"The defining spirit or mood of a particular period of history as shown by the ideas and beliefs of the time."
Some could call it a ~Sign of the Times~
This song is such a vibe I couldn't resist.
Has anyone else noticed that the Smoov Blog is on fire recently?
Selfishly the exercise of writing helps me finalize and simplify my thoughts and I've found it to be beneficial in multiple ways. The first is what I just mentioned, providing clarity. The second is that I can share what we're thinking and talking about inside the company with anyone who's willing to hear about it.
Something that a lot of investor types like to ask is, "Why now?" Not a very creative question imho but a valid one nonetheless. Other than the most obvious answer which is, "Why Not Now?" I want to share some of my thoughts about exactly why the timing for Smoov is actually right now.
Before that I want to give a quick shoutout to arguably the most important concept and one of my favorite cheeky startup buzzwords defined above:
It's just a word... not for nothing a high value scrabble word. But in a lot of ways this one word determines whether or not a start up will succeed. At any startup there are things in your control and things outside of your control; zeitgeist refers to the latter, and if the zeitgeist of your era is in your favor, the chances to do something big are significantly higher.
Let's unpack three specific reasons why the zeitgeist of 2022 is in favor of Smoov.
1. A fundamental shift in the workforce.
In the words of my dear friend Bob Dylan, "Times they are a changin"... despite the fact that this record was first released over 50 years ago, it's possible that this sentiment has never been more true.
Among other things, in the context of Smoov and couples finances there are some major macro trends taking place that are in our favor. First and foremost, gender equality in the workplace. The time of women making 80 cents on the dollar against men in the same role are finally fading away, albeit not quickly enough but still we're headed in the right direction here.
So with women outpacing men in terms of annual earnings in some of the biggest economic hubs in the world, how does that translate to sharing expenses.
As we have said consistently, this is not a one size fits all situation and couples should do what makes the most sense for them. As a generalization though, if one partner is earning more than the other, their expenses should most commonly be split in a way that reflects that.
One of the nice pieces we're building in Smoov is the ability to set a threshold for split % to kick on. For example couples can set their threshold of $100 and any expense under that amount will be split 50/50 (or whatever % they want) and any expense over $100 will be split by their income based % that's more consistent and equitable with their annual earnings.
2. Mobile first mentality.
We are in the midst of a major FinTech platform shift.
When personal computers became mainstream in the 1980s the banks took a little while to catch up and it wasn't until roughly 2008 that online banking became a trustworthy way for consumers to manage their funds.
With the rise of mobile investing platforms like Robinhood and Coinbase, money transfer apps like Venmo and Cashapp and the overall ease of use and intuitive nature of big banks mobile apps in general, consumers are more comfortable than ever with managing their money via mobile opposed to a desktop.
These adoption statistics are only expected to continue growing.
So as consumers are well accustomed to managing their finances via mobile, Smoov is offering them a solution to a problem they're already solving via mobile in most cases, the only difference is we're automating what they're doing manually, and who doesn't love automation?!
3. Growing culture of Independence.
The third and arguably most important macro trend here is the rising culture of independence amongst young people. Some argue that this is partially a byproduct of the isolation experienced during the pandemic but if we take it apart there are a number of factors at play here.
Without getting too far into the weeds, as it relates to Smoov, the biggest factor in terms of independence is that as younger generations are entering committed relationships later in life, they are accustomed to a strong sense of financial independence and autonomy. This makes the notion of combining bank accounts with someone else, regardless of how deeply in love you are with that person, extremely daunting.
Unfortunately, until now opening joint accounts has been one of the most reasonable blanket solutions to solving the challenge of managing shared expenses together. But as we discussed in the last blog post, it can be a double edged sword.
With Smoov, couples will be able to integrate with their existing credit and debit cards, and simply select which expenses they split with their partner. Those transactions will get added to the couples shared expense view and Smoov does the math for them. When users are ready they can settle up via ACH transfer directly from Smoov.
We're offering a simple and effective alternative to a complicated problem that the market is ready for and craving. Timing is everything.
Invites for our beta are going out as we speak. If you want to be one of the first users don't forget to join our waitlist.