Winners of WealthTech: Stuart DePina

This is the third article in a series we are calling Winners of WealthTech, where I interview people who have made a name for themselves in wealth management technology and have a track record of innovation and success.

My first interview was with Aaron Klein, CEO of Riskalyze and the second was with Bill Crager, President of Envestnet, which was just in the news this past week when they dropped almost $200 million to take their competitor, FolioDynamix, off the market. (See Envestnet Expands Their TAMP Empire with FolioDynamix Deal)

Sticking with the Envestnet theme, my third interview is with Stuart DePina, @ENVDePina, who is the president of Tamarac, a provider of portfolio management software for RIA’s that is owned by Envestnet after they purchased the company back in 2012.

Stuart was very gracious and opened up about his background, how he came to Tamarac after being a successful CEO in other industries and how he stays motivated after so many years of success in the wealth management space.

How did you wind up at Tamarac?

I started my career in public accounting as a partner at KPMG, and the majority of the work was in financial services. So I got a pretty steep background in this particular industry. I’ve been in technology ever since I left there way back in 1995.

I would characterize the transition to Tamarac as a bit of good fortune.  One of the investors in the business I was running prior to this was also an investor in Tamarac.  Knowing of my background in financial services and technology, he was able to get me to look at this opportunity and have me come over [to Tamarac].

What was it about the Tamarac opportunity that interested you?

Initially, I wasn’t interested.  To be completely candid, I wasn’t interested.  I was doing it as a favor.  The company was running had over 400 people and Tamarac was much smaller and I wasn’t interested in such a small company.  While I was interested in both technology and financial services, I felt that the company was a very good asset for someone else to buy.

Because I was brought in by a friend, I agreed to do some consulting for them in order to help them “figure it out”. And in the process of figuring it out, I figured out that there was something there.  That was the catalyst for me.

The turning point came after I spoke to every customer Tamarac had at the time, which was about 40.  I asked them all a basic question, “what do you like about what we’re doing and what don’t you like?”  It was unanimous about what they liked; the product did what it was supposed to do and we were delivering on the promise.

The other thing that helped to sway my interest was that the value of the service provided really helped advisors reach the potential of their practice. Those two things together resonated for me and made me reevaluate what was here.

What’s become more important to you in the past few years and what’s become less important?

What has crystallized in my mind is that you have to deliver on the value and promise that you make to clients.  We’re dealing with small and mid-sized businesses.  Entrepreneurs that are running their own businesses.  And when they license our technology at the end of the day, it’s money coming out of their pockets.

In order to make a business like [Tamarac] work, when you’re dealing with hundreds of small businesses, you have to pick the right partner, first and foremost.  Make sure that you’ve got a relationship that you both are aligned.

There are some firms that we recognize as prospects who aren’t going to fit our model.  I don’t try to make this business fit everyone’s model.  We’ve got to be crystal clear and fixated on that.  Because we both have to win.  They’re writing a big check to us and we’re making a big investment in our commitment to support them.

What’s become less important to me, is not having to come out every month with the next cool thing.  When you’re an early stage entrepreneurial organization, when you’re in the technology segment with the big economic investment that’s going into it, you feel as if you need to have everything, and give everything to everyone.

No you don’t.

Do the things that you do, do them very well.  And you will buy yourself the opportunity to get to the next thing that’s right for you.  But not everything that’s right for you.

What do you think of when you hear the word “successful”?

I think of a lot of hard work.  We all can recognize stories about successful businesses and while we see the outcome, we don’t always see what goes into getting there.  Some companies are lucky because they were in the right place at the right time.  We were certainly fortunate that we were doing what we were doing when the market did what it did, but I will tell you that the big catalyst for us was 2008, when the market went South.

It put us into a position where we needed to reposition who we were and help our clients who were struggling to meet their own goals. We also wanted to fill in the void that was left because they now needed to become more operationally efficient and more profitable.  So, we had to make some big investments and there was a ton of hard work that went into that.

At the time there were only 40 people in the organization and I attribute our success to the fact that there was a relatively smart group that helped to get us where we are.

What is the most worthwhile investment you have made recently (not money)?

It’s really in people. We have had a great amount of growth over the past few years.  We’re a software as a service business and we have to continue to support our clients.  We did a restructuring of our organization and put key people in key positions in order to help us reach the scale that we needed to.

How do you stay motivated?

We are a market leader in a lot of things that we do.  But my motivation comes from the fact that there is still so much territory for us to capture.  I believe that we will continue on the pace that we have been on.  I try to identify what’s the next hill to climb.

What is your morning routine?

I started this routine when I was in college.  I wake up somewhere between 4 and 5 in the morning and work out.  It gets my juices flowing.  I’m an early morning guy and like to show up before everyone else so I can get a couple of hours of work and clear my plate.

Is there something you believe that other people would say is crazy?

This is the third small business that I’ve done.  I did believe that

Building distribution channels that are efficient and effective for small and medium sized businesses is hard to do.  Once you gain scale though, it’s a winner.  I believe there is an opportunity to win in those segments if you have a good model in place.  Most business people would say that it’s better to try and sell your solution to larger businesses and I’m not going to argue that. I’m just saying that there’s real money to be made in dealing with smaller to medium-sized businesses.

What bad advice do you hear being given out most often?

I hear a lot of people saying that you should spend a lot of time to make the weakest link in your team stronger.  In the businesses that I’ve been in, sometimes you should just cut your losses.  Someone gave me great advice once that I’ve embraced and it’s if there is an employee who is keeping you up in the middle of the night, then you should probably fire that person.  If everyone isn’t on board with where [the company] is going that can really be a distraction.

What message would you send to your 25 or 30-year old self?

Probably, “chill out”.  It’s all going to take care of itself.  Jud [Bergman] often says that I have a chip on my shoulder.  And I do.  That’s what gets me going.  That’s what’s made me what I am.

I take it personally if we’re not perceived as the best.  And this has been true with every company I’ve been in.  I believe that if you’re going to put your soul into something, it should be worth it.  When I was 25, I was the same way.

CI: Where did the chip come from?

A lot of it has to do with the fact that I grew up in Texas.  It comes from people telling me that I’m not going to do certain things because I fit a certain profile.  That may have been their perception, but it wasn’t mine.

Even when I played football, I tended to be a smaller kid on the team and was told that I would never be a starter.  But I did.

I grew up in an environment where being African-American placed too many constraints on my upside.  I went into public accounting and felt that I needed to be on the West Coast to have more freedom to succeed.  Just because the mindset was different and that worked for me.

Being African-American isn’t the driver of the chip, but it drove my attitude that you may have your opinion, but watch me succeed.

I find that there are very few African-Americans running technology businesses. And for me, in leadership situations that I’ve been, people have implied that maybe I can’t really run that business.  From my perspective, I don’t need people to believe that I can.

I’ve had success in all of the positions I’ve been in.  Those are the things that motivate me and are deeply ingrained into who I am.

CI: Do you think it would be different if you were just going into school now?

Absolutely.  I watch my kids now.  And good for them.  But, I think I benefited from [my upbringing] and frankly, I wouldn’t want it any other way.  The things I experienced in my life, in terms of perceptions, are fuel for me.  I can’t imagine not having this kind of drive.

CI: I have three daughters. Two are biological and one is adopted. And our adopted daughter is African-American.  And she’s 14 now and I often think about how different her life would be if she had gone to school back when we did.

No question. My kids live on the West Coast, so it’s a bit different.  I was raised in Texas, and was in elementary school in the mid-sixties.  I was among just half a dozen non-white kids.  And stuff happens.  There’s the fight or flight response in everyone.  You’re either going to fight and get through it or you’re going to give up.  And too many people give up.

It’s a different world for my kids and I’m thankful for that.

What book have you most often given as a gift?

The book I gift the most is Great by Choice by Jim Collins.  I love that series of books.  But I really love the fact that, there is a choice.  We’re fanatical about our support.  We could do a much worse job when it comes to support and it would still be considered ok by our clients.  But I don’t think that’s acceptable.  You make certain decisions about how good you want to be and how you want to be perceived in the marketplace.

Some people think that these decisions cost you money, but it doesn’t.  This is hard for companies to understand, especially public companies.

Do you have any quotes that you live your life by?

A quote from Winston Churchill, “To improve is to change, so to be perfect is to change often.”  i think about this one a lot because in an entrepreneurial, startup organization, you’re constantly changing.  If you’re maturing, you’re changing.

It’s challenging sometimes to find employees in the right mindset because a lot of people don’t like change.  People who don’t like change are destructive to an entrepreneurial organization and it can fall apart.

How do you keep the entrepreneurial spirit alive in your organization?

It’s a challenge.


























The Wealth Tech Today blog is published by Craig Iskowitz, founder and CEO of Ezra Group, a boutique consulting firm that caters to banks, broker-dealers, RIA’s, asset managers and the leading vendors in the surrounding #fintech space. He can be reached at craig@ezragroupllc.com