Ep. #1189 - Navigating Timely Financial Decisions
Today’s episode of Startup Hustle has Matt Watson and Philipp Hecker, CEO of Bento Engine, discussing navigating timely financial decisions. Listen to Matt and Philipp talk about the critical financial moments in life that matter. They highlight the importance of the youth learning financial literacy and getting good financial and wealth management advice.
Matt and Philipp segue as to why many companies now offer their employees financial and wealth management programs. They also discuss what home buyers and sellers should remember and why taking benefits a little later is advantageous.
Do you want to know more about what Philipp and other startup founders are up to in Connecticut? Check out our top Connecticut startup picks featured on Inc.com by our founder, Matt DeCoursey. Discover the up-and-coming startups in Connecticut, including more on Bento Engine!
Covered In This Episode
Financial literacy and wealth management are not something you just pick up along the way. It requires a conscious effort to acquire these skills. Bento Engine aims to educate financial advisors to help American families build wealth beyond investing.
Philipp shares his backstory to contextualize his motivations for founding Bento Engine and describes the process of building the company. He and Matt exchange insights on the state of financial advice in the US and the spectrum of financial advisors. They also discuss why companies should offer Financial Wellness Programs to employees and the value of good financial advisors.
Home buyers and sellers may also want to listen in. Philipp, an adviser in Columbia University’s new Wealth Management Master’s Program, offers financial advice to them. The conversation wraps up with Philipp’s advice to entrepreneurs and Matt saying that fundamentals are what really matters in business.
Getting the timing right with your finances can spell the difference between wealth and woe in business. Join the conversation in this Startup Hustle episode to learn what you should do.
- Philipp’s backstory (1:26)
- About Bento Engine (3:44)
- The state of financial advice in the US (8:41)
- Advising for Columbia University’s new Wealth Management Master’s Program (20:14)
- The client spectrum for financial advisors (22:05)
- Why companies should offer Financial Wellness Programs to their employees (24:23)
- Financial advice for home buyers and sellers (26:32)
- The value of good financial advisors (31:50)
- The process of building Bento Engine (34:12)
- How Bento Engine found its CTO (37:34)
- There is talent everywhere (39:14)
- What’s next for Bento Engine (39:54)
- Philipp’s advice to entrepreneurs (42:54)
- Fundamentals are what really matters in business (44:46)
The state of financial advice in this great country, despite our best collective attempts, is not where it could or should be….68% of Americans pass without a will, 64% of Americans do not know what a 529 plan is, the key vehicle to save for college retirement…Only 10 to 15% of those eligible actually do so. You get the sense? Americans leave billions, if not trillions of dollars of tax advantage dollars, on the table every year because they do not avail themselves of all the tax advantages, savings, and investing opportunities out there.– Philipp Hecker
Starting early on financial literacy is key to success. I’m sure you’re following the debate along that front; it is commendable that more and more states make financial literacy part of their standard curriculum. Schools, yes, can help on that front. However, I hope we all concur. It’s really the family. It’s really the home where certain attitudes and behaviors get shaped from an early age.– Philipp Hecker
As technologies such as Bento Engine and many others come to life, we see that the loading ratios of advisors, the capacity to serve more and more clients effectively and profitably, is increasing. So bad news, we struggle to generate new human advisors. Good news, the technologies that support human advisors are advancing quite rapidly right now, making them more efficient and effective and thus increasing our capacity as an industry to serve more and more families well.– Philipp Hecker
The most important things about business are always fundamentals. You know, it’s, it’s the fundamentals. Can’t do that right now; the rest of it doesn’t matter. But we never put enough focus on the fundamentals.– Matt Watson
Are you looking for the best software development team? Full Scale is at your service. It takes two minutes to build a software development team quickly and affordably. What are you waiting for? Get started on your project today!
Consider all the services our Startup Hustle partners provide that may help propel your business.
Following is an auto-generated text transcript of this episode. Apologies for any errors!
Matt Watson 00:00
And we’re back for another episode of the Startup Hustle. This is your host today and Matt Watson, very excited to be joined today by Mr. Philip, Phillip Hecker. We’re going to be talking about his company, Bento Engine, and talking a lot about the complicated hard financial decisions a lot of us have to make on a, I wouldn’t say daily basis, but on a regular basis. And especially Americans, we seem to have a lot of financial issues in this country as people and as a government both. So should be interesting conversation today. Today’s episode of Startup Hustle is powered by FullScale.io, which is my company. Hiring software developers is difficult, Full Scale can help you build a software team quickly and affordably and has the platform to help you manage that team. Visit FullScale.io to learn more about what we do. Phillip, welcome to the show, man.
Philipp Hecker 00:46
Matt, great to see you. I look forward to this conversation.
Matt Watson 00:50
You know, I’m hoping you we can talk about some financial decisions that, you know, maybe in the future, I won’t mess up. But I’m going to guess you’re probably going to tell me I’ve already made some mistakes, but should be fun conversation today.
Philipp Hecker 01:03
Indeed, indeed. And I’m sure you’re like many of us. It’s a mixed bag, I’m sure and back. You’ve done some great decisions in your life. And I’m sure looking back you’d like to do over for one or another.
Matt Watson 01:15
Well, so give us a little bit of your beef, brief. Beef, brief background. You worked at Procter and Gamble, done, done some cool stuff. Tell us a little bit about your background.
Philipp Hecker 01:26
Sure, happy to in terms of my professional background, I’m happy to say I’ve done several things in my life so far. I am as you allude to a Procter and Gamble trained brand manager. So thinking about businesses, managing P&Ls in a very client centric way, was beaten into me P&G style, and frankly, has stayed with me ever since. I am also a recovering BCG consultant, five wonderful years in New York with the Boston Consulting Group, picking up a strategic tool or two, before I then spent the next 15 years on Wall Street, at Deutsche Bank and JPMorgan in a number of senior leadership positions. I’m now on to my fifth professional gig, if you will, that as a startup, FinTech entrepreneur, that is what brings us together today. And I’m happy to talk about that journey.
Matt Watson 02:23
Well, so that’s a drastically different career, right? Like, I, myself could never imagine working at Procter and Gamble, Deutsche Bank. No, never in a million years would I want to work at any of those companies, giant companies. So here you are now in your own startup, like it’s got to be a dramatic life change for you like from just life has got to be totally different
Philipp Hecker 02:46
Spot on, Matt. And that makes it very, very exciting for me. My dad and I, we keep on having discussions about this. He’s back home in Germany. When he woke up one day being age 14. He knew he wanted to be an architect, design and build houses. And that’s what he did for his entire life. Happy as a clam. I happen to be different. There is not one thing that excites me. I guess, I’m pretty easily excitable. Although on paper, the gigs I’ve done so far look and feel quite different. I’ve enjoyed them all thoroughly. So well, I guess I’m looking for diversity of exposure, diversity of thinking and working in the gigs that I’m pursuing.
Matt Watson 03:32
Well, so we’re going to talk a lot today about financial decisions and stuff. But before we do that, I would love to hear more about Bento Engine and what led you to start that and what you guys do.
Philipp Hecker 03:43
Yeah, so what is Bento Engine? I’m going to use some acronyms that our audience will be I trust familiar with. If not, you’ll fill in the long forms on the technical front. Bento Engine is a B2B SaaS solution. We sell a integrated technology and content solution that, the net, to financial advisors, okay and their firms. We in a B2B to C way help financial advisors advise their clients and prospects on important moments that matter in the lives of those clients and prospects. You may wonder, what are these moments that matter? We break it down into three buckets. Uncle Sam, the government gives us in the US 15 H-based milestones that matter by law. You know, when you turn 50 you can make catch up contributions in your retirement accounts, and thus increase your tax advantaged savings and investing rate. When you turn 62. You can start filing for Social Security benefits, although many of us will be better off waiting until later because that increases the monthly check we get. You see there’s 15 of these H-based milestones where Americans have to make important decisions that affect the financial well-being. There’s also life events that are less predictable, getting married, divorced, having a child, getting sick, buying a business, selling a home, or moving to Florida, there are easily dozens of life events that not always happen, but oftentimes happens to the clients of our financial advisors that we serve. And when they happen, they represent major opportunities to lead with advice. And from an advisor point of view, capture money in motion. So you get the feeling, there’s dozens of moments that matter. That’s how we think about it. It’s jobs to be done designed thinking that we apply to the space that we equip our advisors to be of support with. Real quick, how do we do that? Via API’s, we connect them to the CRM systems broadly used in our industry. There our algorithms constantly scan the entire book of business to identify upcoming advice opportunities in the lives of the clients. And when we find one, we not only alert the advisor in their CRM, we also equip them with compliance pre-approved content for the all important next step, which is actually acting upon the alert, engaging and serving the client. That’s a little bit about the what. That is Bento Engine. I’m happy to dive into the why. For other any comments or questions on the what?
Matt Watson 06:33
Well, so I just had a baby. So would your guy’s at software be able to pick up somehow via API’s and public data and then know that and tell the adviser like that’s, that’s like part of the hook of your what you’re looking for,
Philipp Hecker 06:46
We focus on information that the advisors have in their own CRM, okay. At this stage deliberately not scraping LinkedIn or the internet and doing somewhat, you know, dicey stuff along those dimensions. We strictly focus on readily available quality information in the CRM, we mind that and make that work even harder for the advisors. Okay, you may or may not know this, many advisors cover hundreds of clients family. Yeah. So staying on top of all the moments that matter is really hard and difficult. Which is why today in terms of state of play, many advisors do this work manually. But they do it for their best clients only. When you look into the middle of the book, the bottom of the book that is oftentimes woefully underserved, and represents a massive built-in organic revenue growth opportunity, from our perspective. So in a way, Matt, scaling the great work that great advisors do for their best clients, and democratizing it, if you will, bring it to the middle and the bottom of the book is what we’re all about.
Matt Watson 07:57
Well, that makes a lot of sense. And I forgot to mention earlier big congratulations to you guys to being one of our Top Startups in Connecticut. We’re doing a whole series on that. And you guys are one of those one of those companies in the series. So congrats on that.
Philipp Hecker 08:12
Matt, and quick shout out here to the emerging Connecticut tech ecosystem, the FinTech buddies, in particular, love the dynamics we see here in this great state of Connecticut.
Matt Watson 08:23
Awesome. So follow up question about the way that you guys work. So, you know, you’re, are you guys totally dependent on the CRM systems and the data that they collect? Like you’re you’re totally dependent on what they do? By designing the data, there’s nothing you can do
Philipp Hecker 08:41
Spot on, it is for better or worse garbage in garbage out, you know, a lot rests on the quality and availability of the data. Now, let me explain why. We do that deliberately because we operate in a highly regulated industry, right? Where you must abide by certain laws and regulations in particular, when it comes to PII, personal identifiable information. So what we can do in kosher ways and reliable scalable ways, might be different to other industries, okay. Also in terms of the culture of the industry, it is for better or worse, a very conservative, you know, mindset and set of stakeholders. Having said that, the opportunities to mine simple data, and provide quote unquote, simple alerts, and then workflows is still massive. Here is what I mean, the state of financial advice in this great country, despite our best collective attempts, is not where could or should be. You may know this 68% of Americans pass without a will. The most simple of estate planning documents. 64% of Americans do not know what a 529 plan is, the key vehicle to save for college retirement. Yeah, give them your recent birth. You know, congrats on that front. I trust you know what a 529 plan is?
Matt Watson 10:14
You just reminded me though I need to contribute some more.
Philipp Hecker 10:17
Yes, you do.
Matt Watson 10:19
Only now my sticky notes, write it down.
Philipp Hecker 10:22
Very good. Very good. See, we have actionable advice at this point already. Awesome. One last data point, the retirement. Sorry, yeah, the retirement account, catch up contributions I mentioned earlier at age 50. Only 10 to 15% of those eligible actually do so. You get the sense? Americans leave billions, if not trillions of dollars of tax advantaged dollars on the table every year, because they do not avail themselves of all the tax advantaged, savings and investing opportunities out there. That is the opportunity we’re leaning into. And we’re doing it via the caring financial advisors.
Matt Watson 11:08
That’s awesome. Well, so tell us let’s talk more about we talked about navigating big financial decisions that a lot of us have to deal with throughout our life and like to talk more about that today. And where would you start? Like, I feel like I feel like as Americans, most of us are pretty financially illiterate. And I think that’s the first, the first part of the problem.
Philipp Hecker 11:31
It is the first part of the problem. And by the way, unfortunately, we are in good company, when you look at the standard of financial literacy around the globe. Starting early on financial literacy is key to success. I’m sure you’re following the debate along that front, it is commendable that more and more states make financial literacy as part of their standard curriculum. Schools, yes, can help on that front. However, I hope we all concur. It’s really the family, it’s really the home where certain attitudes and behaviors get shaped from an early age. So what we do on that front, Matt, is every two years as the children of our advisors clients age, the advisor receives an alert in the CRM. And a package of age appropriate information, guidance and activities to share with their family. It starts at the tender age of four, yes, four. And then every two years, the family receives guidance and very importantly, activities that they can do to hone the behaviors of the child. For example, at the tender age of four, we start with the proverbial piggy bank. You’ve all heard about it, training the muscle of delayed gratification, learning to put money away, physically, literally helping the child to experience that at age four is important. As the child matures, six or eight depending on you know the evolution, we recommend that families break that monolithic piggy bank apart and divide the finite pool of money across three glass jars. And these three glass jars are clearly labeled, saving, spending, and sharing. And they represent three competing interests that the child can pursue with the finite amount of money. You get the feel, it is very thoughtful activities that build on each other to build financial literacy in the younguns, in the next generation. And by the way, if and when financial advisors do that, everybody wins. The goodwill and trust they get from parents is second to none. The opportunity to connect early and constructively with the next generation of the client family is important to strategic thinking firms. And I would add we as a society all benefit from more literal and literal financial financially literate and responsible participants. That is just one, you know, way to start early. I discussed the 15-edge points that matter. Previously, we can double click, I discussed the life events which are more dynamic in nature as well. The sum total of that, Matt, is that all along the life journey of clients and prospects, there are dozens and dozens of opportunities for caring advisors to proactively engage and serve their families. And that’s what we’re supporting.
Matt Watson 14:58
Well, I love that about helping kids and I have five kids. So I’ve got to be on like your bulk, the bulk system for this, like, I want to be like every few months gonna have one that’s going to trigger this thing.
Philipp Hecker 15:10
We’ve got four here at home, I’m only slightly behind you.
Matt Watson 15:14
Yeah. So I just had number five, I got a, I got him from 14 years old, all the way down to
Philipp Hecker 15:21
Matt Watson 15:23
Yeah, it’s crazy around here, I’m glad when they’re going back to school, thank you.
Philipp Hecker 15:27
And let me give you a tip, if I may, for the age of 14. Age of 14, in many, many states is the age at which children can legally start earning income, right to do so they need something called the Working Papers. You can get them either from your school system or your local government. And then we encourage families to have the children indeed start earning income at the tender age of 14. And then we suggest that they don’t necessarily spend all that money. But instead open custodial IRA accounts under the kid’s name, which are tax advantaged, you know, savings and investing vehicle. So that the children learn not only to save and invest, but also to do so in tax advantaged ways. Right? And then the children can watch their early investments compound in tax advantaged ways over the decades. That’s a very formative lesson, you can start doing with your 14 year old.
Matt Watson 16:31
That’s, that’s great. And that’s something I think about all the time with them is trying to figure that out. And even at 14, like, they don’t really have money, they don’t really care about money. You know, I guess beyond buying, like lunch at school or something, right? Like, they’re, you know, they don’t really care as much about money yet. But I started working, I was 14, I had a summer job. And, you know, a year or two ago, I’ll never forget, we were going through the pandemic and all these things and shortage of people, like people won’t work and feel like we still have some of that, right, like restaurants and stuff, can’t hire people and I’m going to the drive to McDonald’s. And some kid is, you know, takes my money and I saw this kid look like he was nine years old. He was probably like, 13 I’m like, Hey, we finally found somebody that can work. Somebody that wants to work. And this super super young kid working McDonald’s like put them to work, man, like that’s, that’s who’s gonna save our country. We need these young kids to work nobody wants to work.
Philipp Hecker 17:26
There we go. Let me share my first job story. Coincidentally, also age 14, I delivered flyers, you know, on a bicycle from house to house, you know, stuffing flyers for a local shop, advertisements, into the mailboxes, going house by house. And it was a crew of three of us covering you know, a certain part of my hometown of Dusseldorf, Germany. One afternoon, it was raining cats and dogs for hours and hours. And I was delivering those leaflets and I came back home to the shop. Utterly wrenched my fellow two participants, I met them, you know, at closing out, we’re dry. And I go guys, like it was raining cats and dogs, like, why are you dry. And they laughed at me and said we didn’t deliver. They put them you know, in a trash can. At first, it made me feel very bad, as though I did like something silly and stupid going out in the rain and doing the job. Having said that, on the way back home and with reflection from the family, that made me feel good. Having done the right thing, and actually putting the work earning the money. I think we both agree, one can learn very important lessons by engaging in work from as early on as possible.
Matt Watson 18:49
Well, and I think that’s one of the most important things that we need to teach our kids is that work ethic, right is hard work. And my, my wife has three younger brothers and none of them had even worked into their 20s and some of them went to college and whatever never worked during college and and I feel like kids need to have like some really crappy job. So they also understand the importance of, like, pursuing a more, you know, a call a worthwhile career of some form, right, then working the drive thru at McDonald’s or whatever. People need to have some of those jobs so they understand, like, I don’t want to do this the rest of my life.
Philipp Hecker 19:28
Yeah, look, exposure to the real world, in its many beautiful manifestations is a healthy thing. And yes, being exposed to the spectrum is even better.
Matt Watson 19:39
Absolutely. Well, I do want to remind everybody, if you’re looking for software developers Full Scale can help. Especially when you visit FullScale.io where you can build a software team quickly and affordably. Our platform at Full Scale can help you define your technical needs and see what developers are available to join your team today. Visit FullScale.io to learn more. Well. Do you do you feel like there Are is a big movement though, in our country, maybe around the world, around people, not not as many people working people waiting to enter the job market at later ages seems like there’s something going on there.
Philipp Hecker 20:14
Yes, but I take it with a grain of salt when I look at the statistics, because how countries define the unemployment rate strikingly differs, you know how Europeans do it is quite different from Americans. So labor participation rates, you know, have to be taken with a grain of salt. I, from my end observe in our industry in wealth management, a dearth of real human talent, you know, the industry is growing, it’s highly attractive, it’s very, very profitable. And yet, we, as an industry struggle to replace the mending the many aging advisors that are about to retire. Wealth Management is a wonderfully attractive and rewarding career, I would hope that more and more people check it out, in earnest. Actually, Matt, I have to put a plug in here, I am so passionate about raising the educational standards in our great industry, that I am a adviser to Columbia University here in New York City, in launching a new master’s program in wealth management. Nice. And that’s just a wonderful thing, because it allows not only people from within the industry to up their credentials, it also allows industry shifters, you know, career changes to come into the industry via highly respected, very effective academic credentialing. So if there are listeners out there that are interested in learning more not only about wealth management, but how to become a efficient and effective advisor, simply type Columbia University and wealth management into a web browser of your choice.
Matt Watson 22:05
Awesome. So for those of us who are not super familiar with wealth management and financial advisors, there has to be a whole spectrum of it, right? Like you’ve got people on one end that have you know, millions of dollars and wealth and have maybe family office and all these kinds of things. And Goldman Sachs is messaging you every month trying to wine and dine you to give them your money. And that’s a whole different world, right? And on the other end, you know, if you’re mad, and then on the other end, you’ve got, you know, some senior citizens that just have Social Security, and they’re trying to figure out how are we going to retire and make things ends meet and you have lots of people in between? So when you talking about financial advisors, I mean, they’re they’re, they’re, they’re people that help even the senior citizens is have a few dollars are trying to figure out how to navigate that side of it. Like what where does that spectrum of that kind of lie?
Philipp Hecker 22:53
Look, the spectrum of needs and client profiles out there is very, very broad, as you suggest. Let’s not forget that a healthy chunk of America actually has sort of negative net worth, and is living sort of paycheck to paycheck, those will be hard to serve sustainably by any human advisor, their employer benefits program, nonprofit, robo-advisor type solutions, can should and do help already. If you go more into the affluent, and then the high net worth, ultra high net worth segments. Those have been historically, the prime focus area of human advisors simply to make their business models, you know, work. It’s interesting now, Matt, as technologies such as pen to engine, and many others come to life, we see that the loading ratios of advisors, the capacity to serve more and more clients effectively and profitably is increasing. So bad news, as I mentioned earlier, we struggle to generate new human advisors. Good news, the technologies that support human advisors are advancing quite rapidly right now, making them more efficient and effective, and thus increasing our capacity as an industry to serve more and more families well.
Matt Watson 24:23
How common is it these days that companies provide some sort of consulting financial advisory kind of service as part of their employment benefits? Is that is that getting common?
Philipp Hecker 24:34
Financial wellness type programs are on the rise, indeed. Quite prevalent amongst the large firms by now and increasing to now more in the SMB type segments. So yes, not only barebone retirement plan type packages, but also more meaningful financial wellness, literacy, and education packages include musingly being offered by firms large and small, alike. So that is a welcome, you know, dynamic.
Matt Watson 25:08
I mean, to your point earlier, right, like, there’s a huge percentage of Americans that are probably living paycheck to paycheck, they’re not very affluent, they don’t, they don’t have like, hundreds of thousands of dollars invest a lot of financial advisors, you know, probably overlook them. But it’d be great if corporations could somehow kind of somehow fund those financial advisors to go out and help these people that still need help. And maybe the fact that they need help as a reason they haven’t, haven’t gotten out of that trap. They’ve been able to help that that group of population, I think it’s probably highly underserved would be would be great as an employer for me to help my employees, I would, I would love that.
Philipp Hecker 25:44
On, spot on, which is why more and more firms are engaging in leveraging these financial wellness type of programs, which lead with, you know, scalable digital advice being tailor made and delivered to the company’s employees. And they do that out of very understandable reasons. Of course, they care about the employees and want them to thrive. That is one motivation, but they’re selfish as well, in a good way. Study after study has shown that financial stress can be a real distraction for employees from being as productive as they can be. So to avoid and mitigate financial stress advice, employers are well advised to engage in and offer these type of programs.
Matt Watson 26:32
So we talked about life events, obviously, buying or selling a home has to be one of them. I’m curious if you have any tips for those out there in regards to that specifically? I mean, if that’s yes, the financial advice
Philipp Hecker 26:48
I do. And first off to dimensionalize, that moment that matters. Per year in the US, roughly 6 million homes change hands, 6 million. That means there’s 12 million when you think about both sides of that transaction, 12 million buyers and sellers that would benefit from financial advice on how to structure the transaction from a financial tax and estate planning point of view. Good advisors recognize that and help the buyer and or seller to think through questions such as the following. is buying or selling right now truly a good decision? What is driving it? Are you prepared for what comes next? Meaning if you’re selling the home, do you have the next you know way of living locked in lined up already? They help structure the transaction think through the most advantageous way of structuring the deal, keeping the financial and tax considerations in mind. Taxes, I alluded to together with the accountants and tax partners of the buyer or seller, they think through again how to structure the transaction, keeping financial and tax considerations in mind. Then it goes into financial planning land. Now that you’ve had the big inflow of cash or the big outflow of cash, which by the way, is oftentimes the single largest transaction that client will ever make in their lives. How does that affect your overall financial plan? Good financial planners make sure that long term planning for retirement and other goals gets reflected in both the buying and selling decision. Last not least tightening of accounts, making sure that should something bad happened, you know, that the family is covered is important. Insurance considerations of massive importance for the deal itself, and then umbrella and so on thereafter. I hope I didn’t sticker shock you but gave you a feel for the multiple dimensions that the transaction entails.
Matt Watson 29:06
Well, and it always seems. So in the US, I feel like there’s a dichotomy of you got certain parts of the country where housing is so expensive, that people can barely afford it. And then, you know, I’m in the Kansas City area where houses are much more affordable. Like, living in California cost five times more money than it cost here. But then here where I live, it’s like people you know, buy too much houses, right? They they they go and get the giant mortgages that they don’t really need and kind of set themselves up to be house poor, you know, and is that still one of the biggest problems that wealth advisors have to fight with against their clients?
Philipp Hecker 29:43
That is a dynamic that is all too real. And I would emphasize what you said America is such a large, diverse, heterogeneous country where you find very, very different living situations setups and costs of living. I, a few years ago asked the question, what does it take to be in the top 1%, you know, the proverbial top 1% of wealthy people in different parts of the country. And as you can imagine, the differences are flabbergasting, you know, to be in the top 1%, it may take only, quote unquote, only high six digits in certain areas. Whereas to be in the top 1% in Boca Raton, this is a few years ago, you needed more than $11 million.
Matt Watson 30:40
Philipp Hecker 30:40
To be in the top 1% $11 million would put you for sure. And I mean, in the top 1%, if not 0.001%? In most others. So that’s just a way to think about what does it mean to be rich? What does it mean to be wealthy is always subjective, and very much depends on the context that you’re living in.
Matt Watson 31:06
Yeah, everything in life is is, you know, isn’t good or bad until it’s compared to something else, right? It’s all totally, totally different based on comparison.
Philipp Hecker 31:14
relative creatures. We are relative creatures.
Matt Watson 31:19
Well, what other financial tips do you have for those are out there that are common problems that maybe we don’t think about, maybe maybe you have some great, great suggestions around.
Philipp Hecker 31:33
For most of us, not all, but for most of us, it’s a good call to think about working with a financial professional, in addition to any legal tax and accounting support that we might be utilizing.
Philipp Hecker 31:50
We, as Bento Engine, very much believe in the value add that a good financial advisor can add not only when it comes to investing or managing money, but providing impactful advice during those moments that matter, that creates real after tax value for the clients. Let me give you an example to bring that to life. I mentioned H point 62 earlier, when Americans turn 62. If you put in during your working years, you can start pulling Social Security benefits. You can also wait until later up until age 70, which would then increase your monthly benefit amount. That’s the trade off. Recently, the Federal Reserve of Bank of Atlanta sponsored a study executed by the Boston University team that looked at Real Life Social Security Benefit decisions that Americans are making. And broadly speaking, 90% of Americans would be better off to wait until later to file for benefits. But only 10% actually do so. And take a wild guess by taking benefits too early. What do they leave on the table in terms of lifetime benefits?
Matt Watson 31:50
Matt Watson 33:15
As far as like a percentage basis?
Philipp Hecker 33:16
Yeah, or dollar amount?
Matt Watson 33:19
Oh, I bet it’s, I bet it’s 30% of their
Philipp Hecker 33:23
$182,000 on average.
Matt Watson 33:28
Philipp Hecker 33:29
So by starting taking benefits too early, Americans on average, leave, shortchange themselves by $182,000 of lifetime benefits. So these moments that matter, financial advice around those age milestones, those life events, can oftentimes have real quantifiable after tax value. So I guess the call to action here is think about working with a human financial advisor. And don’t think of that advisor as only managing your money. It’s giving you advice that creates real value for you and your family.
Matt Watson 34:12
Awesome. Thank you for that advice. Well, I’d love to talk to you more about Bento Engine and tell me you’ve been doing this for a couple years. Talk to us about you know the growth of the company and building the product. And you know, what, how has that process been?
Philipp Hecker 34:31
It’s been a wild ride, man. It’s been a long, windy journey. You’re spot on two years old as a Delaware C Corp. did some research and business planning prior to that as a small LLC. At first two of us bouncing around ideas, exploring opportunities writing the business case. It was clear to me that I’m not a solopreneur. I would have never dared to do this by myself.
Philipp Hecker 34:59
This is your first time?
Philipp Hecker 35:01
Exactly, it’s my first gig. You know, I’m a first time entrepreneur, I’m decidedly not a solopreneur. So I bounced around the business case with a good B school friend of mine, who is a highly successful serial entrepreneur, writing the business case with him. Key to success. His name is Jeff Wald, very prolific, great guy, very thankful for him being our chairman to this day. We quickly assembled a team of deep wealth management experts, cutting edge technologists, and Jeff Wald, as a serial entrepreneur. And it was clear to us that we didn’t want to build Bento in a black box. We didn’t do a stealth mode kind of thing. We did the opposite. We built the technology and the content together was six innovation friendly pilot partners that believed in our vaporware, that wanted to help us build a new system a new idea. So we built the technology. We built the content over the summer of 2021. And in October of that year, we felt like we had an MVP. There was a there there, we had a robust product that we could go to market with. Eternally grateful for the six firms that partnered with us to take a risk. It is fascinating how they helped shape what Bento has become. I would go as far as saying, you know real innovation wouldn’t be happening would not be possible in our industry, if it weren’t for frontline firms out in the trenches, partnering with crazy idea folks, like us. So October 21 started selling now, Matt, where 70 Plus firms on platform 10 FTEs. We are a COVID baby, meaning we are fully dispersed. Yeah, up in the cloud as we go. We range our team from Westport, Connecticut, to LA, from Winnipeg, Canada, to Sao Paulo, Brazil. And we don’t have an office, we don’t have a file cabinet. We don’t have a mainframe. It is fully dispersed. Cloudbased working for us.
Matt Watson 37:20
I love it. So when you you know you started this as a tech company, you’re, you’re not a software engineer, right? That’s not your background, and neither for your co-founder either. None of you were tech.
Philipp Hecker 37:34
Correct. That tech piece was the hardest piece to get into place. And here is how that unfolded. Interesting story. My serial entrepreneur, buddy had a stable of dev shops that he likes to work with. One of them up in Canada called Dispatch doing wonderful work on many fronts, including CRM integrations, which is the theme the topic, you know, that we were after. Long story short, we work with them at first on an arm’s length, contractual basis, you know, building an MVP. It’s two brothers leading that place. And one of them at some point came to us and said, hey, guys, this is interesting. This is cool. This is fun. I want in. And we made him a co-founder, and he is now our CTO via a dev shop arm’s length build the MVP type of relationship. We found our permanent CTO, okay, kind of wonderful, kind of lucky. And I have to say I’m very, very impressed by the tech talent not only in the US, but also north and south of the border. We tap into Canada and Brazil quite a bit.
Matt Watson 38:50
There is tech talent everywhere. And you know, that’s my, my company Full Scale, you know, we’re west of the border. 8000 miles in the Philippines and we have 300 employees. And that’s what we do too. So there’s tell people all the time there’s talent everywhere, you know, 90% of software developers are not in the United States. 90% are not here. And there’s talent everywhere. So
Philipp Hecker 39:11
Ukraine, Poland, you know, where the pools are?
Matt Watson 39:14
Yeah, they’re all over the place. So my last, I had a company called Stackifi, that sold to software developers and we had customers in 60 Different countries that were dev teams and we we had visitors to our website from every country in the world. You know, visiting our blog on our websites. I like that there’s there’s smart people everywhere and as an entrepreneur the struggle is just finding the right talent wherever you can find the talent so looking for you you’ve you found the team you needed so that’s good. It’s good for you.
Philipp Hecker 39:42
Matt Watson 39:44
So what’s what’s next for you guys? Just growing you guys think you’ll raise more money? You think you’ll sell this thing one day? What do you what? What’s the plan?
Philipp Hecker 39:54
So let’s take those questions in turn. Your spot on last summer, we did a kind of a angel round, you know, raising some funds from a crew of wonderful industry insiders that are supporting our journey and helping us in many, many ways truly adding, you know, value beyond the dollars. We are now scaling our offering, we build out our solution set when people go on to bento engine.com. If you’re interested, you’ll find five solutions in the bento box. No pun intended, we feel good on the product. And for now, it’s about scaling that and getting distribution might behind it. We deliberately started in the long tail of small wealth management firms in our fragmented, you know, industry. And now after perfecting the offering, we’re moving upstream, we’re taking the enterprise space. So we’re changing our sales and distribution game, to now also serve ever larger firms as you can appreciate, when you make the shifts that are from retail type clients, where operators are empowered decision makers, to the big fish enterprises, that is an entirely different kettle of fish.
Matt Watson 41:10
Philipp Hecker 41:10
Very, very different sales process set of stakeholders and buying behaviors. And that’s an interesting, you know, learning curve for us.
Matt Watson 41:21
A lot longer sales cycle too.
Philipp Hecker 41:22
Oh, for sure, man, for sure. And again, many more stakeholders and dynamics to be to be aware of when it comes to your exit whatever monetizing strategy type question, I would emphasize that we as a team, we’re very mission driven. Bringing better advice beyond investing to more American families is what motivates us and drives us. In that spirit, we are having a culture of building to last. This is not a built to flip type shop and scenario. We truly make all decisions with a long term sustainable, having been to stand on its own two feet mindset. Having said that, the FinTech space is a hot one. There is lots of M&As still going on within fintech. And you know, people come knocking exit routes, potential exit routes are becoming clear, fast.
Matt Watson 42:19
Okay. Well, good luck to you. And I love what you’re doing a story and financial, you know, management and all that is always a struggle for people. And again, congrats for being one of the Top Startups in Connecticut and being part of that series, reminder, but if you need help with software development, definitely keep Full Scale my company in mind. So as we round out the episode, do you have any other any other final tips, words of wisdom, you know, for other entrepreneurs about anything?
Philipp Hecker 42:53
Two, two, if I may, number one, in particular, perhaps as a Procter and Gamble trained brand manager, the importance of client research and ongoing feedback loops cannot overemphasize the importance in particular early on your journey to get the quantitative and qualitative customer research, right? Ask a thousand questions, observed people using your product, and really go deep on that front would be notch number one. Notch number two is we found it very helpful to utilize the Entrepreneurial Operating System, EOS, as a framework of organizing ourselves and keeping the trains running on time in roughly the same direction. So if you’re not familiar with it, check out the Entrapreneurial Operating System, from my perspective, a wonderful, proven successful framework for increasing internal operational efficiencies, and aligning your entire company in a somewhat coherent way.
Matt Watson 44:03
So, in some of the big firms that you worked at, did they use EOS at all?
Philipp Hecker 44:06
It has very many manifestations and names, you know, I’m dating myself. But the balanced scorecard system from the 80s and 90s, in many, many big places is still being utilized. Again, it may have different names by now, if you ask me and when I stepped back, all of them are no more no less than a serious of common sensical, you know, activities and mindsets. If you ask me, there’s no magic about them. It’s if you if you step back, common sensical stuff, but it needs to be integrated well, and to your earlier point, it needs to be executed well.
Matt Watson 44:46
The most important things about business are always fundamentals. You know, it’s, it’s the fundamentals. Can’t do that right now, the rest of doesn’t matter. So, but we never put enough focus on the fundamentals.
Philipp Hecker 44:52
Bingo. So client input and EOS would be the two nuggets on the way up.
Matt Watson 45:02
Awesome. Well, thank you so much again, this is Philip pecker. Your company Bento Engine is at bentoengine.com. Well, thank you so much for being on the show today. And again, congrats for being one of the Top Startups in Connecticut.
Philipp Hecker 45:15
Thank you, Matt. And go Connecticut.
Matt Watson 45:18
All right. Thank you.