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Host Stacy Havener brings you the storytelling tips, sales strategies, behavioral secrets, and inspirational stories that help YOU turn your words into dollars. Learn from sales and marketing experts. Meet finance and investment leaders, founders and fund managers who have made it, and the ones on the rise. Because there are people behind the portfolios. Their stories matter. So does yours.
@stacyhavener // www.billiondollarbackstory.com/
[00:00:00] Ritik Malhotra: It turns out that the leading indicator of startup success that early on when you have such limited data is actually going to be the quality of the individuals at the company and also just generally speaking, what is the vision and the sensibilities of those people as well? And so it matters less.
[00:00:17] There's what the revenue is. Obviously, having revenue is a leading indicator, but the quality of the people is. impossible to change, you can change business strategy. And in fact, the likelihood you'll change business strategy, given that you may only have a few months of data versus a 10 plus year journey that's yet to come is very high.
[00:00:35] So that's why it comes down to people, people, people in that early stage.
[00:00:40] Stacy Havener: Hey, my name is Stacey Havener. I'm obsessed with startups, stories, and sales. Storytelling has fueled my success as a female founder in the toughest boys club, Wall Street. I've raised over 8 billion that has led to 30 billion in follow on assets for investment boutiques.
[00:00:58] You could say against the odds. [00:01:00] Yeah. Understatement. I share stories of the people behind the portfolios, while teaching you how to use story to shape outcomes. It's real talk here. Money. Authenticity. Growth. Setbacks. Sales and marketing are all topics we discuss. Think of this as the capital raising class you wish you had in college, mixed with happy hour.
[00:01:25] Pull up a seat, grab your notebook, and get ready to be inspired and challenged while you learn. This is the Billion Dollar Backstory Podcast.
[00:01:37] I learned so much from studying the tech industry. I mean, I love the investment world, but I nerd out on tech. I've always been fascinated by the people, the stories, The way the industry celebrates innovation and challenging the status quo. Hrithik Malhotra grew up in tech, was part of Y Combinator not once, but twice, [00:02:00] and is a two time exited founder.
[00:02:02] Now he is bringing his tech experience into the wealth industry. I am here for it. Hrithik is the co founder and CEO of Savvy Wealth, which has 30 advisors and 700 million in assets after their first three years. And they recently raised a twenty six and a half million dollar Series A round. This combo is a glimpse into another world and a chance to see how tech and investments aren't all that dissimilar.
[00:02:30] Grab your popcorn. Let's dive in. Meet Riddick. Riddick, thank you so much for being here in the green room, so to speak. I was saying I was geeking out on your story and wishing I had some popcorn. So I am psyched to actually hear it from you with our listeners. I want to start in the beginning with your backstory.
[00:02:51] Okay, two parts. Did you always know you wanted to be an entrepreneur? Did you always know you wanted to be an engineer? Take me way, way back. [00:03:00]
[00:03:00] Ritik Malhotra: That's a great question. I often say that I got very lucky in knowing very early on what I wanted to do. And so both of those things, both being an engineer and pursuing that as the craft, and then also an entrepreneur as well.
[00:03:13] So the story starts In what I was in elementary school, I very fascinated with computers. My parents had immigrated here from India. My dad had the foresight to go and save up to buy a computer and get it at home. We lived in a one bedroom apartment and it was coming over from school. I was always fascinated what this computer could do and I just I just fell in love with it.
[00:03:35] It just seemed like this unlimited box of possibilities, and I taught myself how to write software, so programming and designing and all that. And over time, I just fell in love with it more and more, and I started creating these internet websites, and I said, this is a lot of fun. I mean, there's, but it's also really hard to create these internet websites.
[00:03:56] Maybe there's a business here where I can help others also create [00:04:00] websites. I set up a service to do that and organically, just one after another, you know, as I encountered my own problems, started to really think about, is there a business opportunity? I was able to set up a few different internet, internet businesses, and by high school, I'd found a way to make great money online enough to go and pay for college.
[00:04:17] And at that point, what I realized was a few things. Number one, I figured there must be a career here somewhere. What it was, yet to be uncovered. But then number two, I didn't know this at the time, but I look back, and that was the best thing that could have happened is, at the age of 13, I knew that, hey, something related to computer science engineering is within my grasp.
[00:04:38] And it was so much fun being an entrepreneur and doing things and building and tinkering, which really helped me as we fast forward in the story.
[00:04:45] Stacy Havener: So cool. Now, what year is this and where are you located when this is happening? I'm thinking Malcolm Gladwell's book where he says like kind of the place can sometimes influence.
[00:04:56] So are you in Silicon Valley when this is happening? Like are you in California? [00:05:00]
[00:05:00] Ritik Malhotra: Yes. Yes. It's a great point. So the year at this point, it's 2004, I want to say, and it is Silicon Valley. My parents had immigrated there in the 90s before the dotcom boom. It's interesting you call that out because at the time, you know, I didn't know any, any different, but it was so helpful being around the chatter of these tech companies, Apple, PayPal, all of these companies around you.
[00:05:22] I didn't do anything with these companies, but just being around it really helped. And the second thing was also growing up. I just thought in schools, all schools had computers around and it turns out that companies like Apple were donating them to the local schools and just having access to that much technology growing up really made a huge difference to
[00:05:39] Stacy Havener: love that.
[00:05:40] Okay. So, you know, you've got this vision. You're already an entrepreneur. What happens next?
[00:05:46] Ritik Malhotra: I end up going to the university of california at berkeley and i was going to study electrical engineering and computer science and a few semesters in plans change i figured really just missed tinkering [00:06:00] and building something and that bug was still in me so at this time this is now about two thousand eleven i want to say i end up actually going and saying i want to take some time off of school so i dropped out of school and started you My first company or first official company post all the internet businesses funded by y combinator we raise money from investors just me and another friend from from college and we basically just figured everything out on the fly.
[00:06:27] That business is very different than what we do today. It was a cloud storage business that we built some interesting technology to help businesses manage their files in the cloud. And eventually, fast forward, just working night and day, found really strong product market fit with what we were making.
[00:06:43] And eventually we sold that business to Box, the larger enterprise cloud storage provider in 2014, which was the year right before they went public.
[00:06:51] Stacy Havener: Wow.
[00:06:51] Ritik Malhotra: Great outcome. What
[00:06:52] Stacy Havener: a journey. So how old were you? when you sold to Box?
[00:06:59] Ritik Malhotra: I was [00:07:00] 21 years old at the time.
[00:07:02] Stacy Havener: I mean, come on. Like, dude, I'm not even gonna say what I was doing at 21, but it was nowhere near that cool.
[00:07:09] I actually was working. But geez, that is so cool, Riddick. Now, I wanna talk about this maybe a little bit later, because I want to keep going on the backstory and get us to present day. But you were in Y Combinator, not once. But twice if I read correctly and you're an exited founder a few times over So I want to come back to this because I think there are great lessons and learnings that you can give us about Raising money and product market fit and stuff that in the tech and sass world is more common But in the investment world is not okay, so we're going to come back to that.
[00:07:46] But so you sell to box And then what do you do?
[00:07:50] Ritik Malhotra: So we stayed at Vox for a few years, integrated our technology team, et cetera, and uh, we eventually launched that integrated [00:08:00] product. And still today, if you're a customer of Vox, the desktop products are part of them are still the same stuff we built back in my dorm room effectively.
[00:08:09] Stacy Havener: So cool.
[00:08:10] Ritik Malhotra: That's what we spent a few years doing. And then after leaving box, this is now by 2017, spend some time investing in startups, really just figuring out, is that something that I want to do? Ultimately said, not for me want to go back to really operating to still have the entrepreneurial bond. So, uh, We got our second startup started, which is the same team from the first one came together again, and this time we focused on something a little bit closer to the investment in wealth space, which is we built fintech software that was effectively think like bank ledger software, money tracking systems and things like that, and that startup we were selling to banks, casinos and anyone that needed any sort of software and ledger system.
[00:08:50] Ultimately, And In that business, we eventually were acquired by Brex, which is still a private company, but I think a 12 billion corporate card and corporate [00:09:00] banking company now. And at the time, Brex was much smaller. It was in 2019 where the acquisition happened. Brex had their corporate card product.
[00:09:08] And we came in with our technology and team and started what's called Brex Cash, which effectively became Brex's business banking plus corporate wealth management arm. So that was an entire journey itself. We rapidly built that product, which effectively allowed corporations to deposit their money, still operate their banking activities, ACH wire bill pay, all that stuff, but also be able to allow us to really manage the treasury, do your earned yield on it and interest in all of that stuff.
[00:09:37] We scaled that business to billions of dollars in assets under manager deposits, however you want to call it, and it was a huge business for Brex, again, just relentlessly going after it. But that was a unique time because it taught me a lot about how to really understand the regulatory operations and software element of just running a wealth [00:10:00] management business a bit for corporates, but still enough to understand what was happening there.
[00:10:04] Stacy Havener: Yes, I was going to ask that question because you can start to see now how savvy is taking shape I'm putting myself in your shoes and of course hindsight being 2020. Okay. So at this point, do you decide? I know you don't because you're a founder again. What do you decide? Like, cool, I've done the entrepreneur thing a few times pretty successfully.
[00:10:26] I'm gonna chill. Is chill even in your vocab? I don't think you chilled. Did you chill?
[00:10:31] Ritik Malhotra: I did. I took some time off. I took four months off between leaving Brexit and starting Savvy. To me, that seemed like a great amount of time. Uh, you know, I was bored by the end of the four months, so it was good.
[00:10:43] Stacy Havener: Okay, so now here you are.
[00:10:44] So now we're up to present day. So take that thread from what you built at Brax, which you kind of alluded to here, this wealth management thread, albeit corporate, and pull that forward to Why you started [00:11:00] savvy?
[00:11:00] Ritik Malhotra: Absolutely. So even just taking a step back when we had first sold our business to box, that was really my first introduction to wealth management and from a consumer perspective, because I had the fantastic problem.
[00:11:12] Once Fox went public, I had life changing amount of money, but didn't know what to do with it. And my family didn't come from money either. And so my investors pulled me at the time, you should go find a financial advisor that can help you out. And really over that six year period, 2015 of that event in 2020 when starting savvy, of course, there was a Brex experience that taught me a lot from an operations and software and regulatory perspective.
[00:11:34] But I also ended up speaking with over 100 different financial advisors just purely out of curiosity of just learning more about the industry. And what I found was from a client's perspective, I learned Finding the right financial advisor game changer, but the actual working with the financial advisor could be a hit or miss low technology, if anything at all, snail mailing documents, no dashboards, et cetera, et cetera.
[00:11:56] And it turned out after talking to these financial advisors, the [00:12:00] common pain point was often that the firms that they were at were not technology forward and that they felt that their hands were tied, that they didn't have access to the right tools. So they implemented the manual processes that these firms had been doing and using for decades.
[00:12:12] So ultimately, combining all of that together, I actually spend about that six year period looking for a company to perhaps invest in or help that was going to fix the problem. But finally, in 2021, after taking that time off, really what came to me was, look, I love the industry. I'd spent so much time in it.
[00:12:28] At this point, I used to give lectures on personal finance and new college grads. We'd obviously done the corporate wealth, uh, piece as well and said, let's go and solve the problem ourselves. And I had this idea now for six years, where. We can't just make new software. We can't just do the same thing over again with wealth management firm.
[00:12:45] We have to be the firm that enacts the change, builds modern software and service, and provides it to the best in class advisors and combines the two together. So that's how we got to start studying.
[00:12:56] Stacy Havener: Fascinating. And so when you were kind of the client, [00:13:00] which had been going on for a while, did you in some way Start savvy to like be the financial advisory firm that you had hoped you would find when you were looking Yeah, and isn't that a common way that most entrepreneurs start anything?
[00:13:15] Ritik Malhotra: It's a great point and it certainly was in the early days that oftentimes I used to just think What would I have wanted from just a you even outside just the financial products? It's just what is the experience I would have wanted and then of course that starts as a great Beachhead to start the company and you build things and then you expand over time and you collect more and more feedback But it's it's a great point
[00:13:34] Stacy Havener: and it's interesting because this goes to differentiators a little bit but like if you talk to a lot of the platforms and the The companies that we all know that serve advisors.
[00:13:45] They talk a good tech game, don't they? I mean they talk a tech game and we've got this and that team and we bought that and this and all the things and so I guess It's interesting because you are a [00:14:00] technician. I mean, that's your sort of roots. So when, when you say tech and when those firms say tech, or when I, as someone who's not in technology, think about it, we're all talking about something quite different.
[00:14:13] Is that fair to say? Because it's like, is it that different? Like when you say it, I'm like, okay, but there's lots of firms claiming that. So talk that through for me.
[00:14:21] Ritik Malhotra: It's a really good point as well, because the nuance of when someone says technology actually matters a lot. It's not a check the box, right?
[00:14:28] This is not a diligent checklist of does the firm have technology? It's every firm could have technology, you know, some sort. The way that I describe it the most is that At a very high level, when we initially were starting, we asked every, the advisor we were talking with, et cetera, around, okay, great. We can map out the functionality you do have access to in technology and things you're doing manually.
[00:14:49] Of the areas you have access to technology, what would you rate it? Just give a letter grade in terms of how the quality and how it works for you. I don't know if this is, how this is possible, but uncoordinated, we got every [00:15:00] response we got was C plus. We've never got anything else, but everyone kept saying C plus.
[00:15:05] There is a scientific method to evaluate how satisfied customers are and you can do the surveys and all that stuff. But the thing that we got from that is that intuitively, just because technology existed, didn't mean that it was actually either being used or was liked, which is actually a perfect area.
[00:15:20] And they kind of teach you this at Y Combinator or like the Startup 101, which is just because technology exists, doesn't mean that there isn't an opportunity for you to actually improve and make it better. And oftentimes actually the presence of something already existing is actually A good thing because there are call it buying habits or there's already usage habits there So improving that is actually going to be easier rather than inserting it into an industry that doesn't have anything at all
[00:15:45] Stacy Havener: Yes, pause everyone who's in asset management Rewind and listen to that again and insert your asset class Because what Riddick said right there is super important.
[00:15:59] Being [00:16:00] first in something requires an additional sale, doesn't it? Because you have to sell the concept and then yourself, where what you're saying is the concept exists, it's a known thing, and it's already adopted, you're improving it. That's a big difference.
[00:16:15] Ritik Malhotra: 100%, 100%. I call it market annealing. It's like how much you have to anneal and like really mold the market to what you're building.
[00:16:22] And there are very valuable companies that are built by doing that, but it's a very different and very arduous process versus something that doesn't require as much of that annealing, so to speak, which has its other pros and cons, but that's really the opportunity we found.
[00:16:35] Stacy Havener: Got it. Okay, so given that there's a lot of C pluses floating around, What if somebody said okay great like i'm not a technologist I don't know the nuances, but i'm an advisor and tell me what's different like what's going to be different for me Something jumped out to me.
[00:16:57] I'm just curious if you say it like something jumped [00:17:00] out to me on your website I want to see if it's one of the things you lean into before I ask about it
[00:17:04] Ritik Malhotra: It really does depend on the advisor in terms of what really is going to be the main thing that they're attracted to And and what the differentiator is But generally speaking, one of the things that we that continues to resonate is the fact that this isn't a situation where they're being handed technology and expected to suddenly figure out everything.
[00:17:24] The fact that everything is cohesive and all in one is actually a big differentiator from the perspective of the advisor. And when we say all in one, it's not just a these are 10 products that we've integrated and cobbled together. Everything is built from the ground up with one kind of single pane of glass, uh, from a design perspective.
[00:17:43] So everything looks and feels the same. Uh, we have excellent, excellent designers who've built amazing products in the past that are really trying to simplify and distill everything down, whether you're talking compliance, whether you're talking your CRM, whether you're talking billing and all that stuff into a one kind of unified interface.
[00:17:59] And then we [00:18:00] pair that with, In operations and marketing team that is there to help understand all of the different nuances and help with the training of all the different components. So no one is just left hanging when we say all in one. It's both the kind of people responsible for making the magic happen.
[00:18:15] Plus also the software and culturally. That's how we kind of Build and provide the service for advisors
[00:18:21] Stacy Havener: love that because basically if you're running a business, there are lots of things about it that suck, right? And how much of that can you delegate and get off your plate and put yourself in your unique ability zone as an entrepreneur?
[00:18:37] In some ways, these advisor very much are right and they want to go get clients and stuff. So that leads me to my question. It was a leading question for myself to ask you, which is how much I saw in your, you have a flow chart or just like a process diagram on your website. And the second thing in there was lead generation and sales and marketing.
[00:18:59] And [00:19:00] so how much of that given where we sit today with so much power on the sales and marketing side, Being digital versus the old days of like the golf course. Not that the golf course doesn't matter like how much of that is A differentiator or is that something that advisors really gravitate to
[00:19:23] Ritik Malhotra: it's huge.
[00:19:24] It's huge It's you know, the amount of times That we've heard just that even we're offering marketing support for advisors and we have case studies to back it up is already a game changer and I think a lot of advisors come from a place where they're not getting that support, whether it's, you know, digital or not, just, you know, there's a lack of it and it's something you mentioned, which is really important, which is Whether or not an advisor wants to be, they are effectively a small business owner because they're managing a bunch of clients.
[00:19:53] And so the way that we always positioned ourselves is we help advisors achieve independence. And one of the core [00:20:00] parts that advisors worry about is marketing because they realize that's something that's part of their job. Running a small business. So we offer a unique kind of tailored solution for that purpose.
[00:20:09] And so everything we do at savvy, it's kind of a combination of software and service. So we have marketing software that helps with lead generation, managing the leads and kind of through the funnel, proposal generation, etc. And there's a couple, you know, other nuances there. And then there's a service arm to it as well, which is look, there may be customizations and bespoke things that maybe the software is not set up to do, but you still need access to.
[00:20:31] And so we're able to fill that gap as well. Almost think of it like your internal marketing agency powered by both technology and people.
[00:20:37] Stacy Havener: I think I actually saw that. I was peeking out on your site and I think I saw something about an internal agency. And that's a very cool concept, which is a good dovetail into some of the stuff I want to talk about as well around just your process of building these companies and selling these companies and being a part of Y Combinator and how to do sales and all those things.
[00:20:57] But before we leave that advisor piece, [00:21:00] It's so interesting to me because even in the asset management side like we'll challenge clients like put yourself in the shoes of the allocator What matters to them and they always answer it with the thing that they wish Mattered to the allocator that directly relates to them, right?
[00:21:19] So it's like well what matters to them, of course generating long term Capital gains, you know generating return generating like, you know, and it's like okay. Yes But what really matters to them? Their business. Their business, their pocket, them. And so, it's a big deal to help somebody grow their company. A really big deal and essentially when you say that you have marketing, you know, you're removing pain But you're also helping these advisors harness incredible growth opportunity And that has to be super valuable [00:22:00]
[00:22:00] Ritik Malhotra: a hundred percent.
[00:22:01] Yeah, and actually it's It's something we realized we're not, you know, this is a much more emotional part because again it's their business, it's their livelihood and so we take it very seriously as a result as well.
[00:22:12] Stacy Havener: Yeah. Are you an investment boutique looking to grow your business and need a little help?
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[00:22:38] You'll refine your story, focus on your ideal target market, and practice your pitch. You'll rethink your marketing materials, rewrite your emails, and refresh your differentiators. We'll even help you step up your LinkedIn game and give your profile a makeover. You want to grow your biz, we've got your back.
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[00:23:13] Yes.
[00:23:17] Okay. So let's talk a little bit more about sales and marketing. I want to go back. I want to rewind the tape back to when you were building your first companies that you, you know, that you ended up exiting. So I think the first one you sold to Bach and the second one to Brooks. And so talk about that process, because even though it's different to raise capital, For VC operating capital than it is to raise capital for a fund, let's say, which is what most of the investment managers have.
[00:23:49] The process is very much the same. And I want you to talk about what that's like. You know, one of the things we say is like, people don't buy stats [00:24:00] and charts and data. People do business with people. So it's much more qualitative than perhaps it might seem in a numbers industry like this. Was that true for you even in raising VC?
[00:24:13] Ritik Malhotra: 100%. And it's especially true in the earliest stages of venture capital. So when we're talking Y Combinator, you know, right, even before your seed funding round, they're investing or even these early stage VCs. It turns out, and they're using data to actually make this decision, it turns out that the leading indicator of startup success that early on when you have such limited data is actually going to be the quality of the individuals at the company and also just generally speaking, what is the vision and the sensibilities of those people as well?
[00:24:45] And so it matters less, you know, what the revenue is. Obviously having revenue is a leading indicator, but the quality of the people is impossible to change. You can change business strategy. And in fact, the likelihood you'll change business strategy, given that you may only have a few months of [00:25:00] data versus, you know, a 10 plus year journey that's yet to come is very high.
[00:25:04] So that's why it comes down to people, people, people when they're in that early
[00:25:08] Stacy Havener: stage. And so when you think about that process, now of course you have hindsight having done it multiple times, and you think about sort of the questions and the preparation. What were those conversations like? Or how would you prepare differently?
[00:25:23] Or how would you advise someone, you know, to pitch? Because I think what happens in our biz is they come in. It's all about the pitch deck. It's filled with charts. They're really good charts. I'm going to walk you through every page of this thing. You're going to be wowed. And that sucks for everyone. And so I just wonder, like, What was that like or what would you advise people now knowing what you know
[00:25:46] Ritik Malhotra: knowing what I know I think the number one thing would be just really getting better and just honing in on this storytelling of you yourself And so initially the first time I was raising money.
[00:25:59] [00:26:00] I spent very little time on myself Just you know a few maybe 30 seconds and let's get into the business and talk about the problem this and this that right? That's what I was leading with Now I would actually flip it. I actually would spend several minutes just on the story and really, you know, have them dig in and ask questions about that.
[00:26:16] And even a 30 minute meeting because the story is something that really can capture something beyond just looking at charts and making a data, you know, just a decision based on data. Because look, there's plenty of businesses that you can look at a spreadsheet and say, yep, it's a great investment decision or a great or not.
[00:26:31] But when you're raising capital, depending on what kind of capital in our case, venture capital, they're trying to bet on a, you know, 100 x 1000 x return, which look, the spreadsheet can only go so far in terms of what it can articulate. Ultimately, the individuals, again, behind it and the story and their trajectory and their passion that comes out of it is actually going to be a leading indicator into how ambitious and, you know, how much grit do the people have here to really kind of drive that outlier success.
[00:26:59] Stacy Havener: You just said [00:27:00] the word I was going to ask you about, which is grit. Because to your earlier point, the odds of you having to change, pivot, course correct, go through really tough times. We all. Have them and so how do they get at that? Like what types of questions do they ask or you're an agent? You've been an investor too.
[00:27:19] Like how do you suss that out? Because you can't just be like, so are you gritty?
[00:27:26] Ritik Malhotra: It's a great point, you know Sometimes actually the easiest one is if you have the traction and background, right? that's usually the easiest one where you can look at someone's career in the The things that they've done and the hoops they've had to jump and really be no great This person had to go through
[00:27:39] Stacy Havener: hell and high
[00:27:40] Ritik Malhotra: water to really get to where they are You And that's the best leading indicator.
[00:27:43] Because honestly, if they went through all of that, and they're doing it again, that's almost two levels of crazy that you're putting together. But that's, you know, in some sense, that's the maximum amount of grit you can have. Someone wants to jump back into that.
[00:27:56] Stacy Havener: Yeah.
[00:27:56] Ritik Malhotra: If you don't have that, right. And oftentimes I think that people ask like, [00:28:00] well, what do I do my first time?
[00:28:01] You know, I haven't had any kind of Startup experience, et cetera. I think there are a few indicators in the business itself that you can glean. So forget like how much revenue there is or what the data says for a second, but just understanding and asking questions about the business, about what, and there are all sorts of questions around how much of the business has the individuals or have the individuals, the risk can actually tell you how much grit they have.
[00:28:28] I'll give you one example, which is if I ask someone. How do you know that this is something people want, right? Just very basic and not so great answer would be, you know, I've done the market landscape and looked at three research studies and that's my conclusion based on the data out there is that people really want this.
[00:28:44] A good answer would be, I spent just two months cold calling thousands of people and just trying to figure out and get them on the phone to listen to me and get their feedback. You know, 50 of them listen to me. Here's the feedback I collected. And based on them, [00:29:00] here's my four takeaways. And here are the two that no company is addressing.
[00:29:03] Like that shows a level of grit because in the early days, no matter how you want to slice it, you're not going to build a business by reading research reports. You need to roll up your sleeves and just be willing to do whatever it takes. And so that's another example.
[00:29:16] Stacy Havener: Okay, I just want like that's so mic drop everyone again.
[00:29:19] I'm interested in like rewind and listen to this again Everyone because that is it. It's that it's not just that you want to have your own business It's do you have the resolve to do the stuff that nobody else is really willing to do like cold calling people? Which is really difficult. I mean you don't do that unless you are Super passionate and gritty and care and you're gonna You are gonna make like this is a must this business is a must for you and that is awesome you know, I think it's interesting because And there is a parallel here.
[00:29:58] I'm curious what you think [00:30:00] about it. So a lot of times, a talented fund manager will be working at a big shop, let's say, and for many reasons decide they don't want to do that anymore. They want to have their own business. Now, they've had a career, they're very good at what they do, they're used to a certain way, they spin out, and they start their own business.
[00:30:23] This is really interesting to me because founder life and being a startup is totally different than when you work for a big firm. And I don't think they really understand the concept of like how long it takes, how much they need to be involved, like this whole idea of founder led sales is something I wanted, how important that is, especially in the early days.
[00:30:53] Can you kind of just riff on any of that? Because it's really interesting.
[00:30:57] Ritik Malhotra: You're absolutely right because it's the [00:31:00] classic, you know, people don't know what they don't know. So when they move from being very successful at a corporation to starting their own company, it's effectively taking the training wheels off.
[00:31:08] And no matter what, it's like, you know, I don't know the best, that's probably the best analogy where it's like your body's like stabilization muscles just don't know what to do because they've just never had to do it. And they could be an incredible individual, but still just never have, you know, practiced any of that or trained any of those muscles.
[00:31:24] That I think is the first kind of sticker shock you do get. I think the second one, which I think you're alluding to here as well, is that the habits that an individual has learned in a large corporation. Oftentimes, you're not going to work at the, you know, when it's just them, right? It's like that scaling down is actually a really difficult part.
[00:31:43] So in that example, you provided a founder led sales. It could be a knee jerk reaction of saying, Hey, well, let me go hire, you know, two or three salespeople to go and do this because that maybe it would be the tactic they would have done at the large corporation. But that's actually counterintuitive, counterintuitively, like actually not what you should be doing [00:32:00] because.
[00:32:00] There's so many mistakes that can happen because if you yourself have not tested the market in terms of what is the sales pitch and value props that are resonating, how can you expect someone else to be able to do that?
[00:32:11] Stacy Havener: A hundred percent. And it's interesting to me too, because I borrow a lot of stuff from the tech world.
[00:32:17] Like the adoption curve is one of my favorite thing to teach fund managers. Because It's not just the fact that I think founder led sales is a bigger phenomenon, no matter what industry you're in, but also who are you talking to? So if you worked for big shop and you had these huge, you know, billion dollar clients that have a, no, have a billion dollars with you, when you leave and go set up your new firm, you're like, I'm going to call CalPERS.
[00:32:50] And even if they just give me a tiny little bit of their allocation, it's going to be meaningful to me. They had a billion with me in my last place. This is a great idea. The problem [00:33:00] is They might not be an early adopter. They're probably not and so you can have this vision of some big Allocator giving you a small slice But the reality is you have to go to a different part of that curve and find the early adopter Clients and they might not be the clients that were with you when you were a very large, successful place.
[00:33:26] So I'd love for you to talk about that and then also tie it to Savvy and how that was for you when you were finding your first clients and how involved were you?
[00:33:34] Ritik Malhotra: Absolutely. So I always call it the go to market wedge, which is The ideal customer in the early days needs to make sense in 10 different ways.
[00:33:45] It's not only does the product resonate with them. Can you, you know, there's a lot of other things that will even pick up the phone for you. Are they an early adopter or is there like a structural issue just says like, Hey, look, we just can't do this until because of X, Y and Z reasons. And so I think a lot of times that I made this mistake [00:34:00] often too is it's thinking about who is the ideal customer maybe mid stage in the company's life cycle three years in or maybe Late stage, but finding that initial customer and pairing it with the product is actually really important.
[00:34:12] And there's a reason it's called product market fit. It's like you can move both the product and functionality and also you can move the market. The people think the market is fixed and they just try to insert the product when the market may just not be amenable to it. That is a core kind of piece. The way that that's really transpired for us at Savvy was in the early days, you know, we had to when we were reaching out to financial advisors, it was initially I was, you know, figuring out like, what are the emails to write?
[00:34:35] How, who is the right financial advisor? How do we get them on the phone and, you know, pick up the phone and what are the conversations that they want to have? And what are the pain points that they have? And so a lot of that, a lot of that initially was the stuff that I was spending my time on, because it is important to understand in a whole vast ecosystem.
[00:34:54] Who are the right kind of financial advisors that would be early adopters and have enough of a pain point to actually want to make that [00:35:00] switch so that we can use that information to focus on that market, but also use it to shape the product up to really solve that for them.
[00:35:07] Stacy Havener: Yes. And so you were doing that work yourself and that was intentional.
[00:35:12] Ritik Malhotra: Yes, it was very intentional and others on the team as well as we continue to grow. It was cultural too, where for me, it was. You know, I love doing it because I wanted to learn as much as I could, but also wanted other people to also really be close to the person that they're making something for, right?
[00:35:29] And so,
[00:35:29] Stacy Havener: yeah, that's really special too. Okay. And so now. Do you still consider yourself a startup? You do.
[00:35:40] Ritik Malhotra: You know, it's funny, depends on who you, you ask, I would say we are a mature startup from the perspective of we have found strong product market fit. We have a compelling platform that we offer to our financial advisors and their plans.
[00:35:55] And that's it. That's a huge milestone to hit because it's really hard to find something [00:36:00] and build something that people want. And so, you know, I think as we continue to scale, it depends, you know, are we a startup in the eyes of a large bank, perhaps, but I think we've really tackled that first big problem.
[00:36:10] Stacy Havener: Yeah. So let's talk about target market a little bit because I think that's another element here. Again, very buzz wordy thing that you hear in the tech and SaaS space for sure. Not something you really hear a lot about on the in the fund side because a fund manager's like everyone's money's green Everyone's for me like everyone should have this in their portfolio and not only that they should have all their money in it Like that kind of bs, right?
[00:36:36] So we're gonna bust that myth. Okay reddick So when you think about target market, how do you think about that? Because there's a lot of financial advisors a lot and how have you framed it for yourselves?
[00:36:51] Ritik Malhotra: When we initially started, we focused heavily on individual financial advisors, managing call it between 20 million to [00:37:00] 150 million in assets under management for them themselves.
[00:37:03] And that's where we started because we were able to build a compelling product for those individuals. Over time, what we've done is we've actually expanded as it happens, because we're finding that there was more market demand as we're able to continue scaling up, and now we're able to serve teams as well.
[00:37:17] So teams of advisors and other staff that are managing, you know, well over that 150 million amount. So people call it between 150 million and a billion dollars in asset center management. And so that target market has changed over time, but it's always kind of concentric circles. It expands because the product functionality of the service we're able to offer increases over time.
[00:37:38] Stacy Havener: Love that. So now we're living in the land of demographics. Let's stay on demographics for a second, but I want to go to psychographics because I think that's really important. So my first demographic question is, did you find a natural Like receptivity in silicon [00:38:00] valley Like was there a geographic?
[00:38:03] Connection that you either you foresaw that or it just happened or not.
[00:38:08] Ritik Malhotra: There actually isn't a geographical component Which is interesting. So it wasn't just hey only silicon valley Financial advisors. Yeah, exactly. We found that it wasn't just that and I don't think there was a strong correlation from a geographical basis okay,
[00:38:23] Stacy Havener: and
[00:38:24] Ritik Malhotra: I think that the main piece here was, I would actually say that initially it used to be mid career individuals.
[00:38:31] So folks that still were not looking to retire, but also weren't just starting out in the industry. So they had enough to be dangerous and had an opinion on what they wanted to do next as kind of their, you know, next segment of, of uh, their business. That ended up being a much stronger leading contender.
[00:38:46] Stacy Havener: Okay, this is so cool. I'm like, Next question, is the mid career element a function of, again, demographic, or is there some [00:39:00] psychographic? I'm trying to get at the psychographic because I'm wondering if somebody, the advisor that comes to Savvy, my guess is, has to be a little tech savvy, not to like, I mean, because that is, I mean, you call yourselves a tech company almost first in some ways.
[00:39:20] So that's why I was wondering, was there like a natural geographic filter, but maybe it's more how, I don't want to say savvy, but how tech savvy is the advisor? Because I'm guessing that if it's, you know, Bob Smith, who's been doing this for 50 years and still has a Rolodex on his desk like this might not be the platform for him.
[00:39:44] So how much does that psychographic play in?
[00:39:47] Ritik Malhotra: It's a good question. We have had advisors that, you know, would have said they're not tech savvy as one of the things they would describe themselves and have, you know, largely manual processes outside. And still [00:40:00] find value because of two reasons. One is that even if you think of us as, Hey, this is a, we have a team of people that is able to take this off your hands.
[00:40:09] If you just think of it that way, right? It just so happens that this team is virtual in nature. And you know, we've built a product in a way such that you don't have to be clicking a bunch of different buttons. You could be effectively almost like talking to someone and we'll translate that and effectively automate a bunch of stuff for you.
[00:40:23] So that's more call it user experience, it has molded itself to allow for that type of behavior. And then the second one is that we've also simplified over time such that even people who maybe had not adopted technology to a fast degree or to a large clip were able to understand and be able to adopt it here at Savvy after kind of going through the training.
[00:40:44] Stacy Havener: So interesting. There's some, I like, I could ask you a question. This stuff fascinates me because it's also like, are there end clients more comfortable with technology than other advisors? Because there is an [00:41:00] element, I mean, there's still so much in the finance and wealth space that's so old school, which is why you saw a need for savvy wealth.
[00:41:09] But I can imagine there's some clients that are like, I want a phone call. Like, I don't want you. I'm not on whatever social media platform and I'm not and so like, it's just interesting to me to think about those nuances within a financial advisory practice that aren't just like how big is it or how many clients or what type of investments are they doing?
[00:41:35] There's advisor's business 100
[00:41:39] Ritik Malhotra: percent 100 percent Actually, a lot of our advisors have said that they find having the technology to show any existing or prospective clients is a huge differentiator, just the experience itself, right? And it's not a vector that they've thought about before. It's not a we have access to this new initial product or something like that.
[00:41:56] It's a different experience. And for some clients, that is really [00:42:00] important. Others say, look, Okay. Yeah. Thank you. You know, call me once a year or just let's do a phone call. It's totally fine because the technology that we've made is actually designed to improve the productivity of the advisor as well.
[00:42:10] And that unlocks the ability for them to still interact with their clients the way that they want to.
[00:42:15] Stacy Havener: Okay. Love that. Like it sends them a reminder or whatever, like you got a call, you know, so and so.
[00:42:23] One more question. How has it been for you coming into the finance space? You were sort of on the periphery, but coming into the finance space as a non-finance person, something that I've also dealt with and like, did you find that to be, how did it feel? And then also did you find it to be a challenge or a strength or like kind of talk through that journey?
[00:42:52] Ritik Malhotra: I actually, hindsight didn't. Think too deeply about it. Because I think in my mind, you know, that transition had happened [00:43:00] gradually, especially as we had transitioned to Brooks, and then kind of, it was the first time seeing both financial services and technology come together. So it happened pretty seamlessly was, um, I don't think there was anything That took me by surprise.
[00:43:13] I think the like with any industry though, whether it was finance or something else I think there was an element of earning the respect and trust from other people in the industry But that's just you know the natural course of you have to Be there you have to show that you're building something of value and that just takes time at the end of the day But nothing other than that.
[00:43:30] Stacy Havener: Yeah, and I would imagine I mean if I were an advisor And I did my work on reading your backstory and stuff. I would just Love your backstory. I'm not an advisor and I'm not typical finance person. So maybe that's just me, but it's like, there is something fresh about it. The fact that you have built these companies, that you are an exited founder, that you were part of Y Combinator, that you, you know, now you're turning your attention to the wealth management space.[00:44:00]
[00:44:00] Like how much do people Like, do people geek out the way that I was like, I'm reading your story and I'm eating popcorn and I can't wait for you to, like, dial into the studio? Like, how much, that seems like it would be a strength.
[00:44:12] Ritik Malhotra: First off, I appreciate you saying that. It's uh, I praise, it has resonated a lot.
[00:44:16] And I think it has to do with the fact that it's just, it's different. It's not something that you're typically seeing in the industry. But I also think the other one is that the angle of taking learnings from other industries and over time applying it to a new one is actually sometimes what is needed and we when you know, I, I and everyone on the team, we come in with this very big long term vision, which I think is also helps inspire people as well.
[00:44:41] And I think that the combination of all of that just seems different than what else is in the there in the industry. So I think that definitely does resonate. Okay.
[00:44:48] Stacy Havener: Yeah. I mean, you didn't ask, but if you did, I would say lean into that all day long. Because there's a cool factor, Riddick. You're cool. Like, you've done cool stuff.[00:45:00]
[00:45:00] And it relates. Like even though it might not seem like it does, it relates to what you're building. And the, and your backstory, there's so much to it. I just feel like I would just, yes, more podcasts, more Riddick, more storytelling. Like our industry needs that. It's a lot of boring people over here
[00:45:24] Ritik Malhotra: I appreciate you saying that I appreciate saying that and and look I don't shy away from saying the story I think if anything the joy I get is if i'm able to help someone inspire someone then Great, you know at the end of the day sometimes especially for me I used to look at other people who had successful careers and stories and it helped me along the way So as long as I know they'll do that for at least one person, that's satisfying
[00:45:49] Stacy Havener: I love that.
[00:45:49] And it's so true. We all want to see ourself in the stories that other people tell us. And I think you've done a great job of letting us be along on the [00:46:00] journey and share insights. So thank you so much. I'd love to end with a couple questions patterned after Proust's questionnaire, which is, you know, designed to get to know you a little better.
[00:46:10] We'll baby step in. What book inspires you?
[00:46:15] Ritik Malhotra: The one that really inspired me was It's called Founders at Work by Jessica Livingston. She's one of the founders of Y Combinator.
[00:46:22] Stacy Havener: Yes! Great book.
[00:46:24] Ritik Malhotra: Excellent book. I think it was the first startup quote unquote book that I read must have been 17 or 18 at the time.
[00:46:31] But it's just a collection of stories from technology leaders and really just the industry legends sharing their stories in high degree of candid, candor, excuse me. And how they got those businesses up and so it just made it real right and I think about that and I think about something that someone once told me it's that something seems really impressive because you can't fathom the steps they took to get there.
[00:46:55] But once you unravel the thousand steps it takes, it actually reduces the, it [00:47:00] doesn't seem so daunting anymore. Yeah. And I think like books that really unravel and, and show that are inspirational, but also make it possible for someone to believe that they can go and do something similar to.
[00:47:09] Stacy Havener: Oh, that is so good.
[00:47:11] And that is such a great book. I have that book somewhere and I don't, I'm looking at my bookshelf right now. I am rereading that. Everybody listening should read that because even though it is very much about tech, if I remember right, it's a lot of, but it's still so inspiring. And as we've been saying today, I think there's so many lessons that all of us can take as we build our businesses.
[00:47:32] Okay, great. Next question. What place inspires you?
[00:47:38] Ritik Malhotra: Hmm. I found actually just a very, any place that has a very calming, peaceful energy. And there's a couple places that really did that. So there was, um, sometime I took just a time off between things where I went to, an island off the coast of mainland Thailand.
[00:47:59] Stacy Havener: [00:48:00] Okay. And
[00:48:00] Ritik Malhotra: it was just, you know, beautiful weather, just, uh, staying at, you know, in front of the beach, hearing the ocean waves, no kind of noise pollution or light pollution or anything like that. And I think the reason that that really resonated for me is that It was such a contrast to the extremely fast paced, you know, everything blaring at you lifestyle of New York City and San Francisco and all of these other places.
[00:48:27] That moment still sticks out to me of just, Allowing my mind to put all of that away for a second, drive clarity and just, I remember thinking about so many things and things that were important to me and long term views and all of that stuff in that moment there.
[00:48:41] Stacy Havener: Ah, that, I mean, I, as somebody who loves the beach, I get that.
[00:48:46] And there are scientific studies about the effect of water. I tell people this book, I loved it. But some people in my life, including my husband, said it was incredibly boring. [00:49:00] Just dry, but it's called Blue Mind. I loved it. I thought it was a fascinating book, but the effect of being even near the water is pretty profound.
[00:49:10] That was great. I hope you get to go back there. Or places like that. We all need that type of peace and clarity. Okay, this is a fun one. So let's pretend Well future proof is coming up the future proof festival. I don't know if you're going but let's pretend you have like a keynote Presentation at future proof and you know, this is like a jazzy group.
[00:49:32] They're edgy. They're gonna do cool stuff What walkout anthem as you take the stage?
[00:49:42] Ritik Malhotra: You know, because you said edgy, there's a song I'm thinking back probably what, 20 plus years at this point?
[00:49:48] Stacy Havener: Yeah.
[00:49:49] Ritik Malhotra: It's an edgy song by Eiffel 65 with a European group called, I think the title is just Blue, but it was a very catchy song back
[00:49:59] Stacy Havener: [00:50:00] almost
[00:50:00] Ritik Malhotra: 20 years ago. That made, I think it made its way around the internet as well, and there's been a few remixes, but that's the one.
[00:50:07] It's a very silly song, but very catchy and whatnot. So because you said it's an edgy crowd, I 100 percent don't know.
[00:50:13] Stacy Havener: All right, great. So then I'm going to go listen to that because I don't know that tune. Are you going to future proof?
[00:50:19] Ritik Malhotra: Yes. Yes. Okay.
[00:50:20] Stacy Havener: Great. Good. I'm glad you are. I think I'm going to be there too.
[00:50:24] So we'll have to meet in real life. Okay. Now, what profession other than your own, would you like to attempt?
[00:50:34] Ritik Malhotra: Can I answer this question regardless of where my skills are in this profession?
[00:50:38] Stacy Havener: Absolutely.
[00:50:39] Ritik Malhotra: I think. I'm split between two, but I think the two that come to my mind are an author for children's books.
[00:50:48] And the other one is being a teacher, but I think I'd pick the author. And it's always been something that I've thought about, which is writing. Books for children is [00:51:00] a really meaningful way to make an impact. I mean, first off, it's just fun, creative and you know, you get to do something that's so, so just, you know, joyous, some joyous about it, but it's a great way to instill, whether it's learnings or values in a very simple form to.
[00:51:16] Kids at an early age because they're going to be in the future right there in some sense inspiration for the future and so if you could really maybe change the way in a positive way for a group of kids that I just simply, you know, having a very compelling and meaningful book that changes the trajectory for quite a long time.
[00:51:35] Stacy Havener: Great one. I love that. And also, by the way, if you read a lot of children's books, if you have kids, like you have to be very talented communicator because you have to be short. And simple. It's challenging. I love that, Riddick. I hope you do that someday. Okay, flip side. What profession would you not like to do?
[00:51:57] Ritik Malhotra: This one, I have a lot of respect [00:52:00] for. So my, my fiance is, she's a physician. And It's a profession that I have extreme admiration and respect because I see the amount of great hard work and just kind of all you have to do to do that job, but it's something that I don't think I would forget the skill set.
[00:52:17] I mean, not even close to being qualified in any state in any way, but I think it's something that I don't think I would actually get a lot of joy out of and maybe it's just because, you know, there's so much at stake or maybe it's just, you know, the hours you have to put in. But. Something that I respect, deeply admire, and I think I would not be a good fit for.
[00:52:38] Stacy Havener: Which says a lot about your unique ability teamwork as a couple because they're, right, like That's awesome. I agree with you that comes up. I wonder if there's some pattern it comes up with a lot of founders about the precision the precision and the Although you have a lot of precision as an engineer, but the precision and the [00:53:00] stakes
[00:53:00] Ritik Malhotra: exactly.
[00:53:01] Stacy Havener: Yeah,
[00:53:01] Ritik Malhotra: exactly Yeah, no, I think the world of my fiancee and I think maybe that also makes it harder to imagine How could I ever do something like this? I mean the bar is so high.
[00:53:10] Stacy Havener: Yeah. Oh, I love that. That's so nice Okay, last question, and this is a long time away, but what do you want people to say about you after you've retired or left the industry?
[00:53:25] Ritik Malhotra: The lasting impression I would want is Maybe it's a couple different things. I think one is I learned something or is inspired or Riddick made it easy for me to also take the jump in whatever activity they want to, whether it's a career move, whether it's, you know, an entrepreneurial journey, whatever it is, I think if people were able to say that of, hey, maybe just hearing the story made it easier to do that, I would be so grateful that that would make me so happy.
[00:53:55] And I think as part of that, I also hope that the, call it a quote unquote legacy is [00:54:00] that I was. an instrumental person in changing the way that the industry works and move it into something that, you know, takes advantage of a lot of the technology, artificial intelligence, et cetera, that we have access to and can build on.
[00:54:15] And, you know, I say instrumental person because the reality is there's a talented team here that does it and will continue to grow that. So really, I think it's those two things. I really enjoy helping people and I really love seeing people do great things. And I really also enjoy working with super smart, great people who love their craft and that are doing something that hasn't been done before.
[00:54:37] Stacy Havener: Love that. Well, I can tell you, I won't speak for all of our listeners, but I will. You have been so inspiring today. So you can check that first one off the list as I'm sure everybody who meets you and gets a chance to speak with you feels this way. You are very inspiring. You are doing great work. And I am super grateful to have had you with us today.
[00:54:59] Thank you, Riddick. [00:55:00]
[00:55:00] Ritik Malhotra: Thank you. This is a pleasure and an honor to be here.
[00:55:02] Stacy Havener: This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. The information is not an offer, solicitation, or recommendation of any of the funds, services, or products, or to adopt any investment strategy.
[00:55:17] Investment values may fluctuate and past performance is not a guide to future performance. All opinions expressed by guests on the show are solely their own opinion and do not necessarily reflect those at their firm. Manager's appearance on the show does not constitute an endorsement by Stacey Havener or Havener Capital Partners.