2021 is off to a roaring start in the fintech world with 10 VC deals exceeding $100M in the first 2 weeks of the year1, more than triple what occurred in the same period last year. The sector is all the rage with a seemingly endless slew of solutions to automate the financial challenges consumers face in their lives, and banks eager to adopt the latest technology.
We sat down with Fahrenheit 212 commercial strategy alumni Siddharth Singh to learn about his own personal finance venture, Ready.Steady.Money. Sid talked about how his company helps individuals with the emotional, as well as practical side of personal finance, connecting consumers with financial coaches who guide you through key decisions, and also helping to build healthy habits around money. In addition to sharing with us his vision for Ready.Steady.Money, we talked with Sid about his philosophy on where all of this energy in the fintech market is heading, and how personal finance coaching plays a role.
Hey Sid! So, to start, what is Ready.Steady.Money?
We are still in the process of defining what we are and aren’t...but what we are becoming is a platform that helps consumers, particularly women and minorities who have lagged behind in terms of wealth creation, improve their financial confidence and net worth.
The platform started to take shape based off of a couple of observations. First, if you think about it, money is entirely emotional. What that means is that money affects us in very distinct ways regardless of our status, and is often a source of stress and anxiety - it’s the number one reason why relationships may falter, it’s a difficult conversation between parents and kids, employers and employees, etc, etc.
The other common line of thinking for why people aren’t building wealth is that they don’t know how to - that it’s a literacy problem. But all the information in the world on how to invest, where to invest is available freely on the internet, but yet only 26% of American women have money in the stock market.
So as we dug in, we realized there wasn’t a literacy gap, there’s a massive confidence gap. That’s been the big shift in our thinking.
What prompted you to pursue this challenge?
I didn’t start by looking at money or financial services. I started on the end of mental health and wellness. Like a lot of people in my generation, I’m fascinated by the underdiagnosed nature of mental health and just how profoundly it affects every aspect of our lives. Money is one of the biggest sources of stress and anxiety for people. It’s one of the hidden commodities that affects our life choices.
Companies and financial services will always, even in the fintech stack, look at money as a numerical quantity so inevitably no one really addresses the behavioral or emotional side of money. But there’s increasingly a ton of research that points to confidence as the biggest factor. As a point of context most of our clients are women, and for a variety of reasons that’s where we feel the biggest need is. A big difference is that a lot of men believe they’re good at managing money, but they’re not, and a lot of women believe they’re not good, but they are and they just don’t know yet.
So, I started in mental health and realized I wanted to address this phenomenal dynamic that exists with money that affects people in different stages, whether you’re getting married or having a kid, these are high stress situations but the only things that exist are financial products.
You’re seeing a phenomenal explosion in the fintech stack, but that only means that people need a lot more guidance and support to guide them on this growth.
Speaking of the fintech stack, do you think other fintech offerings are seeing the same problem?
Yes, 100%. They are starting to approach it, and we’re trying to do the same. I look at the fintech space and apps as partners, we ultimately want to be the middleware between the consumer and the marketplace. We want to help you and guide you to make the right choices. We can help you truly make good use of these products and services.
The two pieces we’ve learned is that one, as we’ve discussed, we’re improving financial confidence, and the 2nd thing is that once customers are at that stage of having built confidence, they want to start investing - what products do I use? How do I use this?
Nearly everyone has erratic or incomplete information about their investment tools, and we’re not saying that you need to study and learn everything before you qualify, but once you go through our program you’re a much more mature, bolder consumer than before. So, rather than just participating in the debt side of the financial market, if we do our job right they’ll start participating in the wealth building process.
It sounds like your coaches may not be your traditional financial advisor, what do you think about in terms of a hiring process?
The good news is that the idea of addressing the emotional side is permeating pretty well, and the best financial advisors already do this - when the market topples 20%, they’ll help their clients think through the problem, how to not freak out and explain what they’re doing. The thing is that financial planners don’t have time to be coaches, what we find is that we’re able to do it on their behalf. We’re not financial advisors ourselves, so we’re happy to say hey, financial advisor, here’s a client that wants to work with you, here’s what they want to do, and importantly here are their life goals.
What’s your philosophy when it comes to advising people?
What we look at is coachability and motivation. Making change in your life is not going to happen unless you have distinct milestone motivators. I’d almost say understanding people’s motivations and ensuring there’s a good reason for them to act.
The second thing is self-reflection and awareness. What are their beliefs around money? Where did you learn about money? Most likely it was from their parents, who by the way had their own emotional baggage around money, so there is generational trauma around money.
Another element is that, ironically, the reason they might be scared about money is that they’re scared of math. When you treat mathematics when you were growing up as this thing that was scary, it extends into adulthood. So we take a step back and say let’s gently dig in. We get people to look through the numbers, and overcome their avoidance
You were at Fahrenheit for 6 years..are there any key lessons you’ve taken from Fahrenheit either identifying the problem or getting things going?
Certainly being able to understand the consumer, that empathy is critical.
The second thing was that working in commercial strategy I always had to bring in a strong commercial lens, but the problem in the startup world is that almost creates this barrier to participation. If you think about how the internet economy works there are two schools of thought here, one is that you should build a business and sustainably grow it, and then there’s another that says no, hyper growth, bring on users, move as fast as possible, etc. So how do we reconcile that? With Ready.Steady.Money I always had a strong belief that we need to be unit economics positive on day 1.