FinTech is a crowded space. Why did you see the need for Allio?
There’s a quote by Peter Thiel that sums it up fairly well, “It’s not who is the first mover, but who is the last mover.” For me, it’s not really about how many people are on the coast, but is there a beachhead market that’s open or underserved, and the answer is yes.
Everyone loved MySpace, until Facebook, and everyone loved Facebook, until Instagram. The point that I’m getting at is you can take advantage of the millions of dollars in research your competition has spent in areas they’ve done well in, but also look at where they’ve come up short to improve the client experience.
We’ve really only seen the first wave of fintech, and more specifically wealthtech, built on a secular bull market, but the industry is going to need to evolve with the changing macro climate and that’s where Allio comes in.
At Allio, we’ve built our product around the young professional consumer and the hyper-personalization they want in an app to effectively save, invest and manage their finances. We’ve taken the best innovations that fintech has brought to consumers across disparate products, and combined them into one, intuitive, personalized mobile app with next-level UI/UX designed to optimize the experience for our clients. After all, what separates fintech from finance is the experience itself.
When you started Allio, VC capital fundraising was hitting all-time highs. How has the recent pullback in VC funding affected your thinking about company growth?
I’ve learned during my time in capital markets that sentiment matters more than fundamentals or technicals, and it’s no different on the venture side of things. It’s unfortunate because innovation doesn’t stop and the great wealth transfer is going to continue, independent of supply chain issues and rising interest rates. In fact, it’s my opinion the macro climate we’re currently in only favors Allio as a product because the pain point we’re solving is deeper and more ubiquitous than before.
The reality is that smart money doesn’t sleep and the recent pullback is just a knee-jerk reaction to the uncertain times we’re in. We’ll have to keep a closer eye on our cash burn, but it doesn’t really alter our plans in a major way because the marketing playbook still requires capital and execution.
Gen-Z is still set to become the largest consumer segment in the US and they’re going to rely on their favorite mobile applications to navigate the complex and unique challenges they face as a generation, even more so in the face of economic uncertainty. Allio as a company and team will be there to help them achieve their goals as they begin their life journey of saving and investing, albeit in a very different global economy than the one their parents and grandparents came of age in.
Allio is set to launch in a period marked by wild stock market fluctuations, record inflation, and potentially a recession. How does Allio’s saving and investing app help people stay on track with their financial goals during times of uncertainty?
Well, first off, I want to say that if you started investing in US equities during the last recession when everyone was predicting that the world was going to end, you wound up quadrupling your investment. Warren Buffett, says “be greedy when everyone else is fearful and be fearful when everyone else is greedy.” The point is you buy when company prices are on sale (down), not when they’re soaring and overvalued.
Part of the goal at Allio is to expand accessibility and doing that requires educating our clients. We’ve created Allio Academy, which features insightful and educational content that hopefully, our clients will leverage to make better-informed decisions about their finances.
From a product perspective, Allio makes a complicated process easy for our clients because we take the guesswork of where to start and with how much money, out of the equation. For those who are apprehensive or just don’t have the funds, we allow our clients to get started using their spare change left over from transactions. Rather than skipping your cup of morning joe or arguing with your cell phone provider about an extra 20 dollars they charged you on last month’s bill, we allow you to save as you spend, so the process is painless and effortless.
And unlike our competitors, our portfolios are designed by real finance pros, like our Chief Investment Officer Raymond Micaletti, one of the brightest financial minds I’ve ever had the privilege of working with. We’re not just running a simple static mean-variance optimization algorithm, we’re using full-scale optimization, forecasting future returns in sectors, and making strategic changes ad hoc to our macro portfolio based on leading indicators and regime changes.
But for me, the best thing we do is listen to our customers, so if our client only wants to save for a short-term goal, as opposed to invest for their future, we’ll set them up with a short-term risk-off portfolio designed to attain that specific goal in a time frame that aligns with their risk tolerance.
As a first-time founder, do you have any advice for others?
I remember what this gentleman Correy Finney at Colorado Ventures, a former founder himself said to me, “it only stops if you stop” and I think that’s very sound advice that should resonate with most first-time founders.
There are going to be constant changes and challenges, some you can expect, but most you won’t expect, and each time you really have to look into your soul and pull everything you have inside of you to the forefront to overcome them. The good news is that each time you have one of these issues, some of them might take a week to resolve, some might take 6 months, but each time you come away stronger with more confidence than before, both yourself as a founder, but more importantly, the company itself grows more resilient and determined.