

William C. Martin is the oldest of three children. He hired his

sister, Marcie, right out of Clemson to head the customer service

department, and his brother is a golf pro. He grew up in Freehold,

where his father had a construction business.

But it was his mother’s father who influenced him most. A self-made

man, his grandfather spent a lot of time in the stock market. "At

first I was interested in collecting coins, because I could see what

they were worth," says Martin. "When I found you look up stock prices

every day in the paper, that became more interesting."

He compares stock picking to golf. Both are "ever humbling" and

require lots of mental effort. "With stocks, you are doing more work

than the next guy. Like golf, you must restrict your own emotions." If

you take on the markets’ emotions, "at the end of the day you are

upset and frustrated."

He remembers buying his first stock, Hershey Foods, when he was 10 or

11 years old. His mother, Ellen, overrode her husband’s objections and

took him out of school for bank stockholders’ meetings. "My mother was

used to her father having his own business, a printing brokerage, and

she was always very encouraging, someone I could bounce ideas off of,"

he says. "She understood how I ticked."

Ellen Martin now works at Indie Research doing bookkeeping and

collections. Martin’s wife, to whom he has been married for two years,

is a part-time nanny; they live in Skillman and attend Nassau

Christian Center.

"When we first started the business, I was managing my money and felt

I could pick stock," says Martin. "I am heavily self trained from a

lot of trial and error with my own money. I thought I could add value

and build a track record, and we built the company around that."

To invest your own money is much easier than telling other people how

to invest. "Having so many people looking over my shoulder has enabled

me to find conviction, which is one of the most important ingredients

of being a successful investor," says Martin. "The market will test

you every day."

He has a research staff but does the stock picks himself and writes

about them. "Writing really helps you articulate, to think, and you

have the opportunity to go back and see what you wrote, where you

screwed up."

"Most of the guys in the newsletter business are marketers first,

second, and third," says Martin, "and stock pickers, fourth, fifth,

and sixth. We thought we could put out better stock recommendations

and could leverage some of the Internet marketing channels."

Martin says of himself and his partner Szerek, "we are the perfect

pair. We mesh really well. I’m good at thinking up the ideas. Rusty’s

good at implementing them."

Szerek, 28, is also the oldest of three and was also influenced by his

grandfather, a self-taught entrepreneur who had started and run

various businesses to distribute pipes and valves. It was his

grandmother who encouraged his efforts with Raging Bull by investing

$10,000.

Szerek grew up in a Detroit suburb, where his mother, a nurse

practitioner, runs a school clinic, and his father is the CFO for a

small investment company. He spent two years majoring in engineering

at the University of Virginia. In his freshman year, through UVA’s

investment club, he met his future business partner, finding him to be

"very honest, very driven, a smart guy that knows a lot about the

stock market." Says Szerek: "On the business end, Bill is more of a

big picture guy. I am `big picture’ plus execution. Outside the

business, we have common interests, like playing golf."

Szerek diligently maintains his five handicap, and he and Martin

schedule a golf trip to Ireland every spring.

Though Szerek was enthusiastic about the education he could get at

UVA, he says leaving in mid stream was "surprisingly a pretty easy

decision, because it was an amazing opportunity."

His parents were less sure. "It was on the cusp of the dotcom boom

when things were taking off. No one knew what to expect. They did not

say, `you are making the biggest mistake of your life,’ just that they

didn’t want me to regret this a few years down the road. But my mom

wants me to go back. She used to bring it up in every telephone

conversation, `Are you thinking about going back to school?’ Now it is

less frequent."

Szerek is getting married in October, so his mother’s calls now focus

on wedding plans. He met his bride in Boston when he worked at Raging

Bull; she is a graduate of Cornell and works in marketing at the

personal products division of Johnson & Johnson in Skillman. The

wedding party includes his sister, who is getting her master’s degree

in education, and his brother, who is finishing up at the University

of Michigan. His best man, the former COO at Raging Bull, is now the

CEO of an online photography firm, Shutterfly, and Martin is one of

the groomsmen.

The partners tell about what happened at Raging Bull, founded in

September, 1997. Martin was a sophomore finance and history major at

the University of Virginia, and his high school friend was a civil

engineer at Rutgers. At UVA Martin met Szerek, who joined Raging Bull

in February, 1998.

"It was our first exposure to the working world, and it was our

passion, trying to create a really interesting, thriving business by

harvesting the new Internet media," remembers Szerek. "We thought if

we did everything as well as we could, the money would take care of

itself."

"Knowing what I know now, it was crazy," says Martin. "We started with

25 grand on a summer vacation." The money came from family members –

Szerek’s grandmother gave him $10,000 – and they used their profits

from caddying. Martin admits, "we really didn’t have any vision. Two

months after we launched the Wall Street Journal had us on the front

page of the Money section. I was 19."

In September, 1998, Martin signed a deal over pizza and beer with

David Wetherell of CMGI. A Wall Street Journal columnist quoted

Wetherell on how he didn’t care how young Martin and his cohorts were:

"Of all of our investments, this is the single most enthusiastic group

I’ve run across. I think one of the reasons they went with us is that

we didn’t treat them like kids," he said. "I’m not sure age is so

relevant in this market. To some extent, it might be a liability."

(Wetherell is known in Princeton for his less successful investment in

retail-based dotcom, JustBalls, but CMGI made Wetherell rich when it

bought 80 percent of Lycos for $2 million and took it public for $1.3

billion. It also owned GeoCities.)

Martin had spent the summer fending off potential buyers who wanted to

acquire the company outright. A call from Wetherell, less than two

weeks before the fall term began, convinced him he could retain

majority control. When Wetherell asked for a business plan, the

partners worked for 30 hours straight to write one. The next day

Martin flew to meet Wetherell.

The resulting deal, $22 million from two companies with CMGI in the

lead, derailed their plans to go back to school for his sophomore

year. CMGI’s investment, a 40 percent stake, was worth from $1 million

to $3 million according to what Martin told reporters at that time. He

and Szerek moved into CMGI’s headquarters in Andover, Massachusetts.

"Just a month ago we were working out of my dad’s basement and getting

ready to go back to school," he told the WSJ columnist. "Now we’re in

the headquarters of a major Internet firm. It’s pretty unbelievable."

Wetherell, who also owned Alta Vista, influenced the partners to sell

to Alta Vista in an all-stock deal. But Alta Vista did not go public,

as it had planned, because it just missed the peak of the dotcom boom.

When the market went down 25 percent, that canceled the IPO. Instead,

Alta Vista was bought by Yahoo and the common shares, held by the

Raging Bull founders, were worth zilch.

Meanwhile Raging Bull, still profitable, was sold to Lycos, which in

turn sold it to IDC Corp., a financial data company.

Szerek admits they got caught up in the dotcom frenzy of the late

`90s. "People were raising 100s of millions of dollars. In hindsight,

we got a little greedy," he says. "There was another company we could

have sold to." In that time period, a million dollars seemed "like

nothing," says Szerek. "We learned the value of money."

"We took what we learned and applied that to Indie Research. We

haven’t taken any outside money. We self funded the business. We call

the shots," says Szerek. "We execute against our plan."

"When we started it was literally a couple of us and one newsletter,"

says Martin. "Now we have over 2,000 subscribers reading my ideas

every day, all online. As news hits, we will put out updates, one to

three updates per day. We grew it really slowly and increased to three

newsletters. We bring in an outside auditor to validate our returns

and have four years of good numbers."

The churn rate on the newsletters is 30 to 40 percent in the first

year, then it drops substantially to 10 to 20 percent. It’s a great

recurring cash flow business, but very labor intensive, Martin admits,

with a limited potential for long term equity. That’s why he launched

the database product in 2005.

That year Indie Research bought a 3,000 square-foot house, a former

dentist’s office, on Witherspoon Street near Community Park, but kept

their first location, Martin’s former living quarters on Witherspoon

Street.

"We are centralized here," says Martin. "With five sales people,

you’ve got to stay on top of them." He is adding a layer of

management. "We’re big enough now – in the last six months we hit the

20 employee mark – that we have to be organized and do performance

reviews and track vacations and healthcare." Instead of running his

financials off a spread sheet, he hired his mother as a part-time

bookkeeper. A director of content, Geoff Seiler, recruited from

Bloomberg, joined Indie last month.

When things get frustrating, and they do, Community Park is right next

door. "Every day we are playing basketball or soccer or golf," says

Martin.

Martin and Szerek learned multiple lessons from their first run at the

brass ring, some from their visionary investor, Wetherell. "He put $2

million in our company when we were still teenagers, and I am forever

grateful and indebted for that opportunity. Just the value of the

education was tremendous," Martin says.

He points out, nevertheless, that the same person who can spot

potential in a business is not necessarily the right person to it.

"CMGI folded like a house of cards, worth close to $1 billion at the

height of the bubble, and after the crash went back to a half a

billion."

From his angel investing experience, Martin learned not to enter the

fast growth contests, the ones where you fill out an application and

get your growth numbers validated by a Big Three accounting firm for

the glory of the growth charts. That’s because he doesn’t think

investors care about contests. After he sold Raging Bull he joined

Jumpstart New Jersey, the member-led angel investing group, and he has

heard dozens of CEO presentations. "I have done a lot of angel

investing, and at the end of the day I don’t really care about what

awards they have or what media attention they getting, it’s the bottom

line. We are just trying to grow the business, and it’s the bottom

line performance that really counts."

From his experience with Raging Bull, Martin learned that press

coverage does not help a CEO meet payroll. "We got an incredible

amount of media attention, from CNBC, the Wall Street Journal, and

Entrepreneur Magazine. It did help validate us. Starting a company is

hard. Doing it for the first time is really hard. But now at least we

know we can do it and have done it. The media attention is a less

important for us. What matters is `did you close a sale today, did you

make your customers happy, did you help us get into a hedge fund?’"

That doesn’t mean he wants to be invisible. "Buzz," the

under-the-radar type of public awareness, is very important he says.

"Buzz in Princeton would help us to hire smart people."

Does the future hold a return to college? Maybe later. "When we sold

Raging Bull, all my friends were graduating and moving through a

traditional job route," says Martin. "We were working for ourselves.

We wanted to be creative and approach things our own way."

Down the road, Martin and Szerek might very well sell their data base

business, InsiderScore. "That business fits in very well with the

bigger players," says Martin, reeling off names like Reuters, Dow

Jones, S&P, and Thomson. "They are very acquisitive. They have

hundreds of thousands of customers on their platform. If they can add

really cool products to the existing customer base – they would

acquire the business, take the costs out of it, and upsell it to

existing customers."

Until then, the two maverick entrepreneurs will get along without

bachelor’s degrees. At 28, Martin says he can trade on his youthful

penchant for innovation. "We innovate more in an afternoon than most

companies do in six months," he likes to say. "We are young, hungry,

and nimble."

But he does not worry about being too young. "I was actually pretty

concerned when I was 19, 20, and 21. Now my track record speaks for

itself. Plenty of guys are running hedge funds at my age."

Indie Research LLC, 254 Witherspoon Street, Princeton 08542;

888-278-5515; fax, 208-275-7280. William C. Martin, principal.

www.indieresearch.com

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