Jon Mark, Vestwell COO on Strategy at Multi-Billion Scale

Michael Koenig: Hello and welcome to Between Two COOs. I'm your host, Michael Koenig, and today our guest is John Mark well, the leading provider of digital platforms for workplace savings and investment programs, offering services like retirement plans, advisor managed accounts, payroll integration, and state saving programs for employees and employers. They currently power nearly 25, 000 small businesses with more than a million savers and 25 billion in assets under management in all 50 states. Vestwell has raised over 238 million in venture funding with the most recent round of 125 million coming from Lightspeed Partners at the end of 2023, which was and continues to be one of the most difficult fundraising environments in a decade. Why do I mention that? It's because Vestwell is for real and we need to pay attention to it. John, welcome. Thanks for being [00:01:00] here. Thanks so much, Michael. Excited to be here. So let's dive in. Tell us about Vestwell. You know, what, what is it exactly? Because there's a lot going on right now in the news about retirement, about savings, about preparation.

Jon Mark: Yeah. I mean, at the end of the day, uh, All of these different savings, uh, products that you have at your disposal to help get a tax advantage, right? Each of them comes with its own sort of nuances of how to administer it. Each of them comes with, uh, you know, education around how to best use it to set yourself up to get the maximum advantage out of it. And Vestwell is here to make that simple. Right. At the end of the day, the more that we can distribute through people's workplaces, uh, educate them, help them find that next best dollar for them to be able to put their money to use in a way that is most aligned to their goals. Um, and with a particular focus and trying to do that in the, you know, smaller end of the market, [00:02:00] um, making it so that, you know, every single American can have access Uh, the retirement, the education, the health care that they need, uh, we're here to help.

Michael Koenig: There are a couple of things that I love about Vestwell. We, we're very familiar with 401k programs that, that employers tend to offer, um, which are highly misunderstood and employers tend to offer a match in good cases. Vestwell Takes it a step further. We're talking about 529 savings programs for college. We're talking about much more, um, diverse vehicles for savings that I really haven't seen other providers bring to the table. How do you all think about that? How has that sort of evolved over time and you know, where do you see that going?

Jon Mark: Yeah. I mean, I think like any, uh, you know, burgeoning company that's trying to bring something new, differentiated to [00:03:00] market, right? It had to start somewhere. And it started with the 401ks, the 403bs, um, something that people know pretty well, but it really started with how do you take that experience and elevate it for a small business? How do you make the administration super easy with good payroll integrations? How do you make it so that for you? For the end saver, who is trying to put their money to work, you give them a really powerful user experience where they can actually take every action that they would need to possibly take for their retirement plan directly on our, on a portal. That's a piece of technology instead of, you know, printing out a form and fax it is still a very real. Thing in this industry today And um, and you know from there, I think the idea has always been the ambition Um, that's just you know Finally starting to get realized is the ability to take that one step further to say. Hey, the 401k is great But there's many other things you can save for, like you just mentioned the five to nine [00:04:00] education savings. Um, but there's also other ways to put your money to work. Um, and so, you know, Vestwell's most recent acquisition was actually last fall. Um, and we we ended up acquiring gratify from Morgan Stanley. Um, and that's a student debt pay down product. So employers that want to offer the ability to help their employees pay down their student loan debt. And so, you know trying to incentivize, uh, You know any type of good financial behavior that's going to ultimately help people put their money to work Incentivize the right things and think of it in a very holistic way

Michael Koenig: That's fantastic. And this couldn't be more timely. As I mentioned, uh, recently, uh, Larry Fink, the CEO of BlackRock, which is a firm with over 10 trillion in assets under management, sent up a signal flare about the coming retirement flood and the lack of sufficient retirement savings in the U. S. Yahoo Finance also Recently published a piece that people need to retire is around 1. 5 [00:05:00] million. I mean, can you comment on this and what you're seeing at Vestwell?

Jon Mark: Yeah. I mean, from our perspective, uh, what Larry's saying, uh, what we're hearing in the news, it's, it's all true. Right. And. You know, the call for action, you know, I think while it's getting a lot of good publicity right now, and it's super timely and super important. I think a lot of folks have seen this for, for quite some time though. Um, you know, we're, uh, the largest provider of state sponsored retirement programs. So these auto IRA programs where the state is basically saying, Hey, if you're an employer of a certain size and you don't have a retirement plan, we're going to mandate that you offer a payroll deducted IRA. To start incentivizing your employees to have some mechanism to put money away with, uh, without a lot of friction in the process. And so, you know, I think that, uh, our, our government, our advocates, the private sector, everyone sees this problem that exists out there. [00:06:00] The real issue has been and continues to be, how do you offer a product that actually has the ease of administration, the cost profile, the feature set, That's going to actually be the, you know, putting the right thing to solve the problem. Right. And at the end of the day, if you're a, you know, tow truck company in Nebraska, and you're being told, Hey, your options are You know a very expensive onerous product that you're going to that's ultimately going to feel like Uh, you know something that your employees may not necessarily want that is going to be pretty unappealing But if you can actually get something that's the right fit for the need And it's going to, you know, at the end of the day, no one's maybe excited to talk about retirement savings, but if you can provide something that for this thing that has to be done, that's going to be in your best interest, it can delight people along the way. I think that's a lot of what our product offers and why, you know, we're doing what we're [00:07:00] doing. That's

Michael Koenig: fabulous. And one of the reasons why I wanted you to come on is I've actually been sort of, uh, beating the drum and advocating at every single company I've been at since 2006 that, uh, you know, you, we really need to start thinking about retirement, open up a Roth 401k. Um, let's talk about compounding interests. Let's talk about having the right. credit cards. So you get the right rewards. So this is something that I'm passionate about. And my coworkers are probably sick of me even talking about it. But it's so vital that people start to understand this and take advantage of it when they're younger. 100%.

Jon Mark: And you know, my friends like to joke with me that they're like, Oh man, John, I'm not sure if we should really invite you to this party. You might start talking to us about 401ks again, but at the end of the day, you know, as much as I can nerd out about something like this, because it is an interesting puzzle to solve, like it's, uh, interesting in terms of how you bring the product like this to market. It's interesting [00:08:00] how you actually can realize the innovative benefits on the backend, on the administration of it. To actually be doing something differentiated in the market, right? And yeah, I end up talking about it probably a lot But I think there's also something to be said about the fact that if you aren't thinking about these things And you aren't actually taking the time to educate yourself on Everything that needs to be done for you to set yourself up for a good financial future. You're probably not taking some necessary steps that you need to be taking, right? And one of the things that's actually kind of interesting that we've been seeing is sort of the prevalence now of how the conversation has shifted a bit from retirement savings to student debt. And one of the things that's interesting there is that Gen Z is acutely Of how much debt they have, and they see, you know, government promises not coming to fruition. Uh, you, you know, misunderstanding about what even is going to be the right thing to do. People are [00:09:00] confused and they think that their debt has been canceled and they've stopped paying their, uh, debt. You know, they're, uh, the checks that come every month, the bills, and they're now finding themselves with credit score problems. And so in our minds, thinking about this holistically and bringing together all those different pieces has been sort of critical for us as a business, because ultimately that's what we're expecting is going to deliver to people the product as a, as a, you know, tool to attract and retain talent. That's going to be important and meaningful.

Michael Koenig: There are so many aspects to just personal finance from, retirement savings to active management, active budgeting. And there's really, I mean, one of the great platforms that was out there, Mint was recently retired and Intuit's moving everyone over to Credit Karma or whatever it may be. I think the only other one out there is you need a budget. AI is bringing out some pretty cool budgeting tools and pretty cool personal finance tools. How [00:10:00] does AI fit into, let's first start with your product and how your product team is thinking about this in the future?

Jon Mark: Yeah. I mean, we right now have about 30 different areas that we're looking at in terms of our AI strategy and how we think that AI is going to help really revolutionize this space. I mean, on a Personal note, one of the things that I find to be so interesting is when I look at, uh, you know, really complicated, nuanced questions within, uh, the retirement space, the education saving space, I keep finding that one of the best tools to explain These really complex topics ends up being AI ends up being a chat GPT, the way that it can actually take very complicated things and boil it down. I think that's an incredibly powerful tool. So recently, we actually launched an AI chat bot into our platform. And one of the things that we're super [00:11:00] excited about is, you know, within the first three days, Yeah. We saw 500 conversations had started. And what was really interesting to see is that the, uh, is that not all of those questions were things like, how do I get my money? Right? Like more procedural questions, but you started getting questions right off the bat that says, should I be saving now? I'm 26 years old. Right. And you have people that are really looking for some sort of intelligent agent. To be able to understand your situation and start to give you advice, right? And one of the things that I think differentiates Vestwell in the, uh, in the sphere of, uh, you know, folks who are offering sort of these new entrance into the different saving spaces is that, you know, we've always believed in the importance of the financial advisor. And I think one thing that's kind of interesting to think about is how the blend of A. I. and the blend of human intelligence becomes so [00:12:00] critical and delivering people, um, ultimately the right set of advice that's going to enable people. Then to make the right decisions, because while I think AI can do a great job of taking the esoteric and making it simple at the end of the day, it's still, it's pretty hard to imagine a computer just being able to take everything in, understand, you know, the emotional aspects of what it means to be making financial decisions and then ultimately deliver, you know, a piece of advice. And I think that's an area where we're going to see, you know, a financial advisor can spend less of their time. educating people on the basic concepts, less of their time doing administrative work, and once this person comes in pretty well informed, can really take their time to use it in a more Uh, specific and focused manner to actually end up getting someone on the right path. And I think that's something that I'm particularly excited to see in this space come to life. There's all sorts of ways on the backside of [00:13:00] how AI can be used to make the business more efficient. But at the end of the day, my biggest focus right now is how do we make sure that for our end savers who are entrusting us with their retirement, education, health, whatever it is, right? That we can ultimately deliver them an experience that's going to help guide them on the right path. But also not necessarily find ourselves in a spot where we're trying to step on the toes of the people who could do something that I'm hard pressed to imagine AI replacing anytime soon.

Michael Koenig: Well, and wealth managers as well tend to be, they come into the fold once you hit that point of having wealth. And so one of the things I love about Vestwell is that you're really making that available at the earlier stage to help people develop that wealth. Now, you talked a lot about strategy so far. Your VP of strategy before you became COO at best. Well, which we'll talk about, we'll talk about your career progression in the financial tool market, ? There's so many complimentary things that go to this there. There's [00:14:00] a bigger holistic Picture outside of just savings, right? There's estate planning. There's having your will there's, you know budgeting as I mentioned you mentioned, 30 different areas You From a strategic standpoint, how do you go about making sense of it all? How do you decide your strategic moves when there's so many ways you can take this product?

Jon Mark: Yeah, I think, you know, that is, that is so true. I mean, this is a space that has a lot of different, uh, different products that are going to help with different pieces of the equation, right? I think what is our north star though at the end of the day is Is the savings piece, right? And so I think that there's plenty of consolidation opportunity within the space of savings for the space of being able to pay down debt, right? It's being able to utilize your money and put it against. A savings or a financial [00:15:00] wellness goal that's most important. You could go expand in all sorts of directions at the end of the day, but the chassis that we've built with our technology, right, is going to be able to most effectively, uh, be expanded and is, you know, was built extensively to be able to power these types of products. Right. And so when I look at that, I think strategically where my mind goes is. There is so much opportunity to consolidate all those different savings vehicles that that feels to me like the place to start, you know, still, you know, early stage company at the end of the day, and, you know, the future, sometimes it's hard to fully predict. But I think that what we're going to find is with the sort of the different ways that to innovate with the technology, you know, that's emerging in the markets right now in the AI space, being able to just harness so much of what we've built to be able to apply it to these new other domains that I just spoke of, I think there's so much opportunity there that rather than trying to [00:16:00] split our focus too many ways, that feels like a good way to, you know, Make some real impact, uh,

Michael Koenig: you know,

Jon Mark: in the near term.

Michael Koenig: A couple of things here. First, I've had so many conversations with people about Northstar maintaining focus. I've never had a conversation with someone where they referenced it as a chassis, which I love. That's fantastic. But the next thing, I mean, come on, you're not early stage. You raised 238 million multi billion dollar valuation, you know, 20 million assets under management, or was it billion? I can't remember. It was billion, yeah. Billion. Yeah, forgive me. Tell me about the education component of it, right? That's something that you mentioned previously. We don't know a lot about savings for retirement. These aren't college courses necessarily that you get to take. And I remember my journey of financial literacy and understanding, how I needed to do this. How do you all approach that? Because it is such a Big component of, this sort of planning and preparation.

Jon Mark: Yeah. I mean, I think the biggest thing to recognize is that everyone learns a little differently. [00:17:00] And so I, our approach to date has been around figuring out the different methods that will be most effective to cover the most, uh, you know, have the most coverage over people. Right. So some people want to have a library of resources Consume that information, be able to search for more, be able to continue to go down that rabbit hole. Some people want more of the like, you know, it sounds so 90s, but like the wizard, right? Where they just like, you know, are kind of guided down that tree. Some people want a consultation with a professional. They want to just explain their situation and sort of have the right information pushed to them. And I think our approach to the wellness and the literacy has really been focused around. A lot of our clients come to us through a financial professional. And so part of it has been figuring out what is that individual's approach to how they want, how they've been selling their client on the wellness and the literacy. [00:18:00] And then it's applying sort of a menu of offerings. And that kind of goes back to chassis, right? You want to have all of these building blocks and then you're enable a financial professional to, um, Build the experience for their client that they're looking for, but have enough options that you know, that you're going to be able to assemble something very powerful.

Michael Koenig: And what's really interesting about this too, is the business model and the target demographic and the go to market strategy, which we'll talk about in a bit, but it's a B2B2C. Sort of deal here where, you're selling to either companies, you're selling to financial advisors, and then ultimately those customers, employees, whatever they may be, end up becoming your clients. Now, let me ask, employee turnover happens. Are you seeing employees who leave companies that. Got into Vestwell. Are you seeing them continue on with your platform? Yeah,

Jon Mark: absolutely. So, you know, people, people at the end of the day, and you know, we could, we could spend some time again. If you really want to get down the, the nerd path here, we can talk about, you know, the world of, uh, [00:19:00] 401k rollovers, lost assets, and, and all sorts of things that are, you know, in that space, and there's actually a lot of national attention being put over into the auto portability space to figure out how to make sure that people aren't losing track of their assets at the end of the day, but, you know, at the, for us, at least, uh, in, you know, employees. And end up building up, uh, a pretty decent nest egg in some cases on our platform. Some choose to roll it over to an IRA, some choose to consolidate it into their next, uh, 401k plan, 4 0 3 B. Um, but at the end of the day, it's not necessarily, you know, any one thing taking prevalence. It's more about what's right for that person at the end of the day.

Michael Koenig: Fantastic, and look, the reason why I'm going so deep into your product and so deep into the space is because, as executives, we want what's best for our employees, whether it's total rewards, whether it's, planning beyond just the job and planning for the future. And that's why I'm, I've [00:20:00] really gone deep into this, but let's change focus here. This is about operations. You're in a heavily regulated industry, and I can always tell that by, what's in the email signature, right? And this is, you have the FINRA type of notification. How does that play into the operations of this business? It certainly has complicated it. I would imagine. Yeah. What I would

Jon Mark: say that the regulations, um, are interesting, but at the end of the day, All of these savings products that have a tax advantage, it's operationalizing the tax code and then doing it within the constraints of what the regulations will allow you to do. And from my perspective and how I've always approached my job is I am trying to figure out within a, within a set of constraints, how do I create through people, process, technology, An experience that's ultimately going to be delightful for them and efficient for us. [00:21:00] And that puzzle solving is sort of how, you know, I try to describe it to anyone who's coming into like a leadership or a management role at Vestfold. It's that you are coming into a really complex space. You have to figure out how to abstract, how to generalize, how to basically build within these sets of very complex constraints, uh, something that has not been easy to automate. And it's why there's been so few people who have attempted to kind of tackle this problem and why it's been easier for most companies to throw, you know, bodies at the problem as they've been able to find, you know, labor and cheaper geographies rather than actually solve the underlying technical problem or the underlying thinking problem of how do I properly conceptualize it. The right way to tackle this within this set of constraints.

Michael Koenig: So interesting. Yeah. You all couldn't have chosen a more difficult industry. Maybe, save I don't know, nuclear technology, et cetera, et cetera.

Jon Mark: I think about that every day, Michael.[00:22:00]

Michael Koenig: Yeah. Regularly did industries are always a little bit tougher. I want to get back to your career progression. We mentioned BlackRock. You actually spent a lot of time at Bridgewater. And there were a couple of things that I was really impressed with. And I'm always impressed with is people who progress within a company. Into not only more senior roles, but also areas of different expertise, which is something I actually find very necessary for COO is because we do have this generalist view across the board. Now, the reason I'm also bringing this up is because you started as the SVP of strategy and operations at Vestwell and then made the jump. Into the COO role within Vestwell. Can you tell me about that? Because it always takes that one person to give that opportunity to jump into the C suite.

Jon Mark: Yeah. I'm, you know, I would say that, you know, [00:23:00] I, whenever someone asks like, you know, what is this path? And it's almost always for the purpose of saying like, how do I try to replicate something like this? Right. I always say that really. It comes down to two things, and both are in your control. One is the desire to deeply understand the substance of the problems you're trying to solve. You can't just be able to approach it with a bunch of MBA jargon, right? You have to really get down and understand the cause effect relationship between the different concepts. what the implications of those are and really reason through it. And that reasoning is partly, you know, I think some people are stronger at it than others, but it's not something you can't work to get better at. It's like training any muscle. You go to the gym and if you lift enough times, you're probably going to get stronger at it. But it's really starts with that [00:24:00] desire to understand stuff. You have to think about how the pieces fit together. The second thing that I've always found is super important is finding people. Who will take an interest in your development. There's a big difference between a manager who is going to use you as a cog in the machine versus someone who wants to pour themselves into you in some way, you know, and they, if you can find those people, and that's what I mean, like, obviously. You are sometimes at the mercy of the person you work for, but you are also in charge of picking who you work for. And so to that extent, figuring out that person, who's going to give you the mentorship that you need at that point in time in your career, I think that natural curiosity paired with good mentorship is sort of the Best way to find yourself in an accelerated career path. So if I take that and I apply it to Vestful now for a moment, right, how did I make that jump? I think it was applying those things the you know [00:25:00] years of mentorship the the you know mentorship that I get from our CEO Aaron and being able to actually translate that into business impact and if you can go solve a problem And you keep solving them and you keep putting results on the board, you know, at, at a certain point, the results are going to speak for themselves and it's going to become obvious to, uh, the people around you that it's a sensible decision.

Michael Koenig: Well, let's talk about that finding people who take an interest in your professional development. You mentioned, you know, it's as a candidate, backing up who's evaluating a business. It's the candidate is interviewing you and the business as much as you're interviewing them. How did you identify those mentors? How did you identify the opportunities that we're going to give you that professional development?

Jon Mark: I think it was two things, really. The first one was, uh, early in my career, the decision to go to Bridgewater. Uh, was having a culture that prided [00:26:00] itself into personal development, right? And so, you know, finding a company that part of its ethos is developing talent. I think that is one piece, right? And that's what the easiest thing to look at from the outside. And it's also one of the things that I think is most important, especially in the very beginning of your career. Once inside a place like that, you have the opportunity to assess different managers. You can talk to your peers, figure out who does a particularly good job at that type of thing. And that's what I did. Um, you know, I moved managers a few times within Bridgewater and it was constantly in the pursuit of finding people who I thought was going to, were going to offer me Uh, what I needed at that point in time in terms of development. And then when I made the decision to come to Vestwell, uh, you know, with a couple of stops in between, the big thing that I looked at was I wanted to work for someone who I knew was strong at the things that I was not necessarily strong at yet. Right. And I wanted to try to find a [00:27:00] job that I thought, you know, it was roughly half of things that I felt like were in my wheelhouse to do and half things that were like out of my comfort zone, but were the things that I knew if I could get better at would just make me a stronger, you know, professional to be able to have greater and greater impact.

Michael Koenig: There's imposter syndrome, right? I look for the same thing. Here's a role where I can do, 50 percent of it, but this other 50 percent I'm gonna be I don't know, a fish out of water. And it's difficult to combat that sort of, the imposter syndrome that you might get with that. How did you go about that? Was it even a

Jon Mark: thing for you? No, it's a thing for everyone, and anyone who tells you differently is lying. That, and that, you know, maybe that sounds a little arrogant to say, but I have pretty strong conviction in it. And I would say that the thing for me that helped me get past that was truly just wanting to figure out how things work, right? Because I [00:28:00] figure the best way to get past the imposter syndrome is to really understand the situation. And if you can deeply understand the problem you're trying to solve, and you can come up with a solution, and you can see a path from how to get to A to Z, then you may not feel like you necessarily are qualified, you may feel like you are an imposter, but if you can then show that like, look, I have a practical and tangible path to, I think, the solution. Resolving the things that ultimately I need to resolve for me to be successful in my role. I think that's how you can kind of offset it, right? I think it's when you find yourself in a position where you're so out of water, you can't even reason through the problem anymore. Everything just feels like there's no vector at which to start. That's when I find the imposter syndrome is, you know, unsurmountable. But that's also where I, I reach on a different thing, which is I've had mentors that can help me. And, you know, you, you phone a friend and often believe it or not, like, [00:29:00] A little bit of clarity can go a long way to figuring out how to get from A to B. And once you get from B, it's actually more simple than you might think to get the Z.

Michael Koenig: It's so true. And, one of the things that I always push on with anyone that I'm working with is don't assume that I know what I'm doing. Right. You know, I, I'm self aware enough. To be comfortable and confident in saying, Hey, look, you know, I don't understand this, but I want to learn. And you've mentioned several times about going deep, figuring out how things work. Here's the question. How do you do that without, stepping on toes without micromanaging, because it's a real fine line and fine balance.

Jon Mark: I think one of the ways you do it is by asking a lot of questions. Most of the time, I think people. you know, whether they are in your part of an organization or another part of the organization at the end of the day, if you are asking how things work, people [00:30:00] are not necessarily going to be, you know, they may, they may get a little nervous if a COO is poking in to know how something works. Right. But I think if you can do it with a disposition that disarms people, because you truly. Are just trying to figure out how do we make this better and everyone understands that we're all safe here. We're just trying to ultimately get ourselves to the, to the finish line of winning. Right? Then the questions don't feel so intimidating. They don't feel like the stakes are super high. And I think what's more important though, is then, you know, once you state, this is what I understand to be true. What you do about that may be in a different setting. Right. So it may not be my place to say, Hey, I think we need to change this. Right. So I may end up in a situation where I'm talking, you know, with someone three layers below me in a different part of the organization, because I need to go figure out how something works over there to make other decisions. But I'm not going to tell that person what to go do. I'm going [00:31:00] to go to the right place in the organization, navigate that, you know, org chart to the proper place to then have the conversation about what do we do about it. Right. Um, you know, Michael, there's something, uh, funny though that I thought it might be worth, you know, mentioning. I was about, I think it was about six years into my, uh, relationship. Where my partner turns to me and says, I just don't understand how two people who could have such different risk tolerances can actually like each other. And I said, and I'll never forget this. I said, we have roughly the same risk tolerance. And I get this kind of like, look at me, like, what are you saying? Like you're way more willing to take on risk than me. And I said, no, I get to the point where I dig so deep to understand. And. The situation that I feel like I can understand the risk that I'm more willing to take it on, but I'm not willing to just look at something and be like, this [00:32:00] is really risky. I'm going to go do that. Right. That's not like how I work. And I think that is one of, you know, to kind of tie that back to the idea of. You know, how do you go utilize this tool set of like building a deep understanding of like the substance of a situation? I think the place that it has so much applicability to is in that risk management space. And I think it's the difference between, you know, leaders who look at risk as an impediment to getting impact on the board versus those who can actually navigate it effectively. To make smart calls, uh, to ultimately get where you need to go, which is a hard thing to do when you're trying to grow a business as rapidly as the venture backed space demands.

Michael Koenig: Absolutely. And here is a, I get asked quite frequently, what are the traits that COOs have because I myself have a multi time COO, but also I, I get to talk with really talented COOs like yourself and risk mitigation. Is such a big one, right? Part of our job is to guard the [00:33:00] flank. You talked about going deep, right? And understanding. Do you have other ways and tactics to, really start to manage that risk? Whether it be, capital markets risk, whether it be technology risk, whatever it is.

Jon Mark: Yeah, I know this is going to maybe sound a bit pedestrian, but it really is just all about Coming back to tying every risk back through a series of, you know, cause effect relationships to money and time, because at the end of the day, you know, people talk about, oh, this is a risk of ruin event and everyone goes, Oh my gosh, we have to now, we have to avoid this. And I go, why, why is it a risk of ruin event? Like, what is it going to cost me? Right. What are you like, what's it going to cost me? How much time is it going to delay? What will it delay? And. If you constantly force all the people around you to avoid the buzzwords, you know, to not just stop when they're get told, well, we'll never pass our sock to, and you know how [00:34:00] all of our big clients care about that, but you take it one step further to saying, okay, what will this cost me in money and time. I think that building that type of environment within the risk management sphere is what helps teach your organization to actually really know how to price risk properly. And then if you can give them good frameworks that are tried, tested and true for how to go about doing that. And then it puts them in a position where they understand the right way to apply the industry best practices. To the substance of your business. That's how you get to that place where people can actually explain, Hey, this is, you know, the risk of about 200, 000 if it goes wrong, that's what we figured out as the maximum. And, you know, can we, you know, and the upside of doing this is for roughly, you know, 100, 000 of revenue. So does it really make sense? And you can be looking and say, do you think it makes sense? And you get a quick, like, probably not. All [00:35:00] right, we're going to, Keep going. And that's just better when you can start to diffuse that responsibility out to more people. And they may not be the one who can ultimately cash the check or, or make the decision, right? But at the end of the day, if they can do as much of the thinking as possible, it just makes my job easier.

Michael Koenig: We've spoken a lot about strategy versus tactics. We hear these things all the time. I think they're very misunderstood. I think when we think we're forming a strategy, we're actually just forming a series of tactics by which we're going to achieve an outcome. Again, I get back to strategy because this is a big part of your career and expertise. How do you think about this? How should we think about this in terms of differentiating strategy and tactics and then also formulating our own?

Jon Mark: Yeah, I think at the end of the day, strategy and tactics are roughly the same thing on a different time horizon. At the end of the day, you're trying to pick what are the right things to bet on, right? And if I'm trying to figure out how [00:36:00] am I going to have a sustainable You know, high margin business three years from now. I'm making a set of bets right now at this point in time that are going to deliver that outcome. And as I look, you know, three months from now, and I'm thinking, how do I make sure this next board meeting goes? Well, I'm making a set of bets for what I'm going to do. That's going to deliver that result, right? And so it's really just about the size of the bet. The time horizon that they have to play out on, um, and constantly adjusting, right? I don't think there's ever been a time at Vestwell that I can think of where I could lay out every little detail nine months in advance and have it play out exactly as prescribed, right? It just never works out that way. And so I think that's, you know, when I think about strategy, tactics, I think of it as a series of bets. They look a little different. They have different time horizons. They have different [00:37:00] costs, different expected payoffs, but that's really what it comes down to. And a lot of that comes from the Bridgewater training. Uh, you know, make every decision as an expected value calculation. It was basically setting us all up to become poker players. So, you know, here we are. [00:37:15] Marker

Michael Koenig: What an opportunity to spend such a big portion of your career early on, especially at Bridgewater. We're talking about, one of the most successful companies in the world. I'm actually quite envious now. I think I made some career steps.

Jon Mark: Ah, we all, we all have our own path and it gets us to a great spot and it's, uh, You know, the nice thing is we don't, we don't know the other ways that the decisions could have played out, which is like perhaps a curse, but I think of it more as a blessing.

Michael Koenig: Let's continue down the strategy road. I mentioned at the outset that you have 25, 000 SMBs. You've spoken many times now about small and medium businesses, helping out those employees, helping out those customers. Usually the playbook for a [00:38:00] SaaS company is, get your foothold in SMB and then start building out your mid market and your enterprise products. Is that something that factors into Vestwell? Or are you truly, this is SMB, this is our ethos, this is our values and our mission.

Jon Mark: So I think that that mid market space for us is totally within reach. And I think it's going to be a great place that as we've been able to sort of, you know, build in additional bells and whistles to our product and to just our general operating model, that we become an increasingly great fit for. And I think it's areas where our emergency savings, the student debt pay down, retirement, you know, that starts to become kind of an ecosystem of products that gets that mid market excited. But our focus has been continues to be how do we bring all of that into the smb space? Because I think for us what we recognize is when you have 33 million businesses in the united states and only three million of them [00:39:00] have a retirement plan. There's this incredibly Huge market and so if you can then bring them a retirement plan bring them financial wellness Bring them the opportunity to attract Gen Z talent who's super focused on getting their debt paid down, right? You start to bring something really novel and interesting and you know part of why I chose Vestwell I think really came down to I wanted to work at a place where Growth and mission, you know, tied together in a way that like made it so that the work I do every day had a lot of value, you know, to me personally, in terms of doing something that I think is like good for the world, just as much as it was, you know, adding value to the shareholders. Right. And so I think about, yes, you know, you could go into a mid sized business and, you know, bring on, you know, thousands of funded accounts. Right. And yes, is that, that's great for us as a business, but they were going to have [00:40:00] a retirement plan, a workplace savings platform, regardless. Right. I get more excited when we get to go and really work with the SMBs and find ourselves in a spot where we are putting a, an employee benefit in the hands of people who probably wouldn't have otherwise had it. because there wasn't accessibility to a product like that. So I think it's strategically good for our business to go tap a TAM as big as, as we are. I think it's from a mission perspective of trying to close the savings gap. I think it's also good on that front as well. So I, that's kind of how I see all those things coming together in a very like commercially and personally rewarding way.

Michael Koenig: Yeah. And just a quick asterisk there, TAM is total addressable market for those who are listening that might not be familiar with that acronym. Let's get back to acquisitions. You talked about acquiring gratify from Morgan Stanley. You were at Bridgewater. I'm very curious how, you know, if one Bridgewater had a tactic that you or [00:41:00] a strategy for evaluating acquisitions. And if not, how do you view acquisitions?

Jon Mark: Yeah. I think that at the end of the day, if you can acquire. Uh, whether it is revenue, you could acquire, uh, you know, a new product talent that's going to be a creative to your, to your business, to your strategy, right? There's all sorts of different sort of, you know, headline drivers for why an acquisition would make, uh, sense, right? Uh, for the business at the end of the day The thing that I've always found to be super, super important is you have to form a very cogent deal thesis for how you think this acquisition will ultimately benefit the business. And you have to continuously measure against that. That's the biggest driver. All of our acquisitions that we've done have been because it's a product that gets us strategically closer to our mission of the savings gap. And when you actually look at the. Way that you price that [00:42:00] acquisition in that deal, there was a clear path forward to seeing how it became a very positive growth for the business. And so that has been just the guiding light. And I know it sounds simple when it's just said like that, and maybe it feels a little obvious, but if you're just not comparing your expectations to your outcomes and constantly. You know, looking and comparing those things, you will often find yourself missing the mark. Um, and that's just, no one wants that.

Michael Koenig: Throughout this conversation as I've been listening to you. I am deeply impressed with Vestwell. And your focus on the mission that you are doing and the focus that it brings to all of your business decisions, to your strategies, to your tactics, to your acquisitions, to your markets, whether or not you're going to move up to mid market, whether or not you're going to stay with SMB, the clarity that you have expressed that is rooted [00:43:00] in the mission is absolutely stunning, absolutely phenomenal. I'm so impressed because not all companies are like this. Hey, Pat on the back for you all, really.

Jon Mark: I appreciate it, Michael. You know, I think it's a full team effort to get there, right? You know, we, we brought together a lot of people with a lot of different perspectives, some folks who understand the industries that we're in super well, other folks like myself who are trying to come in with a fresh look and being able to, you know, think more about like that generalist mindset of like, How do you scale something like this that was, you know, can work at, you know, 20 new businesses a month to 500 new businesses a month. Right. So it's a, it's a, it's interesting. And, you know, I think a lot of the time at Bridgewater also taught me how you have to think about assembling a great team by thinking about the collective strengths that are needed and then assembling people together who, who, In composite, we'll bring those things to bear. Uh, and I think that's what something we've done well [00:44:00] at Vestfall.

Michael Koenig: That's fantastic. And so we're talking about mission oriented. How do you communicate that mission regularly? You know, What are the, the leverage that you pull? And how do you ensure that everyone is always reminded that this is how we make decisions?

Jon Mark: I'd say a couple things. The first one is having a tangible north star, right? Our mission is to close the savings gap, but that is an ethos, right? That is, uh, that is not something that you can tangibly attach a quantified, you know, metric to, right? Funded accounts, right? That is something that, and so we anchor our team We anchor everyone in the company to the metric of saying, we are trying to get more people to fund an account or in the case of a debt pay down to become, you know, an active user of that product. Right. And that's what we anchor our folks to. So that's one thing. It's like, you have to have that [00:45:00] anchor metric that matters more than all the others. The second thing is, is to, you know, really embrace the clarity of objectives. And have a forum of transparency for how you're doing against them, right? So for us, we invest a lot of time as an executive team building out an OKR framework for the year. You know, the headlines don't change all that much, right? You're adding new distribution, you're connecting more businesses and individuals, you're getting more accounts funded. You're making sure that you do it as efficiently as you can and that you're managing your risks along the way, right? That story doesn't change each year all that much, but what we're focused on under each of those buckets does. And then the second thing that we do is we make sure that, you know, we use, A KPI channel on slack to be showing people every month. How are these things progressing? We have our all hands meetings where we're talking about the results that we're putting up on the board and what we're going to do [00:46:00] differently based on what we're seeing. Hey, we're having a ton of success with this. So we're doubling down on this. We're seeing that this thing is stumbling out of the gate a little bit more than we wanted, but here's what we're going to do differently and what we've learned as a result of that. And so I think that having that communication is so critical for people because at the end of the day, I find that most people want to do a really good job and maybe that's a function of, of, you know, the world, or maybe that's a function of, of who we've hired at Vestwell. But most people want to do a really good job, but they can't do a good job if they're not armed with the broadest set of information of what is transpiring, because that's what's going to set them up to make the right micro decisions that we all make in every seat that we're in to be able to ultimately get the wins on the board that are needed, you know, to keep growing a business like this,

Michael Koenig: John. It's time for my last and favorite question. We've all had those moments in the C suite or in a leadership role where we've seen just something completely [00:47:00] off the wall and thought, I just never thought I'd see that. Do you have one you can share with us?

Jon Mark: Yeah, I, um, I do. I, um, you know, I really wanted to tell you a story about, uh, the craziest HR situation I ever dealt with. And our general counsel told me I couldn't. But, um, what I did, what I did think would be an interesting one to tell you is, you know, everyone talks about the COO being the generalist, you know, I want to talk to you about the night before we closed our acquisition of Someday from BNY Mellon. And I got three phone calls that night. The first one was how security wasn't going to approve how the CICD pipeline would work for the engineering team coming over. And I had to teach myself what that was and come up with an alternative. And, uh, that was like, you know, that was like 5 p. m. 6 p. m. I got a phone call about how the health [00:48:00] plans The way that they worked was a little different than what we thought. And so there was going to be a lapse in healthcare for every employee for a month. And again, I had to go, you know, I know Arisa pretty well at this point in the 401k world, I had to go learn a different part of Arisa that night. And by 630, we had figured out a solution to, you know, make sure there'd be no lapse in healthcare. And again, you're thinking, okay, it's 6. 00 PM this night. Can't, you know, have another one of these, but it did. And I got a call around seven that said, you know, we actually just realized that we only built out this agreement to cover off mutual funds and not ETFs in this service agreement that's predicated as part of the closing. And we very quickly had to figure out like, What would be an acceptable set of terms that would be different for mutual funds, uh, or sorry, different for ETFs that would be different from the mutual funds. And by about eight o'clock, we had solved that [00:49:00] problem. And, you know, at that point, the next day, everything got, uh, everything was able to get signed and delivered. But I just remember, I look back on that night and think to myself, if you needed proof that a COO has to be able to handle a myriad of different domains. Try solving healthcare, engineering, and, you know, asset servicing in one evening. And, uh, but I look back on that and I just think like, that's also one of those fun memories where you're just like, yeah, this was a fun problem to solve.

Michael Koenig: And underneath that, right. You're not just solving them. It's the team as well. So kudos to the team. That's one catching those. And then two working with you to actually fix the problems. Right. So that was, yeah.

Jon Mark: And you're. You couldn't be more right about that. I mean, like I look at that as like, I'm making, you know, judgment calls, but it's, you know, all of the information and all of the ideas of what could solve the problem, you know, comes from a great team.

Michael Koenig: That's [00:50:00] fabulous. John, thanks so much for joining me. Where can people go to keep up with you and also Vestwell?

Jon Mark: Yeah. I mean, we, uh, Vestwell is on pretty much every, uh, Every platform that a business would put themselves on. So you can find us on LinkedIn, find us on Twitter. Um, we have our blog on our website, always pumping out new and exciting, uh, financial literacy and retirement healthcare, disability savings content. And, uh, And, uh, every now and then I, uh, I'll post something on my LinkedIn, uh, like when I, you know, sit down with you, Michael, and record this podcast. So, uh, I'm pretty much just on LinkedIn and, uh, would be excited to

Michael Koenig: connect with anyone out there who wants to talk more. Yeah. Fantastic. And for those of you looking to connect with John on LinkedIn, it's actually Jonathan Mark. So there you go.

Jon Mark: John. You're giving up my secret, Michael. Oh, I try to make it so that the, that, you know, only the people who really know me would call me John. Dang.

Michael Koenig: I'm well, you know, [00:51:00] risk, right? Well, there you have it. . Thanks to you all for listening to between two COOs. I'm your host, Michael Koenig, and a very special thank you to John Mark for joining us tune in next time for our next COO chat on between two COOs and be sure to subscribe on Apple podcasts, Spotify, or wherever you listen to podcasts. So you never miss an episode. Just visit between two COOs for more information. And if you have a minute, please leave us a review on Apple podcasts and tell others about it so they can get great advice from phenomenal COOs. Thanks for listening to this week's episode tune in next time. And until then so long.