Making Financial Literacy Easy

With 2/3 of Americans unable to pass a basic financial literacy test and 9/10 of Americans wishing that financial literacy had been a required course in high school, there was a clear gap in the market for financial education. Tina Hay created her business Napkin Finance to fill this gap and teach people about money in a simple and accessible way. Through understanding the importance of visual learning and the overwhelming nature of financial jargon, Tina has been able to teach complex topics in a fun and easily understood way. Listen as she describes growing her business, partnering with the White House, and the importance of financial literacy for everyone.

Sam: [00:00:12] Today, Tina Hay joins us on the show. Tina is the founder CEO of Napkin Finance, a visual guide to money. She created the platform for users of all ages to learn finance in a simple and engaging way to further their financial literacy. She’s also the author of the bestselling book Napkin Finance, published by HarperCollins. Napkin Finance describes itself as a social venture with a focus on financial empowerment. Tina, we’re delighted to welcome you to the show.

Tina Hay: [00:01:04] Thank you so much for having me. So happy to be here.

Sam: [00:01:09] So you’ve done a variety of different things over the course of your career. Tell us about the sort of pathway and motivation to you starting Napkin Finance.

Tina Hay: [00:01:21] Yes. So honestly, it was almost a happy accident. Everything about Napkin Finance has been such a, you know, it has not been planned ahead of time. And that’s part of the beauty of it, is that it really– there was such a big need for it in the market. And what happened is originally we just started off building the company as a platform for millennials and money. So everything about money and payments in one place and one aspect of that was financial literacy. And so what started with one napkin, which was compound interest, has grown into now thousands of pieces of content. But the initial goal was never financial literacy or content around money and finance. But it seems like that was the area where we had the most traction and so many people were interested in it, especially since it was very unique and visual and, you know, very different than what’s out on the market right now.

Sam: [00:02:15] So it sounds like you started with the construct of wanting to demystify and explain, you know, in this case, the concept of compound interest in an intuitive way, but you weren’t entirely sure at the time that this was going to head off firmly in this finance direction. So what was the sort of– what was the overall concept you had in mind? Was it simplifying concepts so everyone could understand them?

Tina Hay: [00:02:42] Yes, it was, how can you make money and finance more digestible and palatable and simple for people who are not numbers-people, who may never have had education around money and finance in school, or who may never have learned from their parents, which is actually most people. And so, you know, honestly, the background of this and really the inspiration was my own experiences being a visual learner, as many people are. And so that has always been something that has been a really important tool for me, is understanding complex topics in a simple way. And so money and finance is actually the perfect place for helping people simplify things because it’s also related to every part of your life. So financial well-being is part of you being healthy and having a great place to live, it impacts your career, your professional life, your personal life. There’s so many areas it touches. So in the back of my mind, I always thought about how critical it was for me to learn about money and finance in this way and how I would love to help empower other people as well.

Sam: [00:03:49] I mean truer words were never spoken. You know, two thirds of Americans can’t pass a basic test on financial literacy. And nine out of 10 people wish that financial literacy had been a required high school course. Why do you feel these financial concepts, you know, are so overwhelming to most people yet?

Tina Hay: [00:04:11] So finance is not intuitive. You know, the numbers, the jargon, for different reasons. First of all, again, because most people are better at learning things visually, human beings are naturally visual machines, the way we process different concepts. And so that’s part of it. The other is, again, to your earlier point, if you have never had an education in school and you suddenly stumble into these life events and circumstances where you need to make important decisions, it can be a virtuous cycle or a vicious cycle, where you fall into debt or you can start investing early on and saving money for retirement and planning ahead and it can be actually a virtuous cycle and very powerful over time. So really, most people are never equipped to make these important decisions. So that’s why you see people with, you know, a lifetime struggling through student loan debt or buying a home without having, you know, the adequate resources. There’s so many ways people are getting into trouble, which could be avoided by having, you know, education and resources and tools early on.

Sam: [00:05:21] Absolutely true. Tina, when you started your business, you were marketing your products directly to the millennial consumer and then you pivoted into a B2B model while continuing, obviously, to stay focused on the customer user experience. Tell us a little bit about making that switch.

Tina Hay: [00:05:43] Yeah, so it’s interesting. We started out as a direct to consumer. We always– we still actually have a website, napkinfinance.com that provides free content for anyone who kind of– who comes to visit. And we have topics ranging from investing to taxes to education finance and credit, and so much more. Interestingly, the reason we got into B2B is because there was so much demand for it. So a lot of the large financial institutions and insurance companies are looking for interesting and unique ways to educate their consumers. And so it really came to us more than anything else. So we saw huge demand. And, you know, we’ve never had a business development team. We’ve never had a sales team. But a lot of these opportunities came to us and it was just a natural progression of where our business model was heading. And so we moved into B2B. Ironically, we’re now moving more into consumerism with our book and other projects. So it’s been interesting to see where the content has resonated. And the interesting opportunities that seem to appear over time.

Sam: [00:06:49] That’s super interesting. So, these opportunities come your way. You begin to do more and more work for businesses as your customers. But you kind of keep this user experience piece so firmly at the forefront of everything you’re doing. How did you then begin to scale the business and acquire, you know, kind of more business customers and then, you know, what led you to then in turn sort of pivot into writing the book, which is, you know, more of a consumer product?

Tina Hay: [00:07:25] Right, right. So the beauty of being a B2B business is that we’ve been early on without raising, you know, money. We were able to access, you know, the distribution channels of these large financial firms. So we’re now in 80 million households around the globe without any marketing on our end because we’re able to piggyback on the distribution that is, you know, existing channels that these firms have. So the beauty of the B2B model for us and as our business model has been that we’ve gained visibility and credibility in a way that we never could have as a small firm. And so, you know, the next kind of moving more to the consumer is another opportunity that has opened up. I think partly because, again, we’ve been establishing our brand as an educational tool. We’re very transparent. We’re not beholden to one bank and we always advocate for our readers, which means no matter what project or partnership we take on, that’s always core to our mission and our foundation. And so we never have to compromise on our quality. And so whether we’re creating content that goes into the book or for, you know, one of our partner websites, it’s always very high quality. It’s always accurate, but it’s also educating and empowering the reader, regardless of who that is.

Sam: [00:08:45] It’s hard to strike that balance, you know. But you’ve done it so beautifully, of sort of always keeping the consumer in mind while not having the consumer be your customer in these initial stages of building out your business. It’s amazing.

Tina Hay: [00:09:00] Thank you. Yeah. And, you know, to be completely honest, again, we’ve been very surprised by the reaction. I mean, even though the book was never, you know, to your earlier question, the book didn’t come along as something that we actively pursued. We were approached by a literary agent and then we just realized there is such a huge demand for simple financial content in the market. And so the book was also another happy accident where it was the right timing. We had the right people behind us and a great team. And so the book really was, you know, just an evolution of the existing content and came out at the right time. We luckily released at the beginning of this year, right before all the madness with the quarantine and lockdown. And so it’s been really wonderful to watch it kind of have its own life. And the way people have responded to it has been really, truly amazing.

Sam: [00:09:55] I mean, it’s such an, you know, such a timely decision that you made, and it’s great to hear you say that, you know, it wasn’t necessarily planned, but the literary agent came to you with the idea. But then, of course, you know, you guys saw the opportunity and sort of went after it. In hindsight, looking at that, you know, particularly with this COVID pandemic. It’s like the book came out at the perfect moment on sort of the eve of the disruption that this pandemic is causing to just vast numbers of people’s financial lives. And so I think, you know, in my mind, at least as I think about the book, it’s like the book has acquired new meaning.

Tina Hay: [00:10:36] Definitely, you know. You know, not only is the timing really interesting, but also people’s lives have changed so much financially. You know, a lot more people are unemployed and need to really make important decisions about their finances and moving forward. And so I think most people are realizing right now how important it is to have an emergency fund or save money to budget, really basic things that we’ve been talking about for a long time. And so the book really is positioned as a great opportunity for people to make that first step.

Sam: [00:11:14] Fabulous. So there have been some strides over the last decade or two towards companies, you know, some have become B Corps. Equally, you know, companies having a social mission and participating in sort of the fabric of building communities is more and more important. I think, honestly, in the wake of this pandemic, it will become a priority for every single company. You’ve described the company as a social venture. Tell us a little bit about what that means to you and how that’s manifested.

Tina Hay: [00:11:50] Of course. So we’re a, you know, know for profit for good venture. And what that means is from day one, before we had any revenues and before we had any profit, we’d been providing our content for free to schools, organizations, non-profits. It started with Michelle Obama while she was in the White House for her better make room initiative. FAFSA was a big initiative for students to take advantage of opportunities to pay for college. We’ve worked with universities around the country. We’ve worked with classrooms. But even now we’re working, for example, with the U.S. Olympic Committee because many athletes have unique financial challenges and many live under the poverty line. And so part of just our brand and how we see ourselves is as a tool for people to help themselves, whether or not they can afford access to these resources. And so, you know, providing resource access to our content has been really helpful for so many people. And so, you know, as much as we really love our partnerships and are, you know, growing our audience around the world, this has been our most interesting and I think most valuable aspect to the company and what sets us apart is that we are all about helping people make better decisions. And part of doing that is also giving back. And we’ve done that literally from day one and continue to do so as we move forward and as we grow and evolve into a different company.

Sam: [00:13:21] It’s a perfect segue to my next question. How do you think about differentiation for the company? And you just talked about sort of the next phase. Tell us about some of your thinking that’s going to define this next phase of Napkin Finance.

Tina Hay: [00:13:39] Yeah, so it’s I see our next phase is actually very exciting. You know, what we’re able to do, in which I think we’re very lucky, this is not as common, we’re able to do a lot of small experiments to see what’s working and what’s not working. And so right now, we’re actually moving closer to becoming more of a B to C model as well, because we’re seeing we have a lot of opportunity to serve people individually and provide content or resources where people are looking for it. And so we’re now creating things like courses we have on our website. We’re actually offering it now free of charge for people, especially because of the COVID pandemic. And, you know, many people are struggling right now. A lot of our content is provided for free. And so things like courses and additional content that is about, you know, helping people really understand money in a very basic way is one of our big initiatives. And so we’re always experimenting with new types of content and new ways of reaching people. And so our big push has been growing our library of content and helping people kind of access the information they need at the right time. And at different life stages, whether you’re getting married, having the baby unit graduating, getting your first job and so on.

Sam: [00:14:57] Amazing. Yeah, so many different financial considerations in all of those stages. So let’s talk a little bit about you as an entrepreneur now. If you could go back and undo one thing that you’ve done in the past or do differently, what do you think that would be?

Tina Hay: [00:15:17] I have so many things. I don’t even know where to begin. So the one thing I guess would be, you know, I’ve done multiple startups and I’ve actually had you know successes and I’ve had failures. I think the one thing I’ve realized is I’ve had companies with amazing ideas and a lot of it is timing. And so one thing that I’ve noticed about what I’ve done is actually two things are number one is whatever company it is, whatever venture. Keeping it simple. Right. So even when we started Napkin Finance and first we were a payment portal and we had payments and we had education and we had so many different things early on. I think if we had been more kind of focused on one area and making that, you know, really our focus and doing a great job with that without getting distracted is probably the biggest mistake I’ve made in the past that I would change. The other is, I think, you know, being persistent. I think, you know, there’s so many ups and downs and it’s such a roller coaster with every business that, you know, part of it is just making it through and finding the right opportunities at the right time. And that sometimes that just means you’re really holding on and waiting for the timing to be right. But I think, again, going back to simplification and focus, it’s like everyday, even now we face all these decisions and opportunities that we have to say no to, even though it’s difficult to turn away business or say no to partners or projects. But it’s been so critical to be focused and do one or two things really well instead of different things and, you know, not really be focused and and create something really more impactful than, you know, a million different things that are mediocre.

Sam: [00:17:06] The focus is so important as an entrepreneur, I’ve definitely learned that lesson here in ideamix, and almost every entrepreneur that we’ve talked to, you know, sort of really says that, that it was a learning that happened only by doing.

Tina Hay: [00:17:22] Yeah, and definitely. And the other thing is, until you’re really out of the real world and people are responding, it’s hard to know what is really valuable about your business. I mean, every business pivots and evolves. Even after starting so many times, often it’s just, you know, you very few businesses end up where they begin. But so just to understand what that one critical kind of value is, that you bring people is sometimes hard to find. But I think, again, doing one thing well is so much more valuable than spreading out your resources and your team in many different directions. It just creates confusion and never creates a great product.

Sam: [00:18:02] Totally. As you look back, what’s the lesson that you’ve learned from your journey? That is valuable for all entrepreneurs, do you think?

Tina Hay: [00:18:13] Yeah. So I think one of the lessons I’ve learned is that, you know, I think. There are so many difficult parts of running a startup. Again, it is a roller coaster. Every day there are successes and failures. I think the one lesson I’ve learned is just to be very patient and really kind of be or have the knowledge that things will go wrong all the time and have a long term perspective. So I think, you know, as far as whether it’s raising money or building a team, it’s just we see so many businesses that look like they’re overnight sensations. But the truth is, things that do well and things often take time and effort and a lot of resources to do it right. And so having that patience and being able to have a longer term perspective instead of the, you know, short term build a billion dollar business overnight perspective, I think is really critical.

Sam: [00:19:13] That’s really good advice. Last question, has fundraising been a challenge at all?

Tina Hay: [00:19:20] Yes. So interestingly, we have not raised any money. We’ve been profitable, which has been amazing and we’re very lucky. And I think part of the reason is I’ve been avoiding fundraising or not relying solely on fundraising because for a few reasons. First of all, because I think as a woman, it is definitely harder. But two, it’s that I have you know, I love the fact that the control is not with an outside party, that we can make decisions that are based on our own timeline without having someone kind of take control over the company or our decision making. But on the other hand, we now have you know, we’ve proven we have a product that works that people want. And so we definitely will be raising money moving forward. But I think we come from a place of, you know, having more leverage and the ability to say that, you know, we know that people like our product. We know that we can deliver on that. And then finding partners within our fundraising and finding investors that can actually open doors for us and help kind of take the company to the next level instead of having to compromise, as we would have earlier on.

Sam: [00:20:31] Right. It’s a strong position to be in.

Tina Hay: [00:20:34] And we’re very lucky, again, we have a content company. We’re able to, you know, be very lean if we had a very capital intensive company or product. There would be a different story. So it really depends on, you know, what you’re building and creating. So we’ve been very lucky in that respect. But definitely fundraising is also a full time job. And it takes a lot of time away from you know, especially when you’re a younger company and you don’t have that many people around you to take up the slack. So we’ll see what that looks like after this madness is over with. What the fundraising world will look like.

Sam: [00:21:09] Totally. Here’s another fact you need to know. Female representation in finance remains an issue. The industry often cites entry level numbers to demonstrate their progress. So 46 percent of employees are women. But women are only 15 percent at the executive level. So, Tina, hearing your story of building Napkin Finance in this sector is all the more enriching in our view, because it’s not the most intuitive sector when it comes to women being in positions of decision making authority.

Tina Hay: [00:21:45] Definitely, definitely.

Sam: [00:21:45] Thanks to the World Economic Forum and Forbes for the data cited in today’s show. Sorry Tina, I interrupted you.

Tina Hay: [00:21:51] Oh, no, no. I was going to say, you know, one of the things that we’ve noticed is that women and girls need financial education more than anyone else, especially women who may never have access or take control of their finances until later in life when it’s too late. So I think that that information is really important and it should help people kind of really empower women and young girls earlier on.

Sam: [00:22:19] So true. I love that. I love that mission. Tina, It’s been amazing chatting with you, so many lessons. Thank you so much for being here with us today.

Tina Hay: [00:22:28] Thank you so much for having me.