John Corcoran 7:35
Certainly at the time, when we were there, yes.
Andrei Cherny 7:37
Certainly at the time, and, and look, I think administration’s of both of both parties, that’s largely been true, that sense of responsibility, a sense of got to get every detail, right, and there’s expectation that you get every detail, right. And, and I still think about that, as we’re building Aspiration. But to your point, some incredibly smart people and certainly had that reaction about playing at that level. Happy, I also saw the opposite, too, which is, you know, in college, or your, your friends would sit around and you’d talk about bs sessions around what’s going on in the world and, and kick around ideas. And you’d always think, okay, you know, there are these people who are in a place like the White House, and they’re making, they’re, they’re so super smart, so much smarter than anybody else, they know so much more and, and I also have the experience of just ending up being in those rooms, in, in those rooms in the White House, and listening to the conversation and, and very smart people but also wasn’t all that much different than the things that I friends and I would talk about, and the realization that whatever door you’re on the other side of and you think that there is a group of people that are Olympians, on the other side, it’s really not the case. And in some ways, that’s also shaped what we do at Aspiration too, which is the idea of a denial about starting a financial institution, up against enormous incumbents, but you know what, we’ll figure it out if other people figure it out, we can figure it out too, and may not have the experience, but these are all things that are answerable. And I think that’s part of that entrepreneurial instinct of really believing that. You don’t have to have decades of experience. You have to have the gumption and drive to try something different. And that’s how change happens. Right.
John Corcoran 9:49
Right now you were involved very heavily in politics in Arizona for many years, ran for public office, helped shape many of the movement there from being a really red state more towards a blue state. Did that shape your ideas around starting a company? Because, you know, starting companies, traditionally more of a conservative type of thing to do, or at least the premise of using a company to affect change. But did that shape you at all?
Andrei Cherny 10:22
Not really, you know, I, as I said, I’ve worked on a lot of these very same concerns and issues that we deal with that Aspiration, around climate change around how to help make the financial industry more fair, and was a financial fraud prosecutor. You’re in Arizona, and saw a lot of these very same concerns. And to me, I really believe that part of the answer was, was having a company that would really do things the right way, that wasn’t enough to just preach the companies to change the way they do business and try to convince them or try to pass laws that another way to make change was to say, let’s, let’s build a company that, that does things in a way that’s good for people good for the planet. And that really drove a lot of our thinking and Aspiration from day one.
John Corcoran 11:18
Yeah. So talk to me about how the idea came about.
Andrei Cherny 11:24
It really started with a series of conversations. And as I said, had started working with Al Gore around we’re calling them global warming back in the 90s, and had worked with Elizabeth Warren, when she was a law professor on the idea of what eventually became the Consumer Financial Protection Bureau and had been a financial fraud prosecutor and then was doing consulting for some big banks. And, and just so you had these very large institutions, would lose their way in a fundamental way whose customers just didn’t trust them. They didn’t trust them, because the customers knew that the worst they did in their life, the better their bank did more overdraft fees, more late fees, and so some understandable distrust there, and well-earned distress, but also a lack of alignment and a lack of trust around values, and that so many people were thinking about what was important to them. When they were making spending decisions across their lives, they were thinking about ethics, they were thinking about environmental sustainability, in the grocery store, buying clothes, buying coffee, and that they really needed a financial institution that was built around that. And if you built that, you could really not only serve a lot of people who were being left on the sidelines, and didn’t have an opportunity to make a positive impact through their financial life. But you could also build a business that showed there was a different way of acting and a different way of responding to the challenges we face as a society or as a planet. And so started some conversations with a friend of mine who had known for many years, and he was investing in, in, in startups. And at a certain point, we said, let’s, let’s try to build something. And, and as I said before, we didn’t know what we didn’t know. But if we look at what we’re doing now at Aspiration, eight years later, it’s very much along those same lines of what we bought about on day one.
John Corcoran 13:28
And did you have mentors that you could turn to, you know, obviously, never having started a financial institution before? How did you figure it out?
Andrei Cherny 13:38
You know, in an area like this, I really didn’t have people that I knew who could be, who could be those Sherpas, it was a lot of calling up people and trying to get their advice. It was reading; it was trial and error of figuring things out along the way. You know, the people that we did talk to for the most parts of this can’t be done. And as I started trying to raise money for the company, in startups, you know, we were saying hey, we’re gonna create a financial inclusion built around conscience and sustainability and serving people who care about that not just serving people who are looking for the best deal and we’re gonna let people pay whatever they want even if it’s zero with a pay what is fair process and we were going to give 10% of the earn towards charity and it made for some pretty short conversations I’m sure as we made that pitch to people and a lot of doors metaphorically literally slammed in our in our face. But eventually you meet people who do believe in what you’re doing and are willing to help you along the way. For us, one of the first people that really did believe in that was a guy named Jeff Skoll, who had been an entrepreneur himself and had been the original president of eBay. And made this pitch to him. And he said, I think this is gonna work. Well, maybe you didn’t hear what I was saying, like, we’re really going to zero, we’re going to focus on sustainable financial products isn’t that and I think, I think it’s gonna work. He said, You know, every 10 years or so there are companies that come along that take a big bet on trust. And so that’s what made eBay successful back in the, in the, in the 90s, when they were competing in the early wild west days of the Internet, and the idea that you’d actually send money to somebody that you never met on and only knew online, and they would actually send you the Beanie Baby or baseball card was, was pretty crazy. But it worked. And similarly, 10 years later, the idea that there’ll be businesses based on staying in a stranger’s bedroom in a foreign country, or getting into a stranger’s car, or we’re not. And of course, rideshare and Airbnb took off, and he said, somewhere, you guys are taking a bet on trust. And, and, and people will respond to it. And, and so finding those people who believe in what you’re doing, and can offer guidance and help and, and assistance, whoever they may be, is so important in that journey.
John Corcoran 16:28
What kind of an impact did that have when you met with him? And someone of that stature said I think it’ll work?
Andrei Cherny 16:37
First of all, you know, he invested in the business, and of course, that matter, but more than that dollar amount, was really that credibility was really saying, here’s, here’s somebody who has been incredibly successful, and who is whose opinion is very much valued. And they were in a position where he was able to validate what we are doing and, and get others to maybe pay more attention to us and or take us more seriously than otherwise would have been the case?
John Corcoran 17:09
Yeah, yeah, massively impactful? How did you ensure that the idea was also going to be profitable? Because of course, it won’t get very far, if it’s not profitable, you know, and there’s a lot of people I’m sure, who wake up one day, and they’re like, here’s an idea, we’re gonna start a financial institution that’s gonna give more money back to the environment, you know, there’s probably lots of people who do that, and it doesn’t get very far. So how did you ensure that it would also be successful enough that it would have some staying power,
Andrei Cherny 17:37
the idea was that if a financial decision really did have a trusted relationship with its customers, and was delivering for them, that you’d be more profitable, not less profitable. And that was that the central insight was treating our customers well, giving them a way to do well and do good was not going to pull back on our profitability, but was actually going to supercharge it. Because if people trust you, they want to do more with you, they’re more willing to sign up as customers, they’re more excited to look at the other products and services that you offer. And so for us, it was really fundamental, that we would be building a company where it wasn’t purpose ahead of profit. It wasn’t profit, it had a purpose, but the idea that profit and purpose would be inextricably linked, and that the more successful we were in delivering on the purpose, the more profitable we would be and the more profitable we were, we’d be was only because we were delivering on that purpose and and intertwining that DNA was from the get-go a big part of what we really believe we are doing,
John Corcoran 18:56
and how did you know there are so many companies you think like Google, do no evil, but there’ve been lots of people who’ve made accusations that, you know, Google’s lost its way. You know, there are lots of other companies, where people say they lose it, it loses its way somewhere along the way. So what sort of guardrails did you put in place to ensure that even after you move on, that the company would continue to operate in the way that you see fit?
Andrei Cherny 19:21
I think that gets to that. Combining an intertwining of profit and purpose. Google’s mission and motto can do no evil, but they make money irrespective of whether they’re being evil or not, right. There’s plenty of companies that say, we’re going to make shoes or vests or make paper products, wherever it might be, and then we’re going to do some good on the sides to you. You buy our shoes and we’ll do some good, and that’s great. I’m all Before that, but for us, it was really the idea that if we strayed from that, we would have a less profitable and successful company that was the insurance policy, right? Something like pay what is fair, our customers decide what to pay us if they want to pay us zero, they can pay us zero. A great majority of our customers choose to pay, even though they don’t have to. And that’s an insurance policy, it says that, if we stray from being who we say we’re going to be, and not delivering on what we say we’re going to do, then our customers are going to choose to pay us less, and that’s going to hurt our bottom line. And so we have a company where our financial incentives are linked to and, and can’t be separated from the ways in which we do good in the way in which we empower our customers to do well and do good.
John Corcoran 20:58
How has, I guess it’s hard to separate these two things out. But how has having such a core mission contributed to building a culture with the team that you have now and also attracting quality people to come work for you? I think it’s always interesting talking to entrepreneurs who say, you know, because I have this clear mission, because I had this clear vision, because I articulated it, you know, I had these really quality people who came to work for me, because they believed in it. So how has that impacted you?
Andrei Cherny 21:26
We’ve certainly seen that we’ve seen all kinds of amazing people who probably could make a lot more money at, at other places, and in many cases, who have been making a lot more money at other places Come come to work for Aspiration, because they’re excited about the mission, they’re excited about the kind of company that we’re building our culture, is what we define as mission-driven. And with the idea that both of those words carry equal weight mission, we look to make sure that every person who comes to work for Aspiration is coming because of that mission. And that’s true, whether they’re an engineer or designer, or on our compliance team, or whatever else they may be, but they’re coming for that mission. But the other part is the drive. And that’s as important and it’s not enough to just believe in that mission, it’s not enough to be mission-aligned, you have to be willing to fight for it, you have to be willing to do what people don’t think it’s possible to go beyond the extra mile to break down walls, to really be able to work in ways that are new and different and innovative, every single day, to try to build a company likes of which I’ve never has never been built before a company where we really are creating this category around socially conscious, sustainable, purpose-driven ways in which people can spend their money save their money shop on a daily basis. There isn’t a roadmap for building a company like ours. And so we have to have people who are really mission-driven, to be able to build not just a company but a movement and community that is really necessary to get to the kind of impact that we’re really more and more able to deliver on the community piece.
John Corcoran 23:28
You don’t hear financial institutions often like talking about building a community. And there’s a lot of ways to build communities online these days, you know, with different tools out there, but how targeted is how you’ve deliberately cultivated that amongst your customers.
Andrei Cherny 23:46
We’ve always seen a rate of, for instance, social media engagement way in excess of any financial institution out there that you can benchmark ourselves against. People come to Aspiration not just because they’re looking for a new bank account or looking for a credit card or time they’re coming because they want to make a positive impact. They want to Yeah, have a great way to spend their money and save their money and in shop, but also one in which they are able to see that Aspiration debit card in their wallet, see that Aspiration credit card as a vehicle for a tool for making a positive impact. And that really changes the nature of the kind of conversation that we’re having with our customers and the kind of community we’re building. We have something one of our features is called planet protection. And it is part of our Aspiration Plus product and it automatically makes all of your driving carbon neutral. So whatever kind of car you’re driving however many miles when you buy gasoline with your Aspiration card, we’re automatically calculating the amount of offsets necessary to wipe out the carbon impact from that purchase and we Send out bumper stickers, planet protector on board or this car drives in neutral. And we see people posting on social media, them driving around with an Aspiration bumper sticker on their car, I’d say there’s probably not another financial institution in the world that has people putting bumper stickers on their carpet. But it’s because this community doesn’t see their relationship with Aspiration with each other as another bank, but they see it as a way to make a positive impact and a difference in the world.
John Corcoran 25:33
You know, so much has changed in the last eight years from when you started, in just in recent months, there’s been kind of the rise of Robinhood and GameStop. And there’s been this kind of this teaming up of, of retail investors seeking to kind of fight Wall Street, so to speak. Talk a little bit about those changes that have happened. And does that affect your business in any way? Or does that consciousness or the fact that it’s in the news does that? Does that affect you at all?
Andrei Cherny 26:07
I think it’s something that’s been building. And I think you’ve seen over the years. retail investors and others are starting to have different expectations of financial institutions and different ways of looking at doing things. Aspiration and Robinhood launched around the same time. And in December of 2014, right around the time we launched, there was actually a New York Times article about these two crazy companies. Robinhood and Aspiration had these very different models. And I’d say he had a somewhat snarky tone about that.
John Corcoran 26:48
By the way, thank you for not almost tearing down the markets three months ago, appreciate
Andrei Cherny 26:52
different companies but you know, they were saying we’re gonna let you have free brokerage trades, and we were saying what you pay, pay what is fair and not have fixed fees. And I remember the comments section, people arguing how long it was before these two companies would go out of business. Well, you know, it really lasts till April Fool’s Day. No, I think there’s glass business before there was.
John Corcoran 27:24
And so fun, then common fun now.
Andrei Cherny 27:26
Yeah, well, you know, different companies, different approaches, but all but I think both speaking to this desire for individual empowerment and new ways of doing things, right. And I think what you’ve seen, the good aspect of democratization that Robinhood and other companies like that have brought has been being able to bring more people into the financial system, and not have it just be the province of very, very wealthy individuals and large institutions. That’s a good thing. Now, how you do it, ways in which to make sure there are safeguards built in place, all kinds of conversation that can happen around that, I think that’s a good thing. You know, similarly for us, we really see ourselves as democratizing the space around ESG. around sustainability in, in finance, so a different approach. We’ve seen so-called ESG, investing, explode over the past few years in a similar time period. It wasn’t a $5 billion of new investment a year and 2016 2017 2018 2019. It was $20 billion of new investing in ESG. and sustainable investing 2020, mid-COVID went to 50 billion. So Wow, an increase over the past just two years. And yet still, when you look at who is investing in this country, and the amount of money, they’re investing, it’s a pretty small slice, you’re talking really, that top 1% maybe the top 10% at best of people out there, what we’re doing Aspiration is really taking that and bringing it into the financial products that people use every day, the way they bank, the way they buy things in the store, the way that they get insurance and the things that everyday people are using on a daily basis in order to think about their financial life and how we can really bring that ESG revolution into consumers, daily financial habits.
John Corcoran 29:42
I’m always interested in finding out if there was a turning point for founders in the life of their business you mentioned, you know, when you’re raising money talking to Jeff Skoll and the impact that had but I’m wondering if like a year in two years in three years and at some point was there something whether small or large You know, I interviewed the founder of Netflix recently, and at some point Jeff Bezos called up very early in the life of Amazon, but they had a meeting with them. And it showed him that like, wow, this idea has some legs there. Others are taking it seriously. So for you, is there any kind of pivot point turning point where you realized, okay, this is starting to get some real traction.
Andrei Cherny 30:22
I think there have been a lot of points and a lot of twists and turns along the way. I think one of the early insights we had right around the time we launched in 2015 was, you know, when we first started, we thought that a lot of what we would do would be add ons, we have investment products, but people would already have an account at fidelity or Schwab, and they’d add our product on or we’d have a bank account, but they would already want to keep their bank account in Bank of America, Wells Fargo, and maybe have an Aspiration account as a way to have some of their savings be fossil fuel free and firearm free, as opposed to of course, what the big banks do with your money. And we saw really early on people saying, Oh, that’s great. I’m glad you guys have an account, I’m shutting down my Wells Fargo account today and moving everything over, we’re saying we’re not we’re not ready to give you everything yet. And, and I think the quick and early learning there was, there was a lot of pent up demand from people for financial products that allowed them to, to live out the kind of life they wanted to live, when it came to the concerns they had and all these other aspects of their lives and, and to be able to bring that into their financial life was something that was really exciting for people.
John Corcoran 31:46
You know, have there been people along the way prime many people but aside from Jeff Skoll, have there been people along the way, or books, or communities that have helped you to figure out, you know, each step along the way you got, I don’t know how many people working for you Now, a couple 100 people working for you, you’ve got you’ve in many ways, you’ve got people’s life savings, you know, so which is a weighty responsibility. What have you turn to in terms of figuring out the next move, figuring out challenges overcoming them
Andrei Cherny 32:18
a lot, a lot of great advice and, and people that we’ve met along the way who’ve been helpful, but I really think it’s been our customers that have provided the best insight and listening to them about what’s important to them and what they’re looking for. And, yeah, as we all know, sometimes they don’t know exactly what the solution is, but they know what the challenges are. And, and when we’re able to speak to that and really live up to that is when we’ve been at our best we launched something in April of 2020 called Plant Your Change. And with Plant Your Change, it’s a feature on our Aspiration cards, but it’s also now available at plantyourchange.com. On any debit card or any credit card that you may already have. And what it does is it allows you to plant a tree with every purchase you make. And the way it works is by rounding up that purchase to the nearest dollar. So you buy something for $1.75, we’ll round up to $2 and take that extra 25 cents and whether it’s 25 cents, or one cent or 10 cents, or 80 cents, whatever the size of that round up is no matter what you’re planting a tree with every purchase you make. And as I said, we launched that in April of 2020. Right as COVID was, was building up unclear about what the response would be. And some internal debate about, you know, should we be asking people to pay to pay more for something like this? It’s optional, but even an extra 20 cents 25 cents on their purchases? How would people react? And what we found was an enormous response. We’ve seen a great majority of customers, new customers signing up for it. Our current customers embracing it planted over 5 million trees in less than a year planting more trees are in Central Park and I think that was because we believed in our customers, we put something to them and we said let’s give them a voice and every time we’ve done that, it’s worked out for the best.
John Corcoran 34:33
That’s great. All right, I have two last questions before we wrap up Andrei. First of all, I’m a big fan of gratitude. So if you look around at your peers, maybe others in your industry, maybe other founders who you know you change ideas with Who do you respect? Who do you admire? Yeah.
Andrei Cherny 34:51
There are so many people that we’ve learned from along the way, you know, we have an As President called the Conscience Coalition, and that’s a group of mission-aligned companies that are ones that have a not just a consumer product, but also make a positive impact as well. And when I talk to some of those founders, some who are well known, you know, that we have Tom’s is one of those companies or Warby Parker’s is one of the companies but we have, we have companies that are doing really amazing things in, in toothbrushes that have a social mission. There’s so much innovation going on in this moment, unlike any other moment we’ve lived in of really building a new vision of what businesses can be where the bottom line includes positive impact and, and every time I talk to founders who are doing that, in areas way beyond just financial products, it always inspires me.
John Corcoran 36:04
Hmm. Alright, and then final question, let’s pretend we’re at an awards banquet, much like the Oscars of the Emmys, you are receiving a Lifetime Achievement Award for everything you’ve done up until this point, what we all want to know is who do you think, you know, initiative family, friends, but who are colleagues, friends, mentors, peers, professors, teachers, investors, who are the people that you would acknowledge in your remarks?
Andrei Cherny 36:29
There’s, of course, so many, and I think about some of those early teachers who took a kid from an immigrant family and whose family didn’t speak much English and believed in me and, and showed me that I could, I could do things way beyond the world that I lived in. And I think so many people like that. So misery to me, my fourth grade teacher or Dr. Kaplan, my, my sixth grade teacher, Mr. Mertens, in junior high and others. You know, I think about a guy that, that you’ll remember named Don bear, who was White House communications director who happened to pick up a copy of my school newspaper, when I was in college and, and saw an article I read, because he was on campus that day, and, and showed it to President Clinton and, and said, you know, we should, we should, we should hire this kid. And, and, of course, that changed my life in many ways. Mike, my co-founder, and who is our early investor, Joe Sanberg brought a vision of what we’re doing, to building this and, you know, as you said, there’s and i and i just think, I think the Aspiration team, you know, over 200 people who, you know, who show up every day and, and are building something extraordinary and sometimes the founders get to have these kinds of conversations but nothing gets counted and nothing gets built from, from a vision or from one person or a couple people it’s, the work of a lot of people on a daily basis. And so, you know, those are the people I would really thank and point to for, for building Aspiration to what we are today.
John Corcoran 38:17
Andrei, such a pleasure to reconnect with you and for you. Thank you for taking the time to share what you guys are working on. Aspiration.com is the website. Where else can people go to connect or to learn more?
Andrei Cherny 38:27
Go to Aspiration on Twitter or on Instagram and join our community and, and sign up to learn more. Sign up at plantyourchange.com, now over 4 million members and excited to really build this community of people who want to do well and do good. And believe we all have an individual responsibility to do so.
John Corcoran
Andrei, thanks so much.
Andrei Cherny
Thank you.
Outro 38:52
Thank you for listening to the Smart Business Revolution Podcast with John Corcoran. Find out more at smartbusinessrevolution.com and while you’re there, sign up for our email list and join the revolution. And be listening for the next episode of the Smart Business Revolution Podcast.