SmartyPig CEO Bob Weinschenk (middle) poses with co-founders Jon Gaskell (left) and Michael Ferrari at Finovate 2009. Photo by Christophe Langlois of Visible Banking, from clanglois.blogs.com.
When you’re in the air as much as Bob Weinschenk, you should know where you’re headed – even if the route is winding and long. But even the CEO of Des Moines-based SmartyPig, who commutes over 2,000 miles a week for his job at the goal-based social savings startup, couldn’t have plotted the course his life has taken.
Weinschenk, the CEO of one of Iowa’s recent web success stories, started as a hardware manufacturer. He spent nearly 15 years at AMD Web Design, becoming the head of the Core Logic Division and, within 18 months, made chipsets a $200 million business for the company. It was that work as an independent division that whet his appetite for start-ups and entrepreneurship.
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“It was so much fun to go out there,” Weinschenk said of experiencing a startup mentality within AMD. “Every meeting was disruptive. Everyone was contributing. That was really a start towards moving toward a startup world.”
After AMD, Weinschenk moved to Lucent, where he worked on the DSL and wireless product lines. He also put in significant time helping to developing products at Apple at the time when they were releasing the first WiFi integrated consumer products.
Despite those groundbreaking experiences, Weinschenk had been bitten by the startup bug during his AMD years, and he couldn’t shake it. So when a few friends from Stanford approached him about being the CEO for digital imaging startup Pixim, he bit back.
“This was the 1998 timeframe,” Weinschenk recalled, “so digital imaging was basically just a mess. Digital cameras were really expensive. So we were one of the first people to come out with high quality imaging that really competed against film…at that point I was irreversibly moved to the startup world.”
Weinschenk’s base in this new world would be Austin, Texas, which he and his wife chose over Silicon Valley as the place to raise their family. It was there that he continued iterating as an entrepreneur, spearheading several ventures including Britestream, a commercial encryption provider that sold to nCipher, and Smart Food Healthy Kids, a nutrition and wellness site for parents that he began with his wife.
In 2006, Weinschenk started Barfly Interactive Networks, a from-scratch endeavor that provides interactive content to bars and restaurants, and in turn sold that property to TouchTunes, “the largest digital jukebox company in the United States,” according to Weinschenk. The advertising technology will be incorporated into TouchTunes’ many kiosks already in service.
One of the largest investors in Barfly is Billy Joe “Red” McCombs, the Texas investor known equally for his past ownership of the Minnesota Vikings and for founding Clear Channel Communications. It was McCombs who, after the deal was made with TouchTunes, turned Weinschenk on to another investment he had made: financial planning startup SmartyPig. He was asked to head the young company, coming on board as CEO in September 2009.
Weinschenk’s only familiarity with the Midwest had come via his mother-in-law, a Pella, Iowa native, but he had no qualms about working in the state (part-time, at least: Weinschenk splits the week between his home in Austin and his work in Des Moines).
“Having lived in [Silicon] Valley for 14 years, Iowa has all of the ingredients to foster successful entrepreneurship,” Weinschenk said.
In fact, he stipulates that SmartyPig would not have sprung from such a traditional startup capitol. The key factor from the Des Moines marketplace is its abundance of financial institutions.
“In order to have an entrepreneurial environment, it’s built on relationships,” Weinschenk said of Iowa’s unique cache of experienced programmers of financial software. “All of the financial underpinnings of SmartyPig have been proven at DataVision(SmartyPig’s security and platform partner). That doesn’t exist in Silicon Valley. It isn’t a core compitency.”
Weinschenk looks for opportunities where he can exploit inefficient or stale business models, and that’s what attracted him to the innovations being created at SmartyPig.
“After doing 25 years of business with me,” Weinschenk said of his past bank, “it wasn’t giving me hints or suggestions as to how I could do things better. It wasn’t communicating with me in a relevant fashion.” Describing himself as “extremely conservative” in his buying habits, Weinschenk had an immediate attraction the work being done in the financial-services-heavy corner of the globe that is Des Moines.
Weinschenk was also drawn by the culture SmartyPig’s co-founders, Michael Ferrari and Jon Gaskell, COO and president, respectively. He was impressed with the devotion the two entrepreneurs brought to providing banking services to consumers, how they “advocate for the customers.” Ferrari and Gaskell certainly don’t approximate the typical customer service interactions we may be used to in the banking community.
“You can hear the visceral hurt when [Michael] disappoints a customer,” Weinschenk said of Ferrari’s instinctive drive to separate SmartyPig from its brick-and-mortar predecessors. “And that’s a unique set of DNA.”
While the recent economic downturn has driven people to financial programs like SmartyPig, Weinshenck doesn’t foresee the interest in his company dropping off in the event of an economic recovery.
“I’m getting a sense – and I’m seeing some economic data that will back this up – that unlike other downturns where people have immediately turned back to their old spending behavior, this [recession] seems to have left a more permanent message,” Weinshenck said.
The SmartyPig CEO also feels strongly that the next generation coming up will look for products that help them plan for the future.
“We’re seeing stickiness in savings products,” he said. “I think they’re gonna plan out a little more than they have in the past … my bet’s on SmartyPig.”
South by Southwest Interactive: Next Monday at SXSW, Weinschenk will be participating on the “Banks: Innovate or Die!” panel. Visit our “SPN at SXSW” page to follow the action from the Silicon Prairie region at SXSW: siliconprairienews.com/sxsw.
