20 VC FF 034: What Fintech Can Learn From Uber and The Shift From Financial Organisation To Financial Efficiency with Kelly Peeler, Founder & CEO @ NextGenVest

Kelly Peeler is the Founder and CEO of NextGenVest, the College Money Mentor for every student, helping students navigate the financial aid and student loan application process. While at Harvard, Kelly started Business Across Borders, a non profit that helps Iraqi students rebuild their own economy by starting their own companies and the International Women in Business Summit, bringing together top female college leaders. She was selected as one of the eight Kauffman Foundation Global Scholars, named by Goldman Sachs as one of the 100 Most Intriguing Entrepreneurs, and named a White House #StartTheSpark Ambassador. Her TED Talk is called "How to Change the World as a Millennial - Don't be Stupid with Money" and can be found here. A special thank you to Mattermark for providing all the data displayed in today's show and you can find out more about Mattermark here! In Today's Episode You Will Learn: 1.) How Kelly made it into startups and what was the origin story for NextGenVest? 2.) How has the Fintech ecosystem evolved over the last 5 years? What does Kelly mean by Fintech 1.0 and the next phase of Fintech? 3.) How can emerging brands and in particular fintech brands build loyalty with the emerging millennial generation? What is the attention graph for millenials looking like? 4.) What does Kelly mean when she states a shift from financial organisation with Mint to financial efficiency today? 5.) What key determinants that have made Uber so successful can be used within Fintech startups to build the same trust and relationship? 6.) What is Kelly's view of startups taking a platform dependent approach? What are the benefits and what are the concerns? Items Mentioned In Today's Episode: Kelly's Fave Book: The Thank You Economy by Gary Vaynerchuk As always you can follow The Twenty Minute VC, Harry and Kelly on Twitter here! If you would like to see a more colourful side to Harry with many a mojito session, you can follow him on Instagram here!

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Harry Stebbings?

  You're listening to the 20 Minute VC with your host, Harry Stebbings, and a very special episode of Founder's Friday. Today's guest I read about in TechCrunch, and then I watched her TED Talk, and it instantly became my favourite ever TED Talk. And trust me, I've watched a lot of TED Talks. And I felt compelled to have her on the show following watching her. Therefore, I'm so delighted to welcome Kelly Peeler to the show today. Kelly is the founder and CEO at NextGen Vest, the college money mentor for every student, helping students navigate the financial aid and student loan application process. I think it's fair to say Kelly's always been interested in empowering young people. And while at Harvard, she started Business Across Borders, a nonprofit that helps Iraqi

• 0:45Harry Stebbings?

  students rebuild their own economy by starting their own companies. And she also helped with the International Women in Business Summit, bringing together top female college leaders. Kelly was also selected as one of the eight Kauffman Foundation Global Scholars, named by Goldman Sachs as one of the 100 Most Intriguing Entrepreneurs, and named a White House hashtag Start the Spark Ambassador. Her TED Talk is called "How to Change the World as a Millennial: Don't Be Stupid with Money", and can be found in the show notes. It's an absolute must, really is my favourite TED Talk ever. But before we dive into the show today, I have a very special announcement. I'm delighted to say that I'll be joining the godfather of SaaS, Jason Lemkin, at Sasta

• 1:30Harry Stebbings?

  at the amazing annual Sasta Conference. And we will be producing a podcast from the latest and greatest founders, operators and investors in the SaaS space. So stay tuned for that. And if you'd like to meet while I'm in SF, hit me up on [email protected]. It would be fantastic to meet in real life. However, without further ado, it's now time to welcome Kelly Peeler, founder and CEO at NextGen Vest.

• 2:02Speaker 01

  You have now arrived at your destination.

• 2:05Harry Stebbings?

  Kelly, a very warm welcome to the show. It's a real pleasure. I'm such a huge fan of the mission at Next Gen Vest. Um, so, so thank you so much for joining us today.

• 2:14Speaker 02

  Yeah, absolutely. Excited to be here and happy Friday.

• 2:18Harry Stebbings?

  Absolutely. We don't have happy Friday in the UK, but that's great.

• 2:22Speaker 02

  You should.

• 2:22Harry Stebbings?

  I got a happy Wednesday the other day. That was an interesting one. Um, but anyway, I'd love to kick off today's show by hearing a little about your background and, and how you started Next Gen Vest.

• 2:33Speaker 02

  Uh, the reason why I started Next Gen Vest is really kind of the result of two of my personal passions, which don't laugh at them. Um, one, they're very at different ends of the spectrum. One, the first is empowering students to live their fullest lives. Um, and the second is very different, which is around the history of financial crises. Um, both of which I sort of developed and became obsessed with in college. But to kind of just give a little bit of background in college on the empowering student side. I started several different companies and organizations that focused on this idea of empowering students to live to their fullest potential. Uh, we're one of the more notable ones is called Business Across Borders. And we helped Iraqi university students start their own companies in Iraq to rebuild their own economy.

• 3:17Speaker 02

  So I went over to Iraq, um, and I think it was maybe 2012. Um, and he helped set up partnerships with corporations and work to bring in TEDx Startup Weekend. Built an entrepreneurship program, helped start a bunch of companies over there. Um, and though my parents would probably still say that I was insane to go do that by myself. Um, I absolutely loved it because that really turned me on to the idea of kind of inspiring and, um, helping students see themselves at a higher level. Um, and then the second kind of motivation or inspiration, I guess, for starting Next Gen Vest. Part of my other very different passion, which is the history of financial crises.

• 3:58Harry Stebbings?

  Of course, the natural passion.

• 4:00Speaker 02

  Yeah, exactly. Uh, I'm a huge, um, uh, like nerd as it comes to financial history. Generally curious person as it relates to, um, how the economic machine works. And I'm stealing that phrase from Ray Dalio. He has this amazing piece on how the economic machine works. Um, but anyway, so I was actually debating um at graduation whether to go be a financial historian or go work in a finan- like a a financial institution that was actually um relevant for my past studies and that was JP Morgan. I needed to make some money, so I went to go to JP Morgan. Long story short, I started to start NGV um because it really involved both of my core two interests,

• 4:44Speaker 02

  students and financial crises and um in a very kind of high level way, I wholeheartedly believe that the absolute number one thing preventing young people from living their fullest lives currently is the student loan burdens that they have to deal with. In the US, the average kid graduates with around thirty K in loans. On the whole, how we're trying to solve this is that Next Investor, NGV, um helps students navigate both the financial aid and student loan application process through text message and Snapchat. Just a little bit of context there, students leave about two point nine billion dollars in free financial aid on the table every year because the process is frankly just so shitty. Uh, and even worse, for the people who do take out student loans,

• 5:27Speaker 02

  um thirty percent of those people end up dropping out of college before they actually graduate, which is just the absolute worst. So you owe money and you don't have a degree to be more employable.

• 5:36Harry Stebbings?

  And and we spoke there about the economic machine of Ray Dalio there. Um, and and taking a step back then, before we dive into the nitty gritty, I'd love to talk about the evolution of the fintech ecosystem as a whole now and the developments that we've seen in this space. So so let's talk about phase one, two to five years ago, and how that's evolved when comparing to the to the massive consumer fintech landscape that dominates today. What is your thought on this?

• 6:03Speaker 02

  In my opinion, we're currently in the the midst of a consumer financial revolution. And what I mean by that is we're in a transition from um consumer fintech going from You know, five years ago, from financial organization to financial efficiency currently. Um, so that transition from financial organization to financial efficiency is really what I think is an interesting time. Um, currently, and I'm super excited to kind of be hopefully, you know, leading the way in that financial efficiency space. So what do I really mean by financial organization or this V one? Um, stage of um, consumer fintech, I I would say, just think back to when Mint first came out.

• 6:46Speaker 02

  Um, the innovation and technology there was really organizing money for a user to help them see their whole picture, their whole financial lives better with the hopes of a user being able to make their own decisions and act on that. And people went wild over this because the idea of organization to prompt financial action was like the killer app or at the, you know, app, they were app initially, but the killer thing. Um, and and but the really cool transition now um, is that we're moving from people needing financial organization to people needing what I'm calling financial efficiency, and that has everything to do with time. So if you think about this in, I'm a very visual person, so if you think about this in like two columns, so V one

• 7:32Speaker 02

  is uh, of like, you know, like the consumer financial landscape, V one is financial organization. And really what in column one, if you think about it, that stage or that phase was really optimizing for giving you a clear picture of your financial help for giving action. V two, column two is um, this idea of optimizing for your time through automation and personalization. So I I I mean, I don't know if you used to, if you watch QVC, um, I used to.

• 8:00Harry Stebbings?

  The shopping channel.

• 8:01Speaker 02

  Yeah, the shopping channel.

• 8:03Harry Stebbings?

  Yeah, no, I know, I do know, yeah.

• 8:04Speaker 02

  I'm very, I'm very odd. I like financial history, QVC and like all that, um, but uh, but we're, but I like to say that we're edit, we're entering the quote unquote set it and forget it stage of personal finance, um, where people don't want to be checking charts and graphs. They just want their tools working for them in the background. Um, and so one of the, one of the main things that I see in that transition is as opposed to, um, you know, just displaying information clearly, which is V1, um, people will start to leverage and company, and we, I see a lot of companies already doing this, like Acorns,

• 8:46Speaker 02

  automating, um, and kind of working behind the scenes to, by leveraging your trust to make things super efficient for you. So you're not constantly checking because frankly, no one has the time to do that anymore. And time is really a huge thing that users are valuing substantially more, um, than they might've done five or even 10 years ago.

• 9:07Harry Stebbings?

  Mm hmm. And how do you feel then as, as a startup in this very frothy fintech ecosystem? How does that affect you, do you think?

• 9:15Speaker 02

  I think that the entire game with this ecosystem in fintech is, at least on the consumer side, is about a couple of things. One is time, um, and two is trust. Um, so I think that the, the brands that really develop that in an efficient way for users and really put that at the core center will win. Uh, you know, whether it's investing, whether it's credit cards, whether it's, uh, budgeting, whatever the, kind of the, the vertical, um, it's, it's time and it's trust.

• 9:45Harry Stebbings?

  And it's interesting you said there about trust. And, and one of the main reasons for the, for the rise of the fintech revolution is the lack of trust in traditional financial services. Um, so, so where do you stand on this? Do you think there is a fundamental mismatch between the traditional old players of the financial industry and today's consumers?

• 10:05Speaker 02

  I, I mean, absolutely, like without question. And I can speak, um, both from the consumer side in dealing with, um, sort of a very skeptical and fickle audience, the age demographic of 17 to 25, but also I worked in financial services, um, and, you know, I, I saw the other side of the table as well. But, um, but like I was saying before, I mean, I think trust is the entire game with consumer fintech right now. I'm cer-, I mean, I'm personally certainly betting hard on it. We're starting our relationship with students in high school, um, to build long-term trust with them. Um, and the reason being is because, I mean, whether it's you just ask a student or, you know, quote unquote, millennial on the street, or you go into any of this study after study,

• 10:50Speaker 02

  it's that millennials, um, or students for us in that case, um, have no one that they can trust for financial guidance and, um, and that the millennial generation is ready for a new type of financial partner. And I take that directly from Facebook's insights, um, that they put together around how young people are dealing with money on Facebook. Um, another, another kind of ridiculous stat, in my opinion, is, is also from this Facebook, um, uh, research report, which I'm happy to send you, is that, um, eight percent of millennials trust banks, um, and financial institutions for guidance. Eight percent. Like, is that

• 11:30Speaker 02

  a, like, is that a joke? You mean, like, that, these are core functionalities that people deal with every day, and eight percent is pretty low.

• 11:39Harry Stebbings?

  So I have to ask then, I mean, absolutely eight percent, it's, it's embarrassingly low. But then I have to ask, how do you, as a, as a new and emerging brand for the student and millennial sector, how do you build a, a brand loyalty and trust in your brand with this new emerging demographic?

• 11:56Speaker 02

  Yeah, so I think, I think that has, is amazing question, and we really think a lot about that. I think that trust really boils down to three things. So if you can build a product or a service that, that does one of these three things, or all of them even better, that's kind of, you know, you're on your way to building that long-term trust, and, and we really are aiming to do that. And those three things are, one, save users time, two, save users money, and three, provide a customized and personalized experience in a reliable and consistent way. So, I mean, I draw that very much so from Uber as well. So Uber sells time to people.

• 12:39Speaker 02

  Um, and they, because of that, people have become completely dependent on them. They're reliable, they save, they're now starting at the point where they're starting to save users money. And it's, they've added on layers in terms of being customized. Um, you know, whether you're setting music in the, your car, or you're being able to share with other people in a pool. To your, to answer your point, it's really going after those three things, saving users' time, saving users' money, and providing a customized and personalized experience. So at the, at the core of that is, is all of those meeting students where they are and being incredibly empathetic to them, um, which has a lot to do with how we have built our product. Um, and the kind of core functionalities of it.

• 13:19Harry Stebbings?

  And, and talking about the product then, and, and, um, particularly personalizing and customizing, I mean, I think you've probably done that, well, definitely done that for your market. So what few observe then, when you look at the attention graph of the millennial market? We discussed there a bit the Facebook report, but the millennial market for the attention graph, what's that show?

• 13:39Speaker 02

  So a, as I mentioned before, we, we primarily serve our students and communicate with them over SMS and Snapchat. The reason being, and I'll kind of, I was doing a little bit of research and I caught your interview with Ellie Wheeler. Um, I think that was maybe last week or a few weeks ago, and I completely agree with her comment around push notifications, um, that they need to be smarter in order to give people the right service at the right time and in the right way. This is ultimately why we didn't first build a native app, was because we couldn't customize communication, um, to the extent that we really, really wanted to with this, with this audience. So we chose, um, we frankly chose the two most engaged means of, um, communication channels for students, SMS and Snapchat.

• 14:24Speaker 02

  The reason being is the attention graph is completely off the charts for students with these two platforms. Um, I'm not like sort of the first person to say this, but actually Gary Vaynerchuk, uh, VaynerMedia actually just released a really awesome article yesterday, um, on Snapchat and the attention graph of Snapchat. Um, and in that he said, which is sort of a common statistic, that forty-five percent of Snapchat users are under the age of twenty-five. And they're over, there, there's nearing about two hundred million users with about seven billion video views per day. So in terms of, you know, attention graph. This is where students or our demographic is, so we have to be there.

• 15:04Harry Stebbings?

  Mm hmm.

• 15:05Speaker 02

  And it doesn't matter that we're talking or that we're communicating with them about, you know, pretty personal topics like student loans or financial aid, or making that more accessible. In my opinion, that's where every single brand will have to be, because you have to be where your users are. To kind of summarize, I mean, part of building trust, especially with something as personal as your own family's income levels around student loans and college financing, with our audience, it's just meeting them where they are and they're on Snapchat and SMS.

• 15:37Harry Stebbings?

  I have, I have to ask them, being kind of platform dependent, not, not that you're solely one platform dependent, but you know, when we look at the likes of Meerkat who struggled when, when they were taken off Twitter, does it concern you that platforms potentially trend? And in five years' time, Snapchat may not be where all millennials and teenagers are?

• 15:56Speaker 02

  Um, yeah, absolutely. I mean, there will one, I, I have absolutely no doubt that there will be another, you know, the, the next version of Snapchat will come along in five years. And a lot of that just has to do with how, um, how different age ranges, you know, catch on to new trends. And what I would say is we're not, we're not necessarily platform dependent. Ultimately, we are taking and engaging with, I mean, our core functionalities over SMS, but we're just making huge efforts um, into um, that initial outreach with students over Snapchat and providing initial immediate value over Snapchat. Um, but I would say that it's, we're not platform dependent. We are learning from platforms. We're collecting more information from our users

• 16:41Speaker 02

  from um, these two platforms and aggregating that to have a holistic picture of them so that we can better serve them as they're going through um, major financial decisions.

• 16:52Harry Stebbings?

  And then finally, before we dive into a quickfire round, I'd love to hear how you're approaching and growth and scaling up these millennials on the platform. So what's your kind of customer acquisition channels like at the moment?

• 17:04Speaker 02

  Yeah, sure. So um, one, and this is, I mean, I spent, this is sort of my background, is the organizations in the past that I've built have Essentially employed student referral models to build community. So whether that's been in Iraq or another company that I helped start in college. But we we have an entire network of students, both in high school and college, that essentially set up clubs. If you're familiar with that concept, like a chess club.

• 17:36Harry Stebbings?

  Yeah, after school club, yeah.

• 17:38Speaker 02

  Yeah, exactly. So there's Next Gen Vests or NGV clubs that are in high schools across the country. Students meet on a weekly basis to host workshops. They come up with creative strategies of reaching out to new high schools to bring Next Gen Vests mission to other students. So I would say that bucket one is really a grassroots, organic approach, which is students referring to other students without us really doing much at all. So student, you know, the average club member will refer at least three other students within the first week that they come into contact with us, which is pretty cool. And then the second is doing a lot, like I mentioned, I mean,

• 18:18Speaker 02

  really embedding a lot into the two platforms that I was referencing before SMS and Snapchat. So we, that's bucket two. So we have a lot of referral programs that are built into that. And bucket three is really leveraging a Department of Education mandate for about seventeen states, which require a financial literacy course. So the first product that we introduced was an online digital financial literacy platform that schools across the country now use because they have to meet this requirement. And so that allows us to get in front of students in the classroom and then and then continue the relationship with them through a customized channel over text message if they want. So those are really the three buckets.

• 19:04Harry Stebbings?

  And and I'd love to dive into a quickfire round now.

• 19:07Speaker 02

  Yeah.

• 19:08Harry Stebbings?

  So your favorite book and why is it Financial History?

• 19:11Speaker 02

  I would say, I mean, I could go on forever about that. I read probably a new financial history book every week, but, um, but no, I mean, I guess I, what I would say in terms of business, I would say the thank you economy, um.

• 19:25Harry Stebbings?

  Gary Vaynerchuk.

• 19:25Speaker 02

  Yeah.

• 19:26Harry Stebbings?

  He's coming on the show.

• 19:28Speaker 02

  Oh, my goodness. I, this is like a fangirl moment for me. I'm obsessed with him.

• 19:32Harry Stebbings?

  He's an amazing guy.

• 19:34Speaker 02

  Yeah, he's really fantastic. And I just really, I love this idea of the best people kind of out hustle other people to, for their users. So, you know, any, I was asked this question the other day, like, if you're going to do press, why would you do press? And my answer is so that more users know and have the opportunity to, to choose to get more financial aid. So, you know, we, I believe on the, the intimacy of user by user interaction and have, you know, personally mentored a ton of our student users as well. But I really think that idea of going like the extra 2% um, in saying thank you, or doing something unique, um, really just builds lifetime value exponentially.

• 20:18Harry Stebbings?

  I've always found that building kind of brand ambassadors from the beginning is so important.

• 20:22Speaker 02

  Yeah, that's, that's essentially the, that club model that I was mentioning before. So those are all, another way of saying them is they're all, you know, they're brand ambassadors or advocates, um, for us.

• 20:33Harry Stebbings?

  And then the biggest productivity tips and tools, what do you use to stay focused?

• 20:37Speaker 02

  Yeah, so I'm, I'm a very, very visual person. Um, so I'd say two things. One is I am, I'm really a believer in focusing and know more than one to three things at a time. And, um, to really kind of prep myself for the, you know, each day at night, I have these really huge, um, index cards next to my bed and I write the, the three things that I'm going to accomplish the next day. So it's sort of like embedded in my mind. Then I wake up and I read those three things and I found it just really focuses me.

• 21:11Harry Stebbings?

  You're kind of like the human that I want to be.

• 21:15Harry Stebbings?

  Yeah, I do the same.

• 21:18Speaker 02

  Oh, that's amazing.

• 21:20Harry Stebbings?

  No, I'm joking.

• 21:25Speaker 02

  And then the second thing, which I've only really recently developed in like the past year, has been focusing on getting to that focus much quickly and much more consistently as opposed to, you know, everyone kind of always talks about how they get muddled down in busy work. But I I've really set aside Saturdays every week to recharge um by doing uh what I call Creative Saturdays. So I'll usually go paint, I'll host um groups of my friends in New York or different um, you know, states to do painting um days. So we do arts and crafts and cocktails.

• 21:58Harry Stebbings?

  Mm hmm.

• 21:59Speaker 02

  Um, uh, so anyway, I would say uh one, these note cards and then also recharging um by do like making things.

• 22:06Harry Stebbings?

  Okay.

• 22:07Speaker 02

  Yeah.

• 22:07Harry Stebbings?

  And then best piece of advice ever given to you?

• 22:10Speaker 02

  Okay, so I couldn't narrow this down to, I I just cannot narrow this down to one. So I'm gonna bucket it in like three, three things. Um, I'd say on the business side, um, Adam Nash at Wealthfront um said, you know, really smartly to build trust to me, really smartly to build trust um not only into the dynamics of our product, but also really into the philosophy and the culture of um my company, which I just thought was very insightful as opposed to, you know, getting up to fifteen, twenty, a hundred people and then having to backtrack on that.

• 22:44Harry Stebbings?

  Mm hmm.

• 22:44Speaker 02

  Um, on the, on the team side, um, Josh Elman at Greylock um gave me some really awesome advice on how to build a great team. And he said um that being a supportive teammate is more important than telling someone how you think they should do their work. Um, which I just think is pretty brilliant way of phrasing, don't be a micromanager.

• 23:07Harry Stebbings?

  Yeah, Josh is amazing.

• 23:09Speaker 02

  Yeah, um, so those are, I'd say that those are, and then I guess on the personal side, um, my friend Taylor Conroy, who runs Change Heroes, you know, really got me thinking about that. I I really need to be meditating every day as a means of regaining that focus and not, you know, for half hour, but even if it's like three minutes um every day, just kind of a consistency of habit around that.

• 23:31Harry Stebbings?

  And then the biggest mistakes and and what you wish you knew at the start that you now know.

• 23:36Speaker 02

  Easy, uh, I'd say optimize on my strengths or to my strengths and delegate my weaknesses. Um, I I have pretty large ambitions to be number one in the world at inspiring students to live their lives. I spent way too much time earlier about worrying about my weaknesses um and just getting too caught up with them. I should have just been only focused on um developing the strength.

• 24:00Harry Stebbings?

  And then the next five years for you and for NGV, what have we got in store?

• 24:05Speaker 02

  For for me, I wanna run a marathon.

• 24:08Harry Stebbings?

  Okay.

• 24:09Speaker 02

  Um, so that's uh, that's, you know, another crazy thing. Um, and and maybe do an Ironman too, that would be really great.

• 24:15Harry Stebbings?

  Oh wow, that's that's going for it.

• 24:18Speaker 02

  Um, but.

• 24:19Harry Stebbings?

  Have you run a marathon before?

• 24:20Speaker 02

  No, no, I did it. I did a ten K, I did a ten K open water swim in the Gulf of Mexico before. I played water polo in college and have always been a swimmer, but I wanna, but I stuck it running and I wanna try it. And then for NGV, I'd say, uh, I mean, there's a huge gaping hole um to be the next student first and trustworthy money brand. Um, and we will be it.

• 24:41Harry Stebbings?

  I, well, I have no doubt and and I want to say thank you so much for sharing the NGV journey and mission with us today. It's been such a pleasure hearing it and having you on the show.

• 24:49Speaker 02

  Yeah, absolutely. Thank you.

• 24:52Harry Stebbings?

  And again, I'd like to give a huge hand to Kelly for that fantastic interview, really fun and great to hear the story with NGV. And if you're loving the Twenty Minute VC, then do sign up for our newsletter on thetwentyminutavec.com. I would absolutely love to hear your thoughts on the show also, so you can email me at [email protected], all in letters. Or you can follow us on Twitter at Twenty Minute VC, all in letters again. Thank you so much as always for listening. Your support really does mean a huge amount. And I look so forward to bringing you next week's episode. And remember, I'll be in SF for February. So let me know if you'd like to meet up. It would be fantastic to meet you.