In the latest episode of 'The Next Next,' host Jason Jacobs interviews Reagan Bonlie, the co-founder and CEO of Nudge Money, a financial wellness platform. Reagan discusses his extensive career in financial services, including a decade at JPMorgan Chase, and the transition to founding Nudge Money. While initially anticipating an AI-centric discussion, the conversation delves into Nudge Money's strategy, which includes leveraging AI mainly for product development and code review. The company focuses on assisting credit unions with personalized financial recommendations based on member data, addressing both financial wellness and growth. Reagan emphasizes his passion for community development, particularly in underserved areas, which aligns with Nudge's mission. The discussion also explores broader themes such as the cultural and regulatory challenges credit unions face, the role of AI in the finance sector, and Reagan's balanced approach to leveraging technology while maintaining community-focused values. The interview concludes by touching on Nudge Money's future goals, funding strategies, and the importance of relational business practices.
Balancing Innovation and Community: Reagan Bonlie on Nudge Money In this episode of The Next Next, Jason Jacobs speaks with Reagan Bonlie, co-founder and CEO of Nudge Money. They discuss how Nudge Money, a financial wellness platform, uses AI to help credit unions better understand and serve their members, particularly focusing on community development and personalized financial advice. Reagan shares insights from his extensive background at JPMorgan Chase and the journey of pivoting Nudge Money's business model. They also delve into the challenges and opportunities in integrating AI in the conservative and highly regulated credit union sector, emphasizing that the technology must add real value without disrupting the human-centric mission of credit unions.
00:00 Introduction to Reagan Bonlie and Nudge Money
00:26 The Role of AI in Nudge Money
00:52 Challenges and Opportunities with Credit Unions
01:46 Reagan's Passion for Community Development
02:54 Introduction to The Next Next Show
03:34 Reagan's Journey from JPMorgan to Nudge Money
04:17 Nudge Money's Mission and Approach
04:58 Reagan's Entrepreneurial Background
05:47 The Genesis of Nudge Money
08:23 Challenges in the Financial Wellness Space
09:44 Pivoting to Work with Credit Unions
13:07 Understanding Credit Union Needs
17:43 Building and Iterating the Product
25:03 Leveraging AI in Product Development
27:12 Navigating Industry Challenges and Opportunities
28:56 Balancing Compliance and Innovation
30:25 Leveraging AI for Efficiency
32:20 Market Perceptions and Realities
36:42 Strategic Growth and Community Impact
42:11 Funding and Capitalization Strategies
45:28 Long-Term Vision and Success Metrics
49:31 Final Thoughts and Contact Information
Jason Jacobs: Today on the Next Next, our guest is Reagan Bonlie, co founder and CEO of Nudge Money.
Nudge Money is a financial wellness platform designed to assist individuals in achieving their financial goals. Prior to founding Nudge, Reagan amassed over a decade of experience at JPMorgan Chase, where he held various roles, including financial advisor in Manhattan and manager of a multi billion dollar investment team in upstate New York.
Now, I thought this was going to be an AI discussion, and while it's true, That nudge money is using AI a bit internally as it relates to building the product, specifically as it relates to code review. , and they are incorporating it in some ways into the end product as well that they're, offering to their customers, these big credit unions, but I was surprised.
The credit unions, they're non profits, and they also tend to be more conservative, almost technology laggards. , and so There's kind of the cultural mindset where they aren't necessarily looking for the tippy tip of the spear, but also there's the regulatory and compliance landscape as well, that it sounds like slows down, , incorporating technology even when the technology is, is ready.
So it was a really interesting discussion talking to Reagan about their approach, how they kind of pivoted from, , working with end customers directly to working with these credit unions. And we talk about the credit unions and how they think and how they operate and what they want out of technology , and out of vendors , and also what they want for the good of, of their customers.
One other angle I thought was fascinating is that Reagan is clearly very passionate about community development, especially in underserved communities And it really shows, , in terms of, , what's important to him, but also with the mission of Nudge Money and how they're going about building it. So, the right investors, for example, aren't necessarily going to be the ones who are Blitzscale, you know, capitalism at all costs, , tippy tip of the technology spear, automate everything, and it's much more around, , community development, one brick at a time, in it for the long haul, mission first, , and just thinking about how that human element will intersect with it.
The technology and automation that is and will be taking place is just a really interesting intersection and one that I think deserves a lot more attention. At any rate, I really appreciated Reagan making the time and I hope you enjoy this one. But before we get started, .
I'm Jason Jacobs, and this is The Next Next, it's not really a show. It's more of a learning journey to explore how founders can build ambitious companies while being present for family and not compromising flexibility and control, and also how emerging AI tools can assist with that. Each week, we bring on guests who are at the tip of the spear on redefining how ambitious companies get built.
And selfishly, the goal is for this to help me better understand how to do that myself. While bringing all of you along for the ride. Not sure where this is going to go, but it's going to be fun.
Okay, Reagan Bonlie, welcome to the show.
Reagan Bonlie: Thanks for having me.
Jason Jacobs: Thanks for coming. We got introduced, I think, through Ben Carcio, right?
Reagan Bonlie: That's right. Yeah.
Jason Jacobs: Yeah and you had asked for some advice, and we had a nice chat, and what you were doing seemed pretty interesting and relevant to the stuff I'm exploring, so here we are.
Reagan Bonlie: I was excited for the conversation. You are taking a very interesting path to fatherhood and building companies, and I'm excited to continue the conversation.
Jason Jacobs: I am as well. Yeah, I would have been excited to continue without the microphones, but if we're gonna have a great conversation, we might as well share it in case other people get value from it as well.
Reagan Bonlie: Sounds great.
Jason Jacobs: Great. I'll take it from the top. What's nudge money?
Reagan Bonlie: So we help credit unions uncover and convert growth opportunities and help them achieve their financial wellness mission. We do that by helping them analyze data from their members and then reach out to them in a very personalized way. And what you find is that the vast majority of financial institutions, about 9, 000 in the country, they struggle with that process, understanding their customer and reaching out to them in a personalized fashion.
And it's what people are asking for. They want to they want, they don't want the cookie cutter approach to having their bank reach out to them with product recommendations. They actually want some guidance along the way, and that's what we solve for.
Jason Jacobs: Huh. Yeah, and before we get into anything nudge money specific, one thing I noticed is that, you worked in big banks for a long time, right?
Reagan Bonlie: That's right, 12
Jason Jacobs: so is this your first time doing something that's not a big bank?
Reagan Bonlie: No I blame it on my father. He helped me sell mistletoe at the age of five door to door. And that transpired into auto repair businesses and air conditioning companies, which I exited. And while I was at J. P. Morgan, I, Opened a luxury beauty supply business, which I scaled to half a million of revenue, gave that to my parents so they could retire.
So I've been constantly doing different things. This is the first scalable SaaS company that's aligned with my passions and the most expertise that I have. Yeah been around the block, but first time specifically in sas.
Jason Jacobs: So did your co Now, did you have the idea for nudge money before you left J. P. Morgan?
Reagan Bonlie: I did. I did. Yes. So I have always had the idea that most of my time there was in wealth management. And I realized that the right recommendation at the right time can really help someone take the next best step in their financial journey. And I did that for hundreds, thousands of people over my time there.
And I realized that the data is there and people just need the right message. And there's a platform for that. We just need to make it happen. And, it took quite a while after I left the company to realize, Okay, it's not in an app. It's not in a chatbot. We can actually do that by helping marketing teams improve the way they communicate.
The idea's always been there. But, really putting that in practice and learning more about the industry came after.
Jason Jacobs: So was the reason that you said your goodbyes at J. P. Morgan because you had this idea and wanted to pursue it full time?
Reagan Bonlie: Not entirely. In fact, at that time, my, my father, he had, he's had some heart issues for quite a while, so I realized that's a good opportunity for me to spend more time with my family and then also work on nudge at that time. So it was a little bit of a dual purpose and, at the end of the day, got to help my parents, help them grow their business a little bit and then really focus on nudge money full time after that.
Jason Jacobs: Got it. And just to set the stage, what was the timing around that? So when did you leave J. P. Morgan and then at what point did it switch from, a side exploration as you're being caregiver to something you were actually going to take a run at?
Reagan Bonlie: Right as I left, I was deep in the weeds helping my parents with health as well as helping them with their business because there was that business that I started the luxury shampoos that There needed some work in that company. So I'm sitting there, it was mostly operationalized, but I had to do a little bit of work there and I got naturally got antsy, there was where I'm working 60, 70 hours a week for many years and, obviously have these ideas bubbling. It took probably two, three months for me to really start formalizing the MVP and product idea and building up the team. But it wasn't too long after I left
Jason Jacobs: Huh, and when was that?
Reagan Bonlie: June June of 2022.
Jason Jacobs: Got it. And so what was the initial germ of an idea and maybe take us through some of the twists and turns that that have come from that initial germ?
Reagan Bonlie: Yeah, interesting. So I, the, back to my point about the right message at the right time. Part of that is having the right data and having the right platform to communicate that. And we first thought, okay, we need to gather the data to understand more about the member or the user. And we found that to be quite a journey.
So we engaged, we had thousands of different people that would test our product through an application. So they would come through and put various different details, ultimately connect their accounts through Plaid and what have you. And we realized that was quite a long journey of communicating and ultimately understanding the full picture.
Then we also learned that apps in general are a competitive space. Many people don't have an app. Generally, there's about 90 percent plus attrition in the first couple of days from downloading an app. So you're more than likely going to delete that app in the first few days. So we realize, okay, that's a, it's a difficult business to be in.
The data will be challenging. And we realized through our conversations with credit unions that We can connect to their data directly through their core processing systems and get pretty much everything that we need to better understand them from what products they need, what financial wellness challenges they're going through, and then how we can leverage behavioral science to create a powerful message.
So it took a little while for us to, MVP that app and test it out in the market with thousands of individuals. To then realize that, okay there's better ways to collect the data and then communicate that as opposed to just an application.
Jason Jacobs: So I'm going to, I'm going to try a simplified explanation of what I think you're doing just as a way of testing whether I think what I'm hearing is that you, as a financial advisor, you served a lot of clients, one by one and found that consistently there were parallels in the type of pain they had and the types of answers that could help fill in gaps to give them better financial health.
You thought that by almost like what Uber is to private cars, that if you did that in a more. Automated way you could serve more people and get more leverage around the same message. And then, unlike Wealth Manager, you need to find other ways to make money, but from a much bigger base of clients.
Reagan Bonlie: Yeah, that's right. And it doesn't need to be only financial wellness focus. Obviously helping people make decisions on their finances moves them in the right direction. But often we find that the people that are communicating these products and these recommendations for a new savings account or CD or a personal loan, And they're doing it in the wrong way, which is, try our 4 percent promo offer, but most people they can't understand if 4 percent is good or bad, if how that impacts their financial goals, is that going to help them achieve something better, as opposed to where we can look through the data and say, okay someone's car broke down a couple of times in the past few months.
Their other data points match to say they probably need a new car and by the way, they have some children because we've seen where they're shopping. We can say that, how would you feel if you can get from point A to B in a more reliable car for your family? So really changing the perspective and putting their goals in mind as opposed to just pushing a product with interest rates that are not going to resonate with people.
Jason Jacobs: And then once you started where I just said, and then you it sounds like you uncovered that the going direct to consumer route was possible, but. Crowded and hard for a bunch of competitive and behavior change reasons but if they're already going to these credit unions that they trust that you could arm the credit unions to essentially do what you initially were thinking of doing direct to consumer, is that right?
Reagan Bonlie: Yeah, that's right. And we can help the financial institution, the credit union at the same time because they need the help with understanding their members more, more and the marketing help so we can help them with both of those things and then help their members. That's all aligned.
It's a win, win scenario. Obviously there's a lot to unpack in that entire process but yeah. That's essentially right.
Jason Jacobs: And what have been the biggest inhibitors to consumers having a good handle? on this stuff historically? And then the same question in terms of what's been inhibiting these big credit unions with lots of resource from from just solving the consumer's problem like you're trying to do.
Reagan Bonlie: There's a lot of reasons why consumers may be having their challenges, whether it's they need to build an emergency fund. Vast majority of Americans don't even have 400 set aside for an emergency paying down debt. It's, may seem intuitive to some people, but it's. How to navigate that process and which debts to pay off first.
That, that can be challenging. How to negotiate with creditors. There's a number of various different financial goals that you want to achieve from buying a car to a home. And that education process is, where are you going to get it? You can walk into a credit union and many people don't understand that.
There's some non profit organizations that will help but often times people are there without the support. Working through a credit union helps us help their members, essentially. And the inhibitors for a credit union to actually do that is that they have a lot. to accomplish. They have a long list of things to keep up with the market.
So growth and their mission, which is financial wellness, are the two priority, two priorities for most credit unions. And it's a lot, especially for the ones that have limited resources or budgets. So they have to fix their technology stack. They have to make a competitive digital experience. They have to improve their sales process their marketing along with a long a laundry list of other challenges.
So where we can come in and simplify a lot of that, the big challenges like data and marketing, that helps them really accomplish more. And. Overcome many of those inhibitors that they've experienced in the past.
Jason Jacobs: Now, are these credit unions for profit institutions?
Reagan Bonlie: No, they're non profit. Yeah they're non profit. So the difference is they work similar to a bank in the sense that they have their products and services and their team and often in the branches. But the additional revenues goes towards lowering the cost of fees. Or interest on various different products, providing more interest on savings and CDs and things like that.
And then all of that additional revenue stays in the membership. They're owned by the members as opposed to shareholders. So that it's mission alignment between our organization and theirs.
Jason Jacobs: It and from an incentive standpoint, what's the pitch to the credit union in terms of why they should. Incorporate this. I get. Maybe the answer is mission. But I'm sure there's a lot of things that could help the mission. And so figuring out which things make it over the line and how to prioritize them, I'm sure is a challenge.
So how do you make sure that nudge money is at the top of the list?
Reagan Bonlie: It's so they're, oftentimes their number one objective is growth. They do need to grow and stay competitive, and it's not only for their credit union, it's for the whole movement, the credit union movement, which serves 150 million, 140 million Americans just in the United States, let alone other countries.
So the, there's a lot of support in the credit union and the credit union community to help those particularly small credit unions grow. So when we can uncover those opportunities and help tee up the marketing to convert That's quite a powerful message for them. And then at the same time, if we could do that in a way that drives financial wellness, that helps them achieve their top two priorities.
But there's a lot of ancillary benefits to that, which is simply understanding your member. Who, who's your average customer? That can help you improve your branding or your messaging to speak to who you need to be talking to. And one of the challenges that many credit unions have is that they're attracting an an aging population where they need to attract the younger population.
And there's going to be trillions of dollars that are transferred from older populations to younger populations here very soon. And if credit unions are not appeasing to the, Gen Z population, then they could be missing the boat there. So there's growth, financial wellness, but then also just a general understanding of how to operate your business as a credit union.
Jason Jacobs: And in the earliest days, how did you balance building versus customer development? And how did you get confidence that that they would meet? In the middle. And then similarly, there's so many different things you could be solving for these customers. How did you think about prioritizing? And also, how did you think about staging?
Reagan Bonlie: The last thing you said was staging?
Jason Jacobs: Yeah so here are the things that should be on the list. And then here's the order in which we're going to do them.
Reagan Bonlie: Ah it was a lot of customer discovery. So we had a lot of conversations, literally hundreds. Of conversations with executives and, ancillary channels and consultants, people that really understood the space. And then we would build towards what we're learning. And sometimes it took us to put it live in a credit union.
And then we might not even get feedback for three months, but hopping on the phone with them and asking them poignant questions, because we've understood their business by that point, helped us uncover, okay this is something that is really standing out. And by the way, we've heard it from three other credit unions.
That's what we need to prioritize. So it was it was a lot of learning individually with credit unions, but then also. In the market in general, understanding really their needs. And it took us a while, honestly, to gravitate from our big lofty mission of driving financial wellness at scale down to the really solving the burning pains today of credit unions.
And if we solve that, we help them grow. That helps us achieve our mission. And then ultimately, we can have, at scale, drive financial wellness. And that's where we're headed.
Jason Jacobs: Huh. And Scott Weller, who I think I, in touch with recently, but when he came on the show, he was talking about within five in the earliest days how they actually formalized having what did he call them to design partners, right? These these big lenders who they, they didn't take everybody.
They kind of hand picked who they thought the best partners would be not just on fancy names, but based on philosophical alignment and true interest in them. Collaboration and understanding that the zero to one phase, it's not, it's going to be messy, right? And being okay with that.
Did you formalize anything like that? Did did you dabble with a bunch of people? Were there certain firms that you really rolled up your sleeves and work closely with them? Was that more on an informal basis or did you formalize that structure in some way?
Reagan Bonlie: We did. Yeah, we had three design partners throughout the, took about a year. And one of the things that we to formalize, so yes, we formalized that, which involved integration, security white labeling our solutions to their credit union, testing, iterating. So yes, that, that took the better part of a year.
And we so happened that our three design partners were on three different core processors. So we're juggling various different integrations. But what came out of that was outstanding feedback that really drove the product roadmap and helped us integrate with solutions that gives us access to about 22, 000 different credit unions.
So now we. It can, very clearly grow and help more credit unions along the way without a six month integration process. Now we can literally go live in a couple of hours. So it's it's a lot we gained a lot of insights from that process and have streamlined our ability to go live with credit unions along the way.
Jason Jacobs: And what were the biggest learnings from that experience? And if you had to do it again, what would you do different, if anything?
Reagan Bonlie: It there was so many learnings. I think, integrations being one. That just who they're currently partnered with gives us some insight on what types of technologies they'll adopt and what types of challenges we can face. So luckily we ended up with the right partners, but identifying that earlier on could have helped us get to that point a little quicker.
Security was was a big thing in this space and I don't think that was enough. There was enough enough people verbalized. the concerns for security, but we eventually became SOC 2 compliant, and I wish we had done that a little bit earlier. I think it's just that stamp that makes a big carries some weight in our space.
One of the things that was very interesting, that took me quite a while to learn, was that Even though financial wellness is the mission for Credit Unions, growth often times takes a front seat. And that's simply because they have to grow to help more people and then stay competitive in the industry.
And that was something that we had to learn over time. So really getting on the same page with our partners as a, as it relates to their goals helped us really build a product that adds value towards Really their top two three priorities. So I'd say those are some of the bigger ones. Obviously, we've learned a lot along the way as well
Jason Jacobs: And do you feel like you've landed on a product that can serve the top two or three priorities across the landscape of potential customers or is there, is it really there's some saying if you've met one family office, you've met one family office because every family office is wildly different from from the next.
Are credit unions similar or do they have a lot in common in terms of the rhythm and how they think, their expertise, their pain points, etc.
Reagan Bonlie: I think they tend to have similar challenges in ranges of size so their assets will dictate roughly how much revenue and profitability they have so many small credit unions have the same problem, which is under half a billion of assets. And then you tend to find similarities with credit unions that have maybe half a billion to two billion and then two to 20 billion and up.
So we've built a solution that it, it adds value all the way to the top 10, but in different ways. The smaller credit unions and medium sized credit unions, we can add very robust data insights that are akin to what you would find at a top 10 bank or credit union. So we can provide them that insights and help them generate personalized marketing.
And that serves a big population. So just small and medium, that's about 4, 000, 4, 000 credit unions. And then once you get to the very top tier that they've already have a process for analyzing their data and understand their members, they're still struggling with the personalization piece. So how can we generate personalized messages at scale, incorporating behavioral science, that's something that we're not even finding at the top 10 financial institutions.
So there's certainly applications all the way to the top 10. Right now we're spending our time with small and medium. And we can help them accomplish a lot there.
Jason Jacobs: huh, and just in terms of, the way that you've gone about building product, it'd be interesting to understand just, how much your approach mirrors how you might have done it before the age of AI and where, if anywhere, AI is being leveraged as part of that process, and then same question as it relates to The offering itself and how affected you are, for example, by the underlying landscape of, the LLMs and so forth and all the change and accelerating speed and all that.
And, is that kind of a sideshow or is that very relevant for for nudge money?
Reagan Bonlie: Yeah, lots of lots of great questions there. I'll start with the, how we build the product. And then specifically in our industry, how AI is evolving. Building the product has been pretty consistent. Obviously, we have the GitHub Copilot for code reviews and things like that. But that's sped up certain components of the development process.
But it's we're still Through SOC 2 compliance, we have to maintain a structure and a process for reviewing and deploying code. So it's and we have quite a robust technology, multiple applications. So it's improved to some extent, mostly on code review. And I'm the least technical person on my team, but that's that's my, my, my best understanding of that.
Our application is a number of different technologies. We have interfaces to visualize data. We also have member facing tools to help them manage their goals and what have you. But the technology behind it is we have some very straightforward algorithms that It spit out very simple insights such as, total balance of a particular account or total number of actions on a certain financial goal or what have you.
And then we have machine learning. So analyzing various different data points to identify opportunities. And then we leverage NLP and Gen AI to create messaging and a number of different things. And that helps us. Provide a ton of value, really at the end of the day in a number of different ways.
But how that relates to the industry is that we need to be very conscious from a risk standpoint and a really a risk appetite standpoint and an integration standpoint as well. So first benefit for us is that there's a very high barrier for entry, so it's very difficult. for startups to come into our space and to have success really at all.
There's about 4, 500 credit unions. There's about 8, 000 vendors like us. That means that you have the vast majority of them that don't even have a single credit union under their belt. So now that we have several, it provides us the the platform to grow. But looking at our technology, we need to be risk conscious for our credit unions.
Many of them want to be very careful when they leverage any gen AI at all. They want to be very careful about where the data flows. And often times, the integration is not built in such a way that you can easily leverage things like AI agents. So there's a lot of opportunity. I think the industry will just Because of their speed of adoption and the way their integrations are set up, it will take some time before we even get to scalable AI agent applications in our space.
For us to be able to machine learning, genning AI just for creating messages, helps us really accomplish a lot. And then we'll obviously be on the forefront of innovation when the integration rails provide. agents in that space.
Jason Jacobs: So I'm hearing a couple of things that I just, I want to clarify. One is it sounds like you could be leveraging AI to build a lot faster if it wasn't for compliance, but you're hamstrung by compliance because in order to be stay socks sock to compliant. I think he said you can there's a bunch of things about the existing process that need to stay in place until the certification process or criteria changes.
Is that true?
Reagan Bonlie: We definitely have to follow a process, and it's a little bit slower as a result of SOC 2. We primarily leverage the AI for code review, which speeds up things, but for building interfaces and tools or models, we're not really leveraging AI for that. Especially in our space, we have to put out good product.
And if the code base is not consistent with what an AI is spitting out for an interface, or our branding is not aligned, or it's just not, I don't know that AI is at the point where we can feasibly bring it in to build interfaces or. Models or things like that. I think it's more from a code review standpoint where we're seeing the efficiency.
That's what I've heard from my peers as well, but I could be, that'd be something for my CTO.
Jason Jacobs: about that, yeah. Because it sounds like they're actually, they've got a whole agent fleet internally that's actually writing the code. I'm not a technologist nor do I come from either of your worlds, so I'm still getting my brain around what's possible, and then it's what's both what's possible technologically, but also what's possible in terms of Comfort, privacy, legality, risk, exposure, liability, right?
There's consumer perception, right? There's a bunch of kind of non technical factors that also come into play that are real. Yeah, and right now, I'm just it is weird. The answers are wildly different. You have one camp that's just Foot on the gas!
It's go time! Woo! And then you've got another camp that's It's a bunch of noise and hype and, grift and One foot in front of the other and Easy cowboy ignore most of that crap, right? And What is the truth?
And then if the answer is it depends, then what does it depend on, right? That's all the stuff I'm trying to, I'm trying to understand. It's fascinating just how how wide ranging people's views are that are smart, that are each smart and well placed in their own right.
Reagan Bonlie: I'd like to say that we're foot on the gas and easy cowboy. And so we move fast. We have a team of seven developers and we just make sure the code quality is great. We put out really good product. It adds value. We listen to feedback and we iterate quickly. We just. We haven't seen an application for AI to improve the development process of our technology.
Also, specifically in our space feedback loops are a little slower. We, sometimes it takes a little while for our technology to get in there, sink in, add value, and then for us to really understand, where we need to make iterations. But I think that's driven a very consistent road map and development process and allows us to stabilize to make sure that we have good quality products that have consistent uptime.
I think we're a little bit of both in the right way, essentially. Yeah.
Jason Jacobs: to some, like this one guy in New York, he's in A. I. Consultant and he's seeing from his customers that they're like, oh crap. We're behind her behind. We're behind we got to do something what we don't know but let's just and they it's almost like panic spending, you know It's it's equivalent of like stress eating, it's like you're not necessarily hungry But you're just so stressed that eating carbs gives you peace of mind.
It's just spend something on this AI thing because we don't know anything and it's, and the world's going to pass us by, right? And I think because of that, you see some of the worry about the high, the inflated numbers of some of these early breakout AI companies, right? Is that because it's is this real durable revenue because the body's accepted the organ or is this tire kicker revenue that's gonna, that's gonna That's going to churn more than normal once, once things stabilize, right?
And like, where are and granted, financial services, more conservative, and then I would imagine that the non profit side of financial services is even more conservative, right? But are you, what are you hearing from your customers?
Reagan Bonlie: Yeah. No, that's a great, it's a great point. And I think we had that panic mode a year and a half ago where we were, Hey, we gotta incorporate more ai. We had
Jason Jacobs: you being not from your customers but you feeling
Reagan Bonlie: from us. Yeah. Our company, our startups, as, and we were there before chat, GB. became popular and, we saw that, that trend move and then there were pockets of all the fintechs are now incorporating something, but then the something did, was a chatbot or it was a something that didn't really add a lot of value.
So while we went through that small moment of panic, we realized that when we leverage AI, it needs to add value. Because just simply incorporating the word AI. In fact, if you go to our website, you will see one mention of it and you got to look for it. And that's because we tailor it to our audience.
Just saying AI, maybe it helps in, from an investor standpoint, but not with small and medium credit unions. Oftentimes, they want the consistent proven process as opposed to just incorporating AI for the purpose of incorporating AI. So that that's mostly what we're hearing.
At the same time I think we have to bring AI in to their comfort level and slowly help them realize there are massive efficiencies by leveraging this you can create, copy better, you can personalize your experiences, you can infuse behavioral science very easily and we're messaging that to them as opposed to the other way around.
Jason Jacobs: So what, when you see these bold proclamations about what are humans going to do with all their newfound free time? Or Armageddon because all the jobs are going to be gone, right? How do you think about that? Do you think about maybe in some pockets, but, but it depends and not in my pocket?
Or do you think in my pocket too, but not yet? Or do you just think the whole thing is a bunch of crap?
Reagan Bonlie: There's so many different applications and industries and jobs to look at. Certainly there's going to be things that will, even the ghost kitchens, the AI ghost kitchens that you're hearing about Travis Kalanick, Hey, maybe that's put some chefs out of their jobs.
I spent most of my time thinking about the credit union space and they are from an efficiency standpoint oftentimes quite behind. So our ability to leverage AI to get them up to speed is where we're focused on. And very often are we working with a credit union that has a small marketing team or no marketing team.
and marketing just doesn't get done or it doesn't get done as efficiently or as impactful as it could be. So for us to leverage a team of three marketers and get them to execute as a team of 10, without impacting their jobs, it's improving their jobs. I think that's where we're seeing the biggest opportunity and that's all the way up, upstream.
It's not even the tiniest of credit unions. It's at the top 10, they, there's some operational inefficiencies to be able to have a better marketing impact. So that's where we're focused. I don't think there's anything that's going to take people's jobs. It's just really going to amplify and allow them to do two, three, two, three X what they were doing before.
Jason Jacobs: Huh. Yeah, man. I'm glad we're having this discussion. It I think it, it's sense that it kind of flies in the face of A bunch of the hype that you hear about, but it'll be interesting when we put this out there, what kind of reaction you get whether and I guess it depends on what camp, right?
But there'll be, cause there'll be some camps that are like, I told you it's a bunch of hype and crap and over, and there's other camps that are like, oh, like those credit unions don't know it, but those, their days are numbered. And like they're too behind to even attempt to catch up at this point.
And I, And it's the same thing will the institutions of today be the institutions of tomorrow? Higher ed, banking, CPG, automotive, airlines like, how it, the last, we, this is the tail end of the industrial revolution, and we're heading out on the next wave, and there's a whole new way to work and live is that true?
Or is it gonna be a lot more incremental than that, I don't know.
Reagan Bonlie: They're very, these are, they're very valid points. I think there, there are certainly nuances in our space where you think about the a hundred million dollar credit union compared to the JP Morgan, the bank of America of the world. And yeah, they're not going to compete from a growth perspective or maybe not a technology perspective, but the value that a hundred million dollar credit union provides.
in the community is immense. They can't get people that struggle with certain financial challenges, they would normally get a 30 percent interest on an auto loan can get it at that credit union for 12%. That is a world of a difference to certain people. And, I just spoke with a credit union CEO that was very much like that.
He was quite passionate about if their credit union went away. And that makes an impact on thousands of people in the community. So it's not about keeping up, often times, it's about making a difference. So I think, that's something that we need to think about is that, there's not just going to be a mass exodus of small financial institutions.
It's how are they actually positioned in the communities that they serve. And what are the things that they need in that community from a technology standpoint, service, product standpoint, to, effectively grow and help more people. Yeah, it's interesting to think about.
Jason Jacobs: It's such a weird analogy, but but you know how they say that that like dogs tend to resemble their owners? Do startups that sell into certain categories end up resembling the categories that they sell into? Would it be counterproductive and almost overbearing if you tried to Blitzscale and pound your chest and be at the tippy tip of the spear in innovation and right and overcapitalize and hire quick and do you operate your company with lower blood pressure to mirror the blood pressure and pace of the companies that you are doing business with day in and day out?
Reagan Bonlie: That's funny. It's a very interesting question. I think to some extent that's naturally happened and you've only
Jason Jacobs: you have a you have a calming voice, I'll tell you that, Reagan. I don't have a calming voice, but you, you have a calming voice.
Reagan Bonlie: Maybe I should make my volume peak a little bit more. Yeah, I I, I'm I'm passionate about the space and that comes naturally is that I really do what I do because I believe we can make a difference. And so there is true, genuine mission alignment with the credit unions.
And yes, I think we started our business kind of pushing our way into the market from a sales standpoint and. It started a lot of conversations, but I don't think there was as much conversion and we didn't bring on as many credit unions as we probably could have. But we've had a change of tone.
Literally, I went to a conference last week and we had a booth and everything and we did the whole strategy on, more conversations. And then we realize literally in day one, people are there for relationships and we went. We changed that mindset very quickly and wow, we came out of that with some strong partners, some really good, new friends just build genuine relationships that, yeah, they can turn into new clients.
But, we're strengthening our position in the community. And I think that is is incredibly valuable, especially in our space. Second to that, like how we operate our business. It's a, yes, we can go pedal to the metal and, invest in a significant amount of growth. I think the lighting money on fire is probably not the best approach nowadays.
I think there's, more steady methods of growing at a quicker and more efficient pace. And, this is not only just a business that I just started. I'm going to have. Push it to its limits and, let it implode. This is a passion for me. So I'm going to operate the business in that way where I can continue to serve our friends, partners, the credit union community, and then grow it in a reasonable, sustainable fashion, which will get us the ramp and acceleration that we really need, to prove ourselves, whether it's.
angel investors or VCs. But I think in this environment where you don't need to spend millions of dollars a month, you can really accomplish some growth on a more cost efficient way. I think it's possible.
Jason Jacobs: You don't want to share, but I'd be interesting to know how much you've raised and what the source of capital, I'm not looking for any names, but just was it venture? What kind of venture? Was it individuals? What kind of individuals? And then directionally, how you would think about capitalizing the company.
And the reason I ask is that from my seat it's not like I used to think when I was a young entrepreneur that it was like, The goal was to raise from the fanciest VCs that you could, right? And actually that's not the goal. The goal is to figure out what kind of business you're building and then have the best fit for capital sources at the best times.
And fit isn't just dollars or help. It's also expectations and alignment around the pace, alignment around the timelines, alignment around the culture and philosophy, right? And and so you want to be a As selective about that as you are when choosing a team. Again, I'm not saying this is how you should think.
I'm saying this is how I think, right? But I'd love to understand how you think about it.
Reagan Bonlie: so the, so on the first point we, we raised a little over 500, 000 and that was really just from what we needed. That came from a VC. We had Former CEO of FICO, Larry Rosenberger, invests in some angels. I put in some money as well and so that, that's primarily that and that got us very far.
We have a robust team, very brilliant people, hyper cost efficient. We were able to build an enterprise ready, security grade product and put it in credit unions. And we didn't need millions of dollars to get to that point. We were able to do that in a fairly challenging venture capital environment and be cost efficient along the way.
So our path forward doesn't need to be so robust from a cost standpoint. We can leverage our relationships and partners to grow in our process to get into the market that's cost efficient. Remind me of your second question.
Jason Jacobs: What type of capital do you think is the right capital directionally?
Reagan Bonlie: In our space there's really little funding from a pre seed to a seed standpoint. From idea up until where we were, call it about a year ago. Now that we have several clients and we're growing, there's recognition and all the stability that we need in our space. There's more investment.
In our space, in the credit union community, but there's a bit of a black hole from incubating companies like in our space. Path forward is possibly growth oriented VCs, still angels that are aware or familiar with our space, whether it's FinTech or marketing or credit unions. And then there's.
Credit union related VCs. So that would certainly be an opportunity for distribution. And those VCs are funded by multiple credit unions. So that is a, an opportunity to partner and learn. And but at the end of the day, we are very efficient from a cost standpoint and we don't need Tens of millions, hundreds of millions of dollars of capital.
Like I think we can very steadily continue to grow without big VC checks moving forward.
Jason Jacobs: Huh. In your wildest dreams, Reagan, and I know we don't have too much time left, but but what a success look like for nudge money in the long term and long term can be however far out that you dream about
Reagan Bonlie: We're I mean from a hard numbers standpoint, we're aiming for 400 credit unions in five years. And we have the components in place to achieve that. That will ultimately drive impacting more people from a communication standpoint. So we'll help the credit unions grow, we'll help more people achieve their financial goals along the way.
And, those are really the main drivers that get us to our mission of helping more people.
Jason Jacobs: Huh, and then I mean in that scenario if you did that What kind of and just ballpark like what kind of revenue run rate are we talking about? And also what size a team would it take to support that type of customer base?
Reagan Bonlie: That, I'd have to dig into my financial model to identify the size of the team, but we That's about 55 million of revenue in five years.
Jason Jacobs: My sense, and I guess I'll say it as a statement, but it's really a question, is that, you're not just a pure glass chewing capitalist that that community and impact really matters to you, and I respect that a lot. I guess my question is, given how much I'm hearing from you that matters to you about the product, but also about how you're building the company is that something you track?
How do you know if you're actually delivering those results to the In customers that you're serving and fulfilling the mission versus just selling to a bunch of credit unions and stopping there.
Reagan Bonlie: We provide value primarily to the credit union, which provides value to their members. Oftentimes, we hear the stories from our credit union, but we're not directly communicating with their members and we have stories of members that have achieved their goals. They've purchased homes quicker simply more members taking action on recommendations that are being sent from the credit union.
That gives us indication that we're on the right track for that and, simply just. More actions taken on an email or more opens on a particular message that we send. Of that tracking is going to improve over time. But, again, at the end of the day as long as we're helping the credit union grow, we're doing our job.
Because these are credit unions that historically haven't been growing, haven't been growing as much as they could have been. When they grow, they attract new members and they serve more people. And that's, additional money in their pocket, that's better products that are being recommended, a better overall economic environment for that individual.
So there's a lot of different ways that we can skin that cat, but we know we're doing our job.
Jason Jacobs: Yeah. It's an interesting philosophical question to think about, like in the battle of Like tight knit, interwoven, interconnected community and just like glass chewing technology, cost efficiency, whatever, like What wins, right? And I think all the Silicon Valley bros assume that of course, tech wins, duh, right?
And I don't know like that, that, that's one takeaway I have from this discussion is that I think, maybe those people are underestimating the power and importance culturally. Of community or maybe they aren't and just don't give a shit, right? That, that's another option too but I don't know.
That I'll have to let that marinate. That, that, that's not a takeaway I was expecting, but it's a real one.
Reagan Bonlie: I think it depends on the space, if you can certainly have the tech bro win and the, some social media space where, you know, for us it's pretty clear that if you do the right thing, you attract better you, you deepen relationships with your customers.
And that's the Bank of America has proven that. Dozens of other financial institutions and fintechs have proven that. So we're giving that opportunity to our credit unions. And then, we take the same position. If we do right by our partners, our credit unions, then that just helps us grow in the space.
Think it's, I think it's probably sector dependent, but I'm going to marinate on that too.
Jason Jacobs: For anyone listening that's inspired by your work how can they reach you and who do you want to hear from, if anyone?
Reagan Bonlie: Yeah, you can find me on LinkedIn, Reagan Bonley. Our website, www. nudgemoney. com and who do I want to hear from it on your podcast?
Jason Jacobs: No, who do you want to hear from in your inbox?
Reagan Bonlie: Oh, in my inbox
Jason Jacobs: too. Yeah. I'll have to reword that because that trips people up frequently. But yeah, I meant who do you want to if anyone's listening that's inspired by your work are you trying to hire? Are do you want to hear from investors?
Do you want to hear from credit unions? Is there anyone that would be useful for you to hear from?
Reagan Bonlie: yeah we're always open to conversations with with investors. I'm not sure how many credit unions are going to be listening to this, but we always love to talk to credit unions and and really anyone passionate about investing. The opportunities to do good and grow at the same time and in, in the banking space marketing, behavioral science, like those are some things that are passionate passions and big components to what we do every day.
But yeah always love a conversation.
Jason Jacobs: Great. Anything I didn't ask that you wish I did or any parting words?
Reagan Bonlie: I think you covered it all.
Jason Jacobs: Okay, Reagan, thank you for coming on. Congrats on everything you've built with Notch Money. Looking forward to following your progress and reach out any time if I or the Next can be helpful in any way.
Reagan Bonlie: Thanks, Jason.
Jason Jacobs: Thank you for tuning into The Next Next, if you enjoyed it, you can subscribe from your favorite podcast player. In addition to the podcast, which typically publishes weekly, there's also a weekly newsletter on sub stack at the next, next dot sub stack. com. That's essentially for weekly accountability of the ground.
I'm covering areas I'm tackling next and where I could use some help as well. And it's a great area to foster discussion and dialogue around the topics that we cover on the show. Thanks for tuning in. See you next week!