Stash’s new CEO Liza Landsman on Stash Core, delighting customers, product strategy, and moving into B2B
- Stash has a new CEO, who hails from NEA, Jet.com, Citigroup, BlackRock, and E*TRADE.
- Liza Landsman joins us on the podcast to discuss her mandate and where the fintech is headed in the future.
Company transitions are always interesting. One transition I particularly like is that pivotal point when a startup matures to the extent a founder steps aside and makes way for new leadership. It’s an important stage – figuring out how to balance the passion and insight of a founder with new leadership to continue to grow the vision.
Stash, a company we’ve covered at Tearsheet over the past few years, is undergoing an important transition now. Liza Landsman joined a few months back as CEO. Liza seems to have the perfect background to lead Stash into its next leg of maturity – she combines deep product and leadership experiences in ecommerce, banking, and investing – at firms like Jet.com, Citigroup, BlackRock, and E*TRADE. She also worked with a lot of founders in her most recent role as investor at NEA. Stash’s model – which works with everyday folks to consistently invest a little bit at a time – itself is part banking, part ecommerce, and part investing.
Liza joins me on the podcast to talk about her mandate as CEO and the work ahead. We talk about Stash’s mission and how it’s built a service that people genuinely enjoy using. Liza shares the metrics that will serve as the firm’s north star. We also discuss Stash Core – the firm built its next generation infrastructure that will allow it better economics as well as the ability to more easily plug in partners to the ecosystem. Liza says this will manifest itself on the consumer side but also in the firm’s new work embarking on B2B.
Liza Landsman is my guest today on the Tearsheet Podcast.
The following excerpts were edited for clarity.
The great news for me is that I have joined and Brandon Krieg, a co-founder, is still a big part of our executive team. He has returned to his roots as the serial innovator and is leading work for us in a new part of our business, which is focused more on B2B. I have the great joy and privilege of running the rest of the day to day business,
I've had the opportunity in multiple roles in my career to work as an operator, having worked previously with other founders. But more recently, I went over to the dark side for five years as an investor, and I got to work with a ton of founders. And the thing that I will say that I really appreciate and admire about Brandon and Ed, his co founder, is that they're so passionate about the mission of the company, which is a big part of the reason I was excited to join.
They kind of got to a moment in time where they said, this company and its mission is best served by us doing X and bringing in somebody else who's good at Y. And that's kind of this stage of scaling, which is obviously the stage of company I love. So it's a really symbiotic relationship. It is a great gift to work with founders who have this level of self confidence and self awareness. It is not always the most common trait among founders.
I have said this with people here many times that if Stash had existed when I graduated college, maybe I wouldn't actually be qualified to be in this job because I made so many career choices early on around repaying my college debt. I had no clue how to save and build long term wealth. I came from a family with no money and I waitressed my way through college. I didn't understand at that first decade of my career, the great possibility of building sustainable economic viability for myself, other than through sweat equity, which is important.
It just felt to me like the culmination of so many different pieces of my career: working in consumer finance at large money center banks, working in asset management, working at E*Trade, working in high growth startups. People have asked what one thing did you do that prepared you? And I was like, no, it's actually all of those – the smorgasbordord – things together that made me feel like this is the perfect culmination, but also one that spoke to me on such a personal level.
Because not only do I wish I had had it, but I think equal access is, as a human being, one of the most important values for me.
Mandate as CEO
Number one, I’m expected to certainly be a capital allocator. And I say that in part because how you invest your money is similar, as we think about it for consumers. How you invest your money is like a pure expression of what you value. And so here, it's around building out this next generation team for this next phase of growth. So it's a combination of capital allocator: what projects are we going to work on? What things are we going to fund, but also what kind of talent are we going to attract? And how are we going to retain the best talent? I'm an old product person. That always sounds terrible when I say it – I've worked leading product teams many times, I guess I'm just a middle aged product person.
Honestly, my mandate is to grow the company really healthily. I sort of view my mandate and the rest of the executive team right now – we genuinely believe that the product and service we are offering to consumers improves the quality of their lives. So we want more of them to be able to access it. It's not that much more complex than that – when you click down one other level, there are some additional channels we'd like to use, but that's really all how you do it. And there's some additional products we'll probably add, but all of that is in service of helping consumers invest better, so they can build long term economic sustainability. The mission actually stayed pretty pure. And we're now changing how we do that, but not why we do it.
I think one of the things that is great about where the company is, is that it's done so much incredible foundational work, including launching Stash Core last year, which we can talk about in more detail later. But we're very rich on feature functionality. One of the things that has also happened over time, and we've talked about it a lot: the core essence of the product is so powerful and so deeply needed and loved by consumers. Over time – and this is so common in high growth companies– we've kind of become like a loaded baked potato. So like lots of great stuff lumped on top of the potato.
We're doing some work now to actually clarify and streamline the consumer experience. So particularly for first time investors or less confident investors, as they come on the platform, they can get to the meaty kernel of stuff they want to get to sooner. And so I am spending a fair amount of my time on the product side as well. And that's also really fun for me, because I love that stuff.
People dig Stash because of the business model
I think it was part of the magic of the platform. I think it comes, frankly, from the business model itself. Because, unlike many other players in the fintech category, who, because of their business models, are necessarily very focused on driving transactions, the interaction consumers can have with those platforms is literally quite transactional. And everything in it is designed to push you to do more and more.
And actually, because we use a subscription model, and we don't rely on transaction volume, we're just trying to coach you to do the least amount to get you the best outcome. It's actually very simple at its core, which is like a small amount invested consistently over time in a diversified portfolio with buy and hold. And I think we also have really created the product so that it's structured in a way to guide that behavior, as opposed to like preachy and pedantic – it’s a kind of learning through doing rather than let you read a 75 page white paper before you pick your first ETF.
The brand voice and feel
I think part of the magic that is in the model and the way we engage with consumers is that it does feel accessible, it does feel like a peer. I think part of the reason I personally was so drawn to this is having grown up inside of traditional, legacy consumer finance. In great blue chip companies, the thing that you can't fail to observe when you sit inside them is that they are terrific and perfectly designed – if you are part of the 12.5% percent of America that is mass affluent. And for everyone else, not so much. Fee structures don't make sense. The asset level requirements don't make sense. The interaction model doesn't make sense.
Our goal is to actually lighten the load of work. You think about what mental load every human has every day in this country. Particularly for consumers who are kind of in that current environment, a little stressed by macro economics. We really view our role to actually lessen that anxiety rather than heightening it, which I think has historically been one of the common modalities of big finance.
Metrics to guide by
Obviously, we look at whether our subscribers are sticking around. That's kind of funny. The company had tracked prior to my joining a lot of great customer satisfaction metrics, so CSAT on the phones, and very detailed and specific metrics around how people rated different aspects of their journey and app. They're all good. But I am a fan of a first principles view of the universe. And I was like, they're two things that really tell you how you're doing with customers. The first is whether they stick around. But that's a lagging indicator. The second is NPS, which to me is the least imperfect of a set of imperfect choices to measure how much do your customers love you overall. The company actually had not collected NPS on a regular basis until recently – we actually just launched it a month ago.
We're using NPS and retention as our twin north stars around how much our customers love us. And is it healthy growth? There are lots of ways companies in our kind of business can drive revenue, but in a subscription business, whether people continue to feel the subscription has value and stick around for it, to me, it's the purest expression of whether they're doing it or not. Everything else is kind of interesting, but not foundational to the relationship.
For most of the firm's history, when it provided banking for investing, it relied on a third party platform to perform that service. As the business grew and scaled, Brandon and the co-founders realized there was a tremendous opportunity to think about other kinds of innovation, if that back end piece of the system was something we could run, own, and manage. Quite frankly, it would give us the opportunity – from a unit economics perspective – to be able to have more money to invest back in and increase value in the subscription.
The team did an amazing job last year of first building our own platform, and then migrating off the third party platform. Banking for investing is the first application. But because it's an open platform, we're able to plug in other third party APIs, which allow us to provide other services, or build more of our own services on top of it. Today, we use it not just for banking services for investing with our partners Stripe Bank, but also it's the point of connectivity for firms like Marqeta and Mambu, Alloy, MasterCard, and others. And this is kind of like the end of the beginning in terms of how we think about leveraging the core platform to both grow the business but also control our own destiny.
It is one of the interesting challenges. We talked earlier about how I see my role – I said it's capital allocator. It's a great and fortunate position to be in. As part of a leadership team, when we have lots of great choices in front of us, we just have to be really disciplined about which ones we make. So we execute with the quality that our consumers deserve. We're just being very choiceful about not proliferating 75 things on the platform out of the gate. But it's great that we have that flexibility and the agency to be able to determine what those things are, as opposed to being beholden to a third party's development cycle.
Stash moving into B2B
Stash Core enables us to do more things on the B2B side and enables us to do more things on the consumer side. And frankly, one of the things that's great about it, because it's an open platform, is that it allows us to plug other great ideas we haven't even thought of yet or thought of by other people into our platform. I'm a big believer in being highly selective about where you invest your precious tech resources on what you build. This is so core to how we think about account structure and the relationship with the consumer that it made sense to bring in.
But I will tell you, I once worked at a company, a large financial institution, that decided it should build its own video display platform and I was like, How about YouTube? Have you ever heard of YouTube? We don't actually have to build YouTube all over again ourselves. And that is one of the things that I love about the flexibility that Core gives us: we have the opportunity when it is really essential to the lifespan of our business to build out the things we want. But it also gives us the flexibility to say, No, we don't, we're not going to rediscover fire in 75 different sectors where other leading technology companies have great solutions for consumers. We can cherry pick those that we want that way, because I certainly don't believe we have a monopoly on innovation.
It's early days. This is Brandon's baby and he's very excited about it. You think about where you want to meet the love of your life – do you actually care where that is? No. And so I feel that way about consumers. Do we care if we meet them through direct to consumer channels, or through their employers or through other partners? When we think about what we have to offer, both the holistic offering and some of its constituent pieces, like the Stock Back Card, there are lots of different channels through which we think it's appropriate for consumers to encounter this offering. It doesn't just have to be through social media or Google search, or through the App Store.
What better way, on some level, than to meet us through a partner you already know, who has a relationship with Stash. And so it's really thinking about the right strategic partnerships. It's really more about positioning the product because we actually think from a feature functionality perspective, what we've built is actually quite holistic. You know, I'm a Hungarian Jewish lady, so nothing is ever finished for me. But we're pretty close.