Margaret Hartigan found a lot to like about Providence.
Hartigan, the co-founder and CEO of the financial-technology company Marstone Inc., is a New Hampshire native but had spent lots of time in Providence as a Brown University student, graduating in 1997. “It’s an unusual city, given its size,” Hartigan said of Providence. “There’s an incredible level of creativity and diversity here.”
That’s why she decided to make it a base for Marstone.
The company, which has smaller outposts in New York and California, has about 30 employees, 20 of them in Rhode Island. Hartigan said those numbers could double in the next 18 months.
Founded in 2013, Marstone’s first Rhode Island home was at Hope Artiste Village in Pawtucket, and it eventually moved to its current quarters at 171 Chestnut St., above the Art Bar in the Jewelry District.
Hartigan wanted to take advantage of the emerging tech sector centered around Brown’s Warren Alpert Medical School in Providence. She’s led workshops at Brown’s Entrepreneurship Program, which has introduced Marstone to talented interns and potential employees.
Although she does a lot of business travel, Hartigan refers to herself as a “Rhode Island resident and taxpayer.”
Her company has created a digital platform that allows users to custom design financial portfolios based on factors such as age, goals and appetite for risk. Hartigan said one of Marstone’s goals is to “demystify and humanize” finance.
The platform is available through financial institutions, such as investment companies and banks, who can brand the platform as their own (called “white labeling”) while Marstone powers things behind the scenes.
‘It was a big leap. In hindsight, it was kind of crazy.’
MARGARET HARTIGAN, Marstone Inc. co-founder and CEO
Hartigan said it was easier, and less expensive, to use a business-to-business model to market Marstone’s platform, rather than go directly to consumers.
“To make the biggest impact, we wanted to work where the clients already are. Transformation comes from partnership, not disruption,” she said.
Hartigan took an unconventional journey to get to Marstone. Her Rhode Island roots run deep – both maternal grandparents were Rhode Islanders, and she spent childhood summers in Westerly.
At Brown, she studied literature and film, not finance or technology. (She had an interest in finance, though, particularly because her father is a financial adviser.)
After graduation, she moved to San Francisco and got a job with a tech company. After the dot-com bust of 2001, she joined a training program for Merrill Lynch, and worked there until 2012.
Hartigan said the Great Recession of 2008 had a major impact on her thinking. She realized many people, even affluent people, lack financial literacy, while financial institutions need a way to better engage and serve a new generation of investors.
So in 2012, she left Merrill Lynch to create her own company. “It was a big leap,” she said. “In hindsight, it was kind of crazy.”
She said it wasn’t easy telling her father that she was leaving Merrill Lynch to strike out on her own.
For one, he was concerned her new product could disrupt his business, which Hartigan said has not been the case. And, as a parent, he worried about his daughter leaving a secure job for something as risky as a business startup.
The “stone” in Marstone is designer and strategist Robert Stone, who Hartigan knew from her days in San Francisco. She said she originally spoke to him about designing logos, but his role grew to become co-founder and chief creative officer.
Hartigan said the visual appeal and user-friendly design of the Marstone digital platform is a key part of its appeal.
Marstone’s Chestnut Street quarters is a study in startup simplicity, with wood floors, white brick walls, high ceilings, lots of big windows and a ping-pong table.
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Margaret Hartigan, co-founder and CEO of Marstone Inc. / PBN PHOTO/MICHAEL SALERNO[/caption]
In a conference room, Benjamin Baker, Marstone’s head of sales, demonstrated the digital platform. Users can customize the platform by importing a background picture of themselves, their family, or whatever else they want.
A menu called “My Money” enables users to see all their accounts in one place, with room to set goals for different investments – college education, beach house, etc.
Go to “Create a Portfolio” and the user will be asked some questions, starting with age and how much the user wants to invest. Then it tries to gauge capacity for risk, labeling accounts from “Put It All Under the Mattress” to “Let It Ride.”
The computer also asks questions about what the user would do if he or she won $20,000 – take a guaranteed extra $10,000, or try to go double-or-nothing. It also asks what kind of investments are desired, among them biotech, gold, internet, clean water and more.
Then it comes up with a suggested portfolio, with investments represented by colored boxes on a chart. The boxes can be expanded to reveal more details about each one, including a risk-benefit analysis.
Indirectly, Hartigan said, she is still using her Brown education in building Marstone.
“We are a financial-tech company, but we’re also a very creative company,” she said. “To communicate that, you need a strong premise, the ability to flesh out an idea. So it’s served me well in expressing complex ideas to a lot of different kinds of people, including our own team members.”
