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MEDIASCAPE: Insights From Digital Changemakers
Join hosts Joseph Itaya and Anika Jackson as they dive into conversations with leaders and changemakers shaping the future of digital media. Each episode explores the frontier of multimedia, artificial intelligence, marketing, branding, and communication, spotlighting how emerging digital trends and technologies are transforming industries across the globe.
MEDIASCAPE is proudly sponsored by USC Annenberg’s Master of Science in Digital Media Management (MSDMM) program. This online master’s program is designed to prepare practitioners to understand the evolving media landscape, make data-driven and ethical decisions, and build a more equitable future by leading diverse teams with the technical, artistic, analytical, and production skills needed to create engaging content and technologies for the global marketplace. Learn more or apply today at https://dmm.usc.edu.
MEDIASCAPE: Insights From Digital Changemakers
Navigating the Financial Tech Frontier with Stephen Tanenbaum
Stephen Tanenbaum, the visionary mind behind Rainbook and co-founder of UGallery.com, joins us for an engaging conversation that traces his incredible journey from a childhood passion for baseball cards to innovative entrepreneurship. Discover how his early endeavors, such as creating a lofted bed shelf in his dorm room, sparked a drive that would lead to the establishment of UGallery.com—a groundbreaking platform for emerging artists. Stephen’s tale is one of relentless perseverance, strategic foresight, and the ability to forge impactful partnerships with industry giants like Crate & Barrel despite the skepticism surrounding e-commerce in the post-dot-com crash era.
We then pivot to Stephen’s fascinating shift from the art gallery industry to the world of financial technology with the launch of Rainbook. Navigate the complexities of starting this venture during the unprecedented COVID-era investment boom, and uncover the ways Rainbook has transformed to support both self-directed investors and financial advisors. At the heart of Rainbook's mission lies transparency and equitable access, exemplified by tools like the Advisor Analyzer, which shines a light on advisor fees and credentials. Stephen shares the platform’s evolution, focusing on building a gender-balanced advisor network and the role of SaaS solutions in enhancing client engagement for wealth firms.
But it's not all smooth sailing. Join us as Stephen opens up about the hurdles faced in promoting Rainbook and the nuanced approach needed to gather user feedback in the sensitive realm of financial data. Leverage Stephen's insights on evolving marketing strategies, the significant potential of AI in finance, and the vital importance of building and maintaining strong professional relationships. Stephen leaves us with a powerful message on the importance of embracing failure, encouraging us to find joy in our pursuits and to treat every setback as a stepping stone to move forward. This episode offers a wealth of inspiration and guidance for aspiring entrepreneurs and digital innovators alike.
This podcast is proudly sponsored by USC Annenberg’s Master of Science in Digital Media Management (MSDMM) program. An online master’s designed to prepare practitioners to understand the evolving media landscape, make data-driven and ethical decisions, and build a more equitable future by leading diverse teams with the technical, artistic, analytical, and production skills needed to create engaging content and technologies for the global marketplace. Learn more or apply today at https://dmm.usc.edu.
Welcome to Mediascape Insights from Digital Changemakers, a speaker series and podcast brought to you by USC Annenberg's Digital Media Management Program. Join us as we unlock the secrets to success in an increasingly digital world.
Speaker 2:Welcome to another episode of Mediascape Insights from Digital Changemakers. I am one of your hosts, annika Jackson, and I'm here with Stephen Tannenbaum today of Rainbook. Before we get into Rainbook and what that's bringing to the world digitally, we're going to talk a little bit about your background and where you started. So, stephen, thank you for being here.
Speaker 3:Yeah, thanks for having me.
Speaker 2:Of course, I'd love to hear about your journey. I noticed that you got degrees in business and finance, but you also spent some time in Australia, so please tell us a little bit about your journey and your business background and how that teed up your life today.
Speaker 3:Yeah, definitely so. I guess I've kind of always been an entrepreneur at heart, understanding where your customers are I think I tried selling baseball cards on the corner of my street when I was 10 years old Learned very quickly you need to know where your customers are, and some of them In college. I went to school in DC for a couple of years and then out in Tucson, down at University of Arizona, I created a bunk bed, dorm room lofted bed shelf, created that, manufactured, sold it, sold it door to door around college campuses and then landed that in Bed Bath Beyond and then from there I graduated from University of Arizona out of the McGuire Entrepreneurship Program, which was within the business school. There, and me and my two co-founders of my prior company, ugallerycom, we came up with a concept to give emerging artists a place to exhibit and sell their artwork and, at the same time, a place to buy relatively affordable original artwork online and through some business case competitions. Through that we won some seed money to get that started, ended up raising some money from a family office and I like to say that was my 12-year startup and I sold my interest in that in 2018. That was from 2006 to 2018.
Speaker 3:So that was a 12 year journey and it was really an interesting time. It was like web 2.0. You had the dot com crash. Nobody thought e-commerce was a thing anymore. People have tried that. Why are you doing it? You should go to dental school. Why are you doing this? So it hurt it all during.
Speaker 3:When we got started and we kind of like slogged through. 08 was kind of the great recession and I remember one month, you know, only making a couple sales June of that year. I guess I must have been 18 and wondering what are we doing. But we kind of made it through to where, when I left in 18, the business was in the seven figures in terms of online sales. We had a high average order value of over 1200 bucks, which was pretty high. It's still pretty high for e-commerce. We were the exclusive original art provider to Crate Barrel and we had a relationship with Williams-Sonoma Home as well in first step. So definitely learned a lot along the journey. That University of Arizona entrepreneurship program was two-thirds MBA students I know you have a lot of graduate students on, probably listening and one-third undergrad. So we were actually part of the undergrad cohort, but we were able to take advantage and really leverage that program. So I'm very thankful to the university and that they offer that to the students and I know it's still going strong today.
Speaker 2:Nice. Well, and I mentioned to you before we jumped on that in the MSDMM program our students all create a capstone project, which is it could be a business that they have, or it could be their employer, but they create something new, perhaps to help propel the mission, the business, forward forward. Thinking about the fact that you were doing this in 2006, I mean I remember in the year 2000, 2001,. I worked for a magazine publisher in San Francisco and to find people to be my street team, I was still going into music, chat rooms, right, the old edit well model, then Yahoo and all of that. And so I mean, even just jumping a few years ahead to 2006, you were still very ahead of your time.
Speaker 3:Yeah, I mean we were and timing is a lot when it comes to business, I think and we were, and I'd say we were probably a few years, even too early to really hit it perfectly, probably right after the Great Recession and it would have been a little bit better time. But you don't really have a choice in business or startups and I think the goal is to continue to run it and improve every day, every month, every year. So when the timing is right, you can really recognize that and then kind of double and triple down on your business and whether that's from marketing or the business model itself. So we started off representing collegiate artists and recent graduates. So it was U the letter, u gallerycom, and we evolved over time to where, when I left, I think, our average artist was in their 50s and really emerging the career artists, which allowed us to represent more seasoned artists and increase our average order value over time.
Speaker 3:So I think that was a really good lesson. We had a great advisory board and it was. You know, it's important, not? I think it's very important not to be wed to your startup idea, to your baby, like you need to be able to evolve and understand what business you start today or if you're developing a capstone project, it might not look the same three months, six months or a year from now, and that's okay. It probably shouldn't. All businesses need to evolve over time, no matter how successful they are, to stay competitive.
Speaker 2:Yeah Well, and to that point, you talked about winning some business case competitions. You also talked about family offices. For those who are listening, who might not be familiar with that term, can you explain a little bit more about what a family office is and how they can support you?
Speaker 3:Yeah. So we won the case competitions, which are just competitions within the university that we went to One in Canada at Queen's University and another one at Ball State University in Indiana, and then we had one at our business school as well, down in Tucson University in Indiana, and then we had one at our business school as well, down in Tucson, and back then they would give basically cash prizes that we could do whatever we want with it, and we decided to put it towards the business. We ended up raising some outside funding from the family office and family offices are typically ultra high net worth families that are looking to invest some of their earnings fruition wherever they got it if they sold a family business or they actually have it and they're looking to invest some of their earnings fruition wherever they got it if they sold a family business or they actually have it and they're looking to invest into alternative assets. So outside of the stock market, right, and they'll might invest in real estate, they might invest in other multifamily projects, but they also might invest in startup companies or growing emerging companies, and typically family offices will. They might invest where they might have a certain interest or passion in addition to just, you know normal startups, but typically it's because they want to be involved at a little higher level with their investments and have a little bit more of an impact. So we, you know we had a great investor that invested with UGallery. They ended up being they were prominent alumni of the university down in Tucson, so he had a connection to us and we had a connection to him. He's an unbelievable philanthropic supporter of the arts as well and they were a strong supporter of UGallery over the years. And there's typically family offices and it's growing, especially in the last few years. So there weren't as many of these back when we started UGallery back in 06.
Speaker 3:But nowadays there's a lot of different. They can be called angel investors as well. So angel investors might be they're considered family offices. I guess would be a super angel because they're going to invest a bigger check. Versus angel investors might be individuals that want to invest in startups that they're interested in and they might be cutting checks for $25,000. Versus a family office is like one big group, these different angel groups that are out there around the world and especially around the country that are active. They pull together a lot of individual angel investors and they invest as the group and I'd say that's kind of on par with a family office. So that's how I view it. And each angel group, and typically you'll find them in different regions. There'll be one in the Northeast, there'll be one in the Midwest, there'll be one in the Southeast, and you can find those and you can kind of view them on par with family offices. Some family offices might invest more from a strategic standpoint if they own other businesses not too dissimilar to maybe some other strategic investors from like corporate standpoint.
Speaker 2:Thank you, that was a really great explanation. I appreciated it. So you had this online gallery. You saw your original thesis was college and post grads and then you now have this. You know the demographic aged a little bit, where you're able to bring in a lot more people. How did you find these partnerships? Or how did they find you with the Crate and Barrels with Williams-Sonoma?
Speaker 3:Yeah, partnerships take time and it's really, you know, reaching out and finding the right stakeholders. I'd say we found them. Those partnerships came about with original artwork in general being another revenue channel, another product line that was increasing in demand from these home furnishing companies and it wasn't something they were selling and it was something that obviously made sense. You're going to sell the couch, you might as well sell the artwork with it. We were in San Francisco, williams-sonoma Home is based there. So basically that was just reaching out to them Original art for we only sold the original art.
Speaker 3:We did foray into prints at one point for a brief period, but when it came to selling original art through big box retailers it's just a totally foreign product to them. So it was a big learning curve and it was a little bit tougher to get integrated with them until kind of the drop shipping, kind of like the Amazon marketplaces. That's very common today. Back in the day, 10, 15 years ago, that was not normal for any kind of brick and mortar retailer and some companies, some software companies, spun up to offer a drop shipping software service with a wider selection of products, like Amazon does. And today, you know, walmart has their own marketplace dropshipping. It's all very commonplace today, but back then it wasn't. So I think the timing had to be right for us to get into these big box retailers and not us, but other software companies that enabled this among the big box retailers allowed us to be able to gain access to those partnerships.
Speaker 2:So I've heard a few things that I think are really key from you. You talked about knowing where your customer is. If you're trying to sell baseball cards, that could be worth a lot of money, don't you know?
Speaker 2:don't do it from the street corner to 10 year old people, you talked about coming up with an idea start just starting it and leveraging the people that you knew. So you were in university, so starting the university students and you talked about taking a chance and reaching out to potential partners and prospects and cultivating that relationship until there was a partnership in place. So I think these are really key things that are part of your journey that everybody who's listening should consider as they're creating businesses capstones or being entrepreneurs in their offices. You went from the gallery to then moving fully into the private equity advisory realm and then into Rainbook and working with financial advisors. So can you talk a little bit about was that something that really fascinated you when you went through the process as an entrepreneur and is that how you went into that field?
Speaker 3:So I've always been very interested in personal finance and Rainbook. Kind of going back to don't be wed to your idea. We launched Rainbook in 2021 summer and it launched as a platform for self-directed investors to aggregate all of your alternative investments with all your other assets, to be able to display a nice clean net worth dashboard, but with a wedge being the alternative. So when I had exited UGallery, I put some of my money and invested in some private equity, some friends startup, some multifamily real estate investments, some online fractional this is kind of the craze during COVID where everybody was investing you can invest in fractional baseball cards, fractional artwork. You had the crypto boom of that time. So I thought, you know, I had this issue of being able to consolidate all the information into an Excel sheet, which was too crazy, and I wanted to build a platform. But I wanted to make sure there was a scalable enough audience there, demand for it and until kind of the crypto craze and the collectibles and every now you could invest in also other real estate platforms as well that were democratizing access to alternative investments. Once that came to the forefront, I thought, yes, there could be a need for this.
Speaker 3:We launched it and then obviously that craze waned and we looked to see what else, what could we take, what we've learned or built and what's another problem we can go out and solve. And what we saw was that financial advisors we had clients, members that were trying to connect their financial advisor accounts, but we didn't have those connections. So we said, why are they trying to connect those accounts? Obviously it's part of their net worth. And then we kind of saw what else can we do once we have those connections? What can we kind of do for them and serve the industry? And we saw that a lot of people didn't know exactly the fees they were paying their financial advisor. They didn't know about the layered portfolio fees. If you own a mutual fund or even an ETF, you're going to pay an expense ratio part of that fund. Some funds have these front loaded fees where you pay an additional fee before you even invest in the fund, which is just terrible. It might've been commonplace 20 plus years ago, but today we have this thing called ETFs and they're very low cost funds and you know the difference it really came down to. Brokers are allowed to take commissions and their firms are allowed to take these kickbacks Versus a fiduciary financial advisor that works at a typically an RAA firm, registered investment advisory firm is. Not only do they not offer that to their clients, they're not allowed to, and they always put the best interests of their clients and find them the best product, no matter where it's coming from. So we saw that problem and wanted to see what we could do. So today Rainbook has a marketplace of vetted fiduciary financial advisors on the platform.
Speaker 3:We're striving to be the first gender-balanced network out there and we'll match our members.
Speaker 3:If you're unhappy with your financial advisor or if you don't have a financial advisor, you can log onto Rainbook and get matched with an advisor.
Speaker 3:Our marketing kind of from a business standpoint, our marketing hook is we developed this advisor analyzer where members can log on. They can enter their advisor's name and firm name and connect their advisor managed account and we'll basically review their advisor. We'll pull their broker check record, we'll tell you if they're a certified financial planner, we'll tell you if they're registered as a broker or an RIA or both dually registered, and then we'll also give you a fee breakdown of your account so you know exactly how much in total fees you're paying. That's been really good to really drive engagement. And then the last thing I'll say is we've continued to evolve as a business, so now we've begun building a B2B SaaS solution for wealth firms to really recreate their prospect conversion page. One thing we're noticing out there is a lot of wealth firms. Their main call to action is sending their users to a 1990s style contact us form, and we think there's a much better way, leveraging our advisor analyzer to drive engagement for their firms on site.
Speaker 2:Fantastic and Rainbook is a free service. How do you monetize?
Speaker 3:Yeah, so it's free to our members to use. I'm a big proponent of that. I don't think there's a whole lot of scalability in a consumer service that's going to charge, especially when it comes to personal finance. You kind of hit a limit of people who are going to pay, but then beyond that people just don't have the time. Hence why I think financial advisors are great to work with, because they can really take on that ownership that you don't have time for. So it's free to members to use it. And then we have a rev share revenue sharing agreement with the RIA firms on our network. So if you end up working with an advisor on our network, we share in some of that advisory fee revenue, whereas the member will never pay any more than they would typically pay, normally pay that firm in that engagement. So that's how our revenue model is to smooth that out. That's hence our kind of additional service that we're looking to provide to our RIA firms in terms of this prospect conversion page software.
Speaker 2:Yeah, fantastic. I always love when people are really transparent about the process and also realizing that this is a service a lot of people need who might not know what questions to ask, not know if they have the right advisor it's just somebody that was recommended to them or somebody their parents used. So you're helping really create this equity, as you said, and I love that you're wanting to be gender equitable as well.
Speaker 3:Yeah, I think it's important. Part of the requirements to be advisor on our network is you have to be at least a certified financial planner or a CFA chartered financial analyst or a CPA accountant. And part of the industry is just very it's dominated by old white males. That's where the numbers are and it's a growing industry. But to the CFPs, no-transcript, that isn't necessarily going straight down to the millennials from the boomers. A lot of that's going from the boomers who are passing away and going to their spouse, who, the wife, is actually living a lot longer than the guy. So and there's one set out there that I believe like 70% of inheritors changed the financial advisor from who was there. So you see it's within the investment community and the advisory community. So there's a lot of efforts to reach out to women spouses so they can obviously hope to retain that relationship where that probably wasn't there 20 years ago.
Speaker 2:How was it when you started this new company? Obviously, it's very different than online art. Did you have different challenges when you were starting Rainbook, and what?
Speaker 3:was the onboarding process to get to, you know, go to market and then onboard your first consumer, clients and financial advisors. Yeah, very different challenges but all the same in terms of the problems that you need to solve, like, so we're building software versus procuring one of a kind original artwork and artists onto the site. Back when we started YouGallery, you didn't. There wasn't as much open source software or off the shelf software that you could leverage. Here at Rainbook, I have a co-founder that's a technical co-founder, daniel, who's our CTO, and that's been a world of difference to be able to build a software company to make sure you have a technical co-founder. I think that's extremely important In terms of, like, the QA process and going through and making sure the software is working and it has everything is still extremely important. One of the challenges I think we got that I had when we started Rainbook version one, which was the network dashboard, was you want to get feedback from users right and getting, if you can start with your network to get feedback like that's one of the best ways to get initial feedback. But starting with a personal finance app, I think my network and friends are probably they were hesitant to hop on and really go after it because they don't want me seeing their info, even though I said, you know we mask everything and we don't see it. We see it on an aggregate level and connecting all the different APIs, whether that was with legacy alternative investment platforms or up and comers like very new.
Speaker 3:We had the problem of and that's why we pivoted away from that. But we had the problem of legacy alternative investment platforms. They didn't have their APIs, weren't in a place to be able to share it, they didn't have the proprietary data and keeping their users on their site as a competitive advantage and they didn't need to expand it. So it was a little bit tougher to drum up the number of investment connections for that wealth dashboard. From the alternative investment side, from the liquid side, you had APIs like Plaid right that you can connect, you know, to thousands of institutions and you had all the crypto platforms where we could build out those directly. So those were easy.
Speaker 3:But the initial thesis of having this platform for alternatives was a very manual process and then, as we evolved into kind of go-to-market strategy and getting the word out, at least it's been a bit more direct with our current messaging, with our advisor network, to where we're going to personal finance investment newsletters and blogs and going where those readers are and doing some whether it's creative, like guest posts or newsletter sponsorships, you know, starting to try to speak out a bit more through podcasts, and we try to be decently active on LinkedIn as well, where if you have a financial advisor or if you're looking for one, you're probably a professional, business professional working active, decently active, on LinkedIn. So that's where we've kind of gone to Away from when I was at YouGallery and when we were going that we were one of the early accounts on Pinterest and Instagram, so we were really, which lent itself great to showcasing original art and artists and driving interest there. I think you really need to know where your audience is and with financial, talking about investments and financial advisors, linkedin is our focus there.
Speaker 2:Yeah, fantastic, and thank you for sharing your ecosystem, because this is something we talk about a lot in the program as well is what percentages of paid, earned, shared and owned media are in your mix, and so you just talked about all of those so in a very succinct way that shows how they have to really truly be integrated, but they all need to be part of your strategy.
Speaker 3:Totally, totally, I'd say with YouGallery. Over the years, I think the artist story lent itself really well to PR and we really leaned in on that. And today I think the PR landscape is very different. When it comes to publications, right Like then it was magazines and they were going digital. You had a lot of different deal sites et cetera, and now it's a very different landscape. But you try to lean in to where it, to what's working right. So I think it's just important to try to really figure that out.
Speaker 2:Yeah, definitely All right. Now I have to ask you about AI, of course. I've had conversations. People say it's running the financial market. A lot of people are incorporating artificial intelligence into their SaaS products and into other areas, including PR. We were talking about that before we jumped on as well. How is it affecting Rainbook, if at all, and are you utilizing different AI methodologies in your you know, in LLMs, in your software approach, or what does that look like for you?
Speaker 3:So we're not today, so we're. I know from SEC standpoint they're taking a keen eye at this. We have two algorithms. One is our advisor analyzer. That's really rudimentary and straightforward, and then we have our advisor matching as well.
Speaker 3:Where I think we could use it in the future is to call more to enhance the matching that we're doing between our members and the advisors From the wealth tech space and the wealth industry. I think the biggest impact it's going to have there is from the administrative standpoint and the compliance standpoint. I think it's going to save tons of hours off advisors' time and even the firm side in terms of just handling the amount of compliance that these firms have to go through to just keep them in line and keep everything organized. I think it's going to have a profound impact there which is going to allow advisors to be able to spend more time with their clients. Yeah, certainly it's being used kind of on the investment side At Rainbook. We don't manage any assets, we manage zero dollars and we don't really get into the analysis of specific individual securities or stocks. We take a high-level approach and we're focused more on the relationship side of the advisor client.
Speaker 2:Yeah, which I mean everything's built on relationships, or should be, so taking that approach is very refreshing.
Speaker 3:Yeah, I think it is. I mean that goes between you know, in the household right within your family or spouse or partner to business. Relationships with like what I was talking about earlier with the one with Crate and Barrel came about because I met the CEO, was formerly at a different company and we were talking about doing something and then we ended up doing something at a company that he later went to and that wouldn't have come if I hadn't built that relationship when he was at a prior company. So that's why I said it takes time. I think everything's on relationships when it comes to business. I think it's number one. I think people don't want to work or be with anybody who they're not going to enjoy their time. Right, our time is finite here, so we want to make the best of the time we have with who we're with.
Speaker 2:Fantastic. Any last thoughts that you want to share with our audience, with, perhaps, the students who are looking at innovative ways to use technology for the field they want to go into or who maybe are interested in getting into more of the wealth, the investor space?
Speaker 3:the investors face. I'd say stay nimble. The space business is just so fluid and I look back and time really flies. But especially the students who are in school now. I mean, you're probably in touch with a lot more of what's going on and all the new edge technologies that are out there, and with every new technology, especially AI, you can build so many new products and services on top of it. I'd say, don't be afraid to fail and fail quickly. So try something out. If it doesn't work after a couple of months, like don't get stuck to that, like it wasn't a sunk cost, I promise you you learned a ton doing it and then move on to the next thing and find something that works and I think you do that. You'll hit something, and just make sure you're enjoying doing what you're doing.
Speaker 2:Yeah, fantastic. Stephen Tannenbaum, rainbook, thank you so much for being here, and rainbookcom will have that link in the chat for everybody to go to. Thank you to everybody who's watching or listening to this episode of Mediascape. I'll be back again, or Joseph Ataya, my co-host, will be back next week with another amazing guest to share their story, their journey and how they are a digital changemaker.
Speaker 1:To learn more about the Master of Science in Digital Media Management program, visit us on the web at dmmuscedu.
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