eToro: Building the World's Largest Social Trading Network
Social trading platform eToro was preparing for the launch of its expanded offering in the U.S. The company faced critical decisions regarding product-market fit, go-to-market strategy, positioning and monetization. Moreover, it faced the challenge of how best to make its social features relevant to U.S. consumers. eToro was founded in Israel in 2007, with a mission to democratize investing. The cofounders, the Assia brothers, were determined to open the global markets for everyone to trade and invest in a simple and transparent way. By 2020, eToro's customers in most countries were able to trade multiple assets, and in most territories the company offered zero commission stock trading. The vast majority of its users shared their investment strategy, and others in the community could review and even copy their portfolio with a single click. A subset of users were able to garner a large following and become "investment celebrities," enjoying fame and often fortune. Figuring out the best path forward with respect to the U.S. launch was complicated by shifts in the competitive landscape, which had seen consolidation of large players in the U.S. market and the emergence of fintech firms that offered zero commission trading and appealed to millennials. The U.S. regulatory approval was a pivotal milestone in eToro's evolution. But with a limited suite of products, a modest community and a market where zero-commission stock trading was already commonplace, the management team deliberated on what it would take to make inroads in the U.S. and what success could look like.