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Quants in Utopia? Quantopian and Its Crowd Wisdom Hedge Fund Model  
Product Ref: 17/592C Company: Quantopian

Product Type: Case Industry: Hedge Fund Industry

Related Product(s): Teaching Note
Authors: Yanfeng Zheng   
The case describes how Quantopian, a Python-based trading-algorithm development and backtesting platform, leverages its community of quantitative traders (ˇ§quantsˇ¨) to develop a novel crowdsourced hedge-fund model. The case provides an overview of the existing hedge-fund industry and illustrates a few potential issues to be addressed by startups. The case also introduces crowdsourcing as a novel business model and its applications in the emerging financial-technology (ˇ¨Fintechˇ¨) field. The instructor can connect the case to the fundamental design of organizations based on contractual arrangements and how exactly a crowdsourcing model challenges conventional wisdom about organizing business activities. The instructor can also stimulate a discussion on alternative growth models or strategies for Fintech startups, such as Quantopian, and practical solutions to challenges.
Functional Area : Strategy & General Management

Learning Objective: After reading and analyzing the case, students will be able to:
1. Identify key types of Fintech and explain their applications.
2. Review the conceptual foundations of crowdsourcing and illustrate applications of each specific crowdsourcing model in a broader context.
3. Inspect crowdsourcing business models in financial services, especially those that rely on crowd wisdom; analyze key elements of each model; and evaluate each modelˇ¦s strengths and weaknesses.
4. Examine details of Quantopianˇ¦s business model and assess its potential to disrupt the existing hedge-fund industry.
5. Compare Quantopianˇ¦s crowd-wisdom approach with its direct (e.g., QuanConnect) and indirect (e.g., Numerai) competitors; analyze the subtle differences; and explain why they made different business decisions with a similar crowd-wisdom approach.
6. Discuss the alternative models that Quantopian could adopt in the future, and apply both theoretical and practical knowledge to offer reasonable action plans for such models.
Length: 27 pages Country: United States of America

Pub. Year: 2017 Level of Difficulty: 2
This product type is available in the following language(s):      English
Related Information: N/A
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Case (17/592C) HK$58 / US$7.5
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