Welcome back for the next episode of the Fintech OG series!

This week I'm excited to have Jon Stein of Betterment and Alexa von Tobel of LearnVest and Inspired Capital on the podcast. Beyond their professional insights, both of them offered candid reflections on personal growth, the future of personal financial management, and where fintech is headed next. By sharing their professional achievements (selling a company hours before giving birth to their first child), key choices, personal setbacks (getting TechPunched) and times of struggle, there's a lot of great advice for listeners, whether in fintech or not.

Don't forget to follow, like and share the podcast!

‎The This Week in Fintech Podcast: 🎧The Fintech OG Series: Jon Stein and Alexa Von Tobel on Apple Podcasts

‎Show The This Week in Fintech Podcast, Ep 🎧The Fintech OG Series: Jon Stein and Alexa Von Tobel - Apr 23, 2024

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Transcript

 Hey everyone, time for the next episode of the FinTech OG series. This time I have Jon Stein, who is probably best known for co-founding Betterment, the robo advisor. But he's working on something really cool , that's new as well as Alexa von Tobel who's best known for co founding and selling LearnVest to northwestern mutual and is now the founder of inspired capital which has invested in a bunch of the companies that You guys know very well, we talk a lot about personal finance, of course, since that's where their bread and butter is and why they think, you know, we have made some progress in the space, but it still feels like there's so much room left for development and talked to them a little bit about where they see the future of FinTech headed as well.

So, I hope you enjoyed this episode.

Don't forget to follow and like us on Spotify, Apple, or wherever you listen to podcasts.

Alexa von Tobel is the founder and managing partner of Inspired Capital, a 500 million plus early stage venture capital firm. Prior to Inspired, Alexa founded LearnVest [00:01:00] in 2008 with the goal of helping people make progress on their money. After raising nearly 75 million in venture capital, LearnVest was acquired by Northwestern Mutual in May of 2015 and one of the biggest fintech acquisitions of the decade.

Also, I believe it was like two days before she gave birth to her first baby. Following the acquisition, Vontoble joined the management team of Northwestern Mutual as the company's first ever chief digital officer. She later assumed the role of chief innovation officer and Through which she oversaw Northwestern Mutual's venture arm.

She holds a certified financial planner designation and is a New York Times best selling author of Financially Fearless and Financially Forward. She is also the host of The Founders Project with Alexa von Tobel, a weekly podcast with Inc that highlights top entrepreneurs. Originally from Florida, Alexa attended Harvard College and Harvard Business School before settling in New York City, where she currently resides with her husband, Cliff, and three children, Toby, Cashel, and Rosie.

Jon [00:02:00] Stein is a serial entrepreneur, founder, and advisor. He is founding CEO of Betterment, the first and largest independent robo advisor, which he launched in 2010. Betterment started with a vision of access for all to smarter investments and growing it into a market leading pioneer in wealth management, workplace retirement benefits and RIA services with more than 45 billion in assets under management and 850, 000 customers.

He's currently building something new. Jon earned an MBA from Columbia Business School and a BA in Economics from Harvard University. He lives in Pound Ridge, New York with his wife and three children. 

Alexa: And so we just, just moved, we literally can't,

Julie: It [00:03:00] looks like Soho area.

Alexa: we are Jon, you'll remember I don't leave one block, one block radius, same block.

jon: 13th Street,

Alexa: It's really, it's, we're on 12th street and Broadway. LearnVest headquarters were the literal catty corner of this block. The original address on the street. But yeah, so here, and I mean each funds now about, you know, 300 ish million and we just rent and repeat more early stage and it's with all people I love and I've worked with for a long time.

Julie: Very cool. Let's take a step back a second. How did you guys first meet? Cause you both were early FinTech and both early FinTech, like Robo advisor, wealth management type space. I have Alexa

Alexa: I started LearnVest in 2007, if I remember correctly, Jon, 2009.

jon: That's right. And I saw Alexa present at TechCrunch I think I wasn't in the audience. I think I watched like the online version and I thought it was so [00:04:00] cool and so impressive and I wanted to be like her. So that's, that's, that was like, that's why I applied to TechCrunch. That's why we went that route.

You know, you, you sort of, you, you laid the path.

Julie: 401k provider then.

Alexa: Oh my God. I love you guys. First of all, you know, I needed this today. I've got, you know, two months to go to school. Mom's like struggling to get out the door. I'll just do your podcast all day long. No, I mean, it, it's sort of silly, but Jon in the rear view mirror, I think you and I probably at the time, like knew what we were doing was a little out there and a little quirky.

Yeah. When you look back, it seemed like the most logical products on the planet. I mean, it almost, we weren't innovating, if I'm honest. Though I remember actually that TechCrunch that you saw me at that inspired you to go, they hated what I was doing. They literally, it

jon: were hard on you I remember that I remember that it was, it was

Alexa: terrible idea. No one

jon: unfairly so, I'll

Alexa: with

Julie: When you [00:05:00] say they do you mean like the interviewers or who was hard on you? Okay. Got it Okay,

Alexa: We're like, there were four panelists and they were like, people won't, I mean, that's back to Jon sort of the point in the rear view mirror barely felt like we innovated because it seemed so obvious at the time people were like, why would people manage money on their phone?

Young people won't trust online. Why would they gamify? Their wallet. And I just was like, and I joke, my husband likes to joke that, like, you could just literally have like Betterment, Robinhood, Coinbase, like Chime. And you would just be like, that was the next decade of what happened. 

jon: I was, so I was, I just, I was at a conference this whole week. I just got back from Vegas. And I, this was the first, it was an investment advisor technology conferences, the first of these conferences I've been to in a few years. And in a way it [00:06:00] was great to be back out there and to hear, you know, and to see people I've known for a long time, but hadn't seen in a while and and to hear some of the state of the art.

But in a lot of ways. It was, I was shocked at how the state of the art in that space is like, just kind of catching up to what we were building 10 years ago, right? Like it's, it's, they're, they're getting there, but like it's account onboarding, it's it's tax management, it's personalized portfolios.

It's making. You know, you can, you can get into imagine a portfolio of ETFs relatively easily, but that's like just now, like that's the cutting edge. That's the features that these firms are selling to investment advisors. And at the same time, there was a theme that came up. I can't even tell you how many panels I saw where they talked about robo.

They talked about like robo advice and how like, Oh, that idea, you know, that idea has failed or like that idea was proven wrong or something like this. And it's, it's interesting to me because literally everything else that they go on to say they're doing are things that we introduced to the space, you know, [00:07:00] like it's all the things that we were talking about, you know.

Access. I think the one thing that they'll, that they'll probably rightly beat up on, on, on at least Betterment for is, is like this idea that some in the industry had that like people would give up their financial advisors and go to, you know, a totally online platform. And that hasn't happened as much, right?

Like probably some people have done that, but the majority of people with an advisor still have an advisor. And, you know, I think that folks like, like Betterment have served maybe an investing middle class, right? That like was really underserved before people with, you know, 50, 000 or 250, 000 or whatever, who weren't interesting to an advisor before and like didn't have great options from Schwab or Vanguard or whatever.

And so like, you know, we're providing a really great managed platform for, for, for folks like that. Anyway, I just thought it was interesting how, like, so much of, as you were saying, Alexa, so much of what we were talking about is [00:08:00] now, like, finally, the industry is catching up and it's, it feels obvious today I think it felt probably obvious to you at the time that, if, if, if you think back that, like, things were going, going to have to change.

Alexa: think if I remember specifically some of the stuff that got under my skin and kind of became like why I was so focused on building LearnVest. You actually couldn't open an account at a TD Ameritrade or if you didn't have a balance of over 5, 000, like. They wouldn't let you open investing accounts without fees.

And in some cases it was just like the account minimum was 5, 000. And so you'd be like, well, this is just glaring red lights to a young person being like, this isn't for you. You're not there yet. Cause you don't have 5, 000 in your, you know, your IRA or your investing account. And so I mean, that's where we were.

And now, Being able to, you know, open up and democratize the category, by the way, and I'm [00:09:00] sure Jon, you agree with me. There's so much more that needs to be done while, like, I think we've made a dent in lowering the bar for access to advice. I mean, the problem was financial planning was a luxury product and that's just insane.

And if you, it would literally be the equivalent of healthcare said, we'll only see you. Jon, if you're perfectly healthy, you're like, what if you have enough money that to meet a bar where you're actually not in crisis, we will talk to you. It's like truly that wild. And so that bar because of robo advice and all these other things, you can automate it through algorithms.

You can actually help more people. But I still think the advice part of the world has not gotten to where it is. And hopefully AI does some great work there. 

Julie: Me

Alexa: Have lowered their bar, but, but it kind of feels like the category still needs a lot of

Julie: Well, let me ask, when you guys were starting this space circle like 2007, 2008, would you have thought we'd come farther by 2024 than we have in the PFM space? Cause that was [00:10:00] something I had Max Levchin and Jackie Reiss on and one of my questions is where do you think FinTech has failed over this time frame?

And one of them is like we haven't had a Super successful PFM yet. Like there's been like some movement here, but there hasn't been like this just Way for

jon: spend shut down.

Julie: Yeah. Yeah, like all like these companies will go so far and then they end up for whatever reason Not becoming like a square Or a stripe or some sort of like 40 billion company.

And that solves all these problems. And I feel like you two are, if I had to pick like a couple of people that could answer this question, well, you would be two of those people, right? Cause you have so much knowledge in this space.

jon: I think Mint launched in either the same year as you, Alexa, or year before or after. I forget. But around the same

Alexa: It got acquired the day I launched at TechCrunch literally an hour before I went on stage, they got acquired out directionally, right for a hundred and [00:11:00] call it 70 million, one hour. And I remember being like, I'm launching after that is what, and then I had a moment where I was like, that's good. That means I can come in and do something meaningful in the category.

But they were about two years older.

jon: would have thought that product would continue to develop and, you know, and automate so much of your financial life. When I started Betterment, you know we, We talked about this roadmap of like three years that probably took us 10 years to build, you know, we'll have your, your 401k, your, your saving and investing accounts, your checking, blah, blah, blah.

Like all these things. And it all works seamlessly together. I think things took us longer. It took, it's taken the industry longer to change than I thought in a lot of ways. 

Julie: And why do you think that is? Do you think it's just like human nature is really hard to change or why, why has it been so slow and difficult to really make more than a dent in [00:12:00] the category?

jon: it's partly that I think there's a lot of reasons. I think it's partly that it's partly brands. And, you know, it's hard to displace you know, Bank of America or Chase, right? Like, these are just big, big brands. 

Julie: They're often just like good enough for a lot of people, right? Like you look at new bank down in Latin America, like they had a horrible system down there. So of course, like having this really good digital bank and whatnot is a lot easier to just build into this multibillion dollar company. Whereas in the U S like.

Yeah, I prefer using SoFi and Chime in these apps, especially because the better interest rate, like I don't hate like JP Morgan's app is pretty good.

jon: It's gotten a lot better, right? Over the last, over the last decade. I think that, that's, I think part of it is just the, the brands. Part of it's like you know, you have to be so much better to get somebody to leave. It's a pain to, to switch accounts. It's a pain to have multiple accounts. People prefer consolidation.

Share your thoughts And so there's a thing that happens in financial services where, you know, even if you start in a niche, like maybe New Bank or SoFi is an example here that probably a lot of people familiar with [00:13:00] started in student loans, but like, you know, eventually, okay, we'll offer all the financial services, you kind of have to become Bank of America, you have to be like, do all those things.

And I think Betterment is on that path too of like, Hey, we're going to offer everything that, that Schwab does, right? We've got to do all the things to fully serve a mature customer and like in a complicated financial life. So that's like, that's a barrier, right? Like, because you can't just take a point, you know, simple point solution and have a full, you know, your customer acquisition cost is going to be such that over time, you do have to probably offer like a full suite of services.

Silence.

Alexa: thank you. Well, no, what I was going to say, I think one of the things that I admire a lot about [00:14:00] Jon is like, we deeply cared about actually helping as many people as possible. I mean, there's like an incredible mission under what we're doing. And sort of a injustice that exists where it's like, if you don't have a lot of money, like It's actually really hard for you to get ahead, like that's, that's, that's, that's not right or fair.

But one thing I will say, so Jon said a few really good things, it's these big brands are sticky. JP Morgan, Bank of America, they've been around forever. Merrill Lynch, you trust them. They're there. You kind of know they're not going under. You have a Silicon Valley bank moment happen and then you kind of do ask yourselves, should I trust these new incumbents?

So brand is very powerful and they, they're. hundreds, decades, year long brand. So that's their ultimate advantage. The other big problem with the category is that money is extremely overwhelming. There is all three of us on this call find money, find money overwhelming. And, and I used to go to work and I remember just like, I remember I became a [00:15:00] certified financial planner, wrote books.

Best selling books, like deeply nerded out on the category. And I used to walk to work kind of with like a heavy heart some days. And I was like, it's not that I'm trying to overcome my competition. It's not me versus Jon. That was never, there was never a day of that. It was like, how do I make people care more about their money?

Meaning, you know, if you want to get past just basic savings accounts and planning and getting ahead, like you actually have to engage with your money, And one thing I used to kind of fantasize about, and maybe this will exist, maybe Jon, you and I will build this, was that like, at some point, your Amazon Alexa should sit in your kitchen and people don't all want to look at their money.

When you have money, you're more interested in it because it's not horribly overwhelming, but when you're really living paycheck to paycheck, which 70 plus percent of the country is in post COVID, probably closer to 80. The issue is you're like, I actually don't want to look at how little room I have to [00:16:00] move out of the current place I am in my life.

And you know, Robin Hood got exciting because it was actually like a bit of gambling. Like that's what made that work. And on the flip side, which as a financial planner, I don't love that. On the flip side, I always fantasize this Amazon Alexa is going to sit in your kitchen and it's going to just every morning say three things to you.

Your account is up or down one or 2%. What, how has the market moved? Do I have any urgent alerts? Right? Like has 500 left my bank account? Is there anything urgent that's happened that I need to know about? And then finally, if you have a rule system or a security fraud of some kind, and that's, most people don't actually want to sit and stare at their money all day.

They kind of just want guardrails on it and to not engage actually. And so that's kind of an interesting point of view that for a big part of the population. They want you to solve their life for them. And then there's another part of the population that's like, I want to nerd [00:17:00] out and stare at my mint all day and get in the weeds, but there's two very big demographics and the demographic that I was always really passionate about, which is like, how do we give everybody a step forward?

I do think new tools will be built there, but they're not as. They're not the nerdy, like, let me look at every percent of every day and every detail and like, look through every cost. It's actually like, can I not look at that? Cause it's just, it's invigorating stress in me.

jon: Have you all seen Dumb Money?

Julie: Yeah.

jon: You saw it twice. Yeah, I saw it on the plane yesterday. I thought it was so fun. Speaking, speaking of Robin Hood and like, you know, where, where we've been. I, I couldn't kind of, like, believe when, as I was watching it, like, That was like two years ago. It felt like a different lifetime, you know, like it felt you know, like I'd forgotten some of the drama of that moment and how it felt like everything was changing.

And that movie, I thought did a good job of bringing it back. And so much of what we're talking about in this podcast is like that. It feels like a [00:18:00] lifetime, you know, we're talking about the last 10 years, but it feels like a whole lifetime ago. You know, these products didn't exist that like these categories weren't weren't there.

You know, when, when I know when you started out Alexa and like, and when we started at two later, there was no fintech there. That wasn't a category. Like there, there wasn't a word that people used. There, there was no idea that you would just put your money into an online bank account. I mean, there was, There was ING Direct, that was a thing that people did, but it was a really kludgy website, and like, other than that, like, you couldn't invest in, like, some online thing, like, you, you would, you know, like, I, it, it, it was,

Alexa: Air built, acquired by ING and it would let you buy a slice of a share. And I remember being like, this is genius. And then it got acquired. I just want to pause on that,

jon: I, I think it's such a good question, Julia, about, like, how have, how have things Change slower than we thought. And I, I liked Alexa's answer too. And I just wanted to add two more things that she made me think of. One was that the tech to [00:19:00] see across your different accounts continues to be. Behind where I thought it would be so, you know, there's plaid there's like enabling technologies that let you see like bank accounts It's very hard to see across investing accounts still.

I mean there's people that do it, but it's spotty You're missing you're missing data and If you don't get the full picture, like if you have 90 percent of the picture, you can't really give advice on that. Right. Because you might be missing something really important in there. And as a fiduciary, as an advisor, like most investment advisors or fiduciaries to say, you just can't, you're like, you'd be in regulatory trouble if you said, well, you should do this, I don't know your whole picture, but I think you should do this.

Cause you know, somebody could come back and say, you didn't really know your client. You, you, you didn't ask them if they'd, And, and, or they didn't tell you about this 10%. And like, I, you could get in trouble for that. So that is a problem of, of not seeing the full picture. And then if you, if you do see the full picture, it's still [00:20:00] hard to advise on it if you don't manage all of it.

So I might see that, Oh, you have like this you know, your 401k is at Schwab or something, right. And I manage your Betterment or, you know, like I manage your, your taxable account over here. It's hard for me to make smart changes to your taxable account if I can't also go and edit your 401k, right? Those things should be working together in a tax coordinated, smart way for you.

But so there's these problems of, of integration and and those are hard to solve. Because, like, the incumbents have no interest in opening things up unless they're, they're required to by, by regulation. And that's a hard thing to regulate. The other thing that that came into, yeah, yeah, go, go, go, go.

Alexa: you that the like infrastructure needs another major step forward. I agree completely.

jon: The other thing that came to mind is, as you were talking, it was, it was just the endurance of the human advisor and like that, [00:21:00] that relationship being so important. And I think what I undervalued chronically, because I'm, I'm like, I'm, I am a financial nerd. I am my own financial advisor. I build my own spreadsheet.

Like I like to do it myself. I'm DIY about everything. I like to do my own electric and, you know, like, I just want to know. And with, with advice, I totally, so I totally underappreciated the value of the relationship. You know, I thought like what matters is like you're getting the right advice. Like what matters is you're in the right portfolio.

You're optimal. I'm an optimizer. And I thought that's what everyone wants. And how could you want anything less than the best? Everyone wants the best, but that's not how most people see the world. And it's not that they don't want the best, but it's just that like the best is like, I trust this person.

Like I know them, like they know my family. They know me, they know my birthday. They know. Like my spouse, like we met a long time ago. They know my kid's name. It's like. That stuff matters a lot and like that, that advisor being a psychologist or being a [00:22:00] therapist or being a coach to you matters a lot.

It's like having a personal trainer, right? Do you need to have like the personal trainer who is literally like the best, you know, peloton rider in the world? Like to like come to your home and train? Like, no, like, like somebody who can ride a bike is probably fine. Like as long as they can motivate you and like get you excited.

So there's a lot of value in a relationship, and I think now that I see that, like, you know, my next thing is, is it looks like it's going to be in that area. We're kind of heading into that direction of like, how do we, how do we build those relationships, make them stronger, make them more valuable for customers?

Julie: I want to dive into your guys's careers specifically. What have been some of the key decisions that you've made that have brought you to the level of success that you have had in fintech? And then talk to me a little bit about some highs and lows that you've had. Because yes, we hear about. Like successful exits and, you know, getting X amount and valuation and funding, et cetera.

Like it's no path is [00:23:00] linear. And I love hearing about those low points where like, Oh my God, like we thought we weren't going to be able to make payroll or something like that happening. You know?

Alexa: Jon, you want to go first? And I, I, we can,

jon: go ahead. Go ahead.

Alexa: no, I mean, I think actually just like even the start of this, so just like I'll quickly recap some highs and lows real fast here. I went to Harvard business school where I was like, ah, entrepreneurship can't wait. You worked hard to get in. And then I was like, I, there's no way to start a company while you're here.

You have to go to class every day, literally is broken. So I had to drop out to be able to, I had already started the company. So I was like, I'm paying my life savings. And then Lehman brothers went under and I was like, okay, I gotta go do this. So like, Literally at the time, Julie, like in the rear view mirror, you know, cover Forbes, it all looks like it worked out.

My own best friend told me she thought I had lost my mind. She was like, you are [00:24:00] throwing away your life. You have this great track record. And I moved to New York, cried the whole way. First six months of raising capital. It's literally why I started inspired. So like everything out there is like from the first six months where I was like, I have turned my life upside down and put it all on the line.

And I'm being told I can only fly to Silicon Valley to raise capital. What? And I was like, offended by it as somebody who had like decided I was going to be a New Yorker. I was like, where's this, where's the cool meet me where I am. Big swinging capital in New York. And it wasn't here. There was an angel fund for 25k.

So that, that was a pretty demoralizing moment where I had already dropped out and was like, okay, so like, I'm going to move across the country from whoever gives me capital. We ended up with 10 term sheets and that went well, but it was depressing. Started building the company, got tech punched is what I should have called it.

It wasn't like tech crunch.

jon: Silence. [00:25:00] Okay.

Alexa: into laughter and was like, I will wear that dress today. You are correct. But no, I was mortified. I mean, it was awful. I was like, everyone told me my idea sucked and I'd like flip my life upside down for it. And then as Jon and I can, you know, be many moments of commiserating, like just building a company is hard.

Like we were young, you're figuring it out. Was I perfect? Absolutely not. Was I, did I have all the skill sets? Of course not. And you kind of live every day to keep fighting another day. And then like on the good note, you know, great acquisition literally got acquired on a Wednesday and had my daughter that weekend, my first child.

So there was literally a moment where I was like, Oh my God, if this deal keeps slipping, like it could actually [00:26:00] steal the, the focus of like my first child of my whole life, which is priceless. Cause I'm like, God, I'm the CEO and I got to manage that. And like, I have a legal responsibility to everybody. So like everyone in the rear view mirror was like, well, that worked out perfectly.

And I was like, Oh my God. Well, if it hadn't, you know, so you're sacrificing things that like you really, it's miserably hard. And even when it works, it's hard. So I don't know, Jon, what, what I miss.

jon: Those are great stories. I a lot of that resonates with me. I didn't have the courage to drop out of business school. I was in at the same time as you. And I've also found it. Very hard to work on the company while they're but I think I viewed it as a nice hedge. Like at least i'll get through this and then it was also the financial crisis and everyone's like Oh, don't start a company now.

Like it's a terrible time to start a company and like you I probably had that The feeling that well, everyone says it's a bad idea, you know, like maybe maybe there's [00:27:00] a chance, you know I I kind of like like those those things I like that about the opportunity. I we had so many hard times. I, you know, you know, today Betterment you know our, our, our last valuation I think was one, one and a half billion.

The company's continues to do really well. We are. You know, we, we grew over 50 or 60 percent last year. Like we're continuing to, yeah, it's like, it's been a good, it's been a good run. And Sarah, the, the CEO now is doing a great job. I I remember back like for our seed, I mean, we were, we were trying to raise our series a after, after pitching at tech crunch, I just kind of thought like, oh, we'll pitch and then term sheets, you know, like you had 10 term sheets.

Like I thought like, Oh, well, I have 10 term sheets. Like we had zero term sheets. So we had no offers after that. We, we won like the best, the best startup in New York or something. Like, like, you know, we, I thought, Oh, this will be easy. And we just didn't know what we were doing, you know, we didn't We I guess we weren't pitching well [00:28:00] people people weren't into fintech.

It was a financial crisis a lot of things and We I was just looking back at this because i'm i'm starting a new thing and I was like looking back at some early Finance like financials and stuff. There was a time in september of that year september 2010, I think where I made a spreadsheet of like how much cash we had and it was like the next two months.

We were going to run out of cash in two months if we If we hired this person who I wanted to hire He was an engineer and if we didn't hire him we had three months and so we decided not to hire him So we'd have cash through the end of the year We ended up raising our series a in November. So we probably had, you know, a couple of weeks of cash at that time.

And somebody in the class I was, I was, I was, I was just talking about this story at a business school class last, last week. And somebody asked me, well, how, how did you keep going? And I really struggled to answer that because it's hard to put myself back in the mindset at the time. [00:29:00] But I think I said, I just, I just, I just, I just, I just, I just, I guess I didn't want to go back to being a consultant.

You know, like you just kind of keep going because you have to. And I, I read a, like, I, I love to, like, I love to read biographies. Like I was there was this this great quote from from Rockefeller's biography and he, and I, he, he says, and I'm probably misquoting it a bit, but he says Up, up optimism correlates with outcomes.

And I really liked that idea that, you know, if you just kind of like, Are, have, have belief in the idea and like are committed to the idea that that correlates with better outcomes generally. Right. And and I think I find a lot of, a lot of great entrepreneurs just have this kind of like, you know, like it's going to work out, right?

Like we're going to, we're going to get through this. And you know, that was one time when it just did and we just sort of had to, had to believe, but there were a lot like that. I mean, yeah. The series B we were out of money too. And you know, we had to get a bridge and it was bad and we had to change.

We had to change our [00:30:00] pricing. We had to like launch new products and we had to, we scraped through, I wasn't sure we'd raise another round. And then all of a sudden something clicked, you know, like things started that, like the things started to work. So.

Alexa: will things into existence. Wouldn't you say that's the case, Jon, which is I always like look to CEOs and just like have such incredible respect for them because you literally are willing things into existence. It's like, you almost yes, you almost die many times, but it's also. You're, you're compelling the company to continue to keep going and to continue to keep staying alive.

And right when things work, they also go wrong. And so it's like, you're just constantly feeling pain, right?

jon: Yeah.

Alexa: And there's like moments of elation because like small things just make you so proud, but then on the flip side, you're like, okay, I've just got to keep moving. But I think actually, Julia, it's one of the things we like look for in entrepreneurs now is like, They're [00:31:00] doing it for something that is so much bigger than like, I want to be a CEO or I want to make money because otherwise you quit.

You just can't, you can't stick with it because the pain tolerance is so, it's so high.

Julie: Yeah. I remember there was a podcast I released with the payable CEO, Daniel, and he had listened to a podcast with Tom Blumfeld, the founder of Monzo, where Tom was like, if I would have known how hard this was going to be, there's no way I would have done it, but like, I

Alexa: The founder, the NVIDIA CEO founder, just after the company will be the most valuable company on the planet said, I would never do it all over again, even knowing it lands here, never would do it again.

Julie: Would you guys, if you knew how hard it was going to be to get where you are, would you still have started LearnVest and Betterment?

jon: It just, it reminds me of what my, my wife said about having another kid, but then you forget. And and then you're like, yeah, you know, maybe, you

Julie: Yeah. Aren't you exploring starting another thing? So going through this pain all over again,

Alexa: I feel like Jon [00:32:00] needs to start something. We have, we need Jon to start something. Of

jon: it's taken me a few years you know, like I, I was, I was, I, I really thought I'm done. And then I thought If I have another startup idea, like I'll, you know, like I'll do it within Betterment, like we can, like, you know, I can continue to kind of see, see that grow, but now, you know, three years out I've been advising a bunch of FinTech companies.

I've been staying close to what's fresh. And like, I find, I think, I think Alexa, you make a great investor. Like, I think I'd make a terrible investor. For a lot of reasons, but one, like when I get close enough to, like, really understand an opportunity and because I'm kind of a perfectionist, like, because like, like, I really want to know, like, when I'm at that point, I want to do this idea.

This is a great idea. Like, I'm all in, like, so. And, and, and before that I'm so skeptical, you know, like, like until I get to that point, I'm just like critical and like, oh, that'll never work, like that's dumb, like, so but yeah, like I finally got excited about something [00:33:00] and and, and I think I've forgotten enough of like, you know, like the, the challenges that I'm so excited to be starting a new thing and, and, and jump back in.

Silence.

Alexa: in your, it is in your core. No I mean, I, I, I like to back people like Jon who want to go build life changing things right in front of your eyes and have the guts to stick with it for a decade.

That is actually, Jon, one of my things that I really feel like in the rear view mirror, going into something, you just have to have the guts to know that you have to do it for a decade. And if you have the pain tolerance to survive a decade and make a great decision every day, there will be hard days, there will be easy days, there will be miserable days, but if But if every day you give it your best and make the best decisions that you can, you will create immense value.

You just have to have the stick to it [00:34:00] edness and then a mission that you care enough about that it will compel you through those really hard times. So Jon, I'm dying to hear what you want to

Julie: I know. Do you want to tell just between friends here? Can you tell him

jon: I can't, I can't say we're in stealth. Like,

Alexa: Yes, you can. I was, I'm not going to let them

jon: founders would kill me if I broke news ahead. So, but what I, what I will say is like, it's also, it's complicated in more ways than just, you know, am I ready for this thing? I, part of the reason I wanted to hire a CEO for, for Betterment was to, we, at that, that year that, that that I hired Sarah, it was.

During the pandemic, like we moved to Pound Ridge, like during the pandemic, like, you know, where I am today this was our weekend house. Like, we had no intent on leaving New York City, and and, you know, for the last three years, we've been building a life out here. Renovating, but also, like, You know, getting to know the community, getting, you know, like a whole new, a whole new world for us.

We've I've, I've invested a lot more time than I had [00:35:00] in the past with my family. We had another kid. So we have a third, a third kid now you know, who, who's a year and a half old. So he came about in the last the last three years. And now I feel like, not like they don't need me anymore, but, but just like we're in a good place.

Like I feel like I can take the next 10 years and I, and, and, and Importantly, well, like, you know, being here for them, you know, for every dinner is like, is a priority for me still. Like, you know, you know, like I won't be here every dinner, but being here a lot for them in person is important. Also, the person I am and the example I set is important.

Like what I'm doing with my life is important. And I've been super engaged here. Like I've joined the planning board in Pound Ridge and the land conservancy, and I'm doing all these like, Fun, you know, outside of building businesses, ways to engage. But part of me is like who I am. It's like, I want to build a business.

And if, and now that they're getting old enough to like, be like, what do you do? And like, like what's that? Like, I'm excited to be like building another business because I think that's, that's who I am. That's how I want them as they become adults to know [00:36:00] me.

Julie: a question? Do you guys have a hard stop at 45 or could you go to 50? You do? Okay. Yeah.

Alexa: I know we're,

Julie: I'm going to do the quick fire questions then. Cause I want to make sure we get to those.

Alexa: want to give Jon one compliment. Jon, as somebody who has admired you for a long time, you got to be building.

Julie: It's just who you are.

Alexa: needs you building. If it's not you building, I, you know, there are very few of us, and we need you building.

jon: That's very flattering. Thank you. Thank you for saying that,

Julie: All right. So quick fire questions. I'll do. So there's four of them. The first one I'll have Alexa answer first, Jon second, and then we'll swap the second one. Jon will answer first, Alexa second. So personal highlight from 2023, Alexa,

Alexa: I think, honestly, I'm most proud of the team that we built at Inspired. It's really just like, it's an, it's a lot of my old teammates, we all got back in the trenches together. We're pulling back [00:37:00] team members who are dropping into company. I mean, it's been. It's been my happiest moment.

Julie: Jon, what about you?

jon: Finished two renovations, which was like a test of my marriage and in construction knowledge. And and my favorite thing that was, we took a family trip to to Italy. We took we took the, the, the kids on a, on a cross, cross the, the, the cross Italy,

Julie: Which cities did you hit? I went to Rome and Positano a year ago.

jon: started in Rome, we ended in Venice, and in between we went through Tuscany and up to Lake Como and we went to Gardaland on one of my daughter's birthdays, which was like, it's like the, the Italian Disney. It was like a very charming little Italian amusement park,

Julie: Very cool. Alright, Jon, you go first on this one. If you could have dinner with anyone, dead or alive, who would it be?

jon: I would love to meet Vanderbilt. I, I think of all the biographies I've read, his is one of the most fascinating and [00:38:00] I think he's given credit for a lot of the business that he built, but in some ways he started capitalism. I mean, like, he and his, his group created things like shares in the corporation.

And I think that's just fascinating that, that, you know, we, we, a lot of innovations that I'd love to hear, hear his take on how they've evolved over the years and what he makes of the world.

Julie: That's a good one. Alexa, who would you want?

Alexa: Dead or alive, somebody I would want to meet. This is so nerdy. Two people just come to mind immediately. And it would be Martin Luther King or Oppenheimer. And for similar reasons, where they both had to make incredible personal sacrifices. And held very, very complicated moral decisions and were quite lonely in their choices. And I would just be fascinated by the [00:39:00] frameworks that they use to make their life's decisions.

And I think the older I get, the more I appreciate how complicated things can get and how critical leadership is. And that, you know, Oppenheimer, he was holding Absolutely crazy decision and do you move forward with it? Do not. How do you think about that? Just how do you think about the frameworks of those decisions and Martin Luther, or literally Martin Luther King, obviously a very different reason, but like his notes from Birmingham jail, when you read him, like he had little kids, like you're like, I mean, I have little kids.

I'm like, oh my gosh, like what did is profound. So those are the people.

Julie: Alright, so last one. When you're having a hard time, who do you call? Who's on your 911 list?

Alexa: My best friend Lucy who's sitting in the other room and I'm working on it with my husband. Jon, I just emailed

Julie: Good answers. Jon, what about you? Besides your

jon: Yeah, I was gonna, I was gonna leave with my wife. And after that, a couple of my my colleagues [00:40:00] from Betterment have, Move to Pound Ridge. And so like they're now, they're, they're neighbors as well as long time colleagues, and I would call that like, let's say there's a tree down across the driveway, I need to borrow somebody's chainsaw.

All

Julie: and then wait for just a second while it uploads. But thank you again so much for joining me, you guys. This was wonderful to catch up.