Redesigning the Asset Management Experience — Brian Barnes, Founder & CEO of M1 Finance

Miguel Armaza interviews Brian Barnes, Founder and CEO of M1 Finance, a money management platform that combines investing, borrowing, and banking into a single app.

Brian launched M1 in 2015 after he felt frustrated with the tools available to manage his own money and has since grown the company into a platform that manages more than $2 billion dollars on behalf of 200k users with 75 employees. M1 has also raised over $55 million dollars in equity from backers including Clocktower Technology Ventures, Left Lane Capital, Chicago Ventures, and many more.

Back when Brian started building M1, it took the company a full year to build and launch the first version of their product. This timeline is not surprising for fintech insiders and he explained to us there are two main reasons why fintech companies take a long time to launch. The first one is regulation. Dealing with the many regulatory requirements takes significant preparation and M1 had to ensure the product would meet not just regulatory needs but also a long list of requirements established by their partners. The second reason is trust. As a financial institution, you are dealing with other people’s money and can’t afford to make any mistakes. The concept of the “lean startup” might still be applicable in fintech, but the Minimum Viable Product (MVP) bar for fintechs is a lot higher than in other industries.

After launch, it took the company 18 months to get to $100 million in Assets Under Management (AUM), another 18 months to get to $1 billion AUM, and only six months to get to $2 billion!

Culture of Player-Coaches

Brian is keenly aware that M1 Finance is competing against the large asset management houses with tens of thousands of smart employees or unicorn startups with deep pockets. Which is why he considers it extremely important to hire the right talent. According to Mr. Barnes, the only way a 75-person startup can compete in the space is by massively outperforming the market in terms of speed and talent. So, he focuses on hiring what he calls player-coaches, “people who can both set the strategy, think strategically, see the big picture, and know what it takes to get to the perfect end state, but then also roll up their sleeves, and start working on it and actually do the work as opposed to direct a team to complete the activities.” This approach results in a culture of empowerment, high expectations, with a lot of autonomy and responsibility. He is also proud of M1 being a firm with midwestern values like humility and friendliness.

Entrepreneurial Advice

Brian is extremely passionate about building new things. He believes entrepreneurs have to be massively biased towards action and reminds any aspiring builders they will likely never feel ready or capable to get started, but have to do so regardless. Waiting around to develop the right skills will never work and nothing will make you grow faster than actually launching a company and getting really uncomfortable pushing through to get to the next stage. As Brian puts it, “I started M1 at 25 (30 now), so I’m a relatively young founder. And there is absolutely nothing that qualifies me to be the CEO of a broker-dealer managing close to 2 billion bucks, other than the fact that I started it.”

The second crucial ingredient for any entrepreneur is the people that surround them. The challenges of founders very quickly become way too large for any individual person, so it becomes a group effort almost from day one. It is key to find really capable, like-minded, and motivated people that buy into the vision and are willing to work hard in a scrappy environment. As a result, a founder’s ability to sell and recruit people is one of the most important skillsets that can never be taken for granted. In his own words, “it’s where I probably spend the majority of my time now (…) being able to make a broad team productive is where the focus is.”

Brian Barnes

Brian Barnes is the Founder and CEO of M1 Finance. He started M1 in mid-2015 after frustrations with the tools available to manage his own money and has grown the company from an idea to a platform that manages more than $2B. Prior to M1, Brian worked as an equity researcher at a hedge fund and as a management consultant. He has a BA in Economics from Stanford University.

M1 Finance

M1 Finance is a money management platform the combines the best of investing, borrowing, and banking into one easy-to-use app. With M1, users can automatically invest in a customizable portfolio for free, borrow against your portfolio for rates as low as 2%, and use M1 as your primary bank with an industry-leading 1% APY and 1% cashback on debit card purchases. M1 manages more than $2B on behalf of 200,000 users. The company is headquartered in Chicago and has 75 employees.