Today, Tim Chen is CEO and co-founder of personal finance website NerdWallet, which sees 10 million monthly visitors and is valued at more than $500 million.
But in 2008, like so many others during the financial crisis, Chen found himself unemployed.
After spending four years working at hedge funds like Perry Capital and JAT Capital Management, he found out "basically on Christmas Day," that he was being laid off, Chen tells CNBC Make It.
"It was super devastating, because I'd just been very achievement-oriented my whole life and I was very concerned with external status and all that stuff," says Chen, who graduated from Stanford.
Now though, Chen sees it as one of the best things to ever happen to him. It turned him into a successful entrepreneur.
"I always dreamed of doing something entrepreneurial. I just never felt like I had the permission to," he says.
Stumbling onto an idea
Chen, 35, says he got the idea for NerdWallet "sitting around twiddling my thumbs," while out of work.
He had received an email from his sister, who was living in Australia, with a question about finding a credit card with lower foreign transaction fees.
"My first inclination was, 'Let me Google that for you and I'll get back to you in three minutes,' Chen says. "And, I was shocked I couldn't find anything on Google that wasn't basically marketing [or] promotional material."
Chen says he drew on his own finance experience and still it took him, a professional, a week of extensive research to compile what several major banks and credit card companies had to offer. He sent his sister an Excel spreadsheet breaking down her options.
Soon, that spreadsheet was being forwarded around widely outside of his own group of family and friends.
It made Chen realize there was "real shopability problem in financial services," where consumers often had to sift through banks' dense materials for information. Without a professional financial advisor, it's hard to compare products. Meanwhile, "Your checking account provider might give you a mortgage, a credit card, an auto loan, eventually insurance or wealth management services, and they'll make something like $50,000 off of you over the course of your life," Chen says.
"That's how the whole system works."
Chen wanted to offer more transparency with online financial services advice. So working out of his Manhattan apartment, he used $800 of his own money to cover start-up costs like web hosting and domain fees and software and started NerdWallet.
The plan was to provide pros and cons of various financial services and to answer questions, provide advice and aid people making financial decisions via articles written by professional personal finance journalists.
Nine months after launching the site, however, Chen was forced to move into his girlfriend's apartment to save money — he made only about $75 in the site's first year while often working 16- to 20-hour days.
"I was eating Subway everyday… It was like anything you could do to save money," Chen says.
In NerdWallet's second year, the company made only "something like $60,000 in revenue," Chen says. He was unsure if he should continue with the venture or try to find a job with another hedge fund.
Chen tells CNBC Make It that he is "so grateful" for the timing of the economic recession, because the lack of amazing opportunities at Wall Street firms gave him more reason to stick it out with NerdWallet.
"It still seemed like lunacy to go and do this startup thing relative to doing the sure thing, but it was showing just enough early traction that I was thinking 'this thing could work,'" he remembers.
Work it did. Soon, NerdWallet, finally started taking off, with visitor numbers and revenue tripling from month-to-month at one point in mid-2010. Finally Chen stopped thinking about going back to Wall Street.
In 2015, NerdWallet raised roughly $105 million in funding. But the company's path has not always been steady. Last year, NerdWallet was forced to lay of dozens of people (about 11 percent of its workforce) after missing profit goals. In an email to staff last fall, Chen (no stranger to layoffs himself) called the staff cuts "extremely painful," but he also made clear his optimism for the company's future.
"I'm confident we're making the right investments as we enter 2018," Chen told his employees, pointing specifically to an increased focus on the company's mobile app and online memberships that help users find their credit scores as well as set and track various financial goals.
Much of the company's revenue comes from financial services companies that pay NerdWallet when its readers sign up for a credit card or similar product after clicking through the NerdWallet site. This is a fairly common practice among financial advice websites like Credit Karma and Bankrate.
Meanwhile, NerdWallet tries to be transparent about receiving money from some of the financial companies the site writes about. A disclosure on the site notes that those relationships "may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice."
It's a business model that NerdWallet is also putting to use through a new voice-activated feature on Amazon's Alexa that allows users to get voice-activated advice on how to find the best credit card.
Still, NerdWallet is "obsessively consumer focused," according to Chen. The company does "really expensive user-testing" in order to determine what types of financial advice different readers are seeking and how to best answer their questions, Chen says: "We always focused on hiring the best journalists and investing the most [in] creating content that people would feel complete and end their search on."
Chen tells CNBC Make It that, as NerdWallet has grown, he's had a lot of humbling experiences, and the ability to learn from failure has "absolutely" been essential to his company's success. It's also kept him focused.
"When I started NerdWallet, I was a lot less mission-oriented and a lot more concerned about building a successful company," Chen told LifeHacker. Now, it's about offering readers the type of advice they weren't getting elsewhere online.
Says Chen: "If we focus on doing what's right, maybe we can build a relationship with a person so they come back, time and time again."
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