Find and understand the value of your product/idea — While it may seem straightforward, knowing the value that your app or product will add to an already cluttered mobile landscape is key. How exactly it will enhance your user’s experience in a way that they can’t get anywhere else?
NestEgg was founded in 2019 by Brett Foster, 29, an entrepreneur, veteran, and an uncle to two kids (with another on the way) from Salem, Oregon. When trying to open a savings account for his niece for Christmas, he realized that the red tape of the banking industry made it impossible for him to give her this important financial gift. It was with this experience in mind that Brett formed the idea for NestEgg while he was taking a break from the business world to raise cows on a dairy farm.
Thank you for joining us Brett. Can you tell us a bit about your ‘backstory’ and how you got started?
I’ve had a job since I was twelve. Work and education have always been drilled home to me, so I’ve worked in a range of occupations, including cutting cabbage for a Korean restaurant, as a forest firefighter for a local Native American tribe for a couple seasons, farm work, and raising calves on an organic dairy farm.
I enlisted in the military while I was still in high school. In Afghanistan, I worked in intelligence, and was cross-trained in what’s called signals intelligence and human intelligence as part of a multi-faceted team. I worked a lot with the local population, going into villages and talking to people, buying goods from them. In exchange, if I was able to build a good rapport with them, they would provide information. I was injured in 2010 in Afghanistan, shot in the leg during a firefight, and sent home. I started teaching intelligence strategies and did that for four years, until I enrolled in a local community college. I took my first business class there and really got amped up about becoming an entrepreneur. I kind of feel like I’ve always had an entrepreneurial spirit in me. I’m currently enrolled and working on a second degree in finance at Portland State University.
What was the “Aha Moment” that led you to think of the idea for your current company? Can you share that story with us?
On my way home from my sister’s house on Christmas Eve I realized that I had completely forgotten to get my nephew, who was soon to be born, and my niece, who was 3 at the time, a Christmas present, and I was kind of beating myself up about it as I made that 20-minute drive home. It wasn’t like I could whip up some kind of arts and crafts thing overnight, so I started thinking about starting a college fund for them after Christmas.
Almost as soon as that idea came to me, I realized that the possibility, especially from a mobile standpoint, is really limited. To create an account for a child, you have to go into the brick and mortar bank, armed with all the child’s information, and sit down with someone for at least a half a day to complete all the bank forms.
If I wanted to contribute to a savings account for my niece and nephew, I would have to call my bank, make a wire transfer, which can cost $10 to $15, or I could give my sister cash, which would most likely be spent on more immediate needs.
The idea just kind of kind of mushroomed from there and the thought of a trust fund came ultimately when I was talking to a couple investors about how the money would be held and whether it would be in a savings account, whether other assets like stocks and mutual funds could be included, and whether it would have opportunity for growth through investment. The thing that stuck with me, as far as trusts go, is the non-liquidity of the money. If Mom and Dad need to access that money, there may be a way to get it, but it’s going to be a little tougher than just going to the bank and making a withdrawal.
So, my thought was, what if we could create an easy way to establish a flexible trust fund, so that money will be there if the child decides to go to school, but also if they want to travel Europe or open a business or just move out of Mom and Dad’s house.
Can you tell us a story about the hard times that you faced when you first started your journey?
When I left the military, I struggled a lot with depression and just not really have a sense of purpose anymore. I was fortunate to have the G.I. Bill and I used that to motivate myself to go to school. That was a really tough time for me, really trying to find what I wanted to do, how I wanted to live the rest of my life.
I think NestEgg has really been kind of an awakening for me. The thought of pursuing things that are larger than life and have the ability to affect other people and really change people’s lives really appeals to me. So, being able to do something larger than myself is what’s been really motivating for me with NestEgg.
Did you ever consider giving up?
You know, I saved up a lot of money when I was in the military, so that, as well as some money my dad contributed, and our current investors have really helped us get where we are now. But it took us about a year and a half to really get things where they needed to go.
I think I’ve probably sent easily over 100 fundraising letters and it’s extremely hard getting shot down.
Probably one of the hardest things in bootstrapping a company is if you can’t afford it. How are you going to make it come to life? Obviously, I, at the moment, don’t do a lot of coding. Trying to find someone that I could trust with the product, with my ideas, and bring it to life is what has been one of the most difficult things.
I think one of the moments where I really considered throwing in the towel was after I had hired a development team overseas to initially put the product together. I thought it was a good business decision, but I felt like I hit a brick wall when that team presented a product that was not viable. It really set us back, and I definitely started to question what we were doing and whether or not this was something that could go further.
Where did you get the drive to continue even though things were so hard?
I’ve never really quit anything, and that “a-ha! moment” feeling had never really subsided.
This was something that I was leading, that I was really pushing myself and not wanting to give up.
Anytime something is going wrong or we’re having any kind of issues, I keep that “a-ha!” feeling in mind, because there’s not a product like this out there.
One of our developers mentioned something to me the other day about Charles Schwab and how in the ’70s the standard practice for institutional investors was to go after only high net worth individuals and collect steep fees for handling their portfolios. But Charles Schwab decided to focus on bringing investment portfolios to the middle class at a reasonable rate.
In a similar way, that’s what we’re trying to do with NestEgg, and we have a real chance to revolutionize the trust space the same way Charles Schwab revolutionized the investment space.
So, how are things going today? How did your grit and resilience lead to your eventual success?
The failure of the overseas developers was a real low point for me, but that’s what actually brought me to one of my partners, Sunny Clark. I had taken the code to him to see if it was viable. He didn’t just tell me that the code was trash; he ended up helping me finish the product. After that, we secured some new investors and a large infusion of cash.
We’re now right on the cusp of success. Our app is finished and in beta testing.
The last hurdle we’re overcoming is finalizing a partnership with a trust company. They’re in a similar position now as banks were a few years back, when they were distrustful of the emerging online-only banks. I think it’s been a little bit of a generational gap with older trust board members who can’t really conceptualize opening a trust fund with a small amount of money from your mobile phone, inviting friends and family to contribute, and taking advantage of a variety of ways to contribute. Why would someone who doesn’t have $100,000 to invest want to open a trust fund for their child, and why would other people want to contribute to that trust?
Ultimately, I think if anything, we’re going to create a whole new market of people who have been shut out of the wealth-building opportunities of the traditional financial system. Our clients may not be able to afford a traditional trust fund, but they still want to build a future for their children, they want their funds secured, and they want to have that same asset protection. Our app levels that playing field and makes all of that possible for them.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?
When I first got started with NestEgg, I, very ironically, took an approach to fundraising that was a throwback to simpler times. I thought the thing to do was go to San Francisco, because that’s where the big tech companies and venture capitalists are. For three days I went door to door to venture capital companies trying to pitch them. And I got shut down. I obviously had no idea what I was doing. I remember being in Palo Alto and walking up to a venture capital company and knocking on the door. They buzzed me in and the receptionist asked if I had an appointment. I told her no, but I was there to pitch my idea. She told me that’s not the way it’s done. I’d need a recommendation from someone and an appointment.
I don’t know, I guess I had too much juice at the time and was just really shooting for it. It was both comical and humbling, but what came out of it was an understanding that no matter how good an idea you think you have, no one, and I mean no one, really cares until you have something solid.
It could have been discouraging, but it just made me want to work harder to prove them wrong.
I started reading Forbes and TechCrunch and articles about funding and how you get startup capital. And I watched a lot of Mark Cuban podcasts and interviews on YouTube about how he started his company. One thing he said was to never take loans; exhaust friends and family, exhaust your own funds, but never take a loan. That’s something that stuck with me. If you can get the people around you to back you, then you might just have an idea that’s going to work.
What do you think makes your company stand out? Can you share a story?
We’re offering a simple, affordable, and flexible alternative to a product that is notoriously under marketed and over complicated. We’re simplifying something that has always been strictly for the wealthy and bringing it to the masses.
One thing that I have been struck by in conversations with people who have kids or who have young kids in their lives, is that it seems like a lot of people do have a 529 plan or they have a certain type of savings account for those kids — but they had to settle for something that didn’t quite meet all of their needs.
For example, a friend of mine who has two kids opened 529 accounts for them, but she can never get anybody in her family to add money to the accounts. The grandparents always just put money in the kids’ birthday cards, because it’s so complicated to add money to these types of accounts. Nobody wants to write a check and mail it to the trust company. It’s just so clunky when the rest of the world has gone so digital.
With NestEgg, you can complete an instant transaction that is as intuitive as apps like Venmo or Cash, and that is something that’s just not out there right now.
I think that what we’re doing is also really unique from the standpoint that it can meet a lot of different needs and that it’s flexible in a way that none of the other options are. Anyone can open a NestEgg account for the price of a cup of coffee. You can make a single contribution, recurring contributions, or use a round-up feature. You can easily invite friends and family to contribute and they can just as easily contribute to a child’s account using the NestEgg app. And the funds can be used any way the child wants, once they come of age.
Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?
I would say just find what motivates you and hold onto it.
Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
My dad has been a really big help. He believes in me and believes in NestEgg. We wouldn’t be here without him. Working for the Department of Defense, he’s constantly traveling, but at one point he went out of his way to wire $20,000 from Somalia just to make sure that we could make it until we secured other investors.
I honestly think you can really do anything if you have the right help and you have the right motivation.
Approximately how many users or subscribers does your app or software currently have (if applicable, or list your target community size)?
We’re still prelaunch at the moment, with a bunch of friends and family who are helping with the beta testing.
Our primary market is 30 to 35 million people.
Can you share with our readers three of the main steps you have taken, or are planning to take, to build a community?
We’re still talking to anyone who will listen. We’ve hired a public relations firm to help get the word out, and we’ll be doing a lot of digital marketing when we officially launch. We’re also working with people who are really active on Instagram and YouTube, specifically moms in the U.S. When you’re a parent, especially a millennial parent, you’re constantly getting hit with ads and offers, and it’s hard to know what to trust. Working with real people who can talk about our products with their fans who really trust them is going to be a really effective and important strategy for us.
What is your monetization model?
It’s very simple. The first trust that you sign up for is $4 a month. And then any additional child after that would be an extra $2 a month. There’s no additional setup charge, no charge to round up, no charge to make a contribution, except normal interchange fees if you’re using credit cards. By comparison, a trust company would charge anywhere from $400 to $800 a year for maintenance fees. Additionally, creating a trust is expensive, requiring legal consultation and running from $1,400 to $14,000, depending on the complexity of the trust.
How do you monetize your community of users? Have you considered other monetization options? Why did you not use those?
We are considering offering a yearly fee.
What are the five most important things one should know before one wants to start an app or a SAAS? Please share a story or an example for each.
- Find and understand the value of your product/idea — While it may seem straightforward, knowing the value that your app or product will add to an already cluttered mobile landscape is key. How exactly it will enhance your user’s experience in a way that they can’t get anywhere else?
- Establish a team — Especially if have an idea but no coding experience. Many VCs prefer to invest in teams, but that’s not the only reason to establish a core team. Your team brings different strengths to your quest to bring an idea to market.
- Research — Before doing anything whatsoever, do your research. While it may seem simple that you just want to create an iOS and Android app, there a lot of different frameworks, both front end and back end, that you need to figure out. What kind of APIs will you need to bring the idea to life, are they available from third-party vendors? If you’re going with a contractor to build out your idea, shop around, and get multiple proposals.
- Refine your elevator pitch — Simply put, get your pitch down. Have a short and sweet product pitch. Investors like a good story but they also get hundreds of pitches a month. Know how to put the most detail into the fewest words.
- Triple the time, double the budget — Whatever the length of time you imagine it will take to launch, it will take three times longer. Whatever you think you need, budget-wise, double it. Don’t be discouraged if you don’t hit your first launch date and your budget keeps expanding. Many adjustments and changes will arise and you need to be ready to adapt.
If you could start a movement that would bring the most amount of good to the most amount of people, what would that be?
Bring a wealth option that has never existed to the middle class.
I think that’s a fairly revolutionary idea because it opens up so many possibilities. When a kid is in high school and really starts to get the idea that they want to go on to higher education or maybe pursue a trade skill or become a carpenter or start a business of some kind, that’s usually the time that parents have the heartbreaking task of setting reasonable expectations defined by limited financial resources.
If a parent has created a NestEgg, that conversation becomes a lot easier and more hopeful for both the parents and the child, keeping many possible futures open for them.
How can our readers follow you on social media?
NestEgg Social Pages:
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