Kevin O'Leary Wants To Teach Millennials How To Invest With Fintech, Even If He Loses Money Doing It
The finance industry has been agonizing over how to get young people interested in financial products, especially fintech startups that have used venture capital funding to absorb the high customer acquisition costs.
It takes a shark, however, to not sweat the CAC stuff.
Kevin O’Leary, chairman of O’Shares ETF Investments and "Shark Tank" judge, is launching a fintech app. The app, called Beanstox, will allow users to invest small dollar amounts into ETFs and market-leading stocks in order to build portfolios without large up-front capital requirements.
O’Leary announced the app at the 2017 Benzinga Global Fintech Awards and said his 24-year-old daughter’s struggle to start a portfolio inspired his decision to develop a fintech product.
“My daughter can afford to invest about $50 a week,” said O’Leary. She asks me, ‘How do I invest, dad?’ So I’ve been thinking about this: How could I create a platform, just an app, that would allow her to take one of my indexes — or maybe SPDR S&P 500 ETF Trust (NYSE: SPY), SPDR Dow Jones Industrial Average ETF (NYSE: DIA) or PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ: QQQ), one of the top 100 stocks — and invest just five bucks?”
While other fintech products, such as Stash Invest, offer low-cost investing apps, O’Leary claims he has built-in advantages that will let Beanstox have a bigger impact. The first is his sizeable following and media presence, and the second is his personal stake in the product.
“I’m going to promote the living shit out of it in every way I can and see how far I can get,” O’Leary said. “At the end of the day, everybody that’s been a successful entrepreneur owes the next generation the roadmap to success. I really believe that if you’re in your 20s and you’re not investing, you’re crazy.”
O’Leary said he felt his brand gave him a strong base from which to launch Beanstox compared to a financial institution or startup because it will defray customer acquisition costs. He said that as an investor analyzing the fintech space, he pays close attention to marketing costs and sees that many fintech companies have acquisition costs higher than the total lifetime value of their customers.
“Look, if I don’t make any money on this, I’m cool with it,” O’Leary said. “What I want to do is get young people investing. The biggest problem we’ve got is how to get people to hear about these products. It’s so noisy out there, even the big guys can’t make money yet. The key is customer acquisition cost. I’m going to try and break that mold.”
Those interested can sign up for Beanstox beta access here.
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Image Credit: Benzinga, 2017 Benzinga Global Fintech Awards
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