Ethen Yao is an Advisor at Blast, an innovative fintech platform creating more opportunities and the power to earn, win and save you money. In this interview, Ethan will be telling us more about his career and vision at blast.
Ethen, can you please tell the TechBullions readers a little bit about yourself and what your current professional focus is?
I started my career in corporate America and quickly realized that my passion is in new product innovations and entrepreneurship. I helped to jump start a successful financial technology company as the co-founder of Armatic Technologies. I developed and designed innovative algorithm and disruptive technologies to generate a unique business credit scoring system, thus acquiring actual data, customer variables, and creating real-time insight generation to improve customer invoicing process. Where Currently, I’m scaling Blast’s innovation efforts, which includes new products, features, as well as, intellectual property protection. I worked directly with the research and development team at Blast and co-authored 13 patents related to gamified financial processes and design. The concept of gamifying the financial services industry has been attempted for years from the top down with no or limited success. With the advent of esports and gaming becoming mainstream, we believe now it is the time to develop the next generation of fintech products with fresh new perspectives, such as game-driven savings and investments and game-driven modern portfolio theory investment management platforms.
What about your background? Can you share with us how you got to where you are today?
I received my Bachelors degree from Villanova University with a double concentration and triple minors. Then I went on to study Finance at Harvard University. I am also an avid video game player, where I am highly ranked amongst the gaming elites today. I began my first startup after I was laid off during the recession. If I could summarize myself, I would say I’m a combination of three sectors including: entrepreneurship, fintech and gaming/esports.
What is the highlight of your career so far?
The highlight of my career is having the opportunity to build exciting, new and innovative products in collaboration with my team at Blast. I believe I am building a meaningful and life changing product for millennials.
What is Blast? Can you tell us how you got involved with the team?
Blast is an innovative financial technology platform created by Acorns’ founders: Walter Cruttenden and company. The value proposition of the platform is to utilize gamification to help our millennial clients with personal finances. I connected with Sean Dignan, the former Chief Compliance Officer at Acorns at a venture capital investor lunch who passed my profile to Walter (Cruttenden). A week later, Walter offered me the position and I became the first employee at Blast. I figure it would be the opportunity of a lifetime.
There is a clear millennial savings problem, can you tell us more and how the current financial services product offerings are neglecting the millennials?
As you have heard, there is a major millennial savings problem. Millennials are either not able to save, do not want to save, do not know how to save, or a combination. Statistically, the majority of millennials have significantly less personal savings rate than previous generations. The millennial generation affected the economic depression of 2008 and also has a lower average income compared to previous generations. According to the new published CNBC report on college graduate income expectations, new university degree graduates still are only expected to make less than $50,000 a year average as their starting salary. Starting salary has not increased in relation to cost of living and inflation, while cost of attending university has skyrocketed. In addition, students can take classes such as wine tasting or learn a niche language, but are not offered more practical classes like personal finance. Due to the economic depression of 2008, millennials are more skeptical of traditional financial institutions creating a surge in popularity of fintech apps.
The millennial personal finance problem is further exacerbated by traditional financial institutions lack of offerings to millennials. Due to the low savings rate, the majority of millennial account sizes are miniscule compared to account sizes incumbent banks are used to. The average Robinhood trading account is between $1 to $5,000, while account sizes from incumbent banks average more than $10,0000. Even when incumbent banks offer millennial targeted products like robo-advisors, such as the offerings from Morgan Stanley and Wells Fargo, the minimum threshold is at least $5,000 for Morgan Stanley’s Access Investing and $10,000 at Wells Fargo’s Robo-Advisory. The incumbents are trying to address the millennial problem and are targeting the millennials but the fundamental disconnect of high requirements and high fees further distances the gap between millennials and the incumbent banks.
That sounds like a major problem. Can you tell us why the current financial technology product line-up is not the solution to the millennial savings problem?
Stash, Acorns, Robinhood, Digit, all these mobile fintech applications targeted specific toward millennials. They attract millennials because of their friendly mobile-centric user interface, low to minimum balance requirements and zero to near zero management fees. As millennials grew up with mobile phones, being mobile centric to start is extremely advantageous. But in the end these fintech products are mere evolutions of existing financial service products from incumbents. For example, Betterment is essentially a standard modern portfolio theory driven robo advisor, the fundamental difference between Betterment and Access Investing by Morgan Stanley is minimal beyond user experience and user interface. Fundamentally, Robinhood trading platform is a modern version of the old Zecco Trading back in the early 2000s when they first introduced the zero dollar trades concepts.
The intersection between financial services and gaming sounds interesting. Can you tell us more?
Gamification is to applying game concepts to different applications or industries. We know that because millennials grew up playing video games, the current gaming industry, along with esports are one of the fastest growing industries. By now everyone has probably heard of the meteoric rise of Fortnite. So we know millennials grew up with games and love playing games, so we try to incentivize this existing behavior and lifestyle and have it correlate with a positive behavior like personal finances. The current iteration is that we are utilizing in-game actions to trigger savings and investments. For example, in Fortnite a player can score eliminations and every elimination he/she saves a preset amount of points.
So, you’ve mentioned that you’re an avid video game player? Can you tell us more about that?
I played Nintendo and Super Nintendo games growing up and started to get into competitive video gaming in the early 2000s, which is when I became a top player in the United States Age of Empires: The Conquerors. I became Global Elite in Counter Strike and in 2018 focused on playing Blizzard’s Heroes of The Storm, becoming Master.
We have all seen the meteoric rise of Fortnite, do you think it is here to stay?
Fortnite’s popularity is undeniable as it generates a great amount of revenue, media mentions and social interactions in comparison to professional sports. Fortnite’s fan base is comprised mostly of millennials and younger, giving it an advantage over rivals such as National Football League, which has a much older fan base. In terms of Fintech, Fortnite can be considered one of the world’s largest fintech companies, considering its payment systems with hundreds of millions of players making in-game purchases around the world. Blast is currently developing capabilities to support Fortnite and will be alpha testing this feature shortly.
Last question, what three items would you take with you if you were stranded on a desert island?
Sun screen, beach towel and some cool looking shades. When life gives you lemons, order the lobster tail.
For more information, visit https://blast.com/
