Jon Stein is the CEO and founder of Betterment, an online personal investment tool. A trained CFA and graduate of Economics from Harvard, Jon discovered a outlet for his interest in behavioral economics and psychology in founding Betterment.
Though improving financial services are now his passion, we found in our interview that it hasn’t always been his calling. What has remained constant? His desire for progress and his engineering-minded eagerness to fix broken systems.
What would you otherwise be doing right now?
It’s hard to imagine an alternative, but I originally set out down a pre-med track. I thought for a while that I’d be a doctor. I did a post-grad pre-med year, and I loved the idea of helping people and really getting to know their lives and improving their lives. But when I was volunteering in the hospital and working in the Harvard bio labs I realized that, one, I didn’t like blood, and, two, something about the impact felt small. Even though it was helping people, I wanted to fix the system. I thought the hospital was such a mess. I wanted to fix something bigger than the individual patient. So I thought I could have more of an impact in business as a manager or a business leader.
So I think if I were doing something else, I would have followed that doctor path.
What is your main fault?
A challenge I have sometimes is letting my team take the lead and stepping back myself. It’s something I know I should do and I work at it actively, but that doesn’t make it easy or natural. I’m an engineer, and I have this “I want to fix it!” engineering mindset, and so my first instinct is to jump in and fix it. Oftentimes that results in me—I like the phrase “adding too much value”—I’ll add too much value. It’s better to let the team take it or go a direction I don’t love so that they can learn from the experience.
What is the quality you most desire in a tweet?
What is your idea of misery?
A life without family or friends.
What do you appreciate the most in your friends?
I love to hear their stories and look at their experiences. When I look at my friends over the years, so many of them are good storytellers. I think I tend to be more of a listener. I love to hear about people and help people, and part of that is just getting to know people. Hearing other people’s stories about their lives and experiences with others is one of the lenses through which I get to experience the world.
What is your chief characteristic?
If I have to boil it down to one thing, it’s probably that engineer looking to make people happier—myself, my friends, my family, our customers. I’d like to make their lives better, and I do that with an engineering perspective.
What skill do you wish you possessed?
I wish that I had infinite ability to remember people and conversations. Better recall is a thing I often fantasize about. The idea that I could just store observations and memories in the cloud.
I suppose the burden of that would be an inability to synthesize and figure out what’s important. So you’d have to couple that infinite capacity for memory with an amazing synthesis and analysis engine to get to what’s actually valuable. But sometimes it’s telling the full story or the circumstance that’s really interesting or gives some nuance and color to the end observation or takeaway.
What is your most impactful book?
I’ve read a lot of books that have changed my thinking over the years. I think back to college when I read The Winner’s Curse by Richard Thaler and that turning me down the road towards behavioral economics. I think of Jared Diamond’s Guns, Germs, and Steel. That turned me down the road toward human behavioral biology and circumstantial understanding of what makes societies, cultures, and individuals work with more of a scientific approach to things.
If I had to choose a most impactful book currently in my thinking, I’d probably say Thinking Fast and Slow. It’s a book I love, and I’m now reading the Michael Lewis summary of it called The Undoing Project. I think it’s making me want to go back and read Thinking Fast and Slow again.
What defines success for you?
Constant. Iterative. Progress.
One of my college roommate’s mom used to say, “I’m not looking for perfection. I’m just looking for improvement.” I like that idea of constant improvement.
When is confidence lost?
When you lose your team. Confidence is the collective confidence that people have in you. The idea of working without a team feels pretty bleak. So that would be confidence lost.
Which buzzword is exhausted?
Roboadvisor. Which is what they call my company: “The First Roboadvisor.” We didn’t come up with that term, and there are no robots here. So it feels overused about my industry.
What virtues do others have that you don’t?
Where to begin?
I think of my wife and her patience with our children. I think of my grandmother and her constant good humor and sense of connection to the community and importance of relationships. I think of my parents and their always putting family first—their investments in me and my sister, and their selflessness.
There’s a lot that I aspire to. I’ve been fortunate to live with many good influences and to be supported by all of my teachers, coaches, and scout leaders over the years. I just feel fortunate to have a lot of people who are constantly reminding me of how I can be better, and showing me the way.
What impact do you want to leave behind?
It’s trite, but I want to make the world a better place.
I don’t think most people got into financial services thinking, “That’s what I’m going to do!” I got into financial services by accident. I really just wanted to help make people happier.
I got into financial services because one of my happiest friends was in the industry. I thought, “Well, I’ll learn a little bit about business, and I’ll figure out a thing to go and do.” I got enough experience in this particular industry, saw opportunities to improve it, and used this to be my avenue to make people’s lives better.
Ultimately, I want to make money better, and through making money better, help people live better lives.
What’s the biggest problem tech is failing to solve?
Look, I think there are some really big problems that tech has yet to fully solve in financial services, in healthcare, and in education. In financial services, we’ve got to help people save for retirement and just get better at money. Money should not be a thing that people have to worry about in life, just like medicine shouldn’t have to be a thing that people worry about. It should be available to all. Education should be available to all. Technology can help us with all of those problems, and smart entrepreneurs are working on all three. I think over the next couple of decades, we’ll improve those industries markedly and people will live better lives as a result.
I think the next frontier—the one that technology is not addressing but will have to—is government. How we as a society organize will change the way that we distribute surplus in the economy, and the way that we think about equality, rules, and self governance. We’ll be able to evolve through technology, and I hope that we have thoughtful leaders in place who are receptive and forward thinking about how to implement those kinds of changes.
Editorial Note: Answers edited for brevity and clarity.
Illustration Credit: Li Anne Dias
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