Ever since he watched a classic 1982 movie called “Firefox” starring Clint Eastwood and featuring a fighter jet with thought-controlled weapons, Dr. Schalk has dreamed of using machines to decode human thoughts and emotions. This is done through biosignals or any signal from living beings that can be.
After years of education, research, and major accomplishments, Dr. Schalk is now on a venture to revolutionize the way decisions are being made with investments through this same technology. Imagine being able to get trusted information from the tone of voice of the CEO on a publicly-traded earnings call and use it as additional information to make investment decisions.
That’s why he co-founded Helios, an alternative approach to alpha generation. With Helios, investors get access to additional sources of information through the technology of biosignals.
An Overview of Dr. Schalk’s Background & Accomplishments
Dr. Schalk is an entrepreneurial-minded engineer and scientist who specializes in Artificial Intelligence (AI)/machine learning, advanced signal processing, statistics as well as software engineering. He has used his studies and specialties to apply to both the FinTech industry and improve the functionality of medical devices.
A Founder Who Has Impacted Millions
Dr. Schalk’s expertise has been of good use to say the least. Currently, he is the co-founder of Helios which started in 2017. He has also applied his skills in multiple other companies as co-founder, namely:
- Co-founder of Neuroanalytics, Inc. (2014 – 2015): Neuroanalytics focuses on the interpretation of brain signals to optimize information from focus groups.
- Co-founder of Neurolutions, Inc. (2008 – present): Neurolutions focuses on brain-based rehabilitation of people with chronic stroke; currently in Series B round of funding. (www.neurolutions.com)
- Co-founder of FSSF Software Training, Inc. (1990 – 1995): A European software training company.
Major Accomplishments
It’s no wonder Dr. Schalk is considered an expert in both science and technology. His accomplishments are many, including:
- Conceived, implemented, and project managed the most widely used general-purpose software for brain-computer interface research. The use of the software was featured numerous times in the media (e.g., Scott Pelley/60 Minutes, Katy Couric/MSNBC, CBS Sunday Morning).
- International recognition as neuroscientist/neuroengineer (130+ papers, 1 book, 17 chapters; several patents; 18k total citations; H factor 54; listed as 5th most productive scientist worldwide in brain-computer interface research; organizer of 26 workshops; >230 talks worldwide; acquired >$18m in federal grants).
- Invented, developed, and licensed a novel functional mapping procedure that improves brain surgery, leading to an entirely new product line.
- Invented, developed, and licensed a novel device for material testing, leading to an entirely new product line.
Featured Publications
Furthermore, Dr. Schalk has been featured over 100+ times in numerous in national/international media such as:
- New York Times Magazine
- Discover Magazine
- NPR
- CNN
- Michio Kaku’s “I know what you are thinking”
- Technology Review
- Wired
- The Atlantic
He has also been highlighted in several well-known science books such as:
- Al Gore’s “The Future: Six Drivers of Global Change”
- “The Brain Electric: The Dramatic High-Tech Race to Merge Minds and Machines”
- “The Body Builders: Inside the Science of the Engineered Human.”
On A More Personal Note…
On a more personal note, Dr. Schalk’s hobbies include football, powerlifting (bench press, squat, and deadlift), cooking (Sichuan and Hunan Chinese), and studying Mandarin Chinese. In fact, he was a defensive end football player for the #4 semi-pro American football team in Europe. Their team was also a 3x Austrian champion.
How Dr. Schalk Came to Partner & Co-Found Helios
Throughout his career, Dr. Schalk worked on advancing scientific concepts, engineering concepts, and clinical concepts to test and develop new neurotechnologies. He applied the findings and developments to basic research in their respective industries. These developed tools revolutionized the way we study the brain and deepened our understanding of brain function. These new understandings lead Dr. Schalk to develop new clinical tools for the diagnosis and treatment of the nervous system and its functionalities as well.
These new understandings, combined with innovating technology and software programming, allowed them to submit studies of brain signals and anatomical behavior measurements to modern software and technology. The result of combining the studies of the brain with applied technology is a new understanding of human behavior and how we make decisions.
This work provided him with a unique background in advanced brain/biosignal analysis related to human emotions and language function, turning these analyses into useful software products, and pursuing commercial endeavors resulting from this work. This background put me in an ideal position to pursue my latest venture Helios. With Helios, we’re utilizing this technology to advance how investors make decisions on their chosen investments.
“What is Helios, and why it matters” In Dr. Schalk’s Own Words
“In my present function as Chief Scientific Officer at Helios Life Enterprises, I lead the scientific and technical development of COMPREHEND, the first system that can extract important information about equities from the tone of an executive’s voice during earnings conference calls. Helios is currently the only commercial venture worldwide that generates such information from the tone of the voice of company executives.
Executives distribute substantial amounts of information in earnings conference calls. For decades, investors have been guiding their decisions based on information derived from WHAT words an executive is saying. However, there is overwhelming evidence from social psychology and neurolinguistics literature that the tone in the voice, that is, HOW the words are being said, holds independent and vital information.
Our flagship product, COMPREHEND, is the first and currently only widely available data product that delivers comprehensive and accurate analytics of an executive’s voice in earnings conference calls. With COMPREHEND, you tap into another layer of understanding that allows an analyst to make wiser and more effective trades. With the present product, we see a predictive value for immediate market reaction and analyst earnings forecast revisions. COMPREHEND is a novel source of alpha for quants and fundamental analysts.
Helios has rapidly attracted significant attention in the industry due to its unique and highly differentiated focus on the tone of the voice. Indeed, our presentation of COMPREHEND won a competition against 20+ other companies at a large FinTech conference in New York City earlier this year.”
On A Venture to Bring the Next Wave of Financial Technology to Life
Updates by executives of growing companies about the past and future performance provide significant insights for an investor about fundamental aspects of the company. These company updates have been scrutinized by professional analysts and private investors alike for decades.
While there is overwhelming evidence from social psychology studies, neurolinguistic literature studies, and even from Dr. Schalk’s personal experience that the tone of the voice gives us vital information, this information has not been systematically captured.
Thus, when an executive sounds nervous in his response to a probing question but nevertheless makes positive statements, the nervous tone may indicate that the executive is not certain about the answer he is giving. Helios’ COMPREHEND system taps into this new layer of understanding, which allows funds to more completely understand companies and use this improved understanding to make wiser and more effective trades.
How Does This Technology Apply to The Financial World?
Helios’ COMPREHEND system can be useful in a number of scenarios in the financial world. First, it produces about two dozen features that together describe the executive’s voice during an audio recording.
Voice Variations on Earnings Calls
For example, these features quantify the executive’s voice intonation, accent, speed, volume, and inflection, as well as the tone of the voice. These data can be useful to quantitative analysts in large funds because they are predictive of important financial indicators.
An example of this could be how an uncharacteristic rhythm in speech may indicate that the executive is uncertain about statements he/she is making, and thus may be indicative that analysts’ predictions about future earnings that are only considering the words in the executive’s statements may be somewhat incorrect.
Vital Information for Fundamental Analysis
Furthermore, COMPREHEND can also be useful to more fundamental analysts who are trying to understand a firm more comprehensively. To do this, COMPREHEND can detect the level of distress in an executive’s voice in response to specific questions. This information can be helpful to understand particular aspects of the company.
For example, if an executive is pressed about whether or not the firm’s supply chain in China is impacted by COVID-19, the executive may respond with a rehearsed statement that does not fully reveal the executive’s knowledge of the subject matter, but a high level of distress may indicate the executive’s true concern about this specific aspect of the company.
These two applications of Helios’ COMPREHEND technology are just the beginning because voice recordings are ubiquitous, and systematic understanding of a person’s emotional state using voice analytics can be useful in many other financial and non-financial domains.
Aside from all that, it may be useful for more completely interpreting statements made by the Chairman of the Federal Reserve, it may indicate that a customer calling into a call center is becoming increasingly distressed, or it could indicate that a psychiatric patient exhibits characteristics of psychosis.
Helios Technology Has Potential To “Unlock the Mind” Of Investors
Professional and private investors alike have intense interest to best understand the companies they invest in. Because they do not have direct access to all information within the purview of these companies, they rely on understanding the statements of the companies’ executives. For decades, the primary way to achieve this understanding has been to scrutinize the words spoken by the executive.
However, ever since seminal academic work in the late 60s, we know that humans communicate through different channels such as words, body posture, facial expression, and the tone of the voice.
Moreover, this work has shown that some of these channels can be controlled better than others. In particular, studies indicated that the tone of the voice gives away specific information that is not present in the verbal, can be less well-controlled than facial expressions, and hence is a better indicator of deception than facial expressions.
Indeed, it is becoming increasingly accepted that facial expressions are not reliable passive indicators of emotions but rather are actively used by humans to guide (or one could say manipulate) social interactions. Thus, by using AI technology to analyze the tone of the voice, it is possible to better describe the emotional state of the executive, and, in this way, “unlock the mind” of the executive.
