This week on our Masters in Business interview, we speak with Jeff Maggioncalda, co-founder and former CEO of Financial Engines.
Based on the work of Nobel laureate William Sharpe, who cofounded the firm, Financial Engines now manages over $115 billion in corporate 401k plans using the capital asset pricing model insights Sharpe developed.
Financial Engines originally began as a free website Sharpe had developed, and at the urging of a few colleagues (who eventually became investors in the start up), it was turned into an actual company.
Maggioncalda got his undergraduate degree and MBA from Stanford. Sharpe was one of his intellectual heroes (He gave the undergraduate commencement speech at his Maggioncalda’s graduation). When the opportunity to work along side the Nobel laureate came along, he jumped at it.
The company went through a series of business plans, all of which failed. When they surveyed their clients’ employees, they found that wanted someone to tale the vuren of managing their 401k portfolios off of their hands. Down to the last 15 million dollars in venture capital money, they bet the company on becoming a 401k adviser/asset manager. They were so successful that 5 years later the company went public.
The full podcast is available on iTunes, SoundCloud and on Bloomberg. Earlier podcasts can be found on iTunes and at BloombergView.com.
