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Betterment * AUM $3B as of 11/2015 * Average account size is ~$30,000 from what I can gather * That means 100,000 users * At Betterment pricing, they make $

Betterment * AUM $3B as of 11/2015 * Average account size is ~$30,000 from what I can gather * That means 100,000 users * At Betterment pricing, they make $6/mo per user * That's $7.2m/year Betterment has 149 employees on LinkedIn. I would assume the true number is closer to 180. Assuming an average fully loaded (salary, taxes, benefits and perks, etc) cost of $100,000 per employee, that is $18m in headcount costs alone. I also wouldn't be surprised if the CAC is over $100, which means at least $10m to acquire those 100,000 customers. Lastly, $7.2m in revenue is likely over stated for 2 reasons: 1) There are tons of free accounts that drag the average down and don't pay anything, 2) Which means some of the larger accounts that have substantially more fall into lower price tiers and result in lower revenue (per dollar invested)

vonmoltke 11y ago
Why the hell does Betterment need 180 people?
- ffumarola 11y ago
  Product Management, Product Design, Product Marketing, Engineers, Ops & Legal, Finance, Marketing (Growth) & Analytics, Sales, Business Development, Privacy & Security, Talent/Recruiting, etc... They're dealing with people's money and they're growing. Doesn't seem too absurd. They're not just building a rinky dinky dumb interface between a user and a Vanguard fund. Also, they have an institutional product outside of the scope of the consumer product.
  - vonmoltke 11y ago
    > Product Management, Product Design, Product Marketing, Engineers, Ops & Legal, Finance, Marketing (Growth) & Analytics, Sales, Business Development, Privacy & Security, Talent/Recruiting, etc... I get all that. I don't get how that kind of head count works for a company that only has about 100,000 customers and $3 billion in assets, considering the value proposition for this company is supposed to be intelligent passive investing. > They're dealing with people's money and they're growing. Doesn't seem too absurd. They're not just building a rinky dinky dumb interface between a user and a Vanguard fund. Prop shops and hedge funds run leaner than they are, and those places are employing lots of people for actively developing trading strategies and maintaining large, sophisticated backend systems. Betterment is supposed to reduce the risk and cost of investing by using algorithms to build index funds and cutting all that active management crap, thus I would expect them to be running leaner than those other places. As for growth, they have been in business for almost eight years. I don't think the growth rate justifies the current head count. I worry that they are pulling a Twitter and hiring a bunch of people they don't actually need yet as part of a talent war. On their institutional product, LinkedIn gives me the impression that it is run as a quasi-separate entity. I don't know if the 180 people referred to here have much to do with that part of the business.
    - gohrt 11y ago
      Scaling. The whole point of these businesses is that they have minimal per-user costs. 100K customers and $3B in assets costs maybe 50% less in humans than 10M customers and $30B in assets.
  - scurvy 11y ago
    That's still outrageously high for what they do. OK, mark down Betterment in the deadpool for me.

vonmoltke 11y ago

Why the hell does Betterment need 180 people?

ffumarola 11y ago
Product Management, Product Design, Product Marketing, Engineers, Ops & Legal, Finance, Marketing (Growth) & Analytics, Sales, Business Development, Privacy & Security, Talent/Recruiting, etc... They're dealing with people's money and they're growing. Doesn't seem too absurd. They're not just building a rinky dinky dumb interface between a user and a Vanguard fund. Also, they have an institutional product outside of the scope of the consumer product.
- vonmoltke 11y ago
  > Product Management, Product Design, Product Marketing, Engineers, Ops & Legal, Finance, Marketing (Growth) & Analytics, Sales, Business Development, Privacy & Security, Talent/Recruiting, etc... I get all that. I don't get how that kind of head count works for a company that only has about 100,000 customers and $3 billion in assets, considering the value proposition for this company is supposed to be intelligent passive investing. > They're dealing with people's money and they're growing. Doesn't seem too absurd. They're not just building a rinky dinky dumb interface between a user and a Vanguard fund. Prop shops and hedge funds run leaner than they are, and those places are employing lots of people for actively developing trading strategies and maintaining large, sophisticated backend systems. Betterment is supposed to reduce the risk and cost of investing by using algorithms to build index funds and cutting all that active management crap, thus I would expect them to be running leaner than those other places. As for growth, they have been in business for almost eight years. I don't think the growth rate justifies the current head count. I worry that they are pulling a Twitter and hiring a bunch of people they don't actually need yet as part of a talent war. On their institutional product, LinkedIn gives me the impression that it is run as a quasi-separate entity. I don't know if the 180 people referred to here have much to do with that part of the business.
  - gohrt 11y ago
    Scaling. The whole point of these businesses is that they have minimal per-user costs. 100K customers and $3B in assets costs maybe 50% less in humans than 10M customers and $30B in assets.
- scurvy 11y ago
  That's still outrageously high for what they do. OK, mark down Betterment in the deadpool for me.