A Team-building Talk with Vestwell’s Aaron Schumm
Earlier this month, retirement platform Vestwell signed a deal with BNY Mellon to bring a tech-forward approach to state-led retirement programs. The partnership effectively allows Vestwell to become part of the BNY family - as an affiliate of the firm - where Vestwell will be putting together a BNY retirement platform that will be offered out to clientele sitting across all BNY Mellon entities. Vestwell will cover all clients on the 401k and 403b side, as well as those involved in state-sponsored retirement programs.
The Vestwell partnership is remarkable not only because of BNY’s incredible stature in the market - it’s the largest custodian in the world, servicing over $30 trillion in assets - but also because of what it means for the retirement business as a whole. Vestwell has already made a huge dent in the market for retirement consultants who are looking for a way to scale their practices, but large organizations are now increasingly viewing the retirement space as a great opportunity to invest their time and capital resources. Vestwell is finding itself being pulled upstream into larger client markets with enterprise clients looking to revamp their existing retirement offerings. We are incredibly proud of everything the Vestwell team has accomplished to get them to this point, and we’re looking forward to what promises to be an exciting 2019!
We recently sat down with Vestwell CEO Aaron Schumm to talk about this exciting news and the recent growth of his team. A repeat founder, Aaron has been around the block when it comes to team-building, recruitment and fostering a sense of culture within a startup. Here, he reflects on past successes and challenges in those areas and offers some helpful tips to founders who are thinking of the best ways to build their own organization.
Vestwell isn’t your first rodeo. Back in 2007, you co-founded wealth management platform FolioDynamix, which you built from the ground up and sold to Actua in Nov 2014. By that point, the company had hit 110 employees. How did you approach team-building then?
We were at our scrappiest back then! We teamed up with a very small tech firm who had built a core piece of the technology that we built our company around. It was a handshake deal, just eight tech guys in NYC. We acquired that business and taught them how to go after the broader industry that we were trying to tackle. It was a lot more work than we anticipated, and I totally underestimated was how hard it would be to work with an inherited staff who took whatever we said as final word and blindly executed without scrutiny. As a product person by trade, I had been always been surrounded by people who were intertwined in the business, who had a viewpoint, and who wanted to have a say in the business.
How have you approached team-building this time around?
What we did better this time around is, we looked at the team from an architectural perspective from the start. Let’s put a foundation in place that’s rock solid and gives us the ability to build in an expansive, highly secure and scalable platform without having to change the infrastructure. We didn’t do that last time around. It was really scrappy, hacked together, and we assumed we’d figure it out as we went. That approach can only get you so far. You can get to market faster, but eventually, the wheels fall off. That happened three years into FolioDynamix. We had the fortunate problem of bringing on some really large clients, but the system started to choke. So we had to rebuild it from the ground up. So this time we spent more time upfront designing, looking at the right security framework and determining our ability to scale from Day 1.
What’s the biggest challenge you face as a founder?
In the earliest days of FolioDynamix, on top of everything else I was doing (developing, designing, consulting with folks, finding vendors, even some legal work), I had a hard time taking a step back, lifting myself out of the day-to-day chaos, and thinking strategically about the business as a whole. That’s always one of the hardest things to do when you’re building a new business because there’s so much being thrown in your direction all at once.
At Vestwell, I think I’ve done a far better job of prioritizing what’s necessary, and letting go of the things that can be done later. That’s something that comes with more experience, in life in general.
What are some things you look for in candidates?
Building a good team is iterative, and you never get a perfect team right away. For startups it’s even more challenging to find the right people because you have to identify those individuals who are at a point in their life when they’re able to take on a bit more financial risk. And then you also have to be thinking about rounding out your team with the right mix of executors, strategists, and managers, with those who get things done being the priority. In my last company, we hired people who were really smart in the space, but had less startup experience. We also acquired a business about nine months in that came out of SunGard, and the employees were very used to being within a large organization, so it was very hard to get them to adapt to a smaller, scrappier environment.
When you build a team from the ground up, like we’ve done at Vestwell, it’s still iterative and the team shifts over time, but you know where people’s core strengths lie. We hire people knowing specifically which role they will fit in, and we get them into a path where they can add long-term value to the business. We continually evaluate the team to see how each person is doing, and where they can add the most value at that particular moment as well as in the future. It’s important to provide a career path, but also to be flexible about it, especially in the early stages.
How do you motivate your employees to do great work, to feel ownership, and to continue to be invested in your company?
I try to hire people who are motivated to solve problems, to be accountable for solving those problems, and who are really committed to the success of our company. To keep them motivated, we give option grants across the board so everyone is connected to the long-term success of the business. We also strive for a high degree of transparency across the company to give everyone a clear picture of where we stand. So we hold town halls and lunch-and-learns every two weeks that hone in on different aspects of the business, and we do company-wide competitions. We also do 15Five reviews, where we give people credit for a job well done, and everyone can see it on Slack. We’re trying to elevate everyone’s game and create transparency around that, which builds a team in which everyone feels confident leaning on their peers when they need support.
How would you advise a first-time (or repeat) founder when it comes to building an early team?
The most important thing is to know yourself and be honest with yourself. You have to know what you’re good at, what you’re not good at, and where you’re going to make mistakes so that you can surround yourself with people who have complementary skill sets. And in looking for those early teammates, find people you can work with and talk openly with. You’re going to spend a ton of time with these people - more than your family - so you have to surround yourself with people you not only like, but can work with easily.