On this episode of "The CEO Series," M1 founder and CEO Brian Barnes shares how his passion for investing led to the creation of this powerful personal finance app.
We've been visiting the headquarters of some of the most innovative and imaginative leaders in business for The CEO Series, learning what it takes to launch and grow a thriving brand. For this episode, our crew went to the office of M1, a fintech platform that bills itself as "the finance super app." The powerful online investing and banking platform has raised $315 million at a valuation of about $1.5 billion and manages about $8 billion for half a million customers. I sat down with founder and CEO Brian Barnes to learn all about the platform, how it was created, and his advice to founders on running a company built to last.
We've been visiting the headquarters of some of the most innovative and imaginative leaders in business for The CEO Series, learning what it takes to launch and grow a thriving brand. For this episode, our crew went to the office of M1, a fintech platform that bills itself as "the finance super app." The powerful online investing and banking platform has raised $315 million at a valuation of about $1.5 billion and manages about $8 billion for half a million customers. I sat down with founder and CEO Brian Barnes to learn all about the platform, how it was created, and his advice to founders on running a company built to last.
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00:00 (upbeat music)
00:02 We are at the office of M1.
00:07 They're an online investment and banking platform
00:10 and they've raised $315 million
00:14 at a valuation of about $1.5 billion.
00:18 We're talking to their founder and CEO, Brian Barnes,
00:21 about the platform that they've built
00:23 and all things FinTech.
00:25 Let's go talk to Brian.
00:28 CEOs carry a lot of weight.
00:30 They manage businesses, people,
00:32 expectations of stakeholders, and so much more.
00:35 I wanna hear their story.
00:37 How is it testifying in front of Congress?
00:39 What are some things that you look out for
00:40 when evaluating a company?
00:42 Rock and roll, yeah, I wanna see.
00:44 I'm on a journey to learn
00:45 and get to know top business leaders.
00:47 I think everybody thinks that they wanna be a CEO.
00:50 I didn't get into this to be a CEO.
00:52 What are the risks?
00:53 Oh!
00:54 I want you to hold this under your tongue.
00:55 And how do we de-risk that?
00:56 I'm Will Selvey.
00:57 Thank you for your business.
00:59 And this is the CEO Series.
01:01 All right, we are with the CEO and founder of M1,
01:04 Brian Barnes.
01:05 Brian, thanks for being here.
01:06 - Thanks for having me.
01:07 - Yeah, absolutely.
01:08 So tell us what M1 is, how you started it.
01:10 Give us the whole spiel.
01:11 - Yeah, so M1, we're a personal finance platform.
01:13 We combine digital brokerage,
01:15 and so that's investing and borrowing on margin,
01:17 and digital banking.
01:18 And so that's a deposit account, payment cards,
01:20 and different ways to borrow money.
01:22 Started the company about eight and a half years ago.
01:24 We now manage about $8 billion on the platform
01:26 for half a million customers.
01:28 And we are really just trying to create
01:30 the best possible way for someone to manage their finances.
01:32 And so bring a lot of personalization,
01:34 automation, and customization into the experience.
01:36 - So you're competing with Schwab,
01:38 TD Ameritrade, E-Trade, all those types.
01:41 - Some big companies out there, yes, for sure.
01:42 - But can you tell me the inception of it?
01:44 I was reading that you were an avid fan of investing.
01:46 You were interested in finance at an early age.
01:48 Tell us about the inception of the company
01:50 and what kind of spawned this idea.
01:51 - I was fortunate to be introduced to finance
01:53 at a pretty young age.
01:54 And so I was immediately hooked.
01:56 I love the idea of investing,
01:57 of trying to find out what a company's worth,
02:00 how it's operating in a complex world.
02:02 And then you're making a high-convection bet behind it.
02:04 And if you're right, you make money.
02:05 If you're wrong, you lose money.
02:06 And so, you know, some people like sports gambling.
02:08 For me, it was, you know, what is a company worth
02:09 over the next five, 10 years?
02:10 And you're making an investment behind that.
02:13 - Okay, so you mentioned that when you started the company
02:16 in mid-2015.
02:18 - That's correct.
02:19 - Okay, and then come five years later, we hit 2020.
02:25 You're dealing with COVID.
02:27 And from that, you're dealing with an influx of cash
02:29 in the market.
02:31 There's the meme stock craze.
02:33 There's geopolitical tension.
02:34 Now we have an election year coming up.
02:35 So you've been running a company for the past four years
02:37 that have been, it's been interesting times for you.
02:41 So can you talk about that experience
02:43 and how you've managed it as the CEO?
02:46 - We want to create a financial institution
02:47 that lasts for decades.
02:49 And, you know, there's ones out there
02:50 that have lasted for centuries.
02:52 And if you have been around for that period of time,
02:55 it's unquestionable that you're going to have
02:56 these massive disruptions in the overall market.
02:59 And so, you know, there is an aspect
03:01 of any financial institution that's enduring
03:03 is going to have many of these over their life cycle.
03:05 And so we have been trying to build the organization
03:07 so that we can survive in any macro environment
03:10 and not just tailor-made for one.
03:14 - You don't seem affected by the pressure.
03:16 - I think I am calm on the outside.
03:19 (both laughing)
03:20 No, the entrepreneurship quote I love is,
03:23 "The highs are high, the lows are low,
03:24 and they're 10 minutes apart."
03:25 And there are times where you think
03:27 you're taking over the world.
03:28 You're gonna be on cover of magazines and all this stuff.
03:31 - You're gonna be on the CEO series.
03:33 - Hey, you know, if you make it to a great degree,
03:36 that's where you end up.
03:37 And then there are times when you're like,
03:39 "What the hell am I doing?
03:40 You know, I took all this money.
03:43 I convinced people to quit their jobs and join me.
03:45 I'm competing against the Schwab's of the world.
03:47 Like, man, they're gonna outspend me."
03:50 And so you have all of those fluctuations.
03:53 And I think the stewing in that does nothing.
03:57 And so there is an aspect of just maintaining your emotions
03:59 and saying, "How can you actually
04:02 allocate your time productively?"
04:03 is sort of how I orient myself.
04:05 And so trying not to get wrapped up in the highs and lows,
04:08 I think is a, at least it's been a good attribute
04:11 that I've had as I've built the organization.
04:14 - So I'll start it off.
04:15 Hopefully it's a good shot.
04:17 We'll see.
04:18 Oh, it's not a good shot.
04:19 Oh no, on camera.
04:20 - Before the cameras were rolling,
04:22 it was a lot better.
04:23 - It's okay.
04:24 - Yeah, you're nervous on camera.
04:25 - Yes or no, you've done a golf meeting before.
04:29 - I have not, no.
04:31 I mean, I played golf with colleagues and peers.
04:36 - Colleagues and done that kind of stuff.
04:37 But this is truthfully first time I'm in this simulator room.
04:41 - You know, this is like the old way of doing business,
04:45 but in a new way.
04:47 - It is.
04:47 We're marching forward and you know.
04:49 - Yeah, you got to do a business meeting in here
04:52 in the future.
04:53 - I agree.
04:54 I think we will put a lot of,
04:56 we'll bring like contract negotiations
04:59 and it'll be deals will be settled by long drive contests.
05:03 - How has your role changed through the beginning of M1
05:06 to now you had mentioned that you had a short period
05:09 of time where you raised a small amount of money
05:12 and then there was an even shorter period of time
05:14 where you raised like $190 million.
05:17 - The way I describe it,
05:18 I feel like a founder more than a CEO of a tech company
05:20 is you're both the most senior
05:22 and most junior person at the company
05:23 where you get to set direction and strategy
05:26 and things like that.
05:26 And then any area where there is not someone dedicated
05:30 for that role, it's on you to fill the gaps.
05:32 And so, you know, I would say I like played CEO
05:35 from 8 a.m. to 11 a.m.
05:38 And then I played most junior analysts
05:40 from 11 a.m. to midnight every night.
05:42 And, you know, just like running around
05:44 and trying to add value where you can.
05:46 And then you do move from a generalist jack of all trades
05:51 to a manager of people, to a manager of managers.
05:54 And then you, you know, try to scale
05:56 over that period of time.
05:57 And, you know, there is no expectation of,
05:59 oh, you can put things on pause
06:01 while you go figure out how to scale your team.
06:03 It's, no, you gotta scale your team
06:04 and build the product and, you know, acquire customers.
06:06 And so, you know, there's a little bit of chaos
06:09 but you have to sort of thrive in the chaos.
06:11 - And then talk about your mom
06:12 'cause she was the CEO of Pepsi and Sara Lee.
06:17 I mean, that's great person to learn from.
06:20 - My mom was one of seven sisters.
06:22 They all, you know, shared a bedroom.
06:24 They were a Polish immigrant family in Chicago
06:27 and her father was a factory worker.
06:29 And so I think she always had a insanely healthy respect
06:33 for truthfully the people that did the actual work.
06:36 And she, you know, even at Pepsi
06:37 it was the right side up company
06:38 where it wasn't, you know, to form,
06:41 to do the things, to support the leadership at the top.
06:43 But it was really the people who bottled the colas
06:48 that delivered the trucks
06:49 and just like a healthy respect for all the things
06:51 that made the organization run.
06:53 And she was incredibly adamant
06:57 about all people deserve an insane amount of respect.
07:00 They know their job better than you.
07:02 And the leader's job is to set an example
07:05 for what you want the values across the company to be.
07:09 And so, you know, if you could like write down
07:11 all the positive attributes of values or leaderships
07:14 that you would want instilled throughout the company,
07:16 there was an expectation of if you're the leader
07:17 you better exhibit those things.
07:19 And so that's one of the things
07:20 that I've taken from her the most.
07:21 - So you mentioned that you started the company in 2015
07:25 and, you know, we talked on the phone earlier
07:27 and your mom passed in 2017.
07:29 You know, what was that like starting a company?
07:34 I'm sure you leaned on her in that time period
07:37 for advice, for conversation.
07:39 Can you talk about that experience and how it shaped you
07:42 and how it probably shapes you today?
07:44 - Yes, I mean, it was incredibly tough, right?
07:46 You know, my mom was, you know,
07:48 one of the people I loved most in the world.
07:50 I had a fantastic relationship with her.
07:52 And to your point, someone who I looked for guidance
07:54 and perspective on starting this company.
07:56 And so, you know, the first year and a half
07:59 you run into a ton of problems.
08:01 You think they're bigger at the time.
08:02 You know, I would frequently call her
08:04 and ask for guidance and support.
08:05 And, you know, she was my biggest advocate and supporter
08:09 and, you know, helping me in any way that she could.
08:11 And so it was something that you leaned on.
08:14 You learn that it doesn't matter how you plan your life.
08:18 Like it's going to throw you curve balls, right?
08:21 You know, really both, you know,
08:25 the wide spectrum of catastrophic things can happen,
08:27 wonderful things can happen and everything in between.
08:29 And you do have to, you know, respond and adapt
08:32 and keep moving forward.
08:33 I think I've led incredible life as a result
08:36 of some of the success that she had.
08:37 She instilled a ton of values in myself and my siblings
08:42 that we pride ourselves on.
08:43 And it was really, you know,
08:45 there's a lot of motivation of doing right by her
08:48 in some of the things that I try to do across at M1.
08:52 - Do you think the world that we live in
08:54 where it's kind of, we like things fast, we like it now,
08:58 hence the meme stock craze.
08:59 Do you think that's a good combination
09:01 with the world of finance and investing?
09:04 - I do think there is too much focus on short-termism
09:08 and immediate gratification.
09:10 At least at M1, we use the analogy of physical health a lot.
09:15 We talk about wanting to improve someone's
09:17 financial wellbeing or financial health,
09:20 very similar to physical health.
09:22 You don't get fat by eating something bad once.
09:24 You don't get fit by exercising once.
09:26 You get the long-term outcomes
09:29 by doing the right things consistently
09:32 over incredibly long periods of time.
09:34 - Give us something we should be confident about
09:37 in your opinion with regards to the market,
09:39 with regards to the financial situation of our country.
09:41 I think there's a little uncertainty.
09:42 There's a little anxiety around it.
09:44 Again, we mentioned this earlier,
09:45 there's an election year coming up.
09:46 Do you have words of encouragement from your perspective?
09:50 - Yes, and it sort of goes back
09:52 to that zoom out perspective
09:53 that life today is just infinitely better
09:59 than any period of time.
10:01 If you could teleport to any period of time,
10:04 if you could be born at any point in time,
10:07 I would put a high degree of confidence
10:09 that 2024 is the best year in history,
10:11 despite all the turmoil that we get on a day-to-day basis.
10:14 That you go back 100 years and life's not that good.
10:19 - You don't want to get a fever.
10:20 - No, exactly, yeah.
10:22 Any health issue, I mean,
10:24 I think we are going to be entering a world
10:28 of material abundance over the next 10, 20, 30 years.
10:32 I think standards of living are going to massively increase.
10:35 I think health is going to increase at a rapid clip.
10:38 So I am insanely optimistic.
10:40 I think the news--
10:41 - They have an incentive.
10:43 - They have an incentive to,
10:45 negativity stings more than slow positivity.
10:48 They're incentivized to tell you all the things
10:50 that are wrong with the world now,
10:52 not what is going right over long periods of time.
10:55 - Well, Brian, I appreciate you taking the time with us.
10:58 I really think you've built something great
11:00 and I will sign up tonight.
11:01 So appreciate your time.
11:02 - Super fun talking to you.
11:03 - When I always mess it up is the second one.
11:10 And then the third and the fourth,
11:11 and the company and all the stuff that he provides.
11:15 I always say I'll be fast.
11:19 I'm not.
11:21 - I might flip the script,
11:21 ask you about how you started your--
11:23 - Go for it.
11:25 My mom says I swear too much.
11:27 Don't put that in the edit, Colton.
11:29 I swear, I say, "Have fun."
11:33 - Do we even need a second take?
11:34 Yeah, we do.