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

In this episode of "20 minutes vc," host Harry Stebbings interviews Kelly Peeler, the founder and CEO of NextGenVest, a company dedicated to guiding students through financial aid and student loan processes. Peeler, a Harvard alumna with a passion for empowering youth and a fascination with financial crises, discusses her journey from starting a nonprofit in Iraq to tackling student debt in the US. She highlights the evolution of consumer fintech from organization to efficiency, emphasizing the crucial roles of trust and personalization in building brand loyalty among millennials. Peeler also outlines her company's growth strategies, including student referral models and leveraging educational mandates. Throughout, she stresses the importance of meeting students where they are, particularly on platforms like SMS and Snapchat, to provide timely, personalized financial guidance.

• Harry Stebings introduces Kelly Peeler, founder and CEO of NextGenvest.
• Kelly is recognized for her work in empowering young people and financial education.
• She started Business Across Borders and was involved with the International Women in Business Summit at Harvard.
• Kelly received accolades from the Kaufman Foundation, Goldman Sachs, and was a White House ambassador.
• Her TED Talk, "How to change the world as a millennial, don't be stupid with money," is highly recommended by Harry.

"Today's guest I read about in TechCrunch and then I watched her TED Talk and it instantly became my favorite 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."

Harry Stebings expresses his admiration for Kelly Peeler's TED Talk and her work, which compelled him to invite her to the podcast.

"Kelly is the founder and CEO at NextGenvest, the college money mentor for every student helping students navigate the financial aid and student loan application process."

Harry introduces Kelly as the CEO of NextGenvest, highlighting the company's role in assisting students with financial aid and student loans.

• Kelly's passions include empowering students and studying financial crises.
• She founded Business Across Borders to assist Iraqi students in entrepreneurship.
• Her interest in financial crises led her to debate between becoming a financial historian and working in finance.
• Kelly chose to work at Morgan Stanley to gain practical experience and earn money.
• NextGenvest was founded as a combination of her interests in student empowerment and financial crises.

"The reason why I started Nextgenvest is really kind of the result of two of my personal passions, which, don't laugh at one, they're very different ends of the spectrum."

Kelly explains that her two distinct passions, student empowerment and financial crises, led to the creation of NextGenvest.

"I absolutely loved it, because that really turned me on to the idea of kind of inspiring and helping students see themselves at a higher level."

Kelly shares her enthusiasm for inspiring students and helping them achieve their potential, reflecting on her experience with Business Across Borders.

"I started to start NGV because it really involved both of my core two interests, students and financial crises."

Kelly states that NextGenvest was the result of combining her core interests, which align with the company's mission.

• NextGenvest aims to alleviate the burden of student loans, which Kelly believes is a major obstacle for young people.
• The company uses text messaging and Snapchat to help students with financial aid and student loans.
• Kelly highlights the issue of unclaimed financial aid and the high dropout rate among students with loans.

"In the US, the average kid graduates with around 30k in loans... Students leave about $2.9 billion in free financial aid on the table every year because the process is frankly, just so shitty."

Kelly discusses the challenges students face with debt and the complexities of the financial aid process that lead to unclaimed aid.

"30% 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."

Kelly emphasizes the severity of the student loan crisis, where many students drop out and are left with debt without a degree.

• Harry Stebings is interested in discussing the development of the fintech ecosystem.
• He wants to compare the early stages of fintech with the current expansive consumer fintech landscape.

"And we spoke there about the economic machine, Radalio there 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 the space."

Harry transitions the conversation to the broader topic of fintech's evolution, referencing Ray Dalio's concept of the economic machine.

(Note: The transcript provided ends before Kelly Peeler could respond to the question about the evolution of the fintech ecosystem, so no further notes or quotes can be provided on this topic.)

• Transition observed from financial organization to financial efficiency in consumer fintech.
• Five years ago, consumer fintech focused on organizing financial information.
• The current trend emphasizes efficiency, time-saving, and automation.
• Financial organization (V1) helped users see their entire financial picture for better decision-making.
• Financial efficiency (V2) focuses on automation and personalization to optimize time.

"We're currently in the midst of a consumer financial revolution... from financial organization to financial efficiency currently."

The quote explains the shift in the fintech industry's focus from simply organizing consumer finances to making them more efficient.

"V one is financial organization... V two, column two, is this idea of optimizing for your time through automation and personalization."

This quote contrasts the initial phase of fintech, which was about financial organization, with the current phase that prioritizes time optimization through automation and personalization.

• Users now prefer a hands-off approach to personal finance management.
• Desire for financial tools that work in the background without constant monitoring.
• Acorns is an example of a company automating personal finance, leveraging user trust for efficiency.
• There is a significant increase in the value users place on their time.

"We're entering the quote unquote, set it and forget it stage of personal finance, where people don't want to be checking charts and graphs."

The quote highlights the trend towards automated financial management where users expect their financial tools to operate without needing regular personal intervention.

• Time and trust are critical factors for success in the consumer fintech ecosystem.
• Brands that can efficiently develop these aspects will likely succeed across various financial services.
• There is a mismatch between traditional financial institutions and the expectations of today's consumers.

"The entire game with this ecosystem in fintech is, at least on the consumer side, is about a couple of things. One is time and two is trust."

The quote identifies time and trust as the two pivotal elements in the consumer fintech space, suggesting that companies need to prioritize these to gain a competitive edge.

• There is a significant lack of trust in traditional financial services among younger demographics.
• Millennials and students are seeking new financial partners they can trust.
• Only 8% of millennials trust banks and financial institutions for guidance, indicating a trust crisis.

"Millennials or students... have no one that they can trust for financial guidance... 8% of millennials trust banks and financial institutions for guidance."

The quote reveals the low level of trust millennials have in traditional financial institutions and underscores the need for a new approach to financial guidance.

• Building trust with the student and millennial demographic is essential for new fintech brands.
• Trust can be built by saving users time, saving them money, and providing a personalized experience.
• Drawing parallels with Uber, which sells time and has become indispensable due to reliability and cost savings.

"Trust really boils down to three things... save users time, save users money, and provide a customized and personalized experience in a reliable and consistent [manner]."

The quote outlines the three pillars of building trust in the fintech sector: saving time, saving money, and offering a personalized experience.

• The product is designed to save users time and money while providing a personalized experience.
• Empathy for students is central to the product's design and functionality.
• Meeting students "where they are" is a critical aspect of the product's approach, indicating a focus on accessibility and convenience for the target audience.

"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."

This quote emphasizes the product's core value proposition, which is to offer time and cost savings alongside a tailored user experience.

• Personalization and customization are essential features of the product, especially for the target market.
• The product has been designed specifically for the millennial market, with attention to their unique preferences and behaviors.

"And talking about the product then, and particularly personalizing and customizing it. I mean, I think you've probably done that. What? Definitely done that for your market."

This quote reflects the speaker's recognition of the product's successful customization and personalization for its intended market.

• The product primarily serves students through SMS and Snapchat.
• Push notifications are believed to need intelligence to deliver the right service at the right time.
• The decision against building a native app was made to allow for more customized communication.
• Snapchat's attention graph is significant, with 45% of users under 25 and nearly 200 million users engaging with 7 billion video views per day.
• Being present on platforms where users are active is crucial for brand engagement and trust-building, regardless of the personal nature of the topics (e.g., student loans, financial aid).

"The reason being is the attention graph is completely off the charts for students with these two platforms."

This quote highlights the high engagement levels of students on SMS and Snapchat, which justifies the product's communication strategy.

• There is an awareness of the potential for platforms to trend and change over time.
• The product isn't solely dependent on one platform but uses them for outreach and initial engagement.
• The core functionality of the product is over SMS, with efforts to provide value on Snapchat.
• Learning and collecting information from platforms is part of a strategy to better serve users through a holistic understanding of their needs.

"I have absolutely no doubt that there will be another, the next version of Snapchat will come along in five years."

This quote acknowledges the dynamic nature of social media platforms and the need for adaptability in the product's communication strategy.

• The product employs a student referral model for community building and growth.
• Student clubs are set up in high schools across the country to promote the product and engage peers.
• Three primary growth strategies are employed: grassroots student referrals, embedding into SMS and Snapchat platforms, and leveraging state mandates for financial literacy education.
• The product introduced an online digital financial literacy platform to fulfill state education requirements, which also serves as a customer acquisition channel.

"So whether that's been in Iraq or another company that I helped start in college. But 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."

This quote describes the grassroots approach to growth, where students form clubs to promote the product and refer new users, highlighting a community-driven customer acquisition strategy.

• Kelly Peeler expresses a strong interest in financial history books, reading a new one each week.
• She highlights "The Thank You Economy" by Gary Vaynerchuk as a favorite.
• Kelly appreciates the concept of out-hustling competitors for user attention and loyalty.
• She believes in personal user interaction and mentoring student users.

"I read probably a new financial history book every week, but, no, I guess what I would say in terms of business, I would say the thank you, economy. Gary Vayner. Yeah, he's coming on the show. Oh, my goodness. This is like a fangirl moment for me. I'm obsessed with him."

This quote underlines Kelly's enthusiasm for financial history and her admiration for Gary Vaynerchuk's work, emphasizing the importance of customer appreciation in business growth.

• Kelly agrees with Harry on the importance of creating brand ambassadors from the start.
• She relates this to a "club model" and considers them advocates for the brand.

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

Kelly confirms the strategy of cultivating brand ambassadors, aligning it with her previous mention of a club model, which suggests a community-based approach to marketing and brand loyalty.

• Kelly is a visual person and believes in focusing on a maximum of three things at a time.
• She uses large index cards to write down the top three tasks to accomplish the next day.
• Saturdays are reserved for "creative Saturdays," a day for recharging through painting and arts with friends.

"At night, I have these really huge index cards next to my bed and I write the three things that I'm going to accomplish the next day."

Kelly shares her method for maintaining focus, which involves preparing for the next day by setting clear, tangible goals.

• Kelly cannot narrow down to one piece of advice, so she buckets them into three categories: business, team, and personal.
• Adam Nash's advice on building trust into the product and company culture.
• Josh Elman's advice on being a supportive teammate rather than micromanaging.
• Taylor Conroy's advice on daily meditation for focus.

"On the business side, Adam Nash at Wealthfront said really smartly to build trust not only into the dynamics of our product, but also really into the philosophy and the culture of my company, which I just thought was very insightful."

This quote captures the essence of Adam Nash's advice to Kelly on the significance of integrating trust into every aspect of a business, from product design to company culture.

• Kelly wishes she had focused on optimizing her strengths and delegating her weaknesses earlier in her career.
• She believes focusing on strengths is key to achieving her ambitions.

"Easy. I'd say optimize on my strengths or to my strengths and delegate my weaknesses."

Kelly reflects on her past approach, recognizing the importance of leveraging personal strengths and outsourcing areas of weakness to be more effective in her pursuits.

• Kelly aims to run a marathon and possibly complete an Ironman challenge.
• She has ambitions for NGV to become the leading student-first and trustworthy money brand.

"And then for NGV, I'd say, I mean, there's a huge gaping hole to be the next student first and trustworthy money brand, and we will be it."

Kelly outlines her vision for NGV, indicating a clear goal for the company to fill a significant market gap by prioritizing student needs and trustworthiness in financial services.

• Harry Stebings concludes the interview by thanking Kelly for sharing her insights and the NGV journey.
• He encourages listeners to sign up for the 20 Minute VC newsletter and provides contact information for feedback.

"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."

Harry wraps up the podcast episode by expressing gratitude to Kelly for her participation and sharing valuable information about NGV, while also inviting listeners to engage with the 20 Minute VC platform.