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Jon Stein. He\u2019s the CEO and founder of Betterment. With his passion about making life better and his career experience advising banks and brokers, he founded Betterment in 2008. Jon is a graduate of Harvard University and Columbia Business School. He holds a Series 72463 and he\u2019s a CFA (Chartered Financial Analyst). His interests lie in the intersection of behavior, psychology and economics. What excites him most about his work is making everyday activity and products more efficient, accessible and easy to use.

Famous Five:

• Favorite Book? \u2013 The First Tycoon: The Epic Life of Cornelius Vanderbilt
• What CEO do you follow? \u2013 Jeff Bezos
• Favorite online tool? \u2014 Greenhouse
• How many hours of sleep do you get? \u2014 6-7
• If you could let your 20-year old self, know one thing, what would it be? \u2013 Jon could have taken risks a bit earlier in life

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Time Stamped Show Notes:

• 01:15 \u2013 Nathan introduces Jon to the show
• 02:05 \u2013 Betterment is the largest independent investment advisor online
  • 02:10 \u2013 Betterment manages your money in the way old institutions can\u2019t
  • 02:19 \u2013 Betterment automates the best practices of investing and the same technology drives the cost down for you
  • 02:32 \u2013 Betterment is leading in their industry
• 02:45 \u2013 Betterment charges a fee that is the percentage of the asset finder management
  • 02:50 \u2013 It is 2.5%, which is the lowest in the industry
• 03:15 \u2013 \u201cWe have to put our customers\u2019 best interest first\u201d
• 03:30 \u2013 Betterment currently manages $8.2B
• 03:50 \u2013 Jon studied economics and behavioral biology as an undergraduate
  • 03:58 \u2013 When Jon graduated from Harvard, 80% of the graduates took to the finance industry
  • 04:47 \u2013 Jon didn\u2019t want to follow the people he knew in finance
  • 04:31 \u2013 Jon wanted to help people so he thought he\u2019d study medicine
• 04:50 \u2013 Jon found himself back in New York, consulting banks
  • 04:58 \u2013 It was 2001-2002 when Jon got his pre-med from Harvard
  • 05:13 \u2013 Jon was 23 when he went back to New York, in 2003
  • 05:45 \u2013 The banks were not paying attention to what their customers wanted
  • 06:58 \u2013 Jon realized that the industry was fundamentally flawed
  • 07:12 \u2013 There was no scaled advisor that served the market and the people like Jon could
• 07:28 \u2013 Jon started at Columbia Business School in 2008 and he already the idea for Betterment even before he started there
• 08:10 \u2013 Jon didn\u2019t know how to code when he started and just learned in business school
• 08:46 \u2013 Jon didn\u2019t have student debt while he was in business school and he saved some money from his consulting
• 09:14 \u2013 During the early days, Jon and his co-founders didn\u2019t need a lot of money
• 09:30 \u2013 Jon and his co-founders have invested their own money into Betterment
  • 09:39 \u2013 Their initial investment was less than 400K
• 10:14 \u2013 Betterment has raised a total of $205M
• 10:34 \u2013 \u201cI always wanted to build a company that would impact the lives of millions of people for the better\u201d
• 11:04 \u2013 From Day 1, Jon knew that Betterment would be a capital intensive business
• 11:20 \u2013 Team size is 220
  • 11:26 \u2013 About half of the team are engineers and product managers
  • 11:31 \u2013 Most of the team is involved in building the business
• 12:14 \u2013 Most of Betterment\u2019s customers are from word-of-mouth
• 12:46 \u2013 Betterment\u2019s paid acquisition
• 13:03 \u2013 Betterment\u2019s goal as a company is to make noise
• 13:11 \u2013 There\u2019s now a better way to manage money
• 14:11 \u2013 People should put their money in Betterment rather than in Vanguard because they\u2019re burning money
  • 14:18 \u2013 Betterment can make them more money on their assets
  • 14:39 \u2013 Warren Buffett is an active investor himself
  • 14:45 \u2013 Jon thinks that Warren Buffett\u2019s advice was great during his time, but the technology has moved forward
• 15:11 \u2013 Betterment will make you more money than you would make in a single fund
  • 15:27 \u2013 Betterment\u2019s website has all the information about how they work
• 16:00 \u2013 Betterment\u2019s role is to maximize people\u2019s money
• 16:07 \u2013 Vanguard is a fund company that sells you funds
• 16:10 \u2013 Betterment is independent from their funds
• 17:17 \u2013 \u201cWe are growing faster than any firm in the history of this space\u201d
• 17:42 \u2013 People are becoming aware of what Betterment is doing
• 18:21 \u2013 240K customers have invested in Betterment
  • 18:44 \u2013 There\u2019s no minimum amount to invest
• 19:24 \u2013 \u201cWe\u2019re building an institution for the next century and we\u2019re not interested at selling right now\u201d
• 19:35 \u2013 Betterment\u2019s revenue is driven from their 2.5% of the asset management finder
• 19:48 \u2013 Average revenue
• 21:05 \u2013 The Famous Five

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3 Key Points:

1. Just because it has worked in the past, does NOT mean it will still work today.
2. There are better ways to manage your money, especially with the new advancements we have in technology.
3. Take risks as early on as you can.

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Resources Mentioned:

• The Top Inbox \u2013 The site Nathan uses to schedule emails to be sent later, set reminders in inbox, track opens, and follow-up with email sequences
• Organifi \u2013 The juice was Nathan\u2019s life saver during his trip in Southeast Asia
• Klipfolio \u2013 Track your business performance across all departments for FREE
• Acuity Scheduling \u2013 Nathan uses Acuity to schedule his podcast interviews and appointments
• Host Gator\u2013 The site Nathan uses to buy his domain names and hosting for the cheapest price possible
• Audible\u2013 Nathan uses Audible when he\u2019s driving from Austin to San Antonio (1.5-hour drive) to listen to audio books
• Freshbooks \u2013 Nathan doesn\u2019t waste time so he uses Freshbooks to send out invoices and collect his money. Get your free month NOW

Show Notes provided by Mallard Creatives