How this fintech startup made their robo-advisor appealing to millennials

Money Design CEO Jin Nakamura / Photo credit: Money Design

This article is part of Tech in Asia’s partnership with Disrupting Japan where we publish the revised transcripts from the show’s podcast interviews with Japanese entrepreneurs. This is heavily revised from the original transcripts. For the full interview, go here.

Jin Nakamura co-founded Money Design as a way to introduce millennials and other young Japanese to investing. Money Design is the creator of Theo, one of Japan’s first robo-advisors.

Robo-advisors are a lot simpler than their name implies. Basically, you contribute a small amount of money each month and the robo-advisor will invest certain percentages of that in stocks and bonds and will make some adjustments if the allocations get too far out of alignment. It’s a simple concept, but young Japanese have shown very little interest in it.

So, to reach them, Money Design created a lifestyle brand, one that had absolutely nothing to do with finance or money. Here, Nakamura also shares some insights for anyone running a fintech startup.

Can you briefly describe Theo?

We are providing a robo-advisory service in Japan, and our global competitors are Betterment and Wealthfront.

We are providing this financial product via smartphone. Once you access our website, you just need to answer five questions:

1. How old are you?
2. Do you have any experience in investment?
3. Are you conservative or aggressive?
4. What would you do if the market is going down?
5. Are you afraid of inflation?

Once customers put their money into our portfolio, we manage that discreetly.

Who are your customers?

Fifty-one percent of our customers are in their 30s, and 15 percent of them are in their 20s. Compared to our competitors, like large financial institutions, only 5 percent or 7 percent of their customers are in their 20s. So, we provide our service for the younger generation.

How did you reach the millennial demographic?

We differentiated ourselves with two strategies. The first was our UI and UX, and the second was branding.

Our UI/UX is very simple. Large financial institutions always add something and add something and add something, and then the website gets complex. So, we make ours very simple, and we make it easy for people to register and start. That’s our first differentiation strategy.

The second is branding. Theo is the name of Vincent Van Gogh’s younger brother. Van Gogh sold just one painting when he lived. However, Theo supported him mentally and financially. That’s why Van Gogh could paint one painting his whole life. Our concept for Theo is “We care about the money, you can enjoy the life.”

What has been your customer acquisition strategy?

We use three strategies. The first is, of course, internet advertisement, the second is media, and the third is partnerships.

It’s costly to advertise about finance on the internet. How did you do it?

Do you think people will try to copy your approach?

If there’s one thing you could change about Japan, what would it be?