How Ethic rejected VC-prescribed enterprise GTM playbooks and built a motion around financial advisor psychology instead | Doug Scott

**Doug Scott** (0:00)
We had zero followers on YouTube and we're over 200,000 views, and you got to lead with a good product. In this case, it's the content itself.

**Brett** (0:11)
Welcome back to another episode of Builders. As always, this show is brought to you by frontlines.io Silicon Valley's leading B2B podcast production studio. If you're bringing technology to market and want to learn from your peers, we have a library of more than 1200 interviews with venture-backed founders and marketers where they talk all things go to market. Of course, if you want to launch your own podcast, we offer podcasts as a service to more than 80 tech startups. The idea there is very simple. You show up and host and we do everything else. Now with all that said, let's jump into today's episode.
Today, we're speaking with Doug Scott, CEO and Co-Founder of Ethic. Doug, thanks for being here.

**Doug Scott** (0:50)
Pleasure to be here.

**Brett** (0:51)
A fellow podcaster, always fun talking with another podcaster.

**Doug Scott** (0:54)
Yeah, it's fun to be on this side of the microphone.

**Brett** (0:57)
We're gonna be going deep on podcasting and what you're doing with your podcast, but maybe let's take a step back. Let's talk about your company. Tell us a bit more about what you do.

**Doug Scott** (1:03)
So I'm the founder and CEO of Ethic, and we build customized, tax-smart and values-aligned investing for advisors and institutions.
So you can think of this as delivering a platform that allows an investment advisor to personalize across their entire book of business based on the objectives of their client base, all of the issues that they care about, and all of the underlying considerations, whether those are financial considerations, values considerations, tax considerations. And then we are managing that portfolios across all of those different households and accounts. So today, we manage over 9 billion in assets across about 300 different investment advisory businesses. Everything from a small wealth management business up to some of the largest platforms, endowments, foundations, those kind of things.

**Brett** (1:52)
And I know you're what, 11 years into the journey so far. Maybe talk us through the different chapters of the company if it can be broken up that way.

**Doug Scott** (1:59)
For sure. So I mean, the earliest chapter as everyone who's ever founded a company, it's chewing glass and staring into the abyss type chapter.
We picked, let's call it the path of maximum resistance in a go-to-market. I would say most in the investment world and in starting a business in financial technology tend to go consumer route. And mainly that's because it's able to acquire customers quicker, get out from zero to one quicker.
We decided to go a different route. And that first phase we said, look, our experience and what we believe the problem statement is, is centered on this more sophisticated financial professional, who is managing portfolios across individuals, families, endowments, foundations. But the trade-off with that is while these are big pools of capital, it's typically a very trust-based environment and it's typically very risk-averse. And so going from zero dollars under management to any dollars under management is challenging.
And so that first phase, getting the first few accounts really, and then getting ourselves to the psychological threshold. The first big psychological threshold for our business was getting up to 100 million. But in the early days, even well before all of that, we spent years building technology and proving that we can deliver something that we believed that would be 10x better than anything out there. To give you flavor for our product, if you like, it's basically the simplest version of it. If you take an index like investment, you unwrap it and you customize it across all of the different considerations that you care about and then we manage that at scale. And so when we go in, we were pitching again some of the largest institutions and asset managers in the world. And we came in with just a very technology first, deep customization, seamless client experience. That was very differentiated to what was available. But even with all of those advantages on the product side, it was still very hard. And so that phase was like that kind of getting from, let's call it like the earliest phase, the founding of the business up until really just kind of that touching product market fit, so series A-ish timeframe.
And then there was sort of taking that spark of product market fit and then sort of getting to building culture and teams and then after that it becomes team of teams and it becomes very different problems and hit these different milestones with 100 million, 250 million billion, et cetera, et cetera. And as I said, we're on the path towards above 9 billion now and knock on wood hopefully 10 billion pretty soon. So business has really grown considerably since then, but the earliest days are definitely some of them were challenging.