Step: Banking for teens - how FinTech is making Financial Literacy teen friendly

Updated: May 9

Kriti: [00:00:00] Hey guys, welcome to WhyFI matters. I'm super excited for today's episode about a FinTech company. And if you haven't listened to our prior episodes about financial technology and FinTech, I suggest you go listen to our episode called "Banksy it" for a better understanding of what FinTech is and the power it has to help us overcome issues we're facing such as financial exclusion and how it helps the underbanked population of the world.

So, I'm super happy to have the head of growth at FinTech startup "STEP" Tyler Doremus on the podcast today. A specific issue that STEP is trying to solve is a lack of financial literacy in teenagers and young adults. So what they've done is they've created an innovative banking app for teens plus a visa card designed for the gen Z population.

So, some of you who are listening to this, you might be thinking, "Hey, this sounds very familiar". And I've heard of this before. And that's probably because STEP has had many influencers that partner with the brand such as Charlie D'amelio, as well as investors backing up the brand like Will Smith.

So, you might have seeing this company pop up on your social media page from time to time. And that's actually how I invited them eventually on the podcast, because I learned about this banking app from my social media.

So, today I'm going to talk to Tyler about his career path and how he became the head of growth at STEP. And, also about the company's values and the importance of financial literacy for us and credit scores. And that's something new that we haven't really touched on on the podcast and what it really means to build good credit. And also why having the celebrity support the company is important. I hope you enjoy the interview.

HI Tyler! Thank you so much for coming on WhyFI matters today. I'm very excited to learn more about STEP. STEP is kind of all over our social media these days, and I'm really fascinated by this, and I'm really excited to learn more. So thanks for coming on the podcast.

Tyler: [00:02:23] Thank you so much for having me. I'm so happy. I could talk to you today and thanks for reaching out.

Kriti: [00:02:29] So can you, tell the listeners a little bit about your career path and how you became the head of growth at STEP?

Tyler: [00:02:38] Yeah, no, for sure. I think , like most teenagers, I really had no idea what I wanted to do. I was kind of looking to the, my peers that were older than me for guidance on what kind of career paths existed. So in high school I was pursuing hockey as kind of my passion, which took me to the East coast and then, and to a college. Um, but I didn't really know what I wanted to do. And when I was in high school and going into college. I worked at restaurants. I worked at sandwich shops.

Like many folks, I just didn't have that like compass. So whenever I hear stories of folks that are, you know, they knew what their life passion was really like, that's, you know, that's something that I didn't have, but I'm definitely envy envious in some ways. I went to Skidmore college, out in new York's state park.

I kind of took a path of what most of my friends were doing. It seems logical at the time it was kind of investment banking. So my freshman year, I realized I should probably get an internship because that's what most folks are doing. And that's a way to kind of bolster some of your experience outside of the restaurant experience that I had previously.

I wasn't able to land anything in like the investment banking space within my first year. So I actually ended up deciding I wanted to pursue something more close to my passion. So at the time it was like nutrition and that was like nutrition and health. And I was like, I'll do an internship to see if that's something that provides me a little bit more guidance on maybe something that's different than investment banking.

So, my first internship was in DC working for a nutrition consulting company. And I realized like, it's probably not the thing that I want to do, it's still part of my life today. And it was, it was an awesome experience. With the subsequent summers, it was starting to be more clear of like, okay, these are the types of internships based on some of the folks that I've seen that I want to get.

I wasn't truly passionate about investment banking. It was more a comfortable route , that had some of the, you know, allure of a high salary, working finance on wall street. And in that era, that definitely was something that was gravitating for a lot of folks.

So, I ended up working at asset management firm when summer, and I ended up working at an investment bank, JP Morgan , as like a summer analyst in a very typical program. So, took a job offer thought it was going to be my career and where I was going to go. Many of my friends had ended up going in that same career path.

Basically, right before my signing day, where you get to get a nice bonus, I got cold feet and I bailed. I called my recruiter and I let her know that , I decided not to pursue that career. so from there it was kind of like, what should now?

Kriti: [00:05:00] Where am I going to go?

Tyler: [00:05:01] Yeah. Background in investment banking. I majored in economics and business would focus on finance. And I had like a minor in environmental studies. So I was like, maybe there's like a boutique shop where I can blend some of these together. I interviewed a bunch of places and in New York city, which was kind of the place that I was thinking I was going to go.

And I ended up having a terrible experience at a sales and trading firm through the interview process. And it made me realize, I think it was like the epiphany moment of the things that were motivating me to do that were actually not the true things that motivate me. They were things that are outside of what intrinsically motivating. I kind of realized, like I wanted to do something completely different and I wanted to be somewhere where I felt more of a team mentality. So I decided like startups seemed like a good place , in San Francisco seems, seems like a great city. And so kind of on a, on a whim, I started looking at startups in San Francisco and found this very small startup at the time called Order Ahead, which super unknown. I had no idea what they were doing. It was providing a head ordering for restaurants. I kinda just decided, okay, this, this sounds kind of interesting. And I ended up having a friend that knew the person that was leading the business team there. It a 10 person company and so I, I decided to join the team after going through the interview process and moved out. I had never been to San Francisco , packed up my car with a very limited amount of things and drove out.

And that was kind of my entrance into the tech world. And I didn't have like a clear direction of like, I want to be a product manager. I want to be a sales leader. Well, I want to work on a specific products. I just knew that I really want to work in a fast paced environment with people that were, uh, had a little bit more of a humble approach to things. And from everyone that I knew , within Silicon Valley. There was definitely that , the hacker mentality. You know, you don't need an Ivy league degree to do something now which I think is what some of the, the career paths that I was looking at previously definitely had that.

So, my Order Ahead experienced was super interesting and it kind of gave me the under covers of what a company looks like from the ground floor as well. We raised the seed round. We raised a series a. I was doing everything from ordering the Costco, to building a IKEA furniture, to sales, to marketing. So I got a taste of a lot of different things.

And I ended up kind of navigating to Square off that opportunity. And Square as a, you know, it's a small company at the time, bigger company today with a ton of different products. At that time, they had the reader, now the square reader that provides , a way for any type of merchant to accept payment. And then it had a square stand, which was basically an iPad into a credit card reader.

And, so I started there as the first ever sales hire. And that was how I got that job was really based on the person who brought me into Order Ahead. And we formed a strong relationship and he ended up being the first , head of sales for square.

And, so he knew my experience. It's very hard to interview when people, if they have a background to your experience is always much easier, decreases on the risk associated with hiring folks that you're not super familiar with. But I was able to leverage that relationship to start my career at square, where I spent almost six years.

Interestingly, I spent most of my time on the consumer product, which kind of lends myself into the role that I have today. Started off on the sales team. And basically it was the first sales hire, so did a lot of hiring. So I spent a lot of time in interview rooms, speaking to folks and building a team of 65 in the first like four months. And then from there, I, I actually ended up working on a project with the CEO and one of our chief, I would say that our chief product officer at the time, on a way for coffee merchants and all types of merchants to accept orders ahead of time. So naturally my previous experience started to lend itself nicely into this thing. They wanted to explore. So I led the business side of that for about a year and we built this magical product where you could order coffee, decided to purely focus on coffee, and you could order coffee ahead of time and based on where you were in the world and how fast you're moving. The order would trigger at the coffee station or the barista.

And, so this was like pre Starbucks. It was a beautiful experience. And if you ever come to San Francisco, there's a ton of very interesting coffee shops that have amazing coffee. We worked with all of them. It was super interesting from my perspective starts to learn more about like, okay, how does like product get to market? How do we think about operations? And I think that started to drive a little bit more of my interest into. First marketplace economies, but then also into the consumer side. So, we decided to actually acquire "Caviar", which is a food delivery company within that same period of time that I was working on that product.

There's Caviar in Chicago as well.

Kriti: [00:09:29] I haven't heard of it, but, my dad is kind of in this same type of field as you. So, he was with some food groups, like Let Us Entertain You and stuff like that. Yeah.

Tyler: [00:09:41] Yeah. So Caviar, the kind of value props there was like higher end restaurants. We basically make delivery possible for the places that you typically we'd go to sit down at. So "Let Us Entertain You" is a great example. We would deliver a lot of the restaurants that is under that umbrella. And you get potentially like a dine-in experience at your house. And within my role that I took on there, after working on the coffee ordering app, we decided to shut down because we were focusing on, on caviar instead.

I focused on , the full kind of business stack. So the way that an order gets delivered to a customer's house is a courier, picks it up from a restaurant and then they actually have to deliver it to the customer. And so you have a restaurant ,one courier, in one customer. And so I love the team they're focused on the Bay area , for roughly like three and a half years.

And that kind of made me realize there's three parts of that puzzle, but I was most interested in the consumer side and my experience with the coffee ordering app and my experience with Order Ahead start to compound on itself where I started to realize, I I'm gravitating towards this, this part of the product.

And then I realized what's missing, like, what are the, what are the things that are missing with my experience with caviar? And I realized I wanted to make more of an impact on people's lives from a foundational level. And so caviar is fantastic for couriers and it's fantastic for restaurants. You're giving them opportunities to earn income. And you're basically giving the restaurant more delivery radius than they actually would be able to fulfill themselves. But the end customer that he experienced there, it didn't resonate with me enough to kind of keep me motivated to work on.

So I moved over to Cash App. You might be familiar with it. Similar space to STEP older demographic. They have , I would say like 18 to 24 is probably more where they are. And so where I focus there was building out a college growth marketing.

Kriti: [00:11:25] Oh, that's cool.

Tyler: [00:11:27] And so with, with cash app, that was kind of like, okay, let's empower the underbanked. Let's provide solutions to folks that don't have access to parts of the financial world today. And, so Cash App started as a way to like send peer to peer payments, similar to Venmo. And then it's obviously grown into a, more of a, a suite of banking product. So you have a car, do you have the ability to buy Bitcoin? You can invest. And so when I started on Cash App, it was with the intention of really building out my consumer focused experience. And starting to understand the product , from growth to , go to market and then also all the way through to iteration and then future features and getting those to market.

And interestingly, I've known CJ, the CEO of STEP for the better part of a decade. And so part of my, part of my like journey within San Francisco, was meeting tons of amazing people, CJ being one of them and forming relationships with them that , are, are very much personal and, and CJ and I had a personal relationship and we were very close friends. And you served as a mentor of mine through a lot of my, like stages of my career. So provided guidance and feedback. And so there's always been like a strong person within my life. And so when I started on Cash App, he was considering starting his next thing. And so we are, you know, we talked back and forth about ideas, riff on what they could be. And he started, you know, he started to come to the conclusion, there's a gap to teen market and that was working on cash up at the time. So we were able to kind of riff on yeah, I'm, I'm seeing that as well. And there's not that many people focused on that, that demographic and they're building product appearance and the teens.

Kriti: [00:12:56] Right.

Tyler: [00:12:57] So, I was able to see the, see the formation of the company from idea to like purchasing domain to the first round of funding to actually get the real yeah.

Kriti: [00:13:07] The whole process.

Tyler: [00:13:08] Yeah. So this is very long winded way to get good, to get us to where we are. so I decided, uh, probably like a year and a half into Cash App. That I, I just started thinking about STEP more and more conversations with CJ , more conversations with George there, the COO, and just started to realize that I was gravitating towards this, not only from an interest perspective, but my mind share was going there.

I was thinking about Cash App from that perspective. And while I was a Cash App, we, we attempted to create like this low for under 18 , during a hack week. So there's these things that we're constantly going in my brain that are turning against it. And I obviously have my personal experiences associated with money as I was growing up that definitely adhere it to like there's missing something. I think there's a lot of times in your life where. Things feel a little bit murky and you, you're not totally sure if you're making the right decision and it doesn't feel a hundred percent, right. We still do it. And, you know, typically it works out and there's there's benefits to it. And this was one of those times where I had a moment of clarity and was very clear to see that this was something that I really was, this was the time. And so I was pulled toward, towards it more than I was running away from anything else. It was, it was, it was like gravity, you know, You, you, you realize what gravity is when you try to resist it.

And so like when you jump off a cliff and you're plummeting into water, that's when you really realize like, gravity is so powerful. But when you're walking around all day, like it's not something that's super parent. And so I think as I was resisting and I realized how powerful this pole was, and that's, so that's how I ended up at STEP.

Kriti: [00:14:36] I love that analogy about gravity and just like you have this feeling inside of you. And I'm a really big fan of the"How I Built This" podcast. And I feel like you just said a story from there, like a lot of the entrepreneurs who come out of there and I think that was really similar.

Tyler: [00:14:53] Um, but yeah, you were talking about you your life as a child and as a 10 year relationship with money, can you talk more about this? And when did you sort of learn that money management was important. But also, did you have transparent conversations with your family and mentors when you were younger about money?

Yeah, it's a different world today than it was when I was growing up. And so, you know, definitely less cashless, more cash centric. And my relationship with money definitely formed probably when most folks do it's around 12, 13, you're starting to receive money. Maybe it's an allowance or a Christmas gift, or you're working like, you know, summer job or babysitting.

And so I was probably like most teens. I had a massive change drawer. I love being organized, so I got one of those nice change organizer machines for Christmas. And I would ruthlessly save changed. And for some reason I, I valued change more than cash, like paper cash. Who knows why? So I would, I would, you know, squirrel away these sleeves of quarters and hide them in my drawer. I have four brothers. So there's a constant level of suspicion around what their intent, their intentions were in your room. And so my, my relationship with money started with cash. And definitely as I started to enter more of a workforce, like 14 years old, I had a job at a golf course. And I started to ha I received a paycheck.

And so I would come back with my paycheck every couple of weeks. Like I was normally working and I would have to sign it to my mom. Then my mom would go to the bank and she would pass it. And then she would give me cash. That's a very cumbersome process. And I'm asking my mom to go to the bank every time.

And, so she came to the conclusion, like, let's get you a bank account. And my older brother and I got a bank account around that same time. Because I have four other brothers, one older , everything that my brother ended up doing was ended up kind of passed down in small iterations all the way down to my little brother. So it was like a system by the time my youngest brother, uh, was able to like start accessing a debit card and creating a bank account. I'm from a very small town. So we use the local bank. There's you know , it'd be a bank that I could walk into. And it was so empowering to have your own card in accounts.

I remember feeling so independent. I remember feeling like this almost like upleveling of maturity, even though like nothing had changed in that day. But it felt like I'd been given more responsibility, to becoming my own person, which felt great. And I think from there, I took all my quarters that I started putting them in the bank.

And I'll never forget, like the day that I went to the bank with the most amount of change could probably bring to a bank and the teller's face.

Kriti: [00:17:28] And they just look at you!

Tyler: [00:17:31] And all these sleeves of quarters and coins and nickels. So yeah, that's kind of like where my relationship started. And obviously like today it would be more digital. But back then it was very, very archaic and cumbersome. I had to go into the bank to sign up for the account with my mom. She's the co-signer on the account. I couldn't do certain things without her there. If I wanted to get cash out of an ATM, there was a limit. All these types of like little wrinkles that I started to have to learn , which, which were by necessity, not by like, uh, you know, not by something that I wanted to.

Kriti: [00:18:02] Right. I think you bring up a good point because I've had my own sort of saga when it comes to bank accounts. And it wasn't digital my sort of experience with them. And last, like last summer, um, I went to the bank and opened a checkings account and it was like your experience. It was a very cumbersome process and I didn't even open the account that I wanted because I wasn't depositing enough money into a savings account so that it actually would grow and compound. And the lady at the bank she's told me, I should just make a checkings account. But it was a really, it took me like five hours out of my day just to do that, you know, and after that, I was just really annoyed and that sparked my interest in FinTech.

So how does FinTech help bridge the financial literacy gap?

Tyler: [00:18:55] Yeah. I think if you look at kind of the history of the banking system, it's never really been catered towards educating the teen market. And some might say like we're in a crisis when it comes to the financial literacy.

Kriti: [00:19:06] Yeah, we are. We are, I have an episode, like one of my first episodes I created was like alert we're in a financial literacy crisis because we really are.

Tyler: [00:19:17] Yeah. it's apparent to many, but it's not a problem as being approached by most , that have the ability to approach it. And if they're approaching it, they're approaching it on the parent's side. So, you know, you have 34% of teens are unbanked and only 21 States teach personal finance in the current school system. Now, most families don't discuss it. And so when you think about like the relationship that people have with money, a lot of it stems from the relationship they have with the person that was guiding them into it. And whether that's an aunt and uncle, a mom and dad, for me, it was my mom and my dad, their habits, their perception, all of those. Got translated into me and I, some of them were good and some were not so good. Um, and so, you know, as you start to grow up and you start to get more influence and you start to see different places that, um, you know, I'd be able to improve yourself, or you might be able to change your perspective, those things change. And I think that conversation has to be brought out of the covers and behind closed doors and really to the forefront and make people feel more comfortable talking about money.

Kriti: [00:20:22] So, can you tell us the importance of FinTech currently, but also, in the future?

Tyler: [00:20:30] Yeah, so I think FinTech companies are incredibly important. They are part of society, from the time you wake up to the time you go to bed on the weekends during the day. You're starting to think through how you operate. And so even into social, where you start to look at Instagram as a place to buy it. There's a layer of payments that exist across most companies today, whether they're FinTech or normal.

And so I think they're, they're becoming a bigger part of our lives from the FinTech side, as we think about kind of the evolution of the digital frontier of money. There are phones are a central part of how we think about doing anything right? You want to book a flight, you want to call somebody or text someone and you want to interact with someone accomplish any type of task.

And you're spending nine plus hours a day on your phone. You're connecting with friends. There's so many things you can do. So this becomes now this tool and this resource for you to accomplish things. And that's where, you know, FinTech starts to step in to providing tools through that device.

Teams are also making tons of micro purchases. So outside of your phone, you might be playing Fortnite. You might think roadblocks, and there's a currency that's involved with that. So you start to make financial decisions based on like things that you want, whether it's a new skin or a new , whether it be anything from a sense in relation to like robots or $2 that you're putting into that actual experience. So you're starting to really think through, okay, what are good spending habits because you're making those, those are micro decisions and you're, those are actually really important. And then additionally, you know, traditional banks are able to be a little bit, a little bit less nimble, I would say. They've structured themselves where they have branches, they have tellers. They have these systems that are in place that actually lend themselves to being a little bit slower to innovate. And when you look at some of these banks that they're expected to do certain things and provide certain things in a certain way. Breaking that model, I think is challenging and they're not well positioned to do that.

And so they're looking. They're looking for, how do we provide within the structure today? Solutions that it's to the innovative kind of approach the FinTech. And I think that's a really hard gap to close.

Kriti: [00:22:28] It's kind of like the David and Goliath analogy. Because Goliath like the he's like the stronger one and David, he's very quick and he's innovative and he's able to defeat Goliath essentially, because he's like FinTech and he's bridging this big gap. And , I think that's a good analogy for what you described.

Tyler: [00:22:51] Yeah, I would, I would definitely agree. And I think what we think about too is that the difference between teens and parents. Parents in their essential forties , they have different expectation, whereas teens and they're 13, 14, 15, their expectations to be digital, fast innovative, provide something that is very similar to the other products that they're using and very easy to use.

Kriti: [00:23:13] So, I want to talk about STEP right now because you said that it does bridge this gap. And one thing that I've noted and a lot of people have noted is that, especially in terms of the teen culture, it's able to really connect with teens through social media and influencers and just everything that's really in our lives these days. And, I think CJ, so one of the step founders, he said that teens expect to manage their money in the same way as their social media, but banks have failed to keep up, which is like the David and Goliath analogy. And they're largely overlooking this generation and their unique needs. So, can you tell us a little bit more about what STEP's mission is and what you do at STEP two really fit our needs basically.

Yeah, for sure. Great question. So step's mission is to improve, the financial future for the next generation. And, it's something that I think every single employee that works at STEP equally cares about special because they've had

experiences that they wish no one should have again. And, so that's definitely a core of what we think about when we're building our products and how we think about decisions that we make at the company.

And so we want it to help end the cycle of debt and financial mistakes that many Americans have found I themselves buy in by building beautiful products that are really simple to use and they're really designed for teens that making money management super easy. so most of the products that you see in market today are really focused on parents. They cater towards the parents' needs. And then the idea is that the parent will then put the product into the team's hands. When in reality, we believe there's way more power in the teens hands. And the teens form your relationship with the bank more so than the parents, the team's going to grow up. They're going to become financially independent. Yeah, and they need to have their own structure for how they operate. And we want to make sure that we are balding for that generation.