Money Rehab with Nicole Lapin - Why SoFi Stadium is a Big Deal (Literally) with CEO Anthony Noto

Episode Date: October 30, 2023

What do the NFL, Goldman Sachs, Twitter and SoFi have in common? That would be Anthony Noto - veteran executive and Nicole's guest today. Nicole and Anthony talk about what people should be able to expect from their banks, why SoFi bought a stadium, and Anthony's response to Elon Musk's plans to get into the payment space. Watch SoFi's Face of Finance video referenced by Nicole and Anthony here: https://www.youtube.com/watch?v=8Xzfceq29ts

I love hosting on Airbnb. It's a great way to bring in some extra cash. But I totally get it that it might sound overwhelming to start, or even too complicated, if, say, you want to put your summer home in Maine on Airbnb, but you live full-time in San Francisco and you can't go to Maine every time you need to change sheets for your guests or something like that. If thoughts like these have been holding you back, I have great news for you. Airbnb has launched a co-host network, which is a network of high quality local co-hosts with Airbnb experience that can take care of your home and your guests. Co-hosts can do what you don't have time for, like managing your reservations, messaging your guests, giving support at the property, or even create your listing for you.

I always want to line up a reservation for my house when I'm traveling for work, but sometimes I just don't get around to it because getting ready to travel always feels like a scramble, so I don't end up making time to make my house look guest-friendly. I guess that's the best way to put it. But I'm matching with a co-host so I can still make that extra cash while also making it easy on myself. Find a co-host at airbnb.com slash host. One of the most stressful periods of my life was when I was in credit card debt. I got to a point where I just knew that I had to get it under control for my financial future and also for my mental health. We've all hit a point where we've realized it was time to make some serious money moves. So take control of your finances by using a Chime checking account with features like no

maintenance fees, fee-free overdraft up to $200, or getting paid up to two days early with direct deposit. Learn more at Chime.com slash MNN. When you check out Chime, you'll see that you can overdraft up to $200 with no fees. If you're an OG listener, you know about my infamous $35 overdraft fee that I got from buying a $7 latte and how I am still very fired up about it. If I had Chime back then, that wouldn't even be a story. Make your fall finances a little greener by working toward your financial goals with Chime. Open your account in just two minutes at Chime.com slash MNN. That's Chime.com slash MNN. Chime feels like progress. Banking services and debit card provided by the Bancorp Bank N.A. or Stride Bank N.A. Members FDIC. SpotMe eligibility requirements and overdraft limits apply. Boosts are available to I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand.

It's time for some Money Rehab. What do the NFL, Goldman Sachs, Twitter, and SoFi have in common? Any guesses? Well, the answer is Anthony Noto, veteran executive who is one of the smartest minds in business I've ever met and our guest today. On Money Rehab, I tell you all about what smart moves you should take that will help you and your money and which companies can help you make said moves. I've known Anthony from his NFL days, and when I heard he was going to SoFi, I was pretty stoked because I knew he would do positive, creative, and inclusive things within the industry. And he has not disappointed.

And that's what we talk about today. Anthony and I cover what people should be able to expect from their banks, why SoFi's face of finance campaign broke the internet, and why the F they bought a football stadium. Anthony Noto, welcome to Money Rehab. Thanks for having me, Nicole. Can you talk about how your background shaped the way you lead SoFi? I really benefited from a couple of professional experiences that built a foundational understanding of what it would take to be successful at SoFi.

First, I was very fortunate to have been in the Army and I was a communications officer where I learned about the internet as a communication network and the importance of that network in being able to reach people digitally. And that kind of formed the foundation of my technical background. I also had the benefit of working at Goldman Sachs as a sell-side research analyst, covering the internet sector from 1999 through 2007. So I had a front row seat to the commercialization of the internet during that time period. There were hundreds of companies that went public, many more companies that were funded privately. That resulted in a huge boom and acceleration of the adoption of the internet and its ability to provide services like online shopping, online travel, online media, and online finance, online payments. But it also came with a big bust. And there were tons of lessons learned of what it took

to really build a company in an industry. So I watched what Amazon did to retail, what Netflix did to media, what Google has done to print. And companies like Expedia and Priceline have done to the travel industry, but it never really happened in the financial services sector. And so I learned a lot of lessons of what it takes to really disrupt one of these industries and capture the market share and be a winner take most. Then I had the unique privilege of leading tech media telecom banking at Goldman Sachs for four years. One of the companies that I led taking public was Twitter. They convinced me after we took them public to be their CFO, which eventually led to being the COO. And so I had an experience in working with a mobile-first company that was in the category of social media. At SoFi, it leverages the combination of my technology background,

my background understanding the emerging categories in different industry groups that require technology to drive the innovation. And then of course, my experience in social and mobile at Twitter, and then financial services generally having been at Goldman Sachs for about 14 years. The thing that inspired me more than anything else was that there's this cohort of people that were incredibly successful academically, they're successful from a professional standpoint, and they made a lot of money, household income of more than $100,000. But they struggled to have a home or to have a family or to live where they wanted or to have the career choice that they wanted.

And they'd been abandoned by the financial services sector because it was really hard to make money giving them all the products and services they need. So my vision was, how do we build a lifetime relationship? How do we help people that have been really successful achieve that benefit and realize their ambitions with the American dream? So we want to help them borrow better, save better, spend better, protect and invest better. And if we do all those things with them, they're going to have the money to get to that point that they can claim financial independence to do what they want.

And we can't just pick one category, just be there for the businesses that we make money on. We have to be there for all the major decisions they make financially in their lives and all the days in between. Along the way, in doing the work and doing the research, I realized how much my mom and my family would have benefited from this type of company. My mom and dad got divorced when I was three. I had two brothers, one older, one younger. My mom didn't graduate from high school, not because she wasn't smart and driven, but she had a family situation with her mom and passed away when she was 17. And she had to stop going

to school to help raise my uncle who was younger. She was an incredible entrepreneur, but we did go through a tough time after my parents got divorced. We were in food stamps and welfare, and I was a free lunch kid. And she was working three jobs as a hairdresser and a waitress and a bartender. And it probably took eight to nine years to figure it out, but we got to a great spot and good schools and were able to play sports. And she was an entrepreneur on her own, but she would have really benefited from a company like SoFi helping her along the way. Yeah. Thank you so much for sharing that. My parents actually also divorced when I was three, had a really broken background. And I think that that's some of what drives me toward talking more about financial literacy

because I could have used it and my family could have used it. Anthony, did you forget about your time at this other small company called the National Football League? I definitely did not forget about my time at the National Football League. The experience I have there, the appreciation for sports, for live entertainment, for the size audience that the NFL is able to build and the passion, I learned a lot in that role. It plays into how I think every day about managing our company. The specific game of football and the game of sports isn't the business that SoFi is in,

but we're huge partners in sports, given that's where our audience is, given it's a great way to reach a large unduplicated audience in mass at one time in a live setting, and to do it in the context of those experiences, which was one of the reasons we did the SoFi Stadium deal. And as you know, we announced being the title sponsor for the new indoor golf simulator league started by Mike McCarley, as well as Tiger Woods and Rory McIlroy called the TGL, which will be branded TGL presented by SoFi. Yeah. I knew you from back when you were the CFO of the NFL and SoFi made headlines in 2019 for the SoFi Stadium in LA. A huge purchase, a huge decision. What was some of the thinking

behind purchasing the naming rights for that stadium? And huge decision. What was some of the thinking behind purchasing the naming rights for that stadium? And then we can talk about some of the golf stuff too. Yeah, it's not what people generally think. I remember when our board asked me, and they weren't that psyched about the idea to begin with until we put it into a strategic context. How many credit cards do you think we'll sign up or how many checking accounts at the stadium? I said, it's actually not about signing anyone up at the stadium. We'll benefit from that, but that's all gravy. It's really about trying to become a household brand name that people trust. I think our products are better than anyone's, but people need to trust us to use our products.

They're giving us their money. They're giving us their assets and information. And so they have to build trust. And in order to do that, we have to build unaided brand awareness. And unaided brand awareness means you ask somebody the question, Nicole, when you think of a financial services product that you need, what three companies would you consider? When I joined SoFi, only two out of a hundred people would have said SoFi. So they don't get a list of names. They have to come up with the names themselves. Well, the best banks in the world, the largest banks in the United States, they're going to have 25% to 35% of the people mention their names. And I knew that it was going to be a big hill for us to climb to get there,

but we'd have to climb that hill in order to become a top 10 financial institution in the United States. Associating ourselves with the National Football League provides instant credibility. It is a household brand name. It stands for so many great attributes that we want to stand for as well. And so that was one part of it. The second part was, I believe the Los Angeles market is a key demographic and a key DMA for advertisers and the NFL appreciates and understands that. It's the second largest ad market in the United States. And so they'd be highly motivated to put as many primetime games in Los Angeles as they could to benefit from that much larger audience and ratings that would drive than, say, in a small city having primetime games. Add to that that Stan Kroenke and his family was building this most ambitious stage in the world. When I saw the design and where Stan was going, I said, this is going to be the eighth wonder of the world. Every major sports

league in the world will want to play here. Every artist will want to play here. Every entertainment act, they will want to be on this stage. It is going to be something so much more than just a stadium. And sure enough, Stan delivered in every way that he could. And those things have occurred. But the math came down to this. We were spending about $15 to $20 million a year prior to the stadium on sports sponsorships that only delivered 15 million people a year. I knew from my days at the NFL that a primetime football game would get about 20 million viewers in one night. And our cost for the stadium would be about the same as the 15 million viewers that we got through all of our sponsorships, except we'd have five times

the amount. We would have four to six primetime games of 20 million people or more compared to just 15 million people in total through the whole year when we spent 15 to $20 million on these disparate sponsorships. And that was how we got comfortable with it economically. But from a vision standpoint and the association standpoint, it just tied in in a great way strategically. Yeah, the stadium is sick. So before we dig into more of the business stuff, what's the best show you've seen at SoFi and why was it the heiress tour?

So football's not a show. So you're specifically talking about entertainment. I would say Taylor Swift was the best entertainment show that I've seen. The Rolling Stones, shockingly, were the second best. I was blown away at how good they were and Mick Jagger was at his or anyone's age for that matter. He was so energetic and what a great performer. Taylor's a very special person, a very special entertainer. I remember seeing her at one of the Super Bowls at an AT&T event where it was just a small venue and small number of people. So we were very close to the stage.

And I remember saying to my wife, Kristen, I'm like, that woman is a baller. And we saw that on the grandest stage in the world. So my hat's off to her, much respect. From a football standpoint, by far the best game was to watch the Rams win in their own stadium in the Super Bowl. I mean, the thing is with the naming rights, the buzz in the business community is kind of like a joke that once you get naming rights, it's like a harbinger of doom for that company. We saw Enron Field in Houston, Transworld TWA in St. Louis, and then I think they went bankrupt to pull for the stadium open. Is that still the case or do you feel like the naming rights that have gone down in the last few years have changed that perception? I think unfortunately, there's always going to be a tale of two cities with these things.

There's a lot of copycats that don't do it for strategic reasons and they don't do it in a fiscally responsible way. I could tell you the first three or four times my team came to me about the stadium, I kind of sent them away and said, there's no way we're doing that. There's no way we're doing it. And finally, I just said, hey guys, if you can't figure out a strategic reason for doing it, there's no sense even talking about it. And ironically, I'm older now, I'm 55. When I was younger, I could have a preconceived notion of an outcome and just convince myself over and over that that was the outcome and not listen to other perspectives. But now you're 55, you're like, I got to hear all the perspectives. I don't care if I've made up 99% of my mind, that last 1% could

change it. And that was the case here. I was presenting to the board in, I think it was January of 2019. And I said something like, it's a matter of when, not if, would become a top 10 financial institution in the country. They're like, what are you talking about? I said, our products are the best. They're going to stay the best. I'll die trying to make them the best, but we have to become trusted and we have to become a household brand name and people have to trust us. And as I said those words, in my mind, I literally thought, shit, we got to do that stadium deal. Literally, that was the moment. So I called the team back and said, hey, I have the strategic rationale. What do you guys think? Now we have to make it work. So some companies do these things for the notoriety. You saw FTX and crypto.com. And

I think they're on the other side of the spectrum where there wasn't strategic rationale, there wasn't an economic rationale. And if you lack those two things, you're doomed for success. And if you lack those two things, you're doomed for success. Yeah, no, no, you're ancient, 55, like to send you out to pastor. But talk to me about the timing. It was announced in 2019 and then COVID happened. So what was the strategy behind that? You'd already purchased the naming rights for the stadium.

It was a pretty high pressure time. It was, we were facing a number of issues. The president had also announced that those that had federal student loans didn't have to pay for the foreseeable future, which would negatively hurt our business. And so there were a number of factors going on at that time that put a lot of pressure on us and the decisions that we made. I would say great partnerships make great companies. And in order to have great partnerships, you have to have like-minded people with the same sensibility, same morality, same ethical foundation. And the Cronkies fit that bill 100%. And so we worked with Stan and his team on figuring out the best way to present football games in a stadium that had no audience and no

fans. We also talked about economics and trying to make it more affordable in that environment because we clearly wouldn't get the benefit that we thought we'd get. And I'd say there are a lot of sacrifices we each made, but we came out with a great resolution. The best deals in the world require both sides of the table to make some type of sacrifice, but getting more than they would have otherwise gotten. And I think in that circumstance, we both made sacrifices to make it work for both of us. And I couldn't be happier. We restructured the payments slightly, which helped. We talked about some other things that we could do to make up for the lack of fans, to get some higher

visibility. I actually think we ended up being better the following year and the year after that, because we realized how hard you have to work to make something like this with a partnership work and get every ounce out of it. One of our core values is that we want to learn, iterate, and then we innovate. And if you don't go through the learning and iteration, learning iteration over and over, you'll never get to the innovation. And I think about where we are today. And I think that iteration process got driven into both teams out of necessity, and we're stronger now because of it. Hold on to your wallets. Money Rehab will be right back. I love hosting on Airbnb. It's a great way to bring in some extra cash, but I totally get it that it might sound overwhelming to start or even too complicated

if, say, you want to put your summer home in Maine on Airbnb, but you live full time in San Francisco and you can't go to Maine every time you need to change sheets for your guests or something like that. If thoughts like these have been holding you back, I have great news for you. Airbnb has launched a co-host network, which is a network of high-quality local co-hosts with Airbnb experience that can take care of your home and your guests. Co-hosts can do what you don't have time for, like managing your reservations, messaging your guests, giving support at the property, or even create your listing for you. I always want to line up a reservation for my house when I'm traveling for work, but sometimes I just don't get around to it because getting ready to travel always feels like

a scramble, so I don't end up making time to make my house look guest-friendly. I guess that's the best way to put it. But I'm matching with a co-host so I can still make that extra cash while also making it easy on myself. Find a co-host at airbnb.com slash host. One of the most stressful periods of my life was when I was in credit card debt. I got to a point where I just knew that I had to get it under control for my financial future and also for my mental health. We've all hit a point where we've realized it was time to make some serious money moves. So take control of your finances by using a Chime checking account with features like no maintenance fees, fee-free overdraft up to $200, or getting paid up to two days early with direct deposit. Learn more at Chime.com slash MNN. When you check out Chime, you'll see that

you can overdraft up to $200 with no fees. If you're an OG listener, you know about my infamous $35 overdraft fee that I got from buying a $7 latte and how I am still very fired up about it. If I had Chime back then, that wouldn't even be a story. Make your fall finances a little greener by working toward your financial goals with Chime. Open your account in just two minutes at Chime.com slash MNN. That's Chime.com slash MNN. Chime. Feels like progress. Banking services and debit card provided by the Bancorp Bank N.A. or Stride Bank N.A.

Members FDIC. SpotMe eligibility requirements and overdraft limits apply. Boosts are available to eligible Chime members enrolled in SpotMe and are subject to monthly limits. Terms and conditions apply. Go to Chime.coms and conditions apply. Go to chime.com slash disclosures for details. And now for some more money rehab. You just announced the SoFi TGL partnership for the SoFi Center. Congrats on that one too.

Are there more venues, more sports partnerships on the to-do list? You know, we've been looking at every category of sports and also entertainment as well as news. Sports and entertainment are two of our most vibrant platforms. It's where our members are. We can integrate in a very endemic way in those categories. And so we've looked at every major sport in the world. And so we've looked at every major sport in the world. I love some of the more passionate fan bases that may have less broad appeal because passion is an emotion that if we can tie into, we can drive real benefit. David Ogilvie, I once read back in 1993 in a book called Brand Equity, had a great quote

that said, the most effective marketing in the world is that which can convey both an emotional and a rational benefit. So passionate audiences are really important to have. And I think about the category of surfing or the category of golf or some of these other less popular, broadly appealing categories, those are our interests as much as the big categories are. So we'll continue to do a lot in sports and entertainment. We have to find the right partner. They help us with credibility and awareness, but the vehicle of what their

platform is really matters. In the case of TGL presented by SoFi, I think it's going to be a great primetime experience. The fact that it's on primetime television is really unique. And one of the reasons why I wanted to do it, it actually starts right after Monday Night Football ends in January. It goes for 15 weeks. Getting golf into primetime during the week is going to reach more people, will broaden the appeal. I think the game of simulator golf is a lot more accessible for more people than the game of golf on grass. I love both. But younger generations are more into gaming. They're more into data. And when I see them playing on a simulator, they're using data and they're using all the

technology they can to be better at what they're doing, whether it's a longer drive or closest to the pin or different ways of betting in a friendly way. And I think if you reflect back on the Ryder Cup, there was so much banter and passion and competitiveness between Europe and the United States. We're going to get that type of banter and passion and competitiveness among friends. And just imagine being in the foursome of Tiger Woods, Rory McIlroy, JT, and let's say Justin Rose. And they're going to be battling and heckling each other along the way. Maybe they're pressing, they're doing a side bet, whatever it may be. And you can get closer to golf and the emotion of it and the personality of it more so than you ever would on grass. So I'm really excited about it. Yeah. And because throughout the show, we always define things and decode acronyms. There's so many in finance and all sorts of

figures. David Ogilvie, known as the father of advertising, the founder of Ogilvie and Mather, that was the book that you were referring to. So I'm assuming brand is the primary driver behind these sports partnerships. 100%. We want to build our brand awareness or unneeded brand awareness, go from 5% or 6% to 30%. As we do that, it does have a second order benefit. And so yes, we'll benefit from people knowing our brand more and they'll think of it, but that awareness does build trust and it will cause someone to click on our digital ads more than they otherwise would click on them. And so the familiarity and understanding of what we stand for will increase the performance of

our digital advertising as well. And we have a concept that we talk about, which is make your footprint bigger than your foot. And unaided brand awareness, as it increases, makes its footprint bigger than its foot in that it transcends into other marketing vehicles across different channels. I think the intersection, and you touched on with gaming and technology, is an area that we both nerd out on. There have been some tech in finance that people know and love, peer-to-peer money transfers, peer-to-peer lending. It's made life a lot easier, but also some tech in the space that makes folks nervous. AI, for example. Some believe it's going to democratize finance ultimately, but some feel like it's a scary threat. So what tech innovations in

the finance space are you excited about and which ones are you perhaps scared of? I am both excited and scared of AI and the subcomponent of machine learning of AI. So there's generative AI, which has got a lot of great things that it can enable and also nefarious things. And the same thing with machine learning. One of the things that we build in our app is a member home feed. Yes, we provide these financial products and you look at interest rates and you look at fees and all the other benefits. But at the end of the day, we're a digital company. You can call us if you want and we'll help you and we'll give you a free certified financial planner if you become a member. But we want to make sure the app is delivering the complete

experience for you. So we've built a member home feed in the app. And that member home feed, kind of like Twitter shows you what's happening in the world or Facebook shows you what's happening with your friends. We want our member home feed to be personalized. And there will be cards in your member home feed, the way tweets appear in the Twitter feed. And we're trying to personalize those cards to answer three questions for our members every day.

Question one is, what must you do in your financial life that day? That could be paying a bill, it could be paying a friend, it could be looking at your stocks, it could be filing your taxes. And then the second question is, what should you do in your financial life that day? And then last question is, what could you do? And so we're using machine learning technology to look at all the data we have about you and all the data we have about other people like you to answer those three questions. And so that's a very productive way, beneficial way to use it. On the other hand, AI and machine learning can really advance synthetic fraud. People that are created that are not real, that open accounts and steal money. And so we're using AI,

machine learning to prevent that from happening. Our technology platform, Galileo and Technosys have built a product called Payment Risk Platform. It's using the data that we have in Galileo and the data we have at SoFi and actually selling to Galileo's partners, many of which are consumer fintech companies, the capability for them in an authorization to detect fraud from synthetic accounts or from nefarious actors. So there's two sides of the equation. I think it will be one of those wars of mutual destruction for every good thing that's built. There's probably going to be a bad thing that's built, but we're going to continue to stay in front of the bad things so that we have the advantage. The other area that AI and machine

learning could be very helpful with, we're currently using it for customer service. So we have a bot called Connecta, which uses natural language, artificial intelligence to answer your questions. If we hit a roadblock or we can't completely answer you via that bot, we can transfer you to a live agent. We're also selling that to a number of different partners and it's had great uptake as well. I really want to talk about the face of finance campaign that broke the internet. I'm going to link the campaign in the show notes, but just a sneak peek for any

listener who didn't see it. It's a video that documents what happens when AI generates a photo of someone that's good with money, which pictures mostly men, mostly white men. And then SoFi commentary comes in and says, this isn't the real picture of finance, of course, and goes on to show the real facts and figures about how women are bosses with money, how women's investment portfolios up for men's, how women have less credit card debt than men, how single women have more homes than single men. I mean, it goes on and on. It's a really compelling campaign, and it went viral with 33 million views, I believe. So congrats on that. Thank you. Our team did a phenomenal job kind of tapping into the core insights about the prowess and capabilities of women as it relates

to financial success. And we're trying to help people achieve financial independence as our mission so they can realize their ambitions, which means they get to the point that they have enough money to do what they want. That could be owning the size home they want, living where they want, having the size family or career or retirement, which we like to call ambitions. But it's really about achieving what you want as part of the American dream. And part of that is making sure people understand where they are in that stage of development. And it's often the case that people get misportrayed and that creates biases that hold people back. And we want women to feel the confidence that they're capable

of achieving their goals and their financial independence, and that there are other people out there just like them that are already doing it. So don't believe the hype, so to speak. Don't believe the AI images. Don't believe what you've read. Here are the facts. Here's the data. And if you put your mind to it, you can have the same success and that the biases that are shown that men have stronger performance in the financial industry is just false. Hell yeah. That's why I saw it. And I was like, I have to talk to Anthony about this because it's not such a subtle social commentary. And it's one that's really needed. Some brands, it's not such a subtle social commentary and it's one that's really needed. Some brands, as you know, are really hesitant to put social messaging like that in their marketing campaigns.

So how did you think about including this type of commentary in your campaign? And did you weigh the risk or did you find it risky at all before you went out with it? I personally didn't find it risky. I'm sure there are other people that found it risky, but at the end of the day, one of our core values is that we want to embrace diversity in everything we do. We want everyone to feel welcomed, not just gender differences, but sexual orientation, political differences, age, economic differences. If we don't embrace diversity and have everyone feel welcomed and have everyone have a voice, then how can we serve our members really well? Nick Hubermanis, MD, PhD this was one area where we thought we could provide the truth. We have a core value that we call getting to the truth so you can make the best decisions.

And to us, it was a matter of looking at the data, seeing what it really meant versus reality, communicating that more broadly as a motivating factor to get more people involved. I have a wife and five children, four of which are daughters, and I'm absolutely a girl dad. And I see what they're capable of achieving as they've become educated in financial services and how they've used SoFi to actually help them with investing

and help them make other choices. So the more we can bring along all different demographics, the better we will be in accomplishing our overall mission. To give you a bigger head, but I was really stoked when you joined SoFi because I think that you bring this innovation to the financial services space that was really lacking. And I am the biggest cheerleader of that.

So how do you think about balancing innovation and tech, but also profit? SoFi is not a charity, obviously. One of the things that was interesting when I was looking at the company is it was just in loans when I was looking at it. And I was really worried about the accounting. I was worried about the quality of the balance sheet just because the management team had basically been pushed out of the company. And so I didn't know what I was getting into. And as I dug into all the risks, there was no way to be sure. There's only so much information you can have. And I remember very distinctly getting on a plane

from San Francisco back to New York for Twitter's Global Leadership Group meeting and I had to make a decision on whether I was leaving by the time I landed. And I was talking to Kristen and they said, last call for boarding. And I'm trying to talk through all the things with her and she says, well, what could go wrong? And I told her and she said, well call for boarding. And I'm trying to talk through all the things with her. And she says, well, what could go wrong? And I told her, and she said, well,

what would you do then? I'm like, I do this. What else could go wrong? This could go wrong. What would you do then? I would do this. And as I started to play out all these really bad scenarios, I realized there's so many degrees of freedom in financial services to make money. There's so many different ways to innovate your way out and iterate your way out. At Twitter, if our audience wasn't growing, we couldn't charge more for the ads. It was a marketplace. If our audience was growing, but the pricing on ads were going down, it was like gravity. You couldn't fight it. And it's very defined way, at least the business model when we were there, and we should have added subscriptions, a bunch of other things

that were planned that didn't happen after I left. But this business, the functional service industry, it has infinite permutations of product and pricing and segmentation. And if you make it digital, it's even more so. One of the challenges with most internet companies or mobile companies or social media companies is they actually build the consumer experience first, and then they try to build the financial business and the financial model. In financial services, the product is the financial model. And so there's infinite number of permutations of product and pricing. And that's one of the things I love about it. So to your point about how do we balance both investing in technology and profit, we've made a commitment that we're going to invest 70% of all incremental revenue back in

the business and drop 30% of incremental revenue to the profit line, which will be a leading indicator that we can get the 30% EBITDA margins over time and 20% gap in that income margins over time. And that's the path we've been on. We did meaningfully invest back in 2018 and 19 and 20. And since then, we've been balancing growth versus profitability really consistently over the last three years. So we'll be gap profitable. That's our plan by the fourth quarter. We're on track.

Wonderful. Kristen, MVP. Yeah, no, she's, we met when we were 12 years old and got married in 1992 and have five children. And she's obviously my wife and someone I care incredibly about and love very much, but also my best friend and my best advisor. Oh, you too. And she gets a final say, I assume. Well, it's funny. We talked earlier about faces of finance and how women already control spending in the United States. So I call her the CEO, but she's also the CFO. So she's dual-headed. Yeah, she is. So she's the CFO of the Noto household. She deals with the finances at home?

She is the CFO of the Noto household. That's exactly right. Before I came to SoFi, I actually had to go and figure out where our money was and how to get it out. But now I have my own SoFi account. Look at you, big boy. I've become independent in my discretionary spending. Very nice. And you still called it Twitter. Are you ever going to call it X? I boycott it. I'm always going to call it Twitter too. I don't really have an emotional reason for calling it Twitter. Just have it. I actually think, and this will sound so contrarian and I'll get abused for it. I actually think rebranding it as much as it hurts personally having been there, but that they couldn't figure it out to fix it. I actually think it's one of the

ways you have to be willing to break it to fix it. I went to Twitter because it had the best content in the world and the content was for free. There's no better content in the world and they pay nothing for it. Even when we did live NFL football games, it was a revenue split with a minimum guarantee. I think we're the only company ever to get media rights that didn't write a check day one. Now we had a minimum guarantee and they would have gotten a check, but it's an incredible platform. The challenge is the product's too hard for mass market to use. And I've talked about this at length other times. And we have a path to build a killer experience that would make it accessible for the mass market. There's a book that Jeffrey Moore wrote that I used to learn

about why the first wave of the internet failed. And it's called Crossing the Chasm, which is about building a product that appeals to the early adopters and technology enthusiasts. Those people will run over coals to use a product if it's not ready. Think about the cell phone, in 1990, it was super big. The battery only lasted 10 seconds. You couldn't call anybody really at all. But then by the late 90s and 2000s, the battery lasted 24 hours. You can call anybody. It was cheap and easy to use. And that's when it got above 25% household penetration, which I define as the mass market. Twitter's never gotten above 25% household penetration.

It's got a brand that's mass market, but the product itself, mass market doesn't use the product. So anyway, I've always fundamentally believed you have to come up with a killer experience that makes it accessible for the mass market, easy to use to get that content. Because if I say, hey, go watch the NFL on Twitter and you open up Twitter, you won't see the NFL. If I say, go watch Money Rehab on Twitter, you go to Twitter, it's not there. You got to figure out how to write some language of that and hashtags to get there. So that's not mass market capabilities. So I always believed you need these killer

experiences to get people to cross the chasm to be able to use it. And the rebranding of X basically says, screw anything that's ever been done here before. It's a new company. There are new rules. There are no rules. We have the best content in the world. It's for free, largely still. So how do we actually deliver a mass market product? Well, let's start by saying anything in the past no longer matters. Now that hurts for anyone that built the company and I was there and I'm very passionate about it, but I actually think it's very smart. Elon has also wanted to go into the payment space. What do you think about that? I'd say bring it on. I want to fight everybody. I love to compete. I love people investing in our sector. It just means we're going to win more. This is going to be a winner takes most category. And I don't think anyone

can catch us unless we trip or hurt ourselves or poorly execute. It's hard to get to where we are. And I don't think he can get there, but I hope he dies trying. There's no greater victory than going against the best in the world, kicking their ass, and then being able to shake their hand and say, that was fun. Now, it may not have been fun for them because they're not working away for the victory, but just competing to me is fun. But beating the best in the world, there's no better accomplishment than that and no better challenge. John Feinstein, who's a great, great writer, wrote a book called The Civil War, Army versus Navy, about the great rivalry. And I happened to write a letter

to one of the captains of the Army football team that I coached after I played. We had a quote in our locker room that we all hit and they still do today. I lay me down to bleed a while, but I'll rise to fight with you again. And I was at that point in my career where I was like early 30s and you start to kind of hit a wall and you need new challenges. And I said, Joel, the hard thing isn't getting up to fight the battle. The hard thing is getting up with no battle to fight. So I get chills when I say that. And I hope to God he comes after us with every ounce of energy and money he has because no victory would be greater. So he's going to battle on one battlefield, Zach, and on the other, Noda?

he's going to battle on one battlefield, Zach, and on the other, Noda? I do not engage in physical contact any longer. Mental battles, business acumen, strategic battles, I'm all for it. Physical, I'm out of the game. I would win in any physical battle, but I have to say that. My money's on you. Thank you. We end our episodes with a tip listeners can take straight to the bank. I know you have so many, but what's one piece of money advice or info listeners should have today? It could be anything, how to pay down debt, how to start investing, what to remember about making a budget, anything. So here's the key formula. I want to make it really simple. As soon as you can start investing, start investing. The key to getting to financial independence

is actually having enough money left over after you've paid your bills and paid yourself, which means you have to have savings. My mom used to tell us we had to have two years of income in savings for a rainy day. But as quick as you possibly can, get to the point that you have money left over that you can invest. It could literally be $5 a week. The sooner you start investing, the sooner you'll get on a path to financial independence. The effects of compounding, investing $5 over 50 years versus $5 over 40 years is a massive difference. So if you want to achieve financial independence, lower your cost of debt, lower your cost of living, increase how much you make in your job, but do what you need to do so the formula results with some money left over, even if it's $5 or $10

a week to be able to invest. The sooner you start investing and the sooner you get your budget so you can invest more, the sooner you'll get the financial independence. People will say, well, really all you're doing is recommending investing. No, it's hard to get to have money left over. You have to actually get all those things right. You have to get your debt right, your mortgage right, your student loans right, your income right, how much you spend during the week right, how much you save, who you're doing business with. All those things have to be decisions that result with money left over so you can invest. And if you can invest, you're going to be better off than you ever could imagine by getting a new job or cutting some expenses.

Investing is the key. Should you listen to Money Rehab? Because yes, you're never as young as you are today. That's exactly right. Money Rehab is a production of Money News Network. I'm your host, Nicole Lappin. Money Rehab's executive producer is Morgan Lavoie. Our researcher is Emily Holmes. Do you need some Money Rehab? And let's be honest, we all do. So email us your money questions, moneyrehab at moneynewsnetwork.com to potentially have your questions answered on the show or even have a one-on-one intervention with me. And follow us on Instagram at Money News and TikTok

at Money News Network for exclusive video content. And lastly, thank you. No, seriously, thank you. Thank you for listening and for investing in yourself, which is the most important investment you can make.