Disruption is the goal of most entrepreneurs. It's almost a cliché: You recognize a need in the marketplace, you come up with a solution, and you set out to solve it as powerfully as possible. If you have to rattle the business models of a few incumbents in the process, well, that's what entrepreneurship is for.
The only problem with disruption is, it's easier to talk about than actually to do. We're not perfect, but when I look at what we have accomplished, I'd break our path down into five steps that any business could follow:
Step 1. Identify a big problem
What pain point is your company solving? Are you simply taking an existing idea and improving upon it? Or are you figuring out something that no one else has? As you answer these questions, be as specific as possible. At a minimum, your concept of the problem should address the cause (what the incumbents in your field are doing or have done historically), those suffering the most from the problem (the sweet spot of your market), and others who are trying to solve it (your competitors).
What this looks like for me: When it came to financial planning, there had been a huge gap in the market. On the one hand, there were countless books that covered general issues but were no help on personal questions. And on the other, there were very expensive advisers who offered their services only if you had millions stashed in the bank.
To make matters worse, there was an impossible conundrum: To work with financial planners, you needed to have enough money to be of interest to them. But in order to amass that much money, you had to work with a financial planner. I experienced this gap personally when I graduated from college and searched high and low for financial advice that spoke to me directly. I came up empty-handed.
That's where most people would leave it, but not an entrepreneur. I decided to come up with a solution.
Step 2: Build the best team
Going it alone is not an option. To cause disruption, you’ll need to enlist a phenomenal team of people who share a passion for your mission, think outside the box, and are always ready to roll up their sleeves and get dirty. A disprutive team has to be willing to put in those crazy start-up hours without complaint, and it must be driven not by immediate returns but by the thrill of building something new--and much better.
What this looks like for me: We drew on people from a broad range of industries, including financial services--I myself started out as a trader at Morgan Stanley. That worked well for us. As a result of that focus, our team is full of people who understand the realities of financial planning at a deep level but also profoundly understand where the system leaves room for improvement.
To keep that disruptive edge, everyone needs to feel a sense of ownership in the company's mission, and at LearnVest we take that literally. Everyone at the company gets options. Ownership, I've found, is a great way to truly inspire innovation.
Step 3: Get feedback and go quickly back to the drawing board
As you get engrossed in building a company, it’s all too easy to lose sight of the people you're doing all the work for: your customers. You need to keep lines of communication open with them--because, after all, they're the only ones who can truly tell you what you should be doing. So build up a constant stream of feedback. See what your customers want--then get back to building it for them.
What this looks like for me: We conduct qualitative research through our network, known as LearnVest Labs. We watch how users interact with our products, find out what really does change their money behavior, and learn how we can better serve them.
We also have an active feedback email address where we read all messages personally, and we register every single user request and question on our social-media accounts.
Then we take what we learn and apply it to every product at LearnVest. For example, we made the Money Center--where, among other things, you can track your spending--as user friendly and intuitive as possible. We modeled the feature after an email inbox, with spending categories represented as “folders.”
Step 4: Be flexible
There are a lot of channels you can use to build a disruptive business. Though you should hold tight to your big idea, you must be willing to adapt and adjust on the details.
What this looks like for me: Innovative technology is at the heart of what we do, and it's the key to our disruption. Through LearnVest Planning, we have a team of Certified Financial Planners™ who create step-by-step, customized financial plans that people can realistically follow--and our technology helps them do it at a price that traditional financial services firms can't even come close to. We also have an editorial arm that produces simple, unbiased, original content that doesn't try to steer you toward particular investments or gloss over risks.
The disruption also comes from our pricing model. For example, to break the traditional financial planning fee structure, under which the price tag for a financial plan typically runs around $3,000, we’ve introduced subscription pricing (a setup fee + $19/month). Our idea is to make financial planning as easy as joining the gym--because, well, it should be that easy.
Step 5: Live Your Brand
As an entrepreneur, the line between personal life and work life often blurs. You’re living and breathing your company, and to keep that disruptive edge, it’s critical to develop a company culture around your brand.
What this looks like for me: The LearnVest brand is about being smart with your money, and of course, all of our employees have actually gone through the financial planning process. They know our products intimately (and practice our philosophy daily) because they use LearnVest in their everyday lives.
But LearnVest's brand is also about spending on the things that make you truly happy. In our office, we keep a communal jar where everyone can see it. When anyone on the team goes above and beyond, we celebrate his or her achievements by contributing a $5 bill to the jar. Once the jar builds up to a reasonable sum, we use the funds to treat the whole team to something special. Most recently, for example, the jar funded a companywide happy hour.
And why not? You need a hungry team to run a disruptive business. It's only natural that the team occasionally gets thirsty, too.