Jon Stein Talks About Founding Betterment with Guy Raz | How I Built This | NPR

Transcript

hello everyone and welcome to how I built this resilience Edition how how's everybody doing today this week end of the week hope you are doing ok and staying healthy and safe as you know this is the place where we are exploring how businesses are building resilience in the midst of this crisis we're taking your questions for our guest today John St... Read More

Summary

In this video, John Stein, co-founder of Betterment, discusses how the current crisis has impacted the investment industry and provides advice on investing during this time. He also talks about the resilience of his own business and the future of remote work.

Questions & Answers

Q: How has the current crisis affected the investment industry?

John explains that the market volatility has led to a decline in customers' portfolios, which has impacted revenue for companies like Betterment. However, they have also seen a surge in sign-ups and deposit volumes, as more people are looking for better money management options in the midst of the crisis.

Q: Have a lot of people been withdrawing money from their investment accounts?

John shares that some customers have been withdrawing money, especially those who are more emotionally reactive to market fluctuations. However, he explains that the percentage of customers withdrawing during this crisis is not significantly higher than normal, and there are actually more customers depositing money right now.

Q: Are experienced investors less stressed than new investors during this crisis?

Surprisingly, John shares that experienced investors are not less stressed than new investors. He hypothesizes that this may be due to the immediate need for money if their time horizon is short, as well as the familiarity of younger investors with market volatility.

Q: What is John's advice for investing the $1,200 stimulus check?

John advises considering your current financial situation before deciding how to invest the stimulus check. If you have immediate bills or high-interest debt, use the money for those first. If you are debt-free and have a comfortable emergency fund, you can consider putting it into a long-term savings vehicle like an IRA or 401(k).

Q: Will Betterment implement budgeting tools?

Yes, Betterment plans to incorporate budgeting tools into their platform. They are aware of the demand for such features and are working on enhancing their offerings to help customers with budgeting and tracking their financial goals.

Q: How has the crisis affected the operations and culture of Betterment?

Betterment, being a digital company with remote offices, has transitioned smoothly to working remotely during the crisis. They have seen the benefits of remote work and are considering hiring more remote workers even after things return to normal. However, they also recognize the importance of a physical hub for building community and team connection.

Q: How has this crisis influenced John as an entrepreneur?

John reflects on the positive changes the crisis has brought to his work-life balance. He has been able to have dinner with his family every night, something that was not possible before. He hopes to maintain this change in the future and prioritize spending time with his family.

Q: What advice does John have for someone who wants to start a business during this crisis?

John believes that a downturn is a great time to start a business as people may have more free time and there are plenty of problems to solve. He highlights financial services, healthcare, and education as areas ripe for disruption and technological advancements.

Q: How has Betterment been affected by the crisis?

Betterment has been impacted by the market volatility and the decline in customers' portfolios. However, they have also experienced record sign-ups and are adapting well to the changing landscape. The crisis has highlighted the value of digital financial services and the need for better money management options.

Q: What does John hope to take away from this crisis regarding his business and its mission?

John hopes to maintain the positive changes the crisis has brought, such as remote work and a better work-life balance. He also hopes to continue building a resilient and innovative company that can navigate future challenges. He sees this crisis as an opportunity to reshape the way businesses operate and create opportunities in new and different locations.

Takeaways

John Stein discusses the impact of the current crisis on the investment industry and offers insights into investing during this time. He highlights the need for better money management options and the surge in sign-ups that businesses like Betterment are experiencing. John also shares advice for investing the stimulus check and talks about the future of remote work. Overall, the crisis has revealed opportunities for innovation and reshaping business operations, and John hopes to maintain positive changes in work-life balance and company culture.