We live in a world where self-driving cars are a reality, but I still can’t manage my money from my phone
Growing up we weren’t rich. My Grandfather started out sweeping the floor of woolsheds and worked his way up to become the state manager at a large pastoral company in Australia. For my 11th birthday he gifted me some stock in one of Australia’s largest mining companies.
“Hold on to it,” he said. “It will be worth something in the long run.”
He was right. I stuck with those shares through all kinds of ups and downs, and I was glad I did. That small gift was my first lesson in managing money. Since that beginning, I’ve been incessantly interested in figuring out how to make my money work for me.
When I moved to America to study, I was struck by how difficult it was for me to get my financial life going. I had decent savings, no debt to my name, and an American Express card backed by good credit history in Australia. Yet none of it mattered here. American Express would not issue me a credit card. To get a cell phone, Verizon made me pay a $500 deposit. I then had to pay another $500 to get a working “credit” card. As a student, this was a lot of money.
I was told that I had to borrow money now, in order to borrow money in the future. I was told I had to have multiple credit cards and never cancel them even if I didn’t use them, because that would hurt my credit score. I resisted this advice and that decision still negatively impacts my credit score after all these years.
As an entrepreneur and an investor, I’ve seen technology transform many industries. During my tenure at Sequoia Capital we helped the founders of Airbnb, Stripe, Square, Dropbox, and FutureAdvisor build innovative, enduring businesses. The path from A to B was never clear. The founders believed there was a huge problem in their industries and they were determined to change that. The companies they built have succeeded far beyond what I could have imagined and have offered everyday consumers, like you and me, better solutions to our persistent problems.
After all these years in the U.S., I still believe that our financial services industry is broken. Badly broken. To this day, I am penalized for not taking out more debt. Penalized for not having a “normal” job. Penalized for not putting a credit card on autopay, because I couldn’t set it up properly, thanks to my bank’s onerous user interface.
The four leading banks in the U.S. are among the ten least loved brands by Millennials and for good reason. Over half of Millennials believe there is no real difference between the 10,000 banks that exist in the U.S., and 1 in 3 don’t think they even need a bank. They are right, but today, there exist few alternatives.
New “non-bank” alternatives such as SoFi, Earnest, Affirm, and Prosper are offering great alternatives for consumers. More are coming, but progress is slow in this industry. It’s far too profitable though for the incumbent players tonot evolve because the status quo allows them to collect a healthy$6,000,000,000 (that’s billion) a year in overdraft and ATM fees from consumers.
We live in a world where self-driving cars are a reality. From your smart phone, you can beckon a personal driver, make food appear from your favorite restaurant, and even meet your life partner, yet you can’t see and manage all your money from your phone with a few simple taps?
Justin (my co-founder) and I want to change this. We think the time is ripe to go back to the basics when it comes to managing our money. We believe in being able to see how much we are spending, in avoiding unnecessary fees, and in living within our means. We believe in saving for our future while paying down our debts. We refuse to be routinely intimidated by the jargon this industry throws at us. We believe our mobile devices give us that opportunity to reimagine the relationship we have with our finances.