Episode 551 Samir Vasavada from Vise

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This is Samir Vasavada from Vise, and you're listening to The Bank on It Show with John Siracusa.

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You're listening to the Bank on It Show, a podcast established back in 2015. I'm your host and producer, John Siracusa. This show is supported by my podcast and video production company. If you're an enterprise-sized company in a highly regulated industry and you want to upgrade your podcast to video production or jumpstart your podcast to video miniseries, please visit us at listendec.com. On this show, we get deep behind the stories of fintech founders and the ideas, methodology, and investment strategies of top fintech VCs. A double-click behind the tech headlines we read every day. So rather than reading a tech reporter's distilled version, you can hear directly from the people who are building and investing in the future of fintech. Their stories, unscripted. The headlines can get you excited, but the stories will help you get to work. If you're looking to build, partner, or invest in fintech, this podcast is for you. If you like what you hear in today's episode and want to support us, please feel free to give the show a 5-star rating in a podcast application of your choice. You can also follow me on Twitter and Medium at John Siracusa, J-O-H-N-S-I-R-A-C-U-S-A, or on LinkedIn at Siracusa. In today's episode, I chat with Samir Vasavada, co-founder and CEO Vise is an AI-driven portfolio management platform for financial advisors.

So recording remotely with me today, I have Samir Vasavada. Samir is a co-founder and CEO of, of, of Vise. Samir, thanks for being here today.

Thank you so much for having me.

It's my pleasure. So why don't we get started with what exactly is Vise?

So Vise is a platform for independent financial advisors to build and manage personalized portfolios for their clients. So the whole idea is that financial advisors all have this superpower, right? They're best in the world at really relationship management. They're oftentimes their clients' marriage counselors, their therapists, their most valuable, you know, financial resource. But unfortunately, many financial advisors really struggle to be able to deliver personalized advice to their clients. They're oftentimes delivering generic mutual fund ETFs, investments that aren't really personalized to their clients' investment needs. They're tax inefficient. They don't represent the client's values. They're expensive. They're hard to manage. So the idea behind Vyze is we're one platform that can analyze everything about a client, how much money they have to invest, their goals, net worth, needs, private market assets, tax preferences, strategies they might want to take, maybe strategies the advisor might want to take to build a highly personalized SMA-like portfolio of individual stocks, bonds, and other assets tailored to that individual client's needs. We then automate the management of the portfolio, so active rebalancing, tax loss harvesting, with the icing on the cake is we call portfolio intelligence, otherwise intelligence that helps tell the story behind the portfolio. So the justifications, the talking points, everything Advisor needs to explain, here's what you're investing in, why you're investing in it, how it's tailored to you, how it changes as you change.

Awesome. So Samir, how did you actually get into that?

It's a very long and unique story, especially for a company in this space. We kind of stumbled into it in many ways. So my co-founder and I had originally met at a summer program in 8th grade. Our parents sent us to a college program at Northwestern, and the two of us had the brilliant idea of to start building apps for small businesses. Long story short, we had worked on a different project using AI to build app development. My co-founder had gotten a research opportunity with a very renowned institution in artificial intelligence research. We had stumbled on these consulting projects, these consulting opportunities, large investment banks. These investment banks were all curious about how to leverage AI and specifically how to leverage AI with their investment management or money management parts of the business. What we realized was the wealth and asset management side of these businesses was like, you know, the golden goose. It was the distribution channel for many of their financial products. It was the business that was stable, that created a lot of the predictable revenues, that was all built on top of human financial advisors. And we had believed that those human financial advisors were great at money management, but in reality, they were really great at relationship management. And they needed technology. They needed to harness AI. They needed to harness other frontier technologies to deliver them personalized investments.

Hmm. Building a company from scratch is not an easy thing to do. What was the first thing you did to actually make Vise real?

The first thing we did to actually make Vise real, I would say, is probably managing our first dollars, right? Even more than getting venture funding and, you know, having a piece of software built. And it didn't happen until like kind of 3 years into the business. We had a lot of time that we had spent just trying to understand the market opportunity and understand what we were actually building before we were able to get to managing money. We had gotten registered with the SEC. We had realized very quickly we needed to actually be the money manager. We managed capital for the first handful of RIAs, and we saw the difference it made in their practices and their lives. But back to your point, like, companies are hard, right? In this space, it is a much harder space, I would argue, than traditional fintech or traditional SaaS. And it's one where we know that it's a massive market, it's a massive opportunity. Going to change. It's ripe for disruption. And a lot of the incumbent institutions think they might have it, but they don't have the technology. They don't have the ability to build the technology in the same way that a nimble startup might be able to. So we think that it's mostly a game of just staying at it, staying the course.

Your co-founder is Roonik. Is that right?

Yeah.

So how did you end up meeting Roonik?

So our parents were— traditional is the word— where they were like, you know, you guys can't go to summer camp. So everyone else was going to summer camp. We were in 7th, 8th grade, and they said, you need to do college programs at Northwestern where when everyone else is having fun, you are doing coursework. And I was like, okay, I'll do it. Sure. Make them happy. And I was in a dorm room at Northwestern and my co-founder's dorm room was right across the hall from mine. And we just started to become friends. We got to know each other and I was very fascinated by technology, business, all these kind of things, and so was he. And as time went on after the program ended, we stayed close and we started working on app projects together and over time started to build our relationship more and more and more into becoming co-founders to the present day.

So whose idea was it to first create Vise?

I don't want to say it was a shared idea, but in some ways it was. Like in some ways I had the original insight. In some ways there were certain parts of the insight that he had. It was actually born from us collectively doing the state stock market challenge and not having an idea of what to invest in. And then as we started to do consulting, we were kind of able to bridge the path, which is like, okay, we're interested in finance, we're interested in stocks, and there was this competition we did in school, and now we're realizing that All of these large institutions have these huge wealth management arms and they don't really know what to invest or they're poorly investing their clients' money into rather generic investment instruments. Like, can we bridge the gap, so to speak? Can we build a tool where we can deliver personalized portfolios at scale and sell it through wealth managers? And I think it was a shared insight we had because we were both consulting at the same time with a lot of these types of institutions.

So this is your first company that you built, right?

It was my second company. My first company was an app development studio.

Okay.

And that was simply because we wanted to make money and we thought that apps were really hot and apps were really exciting and every small business wanted an app. So it was our first kind of foray into business where we started building apps for small and medium-sized businesses. And we tried to actually turn that into a startup at the time where you could use AI to build apps where you could have one platform where you can type in an app idea and our system would help build an app, kind of an early low/no-code tool. But it was a really challenging technical problem. We had spent all of the money we made building apps on bootstrapping this business. It was a great learning experience. I'm super grateful for it, but it unfortunately just didn't work. However, it got us into the world of startups.

Sounds very complicated to do what you were trying to do there.

Yeah, it was. And I think it's even more complicated when you're 14 because I will actually say it's easier to start a business than you'd think at 14 because you have endless amounts of free time and you can learn really fast. Like, I didn't realize how quickly we could learn at that age, but you're constantly just taking in information, digesting it, understanding it, and you've got all the time in the world to be able to do it. So I think underrated but really important is more 14-year-olds should be starting businesses. Yeah.

And why do you think that they don't?

Because I think there's this narrative in society that is you should follow the path that higher education sets out for you. And I think naturally speaking, most of the people that teach us these things are the ones that followed the path versus the ones that didn't. So you've got this cycle and it's really hard to break that cycle. Cycle. And I think it's also really hard. It's very competitive. But the point to it is even if you fail, just the act of starting the company, the act of trying is a lot of the effort and a lot of the learnings because you will learn so much even if you fail and you will be better off in life even if you fail than if you had never done it in the first place.

Do you think there's any other type of learnings that a 14-year-old kid could do that will help them along this way too? Or do you think being on sports and struggling at a high level actually accomplishes this similar thing, or even being at school and just struggling at a really high level and competing at a high level?

I don't think it's about intelligence or even the level at which you compete. I think it's about one thing, which is perseverance or grit. Like, if you look at some of the most successful people in history, they weren't the smartest, right? They weren't the most capable. There were just people that never gave up. There were people that just kept on going. I think the thing we teach in schools is like, it's okay to give up. It's like a trend that Gen Z has seen, which is you get a bad grade in a test, your parent calls the teacher and says, hey, why did my son Jimmy get a bad grade? You need to fix this. I'm going to complain. It's like this easy out for kids. Or if something's not working, I'm just going to quit. It's this easy out, but it doesn't reinforce the skill you need to build, which is just grit and perseverance, because I think the more of that you have, the more likeliness success can compound. And I think that that, I would say, is the most important thing, even more than competing at a high level or being really smart.

You mentioned the fact that lack of taking responsibility, right? Like blaming your teacher for your kid's bad grade is not a good way to take responsibility for yourself, right? Like the child will never learn Yeah, exactly.

I think like responsibility, accountability, it's really important and we're starting to lose that as a generation. That's just an incredibly crucial ingredient for success.

So your first company, when it did end up not really working out that well, you took full responsibility for it?

Yeah. I mean, I don't think there's anyone to blame it on per se, the failure, so to speak. But I think we just looked at it more as a learning opportunity. Both my co-founder and I knew if this doesn't work, we're going to be better off for it and it will advance us in the next thing we do and we'll continue to advance over and over and over again. But it's important not to think about something as if this doesn't work, my life is over. But it is important to know that you should do whatever it takes to make the thing successful. You shouldn't prematurely give up.

Samir, how did you learn that?

Just different micro failures over and over and over again. I think I succeed quite a bit by failing. I think what happened was the stakes started to get higher and higher and higher, so it became more uncomfortable to fail. After you raise a lot of capital, after you have a lot of people know who you are, after you recruit all kinds of really exciting, successful, smart people, failing, so to speak, is uncomfortable, but when you do it early on when the stakes are lower, you start to build a higher and higher pain tolerance. Then as the stakes get higher and higher and higher, because you failed earlier on, you're more comfortable failing. But when you do have that fail, it hurts, but your pain tolerance gets bigger and bigger and bigger.

How does someone know early on, or how did you know early on, that entrepreneurship was something that you really just you enjoyed the pain of learning?

So I knew this when I was like 5 years old. Okay. I didn't know I was gonna fail and I didn't know if I was gonna be successful. I didn't know what the course would look like. I didn't know what the journey would look like, but I knew I wanted to build something, right? So it all started very, very early on. My parents bought me like a Lego set when I was like 4 or 5, right? And I was obsessed, right? I started building more and more stuff, right? I started buying more Lego sets like every single Christmas and birthday I would ask for Legos. I would just build, build, build, build, build, build. I realized that over time, I thought actually when I was really young, I was like when people asked me what I wanted to do when I grew up, I said I wanted to be a construction worker because I thought that was how you build. But what I realized is how you actually build is you can be an entrepreneur. You can build companies. That was the early foundation as to how I got into building, how I got obsessed with building. I think when you're obsessed with something, when you're like, like so deeply motivated with something that it can't really wait, you're okay with the pitfalls that it might have because you have this vision for yourself for where you're going, for what you want to build, that you'll do anything it takes to get there.

So how did you go though from there to building a company at 14?

I didn't have anything better to do with my time. I think is the candid answer, which is I'm in school texting my co-founder, I'm texting my little group of friends that were thinking of ideas and we're like, this seems like the productive thing to be doing with our time, pontificating on the world and what companies need to be built and what problems need to be solved versus English homework. I would say that the irony to it is that it actually made us better at our core subjects in school. When you're doing something in an applied way, you learn much, much faster than if you're learning it just for the sake of learning it. And I think that it seemed like the productive thing to do. We were also surrounded, I was surrounded by a group of people that equally cared about the same things that I cared about, which I'm still surrounded by those same people today. And it set me off pretty well.

So Samir, how did you transition from building your first company to building your second, which is VICE?

It happened over time, and it really all started with the insight that we started to talk about. But it started with the customer, right? It started with the financial advisor. So what happened was we started talking to more and more financial advisors. Like every single day we would talk to, you know, a couple financial advisors, you know, anywhere between 1 and 5 financial advisors. And we would just learn how do they think, how do they make decisions, right? The average financial advisor really cares about their client. They really care about growing their business, making more money, driving more assets under management, providing high-quality financial advice. What are their pitfalls? Why are they not able to do that today? How can we better help them do that? How do they think? How do they make decisions? How do they act? As we started to spend more time just talking to the prospective customer, we started to get more excited, more validated on the idea of the product we were trying to build. We kind of grew into it over a period of time.

Very interesting. You built a tech company originally, you built a consulting firm, How'd you do that? Like those are two different types of companies, two different types of personalities need to be able to build those types of companies, right? They're very different from each other. How did you build a consulting firm?

So I didn't build a consulting firm. I actually started with an expert network that they just connect experts to investment banks, management consulting firms, different investment managers to like learn about various topics. We got really good at that. They would send us a list of questions that the particular firm wanted to learn about, and we would send our answers. If they liked our answers, we would get on the phone with them and we would be able to build an hourly rate. We didn't build a consulting firm, but the app development firm was relatively simple. We posted Google ads, we posted Facebook ads, and we had a really pretty website, and that pretty website attracted potential customers. We would just build apps based on, we would create a proposal, build an app. It was a pretty simple business. I would say the first startup that we came into when we were trying to build the low/no-code app generator that we talked about before was a very different, very difficult thing to build. And quite frankly, we didn't know how to build that and that didn't work, so we failed. But it was a great foray into the world of startups.

When you started to build Vise, you, you had this expert network that you were able to tap into in order to learn more.

It was actually the opposite. So we were the experts on this expert network and we consulted with these various institutions. When we wanted to learn, we actually learned from the people we were consulting with. So it was kind of a hack for us because we got paid to learn, but we would get on the phone with various experts at these financial institutions as the expert and we would ask them questions. Like we would answer some of their questions, we would ask them a lot of questions about how their business works, how they make decisions, all those types of things. And it got us very familiar with the financial services landscape.

I believe you've raised— you're on your Series C, was your last?

Yeah, our last round was our Series C.

So you went from— you had a seed, an A, B, and C, and this is all over, I guess, how long of a period of time?

So the company is almost 6 years old. We went from no funding to our Series C and almost 3 years, a little less than 3 years, probably like 2.5 years, which is record fast. I don't think there's that many companies that have gone from like seed to Series C in that quick of a time. I think there were a couple circumstances. You know, one, the market environment was really incredible. Like, you know, COVID had happened. There was an incredible amount of stimulus. VCs were on fire. They were just trying to deploy money as fast as they could. And it was much easier to raise, not just for us, but for all companies. And I think that we all saw that as an opportunity to take advantage of. To raise capital at favorable terms. But I think in addition to that, our specific business and our specific market was ripe for disruption. And I think it was clear by everyone that the industry was $85 trillion plus in size. It was scaling at a rapid rate, and technology was the clear next step. And we had the opportunity to build that technology. I think what none of us could have known was that it was a much slower moving industry than one could expect. And selling to financial advisors is not similar to selling to startups or SaaS or what most venture investors are traditionally used to investing in. So we had to all kind of come up to speed, given that none of us had sold to financial advisors before, on how to actually sell to financial advisors. And I think the realization was it will take a lot longer than selling to the traditional venture-backed startup, but it was a big market and it was a market that was ripe for disruption.

So yeah, not so easy though. And you raised all those funds, you know, over a 3-year period, which means that you had signs of growth and in a very short period of time. How did you do that?

Yeah, we went from $0 to half a billion in assets in 6 months, maybe 5 months. This is even crazier thing. We stopped growth. We just decided one day we're going to stop selling. But we made a product decision, which was we wanted to make our product durable for the long haul. We wanted to build the infrastructure. We wanted to build the tooling in order to scale to tens of billions of dollars in assets as opposed to just hundreds of millions of dollars in assets. And we needed to make a dramatic overhaul to our infrastructure. So we did that. We decided to stop growth as a result of it, which had a lot of implicit business decisions. But we saw the trend. We saw the technology moving in this direction. It was clearly the step that advisors were excited about. And no one had been building anything like it.

If you listen to or read the biographies of major generals in, in history and so on, and sometimes when they move slower with expansion, it was due to exactly what you said, to prepare for the next level of whatever, right? Exploration and whatnot. And that makes full sense. So it's not so crazy to me that you would stop growth to build whatever so that you could prepare for the next level of growth, right? Did all your investors or people who were involved in with you and the company, did they all understand it?

No, it was a controversial decision for basically the entire company, but it was the right decision.

Yes.

And I think that making controversial decisions is part of the job and you got to get used to it and you got to stand by those decisions. Right. So when decisions are made, it's important to stick by the decision. And if it was wrong, if it was the wrong decision, it's important to quickly recognize that, take ownership over that decision having been the wrong decision, and reflect on the learnings for the next time.

When you're in the moment and people— you're getting pressure from people who've either given you money, given you whatever trust, given you whatever it was to get you to that level. How did you respond when you're thinking to yourself, well, okay, I'm getting all this pressure right now. I believe I'm right, but you know, if I'm not, I gotta learn from that. Right? So how are you able to continue that kind of mindset and move to where you are today?

So Peter Thiel always says in order to be really successful, you got to bet against the consensus and be right. And betting against the consensus is really different. It's really hard, right? It's really hard to be contrarian because that means that everyone else is contrary to you. And it's easy to say, but in practice it's very hard because that means people pressuring you, that means people doubting you, that means all kinds of things that are not really exciting to go through. And I think we're still in the process of recognizing the decision and understanding this was the right decision for the business, and more importantly, this is the impact. Because when you have a long feedback loop like a business like Vise, where it's more of a business built on top of continuous compounding because you're aggregating lots of assets over time as opposed to growing really, really fast up front, it's hard to come to a recognition of this was a good decision versus a bad decision. So that's what makes it extra hard in this particular instance. But I would say that In general, if you've got a decision that was a hard decision that you've made, it's important to constantly reflect on that decision. What are the learnings that I've made? What are the new advancements that we've made as we've made this decision? How is our business advancing as a result of it? And that short-term reflection can be really helpful for understanding your decision-making framework for the next set of decisions that you make.

Do you mind if I ask some questions about yourself?

Yeah, for sure.

Oh, great. So if we can go to, like, obviously building a few companies and building Vise as you're doing it today, you have a lot of investors, a lot of people involved. You probably received a lot of advice, some of it helpful, some of it not. But do you remember, by the way, some of the best piece of advice that you got that you actually still think about even to today?

So the one thing that I think is underrated that is actually a really big problem that a lot of founders have to go through is advice overload, where it's too many people giving you advice. And I used to think I was a pretty coachable person where people gave advice, I would listen, I would reflect on that advice, I would implement it very quickly. Problem is when you do that with too many different people, you get driven crazy. You get driven in a bunch of different directions. It's actually a really big problem. But for us, we've gotten good at understanding which advice from which people should we take at different points in time. So who's the best at go-to-market? Whose go-to-market is closest to our business? Who's best at hiring and recruiting and closest to the business we want to be? And how can we take different pieces of advice to stitch together the company that we want to build? See what other advice is good. I would say focus is a really critical piece of advice, but I think it goes beyond just focusing on things that seem like a distraction. I think there's lots of good things that you can focus on. There's lots of things that seem like the right thing to do, but they aren't exactly the main thing. And by doing those things, you're actually getting further away from your business. In order to win, you need to win on true core discipline and focus. You can't be doing multiple things at once, even if you believe those things might be the right thing to do to push the business forward. And sometimes it's hard to say no to doing those things because they seem like the right things to do.

By the way, was there anyone early in your life that was highly influential to your character and who you are today?

There's a lot of different people. I mean, I think personally speaking, my grandfather was a big influence on my character. He was a very humble guy, very hardworking, came to the US from India with proverbially $5 in his pocket or whatever the low dollar amount was and had to work his way up into it. I think that it teaches you this sense of grit and resiliency. That is an important lesson to have. I would say there's lots of different people throughout the journey. There are certain teachers that I've had growing up that have just thought a little bit more outside the box and helped harness skills that I had or I didn't know I had that bettered me off nowadays. And I think that the most effective leaders or mentors or people that can support you in your life can unleash skills or unleash potential you didn't know you had, and they can get you excited about things that you didn't know that you could accomplish or you didn't know you could do. And I think that's what a truly impactful person can do to one person.

Absolutely. And by the way, where did you grow up?

I grew up in Cleveland, Ohio, so in the Midwest.

So how did that change the way you think about your career or building businesses and so on?

It was a very slow place to grow up. So everyone followed a similar path, a similar pattern. And I just wasn't like that. I was very neurotic. I was moving at a million miles an hour. I was always thinking about the next big thing I can do. I don't know why or what prompted that, but it wasn't necessarily the place for me to be long-term. I knew I had to get to a big city. So San Francisco was that place for me. I actually spent all my time just from the years of 8th grade to 10th grade just learning about San Francisco and learning about Silicon Valley and understanding why I had to be there. But the one thing Cleveland does have is a lot of happy people that are very humble. Those people can, in the way they live their life, very family-oriented values, all of those things were principles that I took with me that I didn't have or they're just not as widely shared in New York. People are very career-focused in New York and Silicon Valley. People are very money or success-focused. I think there are other parts of life that are also equally as important that the Midwest values were strongly reflective of.

Awesome. And by the way, now that we're coming to the end of the interview, I want to leave off on a final question that I ask everybody. If you could spend a day with anyone ever, whether that person is currently alive or passed, who would it be and why that person?

Probably Walt Disney.

Okay, why is that?

And the reason why is Walt Disney was an incredible creative. He had the perseverance, he had the grit, he had the ability to just keep going despite the failures, the setbacks. Multiple people had tried to sabotage his studio. His partner tried to screw him over and steal his intellectual property and take credit for his first ever big success. And he was able to just keep going and he was able to keep a loyal tribe of people, animators and filmmakers with him on his journey to building the eventual Walt Disney empire. But I think what's most impressive about him was just vision, incredible vision, vision for what he wanted to build, everything from Disney World to how he saw motion picture animations being the future. And I think that the ability to stick to a vision, to stick to a direction regardless of all the road bumps, the changing circumstances, the difficulty is an incredibly impressive thing. And I think he was one of the first creatives to really do that in a profound way.

Awesome. And on that point, Samir, I want to say thank you so much for your time today.

Yeah, thank you so much for having me. Really enjoyed it.

Now, that was a great episode. I want to personally thank Samir for being a guest on my show, but more importantly, I want to thank you, the audience, because if it wasn't for you, we wouldn't exist. And although this show is over, I look forward to seeing you next Thursday morning. I'll be releasing my remotely recorded interview with Kareem Saleh from Fair Play.

See you real soon.

It's over, Johnny. It's over.