Episode 214: From Apple to FinTech: Balancing Automation & Customer Trust with David Myszewski
In this episode of the Product Thinking Podcast, Melissa Perri sits down with David Myszewski, VP of Product at Wealthfront. David shares his transition from working on the groundbreaking iPhone at Apple to leading product innovation in the fintech space. He dives into how Wealthfront's approach to fintech has been shaped by lessons learned at Apple, particularly the power of small, talented teams and high standards.
David discusses Wealthfront’s strategy of integrating consumer research and customer support into product development, emphasizing the importance of understanding customer needs through both qualitative and quantitative data. He also highlights the significance of building a technology infrastructure that supports innovative financial products and services tailored to evolving market needs.
Tune in to explore how Wealthfront is redefining fintech with a focus on reducing client costs, enhancing tax efficiency, and fostering better financial behaviors through technology-driven solutions. Want to learn how to leverage tech for financial innovation? Listen to the full conversation with David Myszewski.
You’ll hear us talk about:
10:33 - The Role of Consumer Technology Experience in Fintech
David explains why consumer technology skills are more valuable than financial knowledge in fintech. He shares how Wealthfront prioritizes creating excellent user experiences over specific domain expertise.
19:28 - Introducing New Financial Products
David outlines Wealthfront’s strategy for evolving and introducing new products over time, focusing on reducing costs, saving taxes, and fostering behavioral change. He discusses the automation of processes to enhance client outcomes.
29:06 - Prioritizing Innovation and Roadmap Planning
Melissa and David discuss the balance between strategic top-down priorities and bottom-up decision-making in setting the product roadmap. David describes how they align business and client needs to drive product innovation.
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Episode Transcript:
[00:00:00] David Myszewski: one of the great things about being a startup and kind of reflecting on the frameworks that we use, I can actually think back to my time at Apple and understand better why things worked really well. I think one that I will always hold dear is that a very small, talented team with incredibly high standards can really magnify and move quickly on any product. So I'm always focused on how do we get the right people in who are really talented in what they do?
[00:00:22] At Wealthfront, I think there was a skepticism that people would trust a digital Product for especially a new startup with their money. At the time we very much believe that we should provide a quality way for people to invest entirely digitally. We are growing up with people who are very comfortable using technology. That's something that's very common with a lot of our customers. They want to do everything through the phone.
[00:00:45] One of the things that I'm really excited about is speeding up money movement. So we've recently did instant transfers. We've already moved more than a billion dollars in instant transfers.
Intro
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[00:00:56] PreRoll: Creating great products isn't just about product managers and their day to day interactions with developers. It's about how an organization supports products as a whole. The systems, the processes, and cultures in place that help companies deliver value to their customers. With the help of some boundary pushing guests and inspiration from your most pressing product questions, we'll dive into this system from every angle and help you find your way.
[00:01:24] Think like a great product leader. This is the product thinking podcast. Here's your host, Melissa Perri.
[00:01:33] Melissa Perri: Hello, and welcome to another episode of the product thinking podcast. Today, I'm excited to have Dave Michewski with us. Dave is the vice president of product at Wealthfront. Where he drives innovation and financial technology. His extensive experience at Apple, including working on the pioneering iPhone gives him a unique perspective on product development and consumer tech.
[00:01:52] I'm thrilled to dive into Dave's journey from Apple to Wellfront and hear his insights on creating impactful product strategies, but before we talk to Dave, it's time for dear Melissa. This is a segment of the show where you can ask me any of your burning product management questions, and I answer them every single week.
[00:02:07] Melissa: Today's episode is brought to you by Liveblocks, the platform that turns your product into a place that users want to be. With ready made collaborative features, you can supercharge your product with experiences that only top tier companies have been able to perfect. Until now. Think AI co pilots like Notion, multiplayer like Figma, comments and notifications like Linear, and even collaborative editing like Google Docs. And all of that with minimal configuration or maintenance required. Companies from all kinds of industries and stages count on Liveblocks to drive engagement and growth in their products. Join them today and give your users an experience that turns them into daily active users.
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Dear Melissa
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[00:02:48] Melissa Perri: Here's this week's question, Dear Melissa, how can I align executive stakeholders with conflicting priorities to support a unified product vision? So this is a very common question when you have a bunch of stakeholders who are out there that all want to go in different goals and different directions.
[00:03:04] The idea here is to not align them specifically around the product vision, but first to get alignment on the company goals. So you got to take it up a level. What can we all agree on is the best priorities for the company. Okay. Can we agree on the goals that we want to achieve the outcomes that we want to achieve and what you want to try to do is make it less relevant for each individual of what they're in charge of, but bring it up a level right above them.
[00:03:28] What do we believe is the company goals? What do we agree is all, the priorities there, what has our CEO said? What does the executive said about what those things are? If you can get them to agree on that, now you can go back and try to figure out how to put that into the context of the product vision.
[00:03:44] All right. Because of this, we are going in this direction with the product vision. You agreed that these are the goals. I've gone out, I've done the research with the customers, I've taken into account your priorities, what you need as well and this is the vision that we're going for. You welcome the feedback.
[00:04:01] But you say they're not in charge of the product vision, right? You want to hear why they may not be agreeable to that product vision. And you want to actually extrapolate, is it because of priorities or because something affects them personally? They have some goals that they're not going to be able to hit, but you also have to set this as I'm here to work in the best interest of this company and for our customers.
[00:04:22] And this is what the product vision is going to be. So a lot of times we default to letting our stakeholders have a ton of, let's say, input and control over that product vision. And you're trying to make it by committee. That's not the role of product management. We're not making a product vision by committee.
[00:04:39] We're making it based off cold, concrete data. And what you want to do is make sure that they're aligned at the top, most important goals. And then you come back with your data and you show how this product vision can achieve the goals you want to. Work with them at the beginning, get their input, take their feedback on it, incorporate that into the product vision, and then come back and give them credit.
[00:04:57] You say, blah, blah, blah, blah, blah. And I took that into account. And this is how it came out with the product vision. That's how you get agreement on there. But you have to make sure that they all align on those higher level priorities. And that's usually what can get us to go back there to make sure that we can all look at this product vision and say, Hey, based on concrete data, this is where we're going to go after.
[00:05:18] I hope that helps. If you have any questions for me, go to DearMelissa.Com Let me know what they are. Now it's time to talk to Dave.
[00:05:24] Melissa Perri: Hey, Dave, welcome to the podcast.
[00:05:26] David Myszewski: Thanks for having me, Melissa. Glad to be here.
Career Journey from Apple to Wealthfront
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[00:05:28] Melissa Perri: So you've had a really interesting career where you started at Apple. You're working on the first iPhone and now you're at Wealthfront, which is a fantastic product that I use as well. Tell us a little bit about your career journey.
[00:05:39] How did you go from Apple? What brought you to product management and what led you to Wealthfront?
[00:05:43] David Myszewski: Yeah, so I started at Apple back in 2004, and I had the fortunate opportunity to work on the original iPhone starting in about 2006, and, uh, through a process over many years, I think I had gotten some cold calls from financial advisors because they love to cold call everybody there. And one of the, and I decided to pick up one of those at one point because what we eventually decided I'd had enough stock in Apple and I wanted a little bit of advice on what to do. And so I, Met with a financial advisor who I thought was very smart, must be really great at what he does and had a really terrific conversation until the very end. He ended the conversation by saying, well, you don't have a half a million dollars, so I can't work with you anymore. And I thought that was a little strange, as in my twenties, I thought that perhaps I would have a little bit more money in the future. And so it was strange to me that they wouldn't work with me, but I think that's very typical that a lot of financial advisors have very high minimums.
[00:06:34] And so what I did was I Decided if somebody is not going to help me, I'll figure out how to do it myself. So I read a lot of the classic books like the random walk down wall street, which was written by Burke Malkiel, who's our chief investment officer, as well as, Benjamin Graham's the intelligent investor.
[00:06:49] And I spent a lot of time trying to figure out what should I do. And I finally came to the realization that the process by which you learn what to do was really hard, but actually doing it is not that hard. And so I was a little curious, why isn't there a technology company that solved these problems for people?
[00:07:03] And it turns out there was one, I just hadn't heard of it, but it was Wealthfront, and then, eventually I decided I would, rather than thinking about this stuff on the side all the time, I would actually join the company and see if I could spend my day job doing this stuff.
[00:07:16] Melissa Perri: So Apple, iPhone to a software company and a FinTech like Wealthfront. What did you learn at Apple that you still think applies to Wealthfront and your role at Wealthfront?
[00:07:28] What did you take with you and maybe what's different?
[00:07:30] David Myszewski: yeah, I think there's a lot of different learnings. And I think one of the great things about being a startup and kind of reflecting on the frameworks that we use, I can actually think back to my time at Apple and understand better why things worked really well. I think one that I will always hold dear is that a very small, talented team with incredibly high standards can really magnify and move quickly on any product.
[00:07:50] So I think a small group, That's has high down density is always going to be bigger than a bigger group. And so I'm always focused on how do we get the right people in who are really talented in what they do? Because if you get people who are really great, they will move everything forward even faster than what you would imagine.
[00:08:07] And so I think that's one standard that I take pride in. All the way through one, one of the things that we did at Apple is I had to write a weekly status report every single week. And one of the core technologies for the iPhone, which was also available on the Mac was core animation.
[00:08:20] And we had this rule where you could only talk about teams. You couldn't talk about individuals in these reports that would go up a chain. And I remember laughing every time I wrote the core animation team, because for years it was just one person doing all of this work. and I think the fact that you could have one person having such a huge impact on millions of people and the overall direction of technology Was just very impressive and really underscores how important it is to find the right people And I think one other, thing that is highly relevant to my journey at Wealthfront is that when you create your own technology, if you want to provide the best user experience possible you're almost invariably going to need to create your own technology in order to deliver that experience.
[00:09:03] And, you'll work with third parties and third parties will get you to a certain point. Some third parties are really good at what they do and you'll. Be happy for many years. But when you're really trying to innovate, a lot of times you have to create your own technology so that you get full control over that user experience and the product that you're delivering to customers. And then once you make those investments, then the platform enhancements that you're making to that technology can compound. And so at Wealthfront. One of the reasons why I joined was that we were in the process of building our own banking and brokerage infrastructure, which is like the operating system. For the company and that enabled us to create a lot more products and a lot higher quality products over time. So it allowed us to do things that massively reduced the number of calls that we would get and emails that we would get to our support team. It enabled us to ship products that we otherwise couldn't have shipped.
[00:09:54] And so I think those investments in technology can really create a far more delightful user experience. And then invariably, you can reuse things for multiple products later on, and those are going to be valuable pieces of technology.
[00:10:07] Melissa Perri: Building an iPhone, definitely different than FinTech. And I love that your journey to figure out. What, how to invest, how to help people with this because the market was, crazy with it, took you to Wealthfront. A lot of people ask questions about subject matter expertise when you became a product leader or product manager.
[00:10:23] How do you view that in your role as a product leader and what did you need to learn to get up to speed to be able to work in the fintech industry?
[00:10:33] David Myszewski: Yeah, so I think I had felt when I joined Wealthfront, I had a decent working knowledge of finance. And I think I realize now almost nine years later that I barely scratched the surface. And I feel like there's still 100 times what I don't know, relative to what I know. And so I think there's always more that one can learn. I think for me, in fintech, what I believe is that it. It's really hard to create a terrific consumer technology experience. So few people can create and so few teams can craft a really great design product where the user interface is really super easy to use yet powerful. The design is beautiful yet functional and the product delivers high quality as well as surprises you with Some dimension on which it's even better than what you expected.
[00:11:20] And so I think the so much of what we do as we craft a consumer technology product, just really takes a lot of experience and being around really talented people to learn for a long period of time. And so I value those sorts of skills. much more than I do financial knowledge. And in fact, for a little while, we were we actually focused exclusively on people who had who didn't have domain knowledge.
[00:11:43] I think that's changed a little bit over time as you've had some really great talent going into FinTech where that can be an asset. But when I look at finance there's so much that you can learn by picking up books, watching YouTube videos, there's certifications like the CFA. And so like, when we were working on our automated bond ladder, which lets you invest in treasuries I was able to read the CFA book on that to really understand everything there is about bonds And pricing and how they work and so you can build up that domain knowledge as long as you're committed to building that. And you can always ask people as well. And so I think we, they're both important, but I think that it is easier and faster to learn about the underlying mechanics of finance than it is to create a really great Consumer technology product experience. I think that requires more experience.
[00:12:28] Melissa Perri: Yeah, I always get into this debate with recruiters, too, who are looking for chief product officers or product leaders, and they, the CEO or the founder would go, hey, they need to be like an expert in, what we do. It has to be like a subject matter expertise. And a lot of times in those organizations, especially like FinTech or healthcare, the whole C suite is like an expert.
[00:12:47] In that area, and they're really bad at building software. So I'm like, Sometimes you have to look at people who have the capacity and the desire to learn. And bring those people in, because that knowledge of how those things work together with technology and build the product portfolio is not the same as somebody who's been working in an industry for 20 years and only sees what's available to them. Sometimes it's hard for people to think outside the box or bring it unless they've been doing that in another company. So I love that explanation and I think so many. Organizations out there should really consider that and the makeup of their team when they're actually hiring.
[00:13:21] David Myszewski: Yeah. One thing that we look for A lot when we're hiring is not just how good are they today, but what is their growth trajectory? And do we believe that this person who we're hiring today is going to be 3, 4 times better here in 2 or 3 years because they demonstrated capacity to learn, desire to learn.
[00:13:38] They're super motivated. And I think when you Very motivated people who are, have shown a past history of growing. They will continue to grow in the future. And so that's always something that we're looking for is who's going to be great, not just now, but from now on.
[00:13:50] Melissa Perri: Yeah. A lot of potential there. Wealthfront. I've been a customer, like I said, for, with Wealthfront for, I don't know, like eight years now. And it's been really cool to see your trajectory and your journey. And I felt like in the market when Wealthfront first came out, a lot of the bigger banks or the investment funds looked at it and was like, Oh, this, we're getting startup things.
The Evolution of Wealthfront’s Mission
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[00:14:09] Melissa Perri: They can't compete with us. Like we're not scared. And now I think they're a little scared. So I'm so curious when you look at the trajectory and the history of Wealthfront, what was the mission of the company and how it started and how has it evolved since then?
[00:14:23] And why do you think it's become so competitive in this market and such a viable option now for people who are looking to get into investment compared to these older, more established companies?
[00:14:35] David Myszewski: Yeah, I think one of the learnings that I've had both at Apple and Wealthfront is a lot of times when you have something that is new and innovative, a lot of people believe that there is some existential problem that's going to cause that product not to work or that company not to work. And. I think at Apple, when we came out with the iPhone, one of the big questions was the virtual keyboard, because at the time the BlackBerry was very popular within business.
[00:15:01] People loved typing on their hardware keys and, people loved it so much. They called it a CrackBerry, not a BlackBerry. And so one of the big debates was, is the virtual keyboard going to work? And, I had been using it for months and months, and so I knew it was not only good enough, but I could actually type as fast as I could on my actual keyboards.
[00:15:18] I knew it wasn't a problem, but there's still the world needed to believe that. And I think a lot of times when you're trying to create something disruptive, you're going to face those things where it's existential. And then over time, those existential Concerns vanished as they were disproved. And now it was okay.
[00:15:34] You need this feature in that feature features you can always build. At Wealthfront, I think there was a skepticism that people would trust a digital Product for especially a new startup with their money. And I think one of the things that we really focus on is to when we're shipping a new product We want to ship a product to a niche audience who's absolutely desperate for it. And so I think we found that with people in technology companies initially predominantly with engineers who I think had been successful in their own career and we're looking for ways to invest, but maybe they didn't have the minimum that a financial advisor had. And so I think at the time we very much believe that we should provide a quality way for people to invest entirely digitally. Now. Older people didn't really, that didn't really resonate with them quite as much, but younger people, really, who grew up maybe in a world where the internet didn't yet exist and they had Experience that transition to the internet now existing they valued the software experience they want. They trusted software a lot more. and in a lot of ways, a lot like schwab grew up through baby boomers who we're comfortable calling somebody on the phone to make a trade. We are growing up with people who are very comfortable using technology and would be able to expand that a lot over time.
[00:16:53] Melissa Perri: That's awesome. Yeah, I don't want to call anybody. I'm like, please give it to me online. Explain it to me. If I have to get in touch with someone, I'm upset.
[00:17:00] David Myszewski: Yeah, exactly. That's very something that's very in common with a lot of our customers. A lot of customers, we say that if they pay us not to talk to us they want to do everything through the phone. If they have to call us, that's usually a bug and something that we should improve with our product.
[00:17:13] Melissa Perri: You were talking a little bit too about your infrastructure and how you recreated these products on the back end to be able to do your own brokerage. Can you talk about why you decided to do that natively versus, plug and play or look for other opportunities? I don't know if there was anything you could even borrow from out there, but I think. You could have went the route of just being a skin on top of investment, but it sounds like you built everything from the ground up
[00:17:38] David Myszewski: Yeah. I think a big driving or really two big driving reasons. I think one was that we wanted to create an even better user experience. And so in order to do that, we needed to create some different technology that could be optimized for our use cases. And one of the things that we see, and we have this really great internal chart. When you're in the finance industry, you often had tax time can be a very busy time because people are looking at their documents and forms and they're figuring out their taxes and it all happens about the same time for everybody. And so that's often busy. And we were seeing a lot of phone calls and emails around tax time. And, there were things that if we had full control for the infrastructure, we could make a far better experience for clients. But also, we had a lot of other ideas that we wanted to deliver to clients. And I think one of the things that is different about us than many others in fintech is that our business model is based on assets under management. and so really our north star is, are we growing our clients wealth over time through a variety of products? So it's not how many transactions do they make? It's not how often do they come back to the app? How much engagement do they have? A lot of times it's People are just fine at depositing and then setting a recurring deposit and forgetting about it for a while.
[00:18:57] And so our business model is very different. And so as an asset based business model, we needed to build the products that really help us grow our clients assets and build the products that we wanted to build with the experience that we want. And I think ultimately that's why we made that big investment.
[00:19:11] Melissa Perri: and Wealthfront has introduced quite a few new products. Over time. I remember when I first signed up, you had different investments that you could do. You could choose From a program, right? That you created. Now you've got retirement funds. You've got all, the cash savings and you just introduced the S&P 500 Direct, which is really cool.
Introducing New Financial Products
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[00:19:28] Melissa Perri: Can you tell us a little bit about how you think about evolving and introducing new products over time? And what led you to create some of these new ones?
[00:19:38] David Myszewski: Yeah. So I think at the, when I take a step back in the investing area, I think there's really three things that one can do to improve client outcomes. I think number one is reduce costs to clients. So if we can offer a better product at a lower price, that's ultimately going to be better for clients in the long run. The second thing is save on taxes. There's no free lunch in investing but you can take The do some really interesting things with software to save on taxes. And then the third is behavioral change, which is in some ways, the toughest of the three human behavior is notoriously challenging in the investing space.
[00:20:11] And so we place a lot of energy trying to get better behavior, create products such that, any behavior results in a better outcomes. And so one of the things, one of the insights that I think we had, or I guess one of our focuses is. We're constantly looking to reduce costs to consumers. So we're automating as much as we can possibly automate. And through automation, we're able to reduce the costs to us. And then we're able to pass along that savings to clients. And so that creates a really nice business and really nice client outcomes. For some of the different products, I think one of the things that we think about in finance is, we don't want to be the company that's only good in 1 market environment. We want to be a company, as a business, that is strong in all market environments and then commensurately our clients have a bunch of different needs. Some people want to save for very specific things and maximize their earnings, or they haven't figured out what they'll invest in.
[00:21:11] And so the cash management is a nice account where some people want to save for a home. And so that's a shorter term time horizon where if you're doing it in three months, cash is good. If you're doing it in two years, then you might want to take on a little bit more risk, like Having an automated bond ladder that will invest in treasuries and save you a little bit in taxes. And then 1 of the things that I think we've seen over the last 10 or 15 years is that the S& P 500 has just had returns that have been a Far superior to other locales. And one of the big reasons is because the U S has produced these giant mega cap companies like the Apple, Google and NVIDIAs of the world where they're marked, they're selling to the entire world.
[00:21:53] And so I think there are a lot of people out there who would claim that will continue for some period of time. I don't know whether or not it will or not. But as we were thinking about that one of the things that we think about a lot of people do really orient around the S and P 500. And we had built some underlying technology and a lot of our clients are working at tech companies where they're compensated in RSUs.
[00:22:18] If you worked in NVIDIA and got an RSU 2 years ago, that RSU is worth a lot more than what it was 2 years ago. And so a lot of people who are really thinking about this problem I know I'm going to pay taxes. Maybe I'm diversifying today. So I'm selling some of my shares to diversify, or maybe I'm going to do that at some point in the future, but I really want to, I know it's going to be a huge tax bill because, NVIDIA has gone up by so much. And so we thought we could create a version of the product that focuses on investing in the S& P 500 for the same price as one of the leading ETFs. S. P. Y. And then, in addition, you get tax loss harvesting.
[00:22:57] And by investing in individual equities as opposed to investing in an ETF, you're able to save on taxes. And so it was a combination of we have automated so much that now we are able to deliver this product at a low cost. We have really good tax loss harvesting data. We're the only company, as far as I know, the only robot advisor that publishes their tax loss harvesting yield. So if you want to compare, if you want to know who's best at tax loss harvesting, it's hard to tell because we're the only one that publishes it. But we believe that we're so good at it, that people will love it. And people will see that they're investing in the S and P 500 and they're getting this tax benefit as well. And so it was the combination of meeting a client need, as well as our technology infrastructure evolving to a point where we can now deliver this compelling product at low cost.
[00:23:44] Melissa Perri: In an organization where you have these products that are financial, and then you have all the technology and that you oversee as well, how do you think about launching a new financial product? And how does that go back into your digital product and technology strategy.
[00:23:59] What's your process for collaborating with the rest of the organization and thinking about how you want to go about that
[00:24:05] David Myszewski: Yeah, I think we first to have an insight and I think the insight can come from a variety of places. It can come from a consumer need that we have identified through building, researching, shipping products. It could come from a regulatory change, that is going to create some new opportunity.
[00:24:23] So China is a good example of this, where the Durbin amendment following the 2008, the financial crisis Durbin amendment meant that it kept interchange revenue on companies banks that have over 10 billion of assets. And so that opened up an opportunity for a digital competitor to come in and say, actually we'll make this our business model interchange.
[00:24:42] And we'll be able to provide a different. Banking like product than what's available to a different sort of target audience. And I think they were able to grow really well because of that. So that would be an example of a regulatory change, um, or looking at some sort of market shift that's going on that's observed.
[00:25:00] And I think the trick with market shifts is In the moment, it's really hard to tell what's temporary and what's permanent. And we have to be very careful to invest in things that will work, not just now, but from now on. So we'll be happy to invest it in five years, 10 years. And so I think when we step back, our North star is how do we build more wealth for clients?
[00:25:17] And, what are the gaps in our product where we believe that there's an unmet client need? That would help them build wealth over some time period. So like an automated bond ladder, I think a lot of people are looking to save on taxes for sort of some short term investments. They don't want to take on a lot of risk but they want to earn a little bit of yield, so if they're buying a home, it's a good bet. It's a good use case for that. If they, have some known expense that's coming up in the next year or 2 could be a wedding could be a tax bill or something like that. I think that's a reasonable use case for it. So we look for these client needs and then we look at where are we at from the technology standpoint? And then how do we invest in a way that meets those needs? And also meets the needs of the business. And then from the business standpoint, I think 1 of the things that we look at is having. A diversified set of product offerings that will work in a variety of market conditions, because there's times like the, the mean stock craze of 2020, 2021, where, people want it to be really far out on the risk spectrum. and I think you're seeing a little bit of that behavior the last two or three months as well. And then there's times when it seems like nobody wants to invest or interest rates are high and then the cash account is really compelling. And so I think we want to build a We want to focus on building trust with our clients and we want to be here for the long run.
[00:26:37] So we're making sure that we have a diversified set of product offerings that will work in any market condition.
[00:26:42] Melissa Perri: in a lot of traditional finance companies, they'll set the strategy from like a financial perspective and think of those products. And I find that technology is like a lagging thought, right? It's the business and the technology are so separate that it gets kicked over to technology after we've strategized it from a business standpoint.
[00:27:00] How do you do that differently at Wealthfront seeing as it was a software native company and you started by looking into the software aspects of it?
[00:27:08] David Myszewski: Yeah, I think one big thing that's very different is that we want to spend about 70 percent of our time optimizing or enhancing existing products in about 30 percent of the time exploring because we believe that over a long period of time you need to have new products that will create a different growth trajectory over time.
[00:27:23] And at the same time, we really want to improve the product as it exists today for all of our clients. But then. The other thing is when you look at the 30 percent where we're exploring, we really want to focus on not the percentage of those bets, which succeed. And in fact, we don't want 100 percent hit rate on success, but rather the magnitude of success.
[00:27:45] So the cash account was a good example of that, where there's a lot of products that we've shipped over the past, decade, but, cash really was a tremendously successful product. I think we believe that if we have a good process by which we go through to enhance our odds of success and really focus on not just, is it going to be okay, but is it going to be a high magnitude of success? Then that really over time, if we do the process we will be able to come up with some of these ideas that end up being successful. really big. And it's really hard to know in advance. I remember one of my memories from the iPhone was, sitting in the crowd as Steve job was announcing it. and there are a lot of us who, knew we had a good product, knew we liked the product. We had no idea if it was going to be a commercial success. and in fact, after it was launched they lowered the price a couple of months later because it turns out they had the business model wrong. I think they were right in the longterm.
[00:28:39] People would pay more for phones, but not wrong about the timing. and so I think you never know what's going to be a success, even if you believe that the product is good and know, and you've used it and you know that it's good. You don't know how it's going to resonate. And so we really want to focus on building a product for a narrow niche of people who are desperate for the product deliver a product experience that they'll really love such that they just can't help but tell everybody else about it.
Prioritizing Innovation and Roadmap Planning
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[00:29:06] Melissa Perri: When you're setting strategy and you're looking at new opportunities, too, is it. something where product is leading that discussion? Or are you also bringing in other people from the organization, or do you have different teams that are strategically looking at these things?
[00:29:19] David Myszewski: Yeah, I'm a big believer that the way that we create really great products and a really great company on the time is, collaborating with people and creating the best version of the products that we can. So we have a roadmap. A process that tries to balance some of the best top down sort of strategic thinking and the best bottoms up decision making.
[00:29:39] And so one of the things that we do in our planning process is we will write a memo about the things that we believe are strategically important Like some of those could be business priorities or financial priorities. But we are really focused on how do we build wealth for clients. Over the long term, and then teams will put together a memo that, considers some of those strategic thoughts that we have. And then we will have a discussion to agree on what the roadmap should be going forward. And so I think what. we find is that is a, it strikes a good balance where you're getting the best out of the people who are closest to the problems and who have been talking to the customers the most as well as the business needs and the sort of maybe longer strategic needs. And so I think that process has worked pretty well for us.
[00:30:21] Melissa Perri: You also, in your role, oversee not just product development, but also consumer research and customer support, which is sometimes unique for product leaders. Why do you think it's important to keep all 3 of those things together?
[00:30:33] David Myszewski: I think that at the end of the day, we're creating products for people who who we want to make more successful in life. And I think that one of the things that I like about having if I take research and product support, Separately having research as part of product, I think really helps us think through how are we spending time in the research that we're doing?
[00:30:54] What percentage of the time are we supporting teams as they're trying to test a particular UI and they want to know whether or not something is understandable? versus things where we might want to explore a new product area that we're pretty new to and we don't maybe even have a fully formed opinion yet as to whether or not we should go down that path and we're trying to new.
[00:31:13] And so I think it helps us really focus that research energy on things that can drive longer term value. And it's also, I think creates a really strong environment for researchers because they know that the work that they do today is going to have an impact on what we do tomorrow and next quarter.
[00:31:29] And so I think that creates a really good culture. And then for the support team, I think it's really helpful to hear about what our customers asking about. How often are they asking about it? What are the issues that are frequent? What are the issues that are maybe the most painful? And it really, I think being responsible for that, I think, really helps make sure that we prioritize improving that.
[00:31:50] And I think There's just so few examples that I could point to where if a client emails us or calls us, we shouldn't actually go off and address that. The things that are in that are probably adjacent markets that we don't yet want to serve, but pretty much everything that somebody asks us about is something that we should at least consider improving.
[00:32:07] And over time, I think that creates a good kind of incentive cycle to because our choices are, do we hire more people in support or do we automate more? And, we would love to automate more being the example. And so I think just looking at what is it that our clients are emailing us about, and then how can we. Make that thing visible in the product or make the product experience better. So they don't have the need to call us because they, there's for every person who calls us, there's probably 10 more people out there who aren't because they just don't want to talk to us. And and then as we solve these things, then people like the product more. And so it creates a nice cycle.
[00:32:42] Melissa Perri: You've been talking a lot about understanding customer behavior, and this sounds like a great way to do it as well. What other ways do you study your users needs or get qualitative or quantitative information at Wealthfront to understand them better?
[00:32:55] David Myszewski: Yeah. I'm a big believer that we. need to use both qualitative and quantitative data to make decisions. And I think that one of the keys is having the right data and then interpreting it the right way as well. And so we have a lot of our data is available, in various databases, and we've done a lot of work on that.
[00:33:15] Kind of to make sure that we have some of the questions, common questions that we should be asking visible and dashboards are easy for us to create. And so I think the more people who can create their own dashboards and the higher quality of those dashboards are, the more fidelity that you have. I think the more likely it is that somebody will come across any insight that is going to lead to something that's going to create a better experience for people over the, over time. And I also think that one of the important things is how you interpret the signals, which I think I place a pretty high premium of.
[00:33:46] And just to give you one, one example of, I think an insight when I first joined Wealthfront, I joined for on the mobile team. And one of the things that I certainly believed having worked on the iPhone for More than 10 years was that like mobile was going to eat the world, a lot of people were going to use mobile for things.
[00:34:04] And I was surprised when I came in to see that when it came to things like deposits it actually wasn't a big percentage of the use of Wealthfront at the time, despite having a mobile app on both Android and iOS and, I think one of the data points that because I kept hearing that it's, small percentage of people actually make deposits and even smaller percentage of people sign up. When I looked at the data, I noticed something that was a little strange and that was the magnitude was low, but the growth rate was high. And so it, Yes, maybe only, I can't remember the numbers were, but maybe only 8 percent of people made a deposit, but it's actually 4%, a year earlier and 2 percent the year for, so we had this exponential growth in mobile, which you could I would take the leap that trend was going to extrapolate over a long period of time.
[00:34:50] And therefore we should actually invest a little bit more in mobile, but that was an example where, two people looking at the same data could actually come to dramatically different answers. Conclusion. So it's not just enough to have data. You need to have good judgment about how you interpret the data. And I think what we've seen over time is we've really invested a lot in mobile and we're very much a multi platform company now people use web, people use mobile for different needs at different times. And so I think. It's really important to have data available and then, ask questions and constantly be trying to interpret the data that you're seeing and make decisions. But I think that in general, the growth rate is one that I think is very important to us because it doesn't matter where you're at today. If you grow exponentially year after year after year, that's going to whatever number that started out is going to be a much bigger number. And I think. Our philosophy in general, as we are building wealth, we're trying to create exponential growth of assets. Now diversified portfolio probably isn't going to double every year, but we want to but over the longterm, we believe a diversified portfolio will grow a reasonable amount each year, and that's going to be a tailwind for the business.
Finding Product-Market Fit at Wealthfront
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[00:35:54] Melissa Perri: Yeah, so your co founder and chairman, Andy Ratcliffe, he coined the term product market fit. Can you share more about Wealthfront's product development process and how finding product market fit is included in that process?
[00:36:07] David Myszewski: I think at the end of the day, the goal is to get exponential organic growth by releasing a new product you don't want to grow just through paid because paid can be gained. And eventually, so what we really want is a product where the people who use it, it can be a small audience, but it's an audience that really loves the product.
[00:36:25] And it's an audience that we can describe and target. In a specific way, and our product process is oriented around how do we increase the odds of success? I think we're a big believer that you can't always tell the quality of a decision by the outcome. It's the process that you go into it that helps you figure out.
[00:36:47] Is that a quality decision or not? Because you can make it. The best decisions possible with the day you have and still be wrong. That's okay. If you go through a terrible process and you're wrong, that's bad. So we like good process and good outcomes, not bad process, good outcomes. And so what we believe is that we want to delight people.
[00:37:05] A lot of times delight comes with a moment of surprise and offering tech driven solution is enables us to do that. So what we do is we have market research, which I think is really an attempt to. Gather all of the insights that we have from various surfaces. That could come from, emails that people have sent us to our product support team, it could come from a technical insight that an engineer has uncovered and says, Ooh, actually we can do this new thing today that we couldn't do, two years ago or it could come from other sort of qualitative quantitative data or just us talking to clients and I'm generally a big believer that a good idea can come from everywhere, but really what makes for a good idea is not, the one liner of here's my idea, but actually the work that you go through once you have the idea to refine it and make that idea better and find out where all the hard work is going to be. So for example, for our latest product S& P 500 direct, we know that our clients absolutely love tax loss harvesting. One of the things that. Some people say is the moment where we did that automated tax loss harvesting, and it was a big amount that really that's something that I think people find a very surprising moment, because even if they're bought into the fact that we'll do it, I think there's something visceral about seeing it that gets really excited.
[00:38:17] We also knew that a lot of people liked to reference their performance to the S and P 500. And it's certainly something that's gotten more attention now. And then we heard that young professionals have these big sizable gains. And so when we showed people this product, they really loved it.
[00:38:34] Now, the process by which we do it is we do some, usually some concept research to better assess the appeal. What leads to that appeal as well as who might the target market be. And then we. write a blog post that describes the product. So who who is it for? What is the product? What is the business model for this? As well as a bunch of FAQs that help align internal people. And so really the goal is to have an articulation of the value proposition of this product as well as a bunch of questions that internal people might have. And then we run a design sprint typically. So we've adapted a book from a book that was written for Google Ventures called Sprint.
[00:39:15] And we've adapted that process for for our process of finding product market fit so that we can do that. Sometimes we do that in just a day. Sometimes it's five days. It really depends on kind of the questions that we're trying to answer. And then after that, we test the prototype with, clients and we're really not looking for. People who just like the product. We're looking people for who really love it. And a lot of times as we're doing these conversations, people will unprompted say, okay, when can I have it? And then you get to the end of the conversation. They say, oh, and when this is this available again? And so it's not just will you use this product?
[00:39:47] Are you actually desperate for it? And we might ask some harder questions. Many of our clients really love us. I think there's a human nature to not try to disappoint anybody that you like. And so I think that's very natural for people to say, yeah, I would use it. Yeah. But we try to ask questions that are a little bit harder to tell a white lie over would you invest a 20, 000 in this?
[00:40:06] And when they say, yeah, I'd do that tomorrow that's a better sign if they're asking, Hey, when this is available those are really good signs. And so we're really trying to, we know that. This process won't always find like a big market. And we may not create the right product on day one but we're trying to do is by creating a very cogent articulate hypothesis, and then testing it, then we're able to learn.
[00:40:28] And if we're right, great. If we're wrong, then we know what we need to do to change. Do we need to change? Is it a different audience that's, do we have something wrong about the different audience? Is there a way that we should be positioning the product a little bit differently so that the, the niche audience really it lands. And so I think there's all these things that are thinking about, but at the end of the day, it's trying to Do a set of activities, which increases the odds of success, knowing that we may get the target market wrong. We may not have quite the right product. And, what we really want is to build our organization to learn. And then once we ship the product, that's really the only true moment where, do you have something or not? And then we'll talk to people after we ship the product to figure out like, what do they love? What's surprising to us? Because the surprises this is something that I think Andy has evangelized and Scott cook, I think was it's the one who really is known for savoring the surprise where. When we ship a product, we're really trying to find. There's invariably something that is very surprising about it. And a lot of times that's where a lot of the value is. And so when we have a successful product, like looking at where is the surprise is a very important part of our process as well.
[00:41:32] Melissa Perri: So once you build these products and launch them, obviously there comes a time where you get one of those surprises and you have to iterate.
[00:41:38] How do you balance the need for stable products, especially in a highly compliant industry with. The need for iteration or being able to get things out to customers fast. Once you learn,
[00:41:48] David Myszewski: Yeah. One of the things I absolutely loved about Wealthfront, particularly when I joined was that we've long had a very strong focus on automation. So we have automated tests that will help ensure a high level of stability.
[00:42:02] We really want to retain that client trust and help them grow. earn even more trust over time. And so it's very important to us to not make mistakes. And one of the best ways that we have is to have really high quality automated tests so that we ensure that the quality of product is always going to be there. And so that when, somebody new comes in who doesn't understand the code, if they make a mistake, then the tests are going to break. It's not the client experience that's going to break. And so I think that's a very huge focus of ours is just making sure that we have the testing environment that's there.
[00:42:36] I think on any given day we transfer, Probably most days we transfer more money than what we actually have in the bank. And so if you think about that the only way that works is if you're actually doing that very responsibly and well, and automation is a big part of that, and one of the reasons why I loved it so much is because I think working on the iPhone, there, there was a lot of reliance on manual testing for years and years.
[00:42:56] And it was only in the later years where there was a greater investment in automation. And you could really see the impact of that on the product Kind of overall quality. And so I think that's something that is very important to us.
FinTech’s Future & Advice for Product Leaders
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[00:43:08] Melissa Perri: when you look at the future of FinTech and especially product management in FinTech, what are you excited about? What do you foresee on the horizon here?
[00:43:17] David Myszewski: Yeah, I think for me, I think one of the things that I just love is so I came, one of my roles on the iPhone was working on performance. And so we made things fast. And one of the first tasks that we had was we had a device which was. what we thought was going to be about the performance of the phone. And it just didn't work on that device. It was slow. It was horrible. So I spent the next decade working on speeding things up, making sure that frame rates were smooth and things like that. And so one of the things that, It was an absolute frustration and almost caused me not to come to Wealthfront was I, when I tried Wealthfront out, took a long time for money to move from one place to another.
[00:43:56] And this is a common anxiety that people have, you make a credit card payment or you move money from one place to another, and it goes through the ACH system, which takes days. And I think this is a very frustrating part of finance. And so one of the things that I'm really excited about is speeding up money movement.
[00:44:15] And we have this counterintuitive point of view where the faster you get money out, the more likely it is that people will keep money at Wealthfront. Which is, you'd think is counterintuitive. Why would you make it easier for, if you make money based on assets, why would you make it easier for get money people to move money out and. I think we just are focused on making that experience better. So we've recently did instant transfers, which lets you through FedNow and RTP move money instantly back to your bank. We've already moved more than a billion dollars in instant transfers. And I think that's just a trend that we'll see going forward is that the speed of money movement will increase over time.
[00:44:52] I think the US is slow relative to other countries. Some other countries we've seen instant payments grow a lot, but I think speed is something that I think will go up. And then I think another thing which I think you'll see is that, I believe very strongly that there will be at least one institution, if not two or three, that will be very successful by winning the business of millennials. Millennials are a huge generation. They're getting just a ton of wealth. And I think there's a handful of candidates out there who I think could, be a big holder of millennial wealth in 10, 20 years. And I think we're all focused on making sure that Wealthfront is is the one, but I think millennials we'll probably use a little bit of a different platform because technology is so important to them.
[00:45:37] And I think you'll just have that consumer experience paired with a diversity of financial products, such that people just prefer to use the lower cost nice digital experience. So I think those are a couple of trends that I would see, and I think there'll be more diversification and consolidation as well.
[00:45:54] Melissa Perri: So Dave, last question for you. What's your biggest piece of advice for aspiring leaders out there, aspiring product leaders. I
[00:46:01] David Myszewski: Yeah, I think there is a handful of things. I think number one you'll. This is something that I think we learned from a previous VP of product Andy Johns, but leaning into what is working is much more likely to create outside success than fixing things, which are broken. And a lot of times some things that are working might be a surprise and that's where there's a lot of value. One of my surprises. Working on the iPhone was the day after we made the announcement we had more requests for the capability to build applications on the phone than pretty much any other request we, Apple had ever gotten for anything in the entire history of the company in just a day.
[00:46:44] So that was a sign that people were really desperate to create apps. And then of course, Apple created that capability the next year and The rest is history. But I think that was an example where there is a big surprise, the amount of effort that people did to hack the phone so that they could actually build it for themselves was huge.
[00:47:01] And I think when you're looking for things like that it may not be quite crazy, maybe a little bit more subtle but as you're looking at creating those moments, I think building in some flexibility. So even if you're product is very tailored to a specific use case. A lot of times, leave the door open for people. Like you don't have to optimize it for people who might use it for something else, but leave the door open because you might be surprised at all the strange things that people do in using your product and so I think by creating those opportunities, you create some more learning opportunities that you can ultimately build off of.
[00:47:32] Melissa Perri: think that's great advice for people out there who are listening to this Dave, thank you so much for being on the product thinking podcast. If people want to learn more about you, where can they reach out to you?
[00:47:42] David Myszewski: I'm available on LinkedIn, I'm on Twitter, Dave Wikipedia is my handle. Either of those work just fine.
[00:47:48] Melissa Perri: Okay, great. And we will put all of the links so that you can find Dave and follow him in our show notes at productthinkingpodcast. com. We'll also include more information about Wealthfront there so you can check it out. Thank you so much for listening to the Product Thinking Podcast. We'll be back next Wednesday with another amazing guest.
[00:48:02] So in the meantime, if you have any product management questions for me, go to dearmelissa. com and let me know what they are. We answer them on every single episode, like and subscribe this and we'll see you next week.