Brandon Krieg is on his second really big startup. His first sold for tens of millions of dollars. His next venture has raised hundreds of millions and is changing the dynamics of money, spending, banking, and investing for millions of Americans.
During our time on the DealMakers podcast, Brandon Krieg shared his adventures in building and scaling big fintech ventures. He talked about raising money all the way through a Series F, even during a crisis. Plus, integrating companies in an M&A deal, hitting product-market fit, and developing successful product roadmaps.
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Hacking Wall Street
Brandon Krieg was originally born in NYC before ending up growing up in South Florida.
His parents hit some financial struggles while he was a teenager, and he ended up going to high school and culinary school in Florida.
He wasn’t finding it fulfilling, and inspired by Wall Street, yearned to move back to New York and get involved in the financial services area.
Brandon made the move and ran into two others who had just started a new company, Edge Trade. Ultimately, they made him a partner in that business.
They were at the forefront of the transition to electronic trading. When he came on the scene it was still very much the iconic NYC Exchange floor with guys shouting and running around with paper. It was crazy.
Edge Trade began facilitating computerized orders trading. It grew, and Knight Capital came along and acquired them for $60M in 2007. It grew so big that Knight was responsible for trading over a quarter of the US stock market on a daily basis. He was certainly responsible for helping to change an entire industry and a massive one.
Merging and integrating two companies is a beast at the best of times. More often than not it just doesn’t work out. It took time, but it did work out for Knight Capital and Edge Trade.
Brandon recalls it taking a good 18 months to fully integrate the two companies. They were careful not to break the fast-moving startup culture that Edge Trade had. Because when you break cultures customers suffer, employees suffer, and things can go downhill fast.
Don’t Create A Problem, Solve One
One of the biggest takeaways Krieg says he gleaned from this experience was to put away ego and preconceived ideas about what customers need and to listen and learn from them instead.
He says to be sure “that you’re solving a real problem, not making one up, then you could ultimately build a really great business.” Be the pain killer, not the problem maker.
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After seeing through the integration at Knight, Brandon was approached by Macquarie. They offered him the chance to repeat the success of his startup, by building them a global electronic trading system.
It was here that he met his cofounder (Ed Robinson) for his next venture.
After Brandon and Ed were randomly asked about their own investments, they set about asking others the same. They were back in that zone of talking to and listening to consumers. Almost invariably everyone answered that they didn’t invest. They wanted to invest. They didn’t get it. It was too confusing. They were going to put it off until one day when they were ‘rich’.
Ed and Brandon saw a huge potential opportunity. A chance to be a financial services provider and wealth manager for 80% of America that wasn’t invested in the stock market. They just knew that they couldn’t do it while working for a bank.
Hitting Product Market Fit
Brandon and his co-founder quit their jobs, pooled their money with family and friends, and set about creating an investment solution for these consumers.
They realized that one of the big hurdles was to educate customers. They looked at different industries, as different as weight loss, and found models for engaging these consumers.
Stash started hiring teachers and building a financial education platform. They pulled down the perceived barriers to investing by removing the minimum investment amounts that kept many on the sidelines. They slashed that to $5, and now just one penny to begin investing.
Scaling & Product Roadmaps
Stash launched in 2015. They opened a thousand accounts on the first day. Then things got quiet. Apple featured them as the best app in the app store and they got a huge wave of new signups. Then it cooled off again for weeks and months.
They got the whole team calling customers and got back to listening. He says they’ve probably iterated over 100 times to hone the product.
50 new accounts a day grew to 1,000, then 3,000. Now it can be much more than that.
Even during COVID-19 Stash was able to raise more capital to grow. They’ve now amassed at least $302M through their most recent Series F fundraising round. Brandon says the convincing investors to participate wasn’t a problem. The challenges were much more around getting all the players on Google Hangouts or Zoom and operating in this new environment.
Storytelling is everything which is something that Brandon was able to master. Being able to capture the essence of what you are doing in 15 to 20 slides is the key. For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) where the most critical slides are highlighted.
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With this capital, Stash has gone on to give customers other things they’ve been asking for. Like life insurance, retirement accounts for kids, bank accounts, and debit cards.
Listen in to the full podcast episode to find out more, including:
- The process of giving up a successful corporate career for a startup
- How big Stash is today
- The key ingredients Brandon says it takes to connect with fintech consumers
- How to get free stock in the shops you shop at