Plus, Jon’s take on why now is a good time to start a business — in spite of market uncertainty.
Today’s callers: Dan from Washington considers new offerings beyond his core loose leaf yerba mate product. Then, Mike from New Hampshire wants to expand his woodworking business beyond his basement, without taking on debt. And Maggie from Georgia wonders how to respond to rising customer acquisition costs for her soccer-themed dog brand.
Thank you to the founders of Heretic Yerba, MTS Woodworking, and Floofball for being a part of our show.
If you’d like to be featured on a future Advice Line episode, leave us a one-minute message that tells us about your business and a specific question you’d like answered. Send a voice memo to hibt@id.wondery.com or call 1-800-433-1298.
And be sure to listen to Betterment’s founding story as told by Jon on the show in 2018.
This episode was produced by Noor Gill with music by Ramtin Arablouei. It was edited by John Isabella. Our audio engineer was Kwesi Lee.
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Recent market swings are causing whiplash for everyday investors. Sarah Levy, CEO of digital investment platform Betterment returns to Rapid Response to shed light on a market in flux. Levy explores the evolving volatility of crypto, socially responsible investing, generational attitudes to finance, and more. Amid the noise around our economy, Sarah offers a clear-eyed vision to help everyone find their own unique approach to money.
Visit the Rapid Response website here: https://www.rapidresponseshow.com/
See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.
It may appear off-brand for Betterment, a digital investment adviser, to acquire a cryptocurrency investing platform. But CEO Sarah Levy explains that Betterment, positioned around its long-term diversification philosophy, has approached this volatile space with their tried-and-true principles top of mind. “Once we believe that an asset class is here to stay,” she says, “the question is: how do we responsibly incorporate that alongside a traditional investment strategy?” Levy, who became CEO in the midst of the pandemic, offers an intriguing perspective on how new, fast-moving digital finance platforms are shifting the norms of the industry. “We are not saddled with legacy businesses here that prevent us from chasing new dreams.”
Read a transcript of this episode: https://mastersofscale.com
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After a gloomy March and a proverbially rainy April, May has shaped up to be a – dare one say it – positive market from a macro market perspective.
Despite the ongoing tragedy of the global coronavirus pandemic, investors appear to be buying. The S&P 500 broke 3,000 for the first time in March and the Dow is up broadly on positive sentiment that efforts to reopen businesses in the U.S. – all in the hopes of coaxing back consumers – will be successful. Yet despite the sense of optimism, analysts hesitate to call it a clear win, given the risks that remain.
The Block sat down with John Stein, co-founder of robo advisor firm Betterment, who spoke about the macroeconomic picture in the context of his firm’s clients. Stein remarked that while the first quarter of 2020 was a strong one for signups – April even more so – the company has nonetheless felt the pinch amid difficult market conditions.
“Our revenue is tied to assets under management. We see our pain, our own accounts are down. You know, my personal account is affected by a downturn in the market. And our customers feel that.” he told The Block. “But overall, our customers are staying the course.”
We also explore:
How Betterment has fared in a world where remote work is the rule, not the exception
The ways in which the firm’s customer base reacted to this year’s market turbulence
How the first quarter of 2020 was one of Betterment’s best
Its checking account product
Staying competitive in a hyper-fast space where all eyes are on the market
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When Tobias Lütke started Shopify, he wanted to empower merchants to start small and build resilience. Tobi spoke with Guy about the relevance of those principles in 2020, as he explains the rise of Shopify sign-ups during the pandemic. Jon Stein spoke with Guy about starting Betterment in the wake of the 2008 recession, and why this economic downturn could be the perfect time to start a company. These conversations are excerpts from our How I Built Resilience series, where Guy talks online with founders and entrepreneurs about how they're navigating these turbulent times.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.
Jon Stein is the Founder & CEO @ Betterment, the online financial advisor built for people who refuse to settle for average investing. To date, Jon has raised $275m in VC funding with Betterment from the likes of Bessemer Ventures Partners, Menlo Ventures, Kinnevik and Francisco Partners, just to name a few. Prior to founding Betterment, Jon spent 4 years as a consultant at First Manhattan Consulting Group where he really honed his experience in working with banks and brokers including revitalizing a bank in Australia with the launch of a best-in-market auto-finance offering, resulting in 50% lift to revenue. As a result of his phenomenal success with Betterment Jon has won many awards including Fortune's 40 Under 40.
In Today's Episode We Discuss:
How Jon made his way into the world of startups and came to found democratize the world of investing with Betterment?
When does Jon believe is that critical moment when the founding team must hire their first employee? What is the right strategy to build the candidate pipe for hiring those first employees? Where does Jon see many go wrong here? What 1-2 questions does Jon always find the most enlightening to ask in the interview?
Once hired, what have been some of Jon's biggest lessons in terms of optimising the onboarding experience and the first 60 days? How has their process changed over time? How does Jon determine when a stretch candidate is a stretch too far? If so, what does Jon believe is the right way to let go of an individual?
What does Jon believe to be the 3 core roles of the CEO in any company today? From those, what has Jon found most challenging? What did he do to level up and overcome the challenges? How does Jon approach transparency with the team in delicate cases like fundraising and acquisition etc?
With the team and product in place, scale can occur, what are the 2-3 things that all companies need to focus on when product market fit has been achieved? How does Jon determine when is the right time to really put the pedal to the metal and scale?
Jon's 60 Second SaaStr:
Jon's favourite book and why?
What does on know now that he wishes he had known at the beginning?
What is Jon's biggest strength and weakness?
Read the full transcript on our blog.
If you would like to find out more about the show and the guests presented, you can follow us on Twitter here:
Jason Lemkin
Harry Stebbings
SaaStr
Jon Stein
When Jon Stein realized he couldn't stand the sight of blood, he gave up the idea of becoming a doctor. Instead, he went into finance, but soon grew restless with "helping banks make more money." So he decided to build a business where he could help everyday investors make more money: an online service that would use a combination of algorithms and human advisers. Jon launched Betterment at a precarious time — shortly after the financial crash of 2008. But today, the company has roughly 13 billion dollars under management. PLUS in our postscript "How You Built That," how Gerry Stellenberg combined his knack for technology and his love for pinball to create the P3: a pinball machine that allows a real-life ball to interact with virtual objects.
See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.
My guest today is Dan Egan, who is the managing director of Behavioral Finance and Investing at Betterment. In this wide-ranging role, Dan has his hands is most of the ways that Betterment interacts with its clients and how it invests their money. This is one very interested and smart guy who is clearly passionate about helping investors make better decisions. In this conversation, we explore everything from science fiction, automation, investor behavior and how Betterment tries to solve problems that goes beyond the automated asset allocation that is their bread and butter.
Please enjoy.
For comprehensive show notes on this episode go to investorfieldguide.com/egan/
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on twitter at @patrick_oshag
Would you be comfortable with a robo-advisor running your entire investment portfolio? That’s the hope of our guest this week, Jon Stein, founder and CEO of Betterment. Betterment manages $5 billion dollars for over 175,000 clients. Patrick and Jon explore the challenge of getting young people to invest, Betterment’s recent foray into areas like the 401(k) market, and how Betterment works with financial advisors. If you’re unsure about robo-advisors, this conversation will make you better understand what they can do for you. Please Enjoy!
For comprehensive show notes on this episode go to investorfieldguide.com/stein/
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on twitter at @patrick_oshag
