Elevator Pitch is a regular feature on Lifehacker where we profile startups and new companies and pick their brains for entrepreneurial advice. This week, we’re talking with to Brendan Malone, chief operating officer for Acorns Australia.
In 128 words or less, explain your business idea.
Acorns is a smartphone app that allows users to round up their daily purchases and automatically invest the change into a diversified portfolio of index funds. Since launch in the US in August 2014, Acorns has grown to 750,000 members. Australia is the first country outside North America to secure a partnership to co-develop and launch a local version of the app.
Through applying knowledge of the Australian market, we have modified the app for Australian investors and the regulatory environment in order to mirror the success Acorns has had in the US. Over nine months we have attracted 750,000 members in the US, and through the modification of the app for an Australian audience we hope to reach similar success here.
What strategies are you using to grow and finance your idea?
The biggest challenge for us is trust, as it is with any fund manager/financial services business. We need to ensure that we are completely transparent to the investor, and ensure that the investor experience allows for feedback and therefore modification. In the Australian market especially, we know that complete transparency and a low-fee model is necessary for success.
While trust is something you gain through time, it’s aspects of the model such as transparency, feedback and minimal output for the investor that will allow us to gain that trust and build the customer base in a relatively short time, like we have done in the U.S.
What’s the biggest challenge facing your business?
In Australia particularly, financial institutions are concentrating on money invested in super when you look at the discussions and subsequent investment products that are being pushed out to customers. This is where Acorns is different’ we are helping customers invest outside super, and have created a natural experience for investors that seamlessly links savings to spending as we ‘invest the change.
How do you differentiate your business from your competitors?
The price point is important, as Australians can now invest for $15.00 a year, which is less than one trade cost for many brokers. There’s also no minimum investment, so first time investors can get involved with little outlay. This essentially disrupts the current market as previous to this, investment into the ASX was largely reserved for experienced investors with larger amounts of capital. We are also not an either/or proposition, so investors can use Acorns as well as invest in superannuation as well as use financial advisers.
What one phone, tablet or PC application could you not live without?
I could not live without my PC and phablet. Being part of a fintech company, I do a lot of travelling, and my phone being a phablet is great for working on the road, which I find myself doing quite a lot. Where the PC comes in handy is when I need to edit documents, which is still a lot easier via PC than phone.
What’s the best piece of business advice you’ve ever received?
You learn the true worth of a person when in a crisis
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