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Jon Stein ’09 was working with some of the biggest banks and brokerage firms on Wall Street as a consultant when he started kicking around an idea for a tech start-up: an investing platform that is as easy and straightforward as an online savings account. Here, he tells Columbia Business how he launched his company, Betterment, a year after he graduated from Columbia — and why it’s important for aspiring tech entrepreneurs to “make it real” as soon as possible.
Automated Money Manager
I started Betterment to make investing simpler. We recommend a portfolio to you, and then we manage and automate everything about it. We offer a service that has never before been available to everyone at a reasonable cost.
As an online platform, we take the emotional haphazardness out of investing, and our software takes care of time consuming tasks like asset allocation, rebalancing, and reinvesting the dividends. We also learn from your behavior — if your account veers off track, we provide advice about how you can get back on target. We do all of this for the lowest fees in the industry.
The Fast Track
I developed the prototype for the site while I was still a student at Columbia, where I took every entrepreneurship class that was offered. Columbia was a great place to vet the idea with my classmates and professors — people who are now our core customers.
Exactly one year after I graduated, we launched at TechCrunch Disrupt New York, where we competed with 500 other companies. We were selected as a finalist to make our pitch to some 2,000 entrepreneurs and investors. After we were named “New York’s Most Disruptive Start-Up,” more than 20 investment firms contacted us.
If You Want to Launch a Start-Up
Make it real as soon as possible. The quicker you can get to a minimum viable product, the faster you’ll know if your idea has traction. So if you’re just starting out, make business cards. Set yourself up with an e-mail address. Start talking about it as though it’s happening and not just an idea. We made Betterment fast, and I think that’s why we succeeded and built the company as efficiently as we did.
We’re growing incredibly quickly. In the past year, we’ve tripled the size of our team, more than doubled our assets under management — now more than $250 million — and we’ve moved to a much bigger office. We’re very excited about mobile and about giving people even more advice on how to reach their goals.
Photograph by Don Hamerman