Anthony Noto WG99 had only been the CEO of SoFi for a little over a year when he made a bold declaration to its board at the company’s San Francisco headquarters. The online bank and fintech firm launched in 2011 focused solely on student loans and in the following years expanded its offerings, achieved milestones, and faced serious setbacks. Noto’s arrival marked the start of a new chapter for SoFi — short for “Social Finance” — but at a board meeting in 2019, no one seem prepared for the goal he would articulate. After outlining a suite of new products the company was about to launch, Noto said to the board members, “It’s a matter of when, not if, we become a top 10 financial institution.”
The reaction was a mix of surprise and puzzlement, which was understandable, since at that point, no online bank was even close. But fast-forward to the start of this year, when SoFi announced its first quarter of profitability; then came its third consecutive quarter in the black, in July. While Noto’s goal is still a dot on the horizon, analysts and investors are taking him, and SoFi, seriously.
Noto has made a career of thinking big. He arrived at Wharton as a brand manager at Kraft Foods and an Army veteran with a background in both mechanical engineering and communications. Noto earned his MBA 25 years ago, then headed to Lehman Brothers and Goldman Sachs, where he quickly became the top-rated Wall Street analyst of the internet sector. What followed was a series of C-suite roles at some of the world’s most high-profile brands as they faced existential crossroads: CFO for the National Football League as the 2008 financial crisis loomed, and CFO/COO of Twitter in 2014 as the social media platform went public and would begin to struggle with growth.
Now, after steering SoFi through its own turmoil related to operational challenges and a culture in need of transformation, Noto is a frequent guest on financial news programs and an evangelist for the potential of online firms to disrupt the banking industry. In a wide-ranging conversation in June at SoFi’s offices in New York’s Meatpacking District — on the day of another board meeting, no less — Noto reflected on essential lessons learned across his career, the importance of a BHAG, the impact of artificial intelligence on finance and beyond, and why going to bed scared is actually a good thing. [The interview has been edited and condensed.]
Wharton Magazine: How did your education at West Point and your service in the Army contribute to your professional success?
Anthony Noto: They were pretty profound. More than anything, it taught the importance of grit and understanding that nothing is ever going to go perfectly. You have to be prepared with contingencies. It also teaches you to trust people and give people the autonomy they need to do what they’re responsible for. Also, there’s no right answer. The most important thing is to get the information, set some principles, and then make a decision once you have a diversity of opinion and perspective. The last thing is, it teaches you how to have confidence in situations that are challenging, like leading your peers. You have to find a way to create that bond where they trust you and they understand their role versus your role.
In your time at Goldman, you were named the number one analyst for internet stocks each year between 2003 and 2007. Yet you didn’t take a finance class until you arrived at Wharton. When did you realize that you had a talent for that work?
It was while I was at Wharton. I liked investing, but I was all self-taught. In class, when I started to understand the theory behind what created value in a company and how to value stocks, I realized I had a great passion to do it. With the financial services industry, picking a stock is similar to being a mechanical engineer: You make a lot of assumptions, and the better you are at building the framework and understanding the variables, the better you are at predicting the future value of the company.
My study group was made up of a diverse set of people, many of whom worked on Wall Street. We had a marketing class where we had to do a case study on the launching of Total toothpaste, and that’s what I was doing at Kraft Foods, so I took the lead on the project. When we were done, my teammates said to me, “You really should look at switching careers into Wall Street. You’re talented. It’s more fast-paced; it’s more competitive, which is your nature.” They thought equity research would be a great starting point.
You’ve talked about the importance of optionality, and your career really exemplifies that; what you learned in your different roles applied to each new opportunity. Anything else from your time at Kraft that still resonates?
I couldn’t be more thankful for it. It built the foundation of understanding how to develop a strategy for a business, understanding the key critical success factors, how to work in an organization that’s matrixed where the resources are shared, and influencing the team to support your plan. I think brand management is the best general-manager training in the world. I use it every day. When I went to Wharton, I was taught the theory behind why my decisions at Kraft were the right decisions. The combination of the two — that DNA has been threaded through everything I’ve done since then.
Let’s jump ahead to your transition from Wall Street to the NFL. You later said you were concerned you’d be the CFO who oversaw the league’s bankruptcy and were so stressed that you made yourself sick. What were the difficulties you faced, and what did you learn in retrospect?
I’d been at Goldman for nine years, and I was ready for a new challenge professionally. Out of nowhere, this job came along, and I saw it as a real opportunity to leverage my experience in analyzing media and entertainment companies and analyzing financial performance, being part of something I’m passionate about in football, and being a part of the league’s leadership with Roger [Goodell, NFL commissioner]. I really didn’t appreciate the financial situation until I got there. It was during the middle of the financial crisis. When you’re a new guy, you can’t walk in and say, “Everything’s ruined,” or “Everything’s broken.” But once Bear Stearns went under, everyone’s ears perked up. It was a combination of factors where you could see many scenarios that didn’t turn out great. I’ll never forget walking up Park Avenue with Roger, prepping him for our sit-down with the leadership at Citi to explain to them why we needed to refinance our line of credit right at that moment in time and not wait.
A lot of what you talked about then as the future of the league — things like incorporating new technology and looking to international opportunities — has come to fruition.
One of the things I was responsible for outside of being CFO was strategy. A lot of corporations have a group called strategy, but it’s not always clear how they interact with the company, what role they play, how instrumental they are. I worked with Neil Glat [W89, then an NFL senior vice president], who reported to me on strategy, and we took a step back and said, “Let’s define what strategy means. What’s a strategy statement? How does it build the foundation of how a company allocates capital?” We said the strategy had to have a BHAG: a big, hairy, audacious goal. We came up with the BHAG of having $25 billion of revenue over the next 20 years — by 2028. I remember presenting it to Roger, and his eyes got big and his face got red, which I had a tendency to make happen. I thought he was about to let me have it for being unrealistic, but it was data-driven and, while bold, was achievable. He embraced it and owned it from that moment on. I’m not surprised that they’re on that path, and I think they’re going to get there.
Let’s talk about your move to Twitter. How challenging was it for you to transition from your first long-term career in finance and then into your second, in tech?
When I went back to Goldman [to help run TMT Investment Banking], my team led the Twitter IPO. I benefited from understanding the company at a deep level. But the execution at Twitter was the challenge. The content on Twitter is the best content in the world, and they pay nothing for it. But it is not a mass-market product. You can say, “Go on Twitter and see the best content in the world,” and when someone opens the app, there’s no content there. Twitter’s answer is, follow ESPN for sports or Jeremy Siegel for the most insightful axioms about investing. But the mass market doesn’t have time to find that content: They turn the television on, and there’s something showing; they change the channel, there’s something else showing. To reach the mass market, a product has to have a clear value proposition, and then the product has to deliver on it instantly. The mass market doesn’t spend time with handles and hashtags, so that was inherently the problem.
Ultimately, we repositioned the company as an information network, not a social network, and we worked tirelessly on making the product more accessible so it would instantly deliver value. Live video was a key element in driving that, and by the time I left, we had returned to growth in the fourth quarter of 2017, and we achieved GAAP profitability for the first time ever.
How was the pivot from the world of finance to tech for you personally?
It came naturally, because I lived in that world as a research analyst covering the internet, media, and entertainment. I spent the majority of my time in Silicon Valley and was very familiar with the tech world and the ecosystem of VCs and founders. But operating inside a tech company and its culture was the new thing for me. It took me a while to stop wearing slacks to work and change to wearing jeans and Lululemon pants and t-shirts. Once I started doing it, I never looked back. But it’s not natural to change your wardrobe that quickly. I think one of the people I worked with at Twitter said, “When are you going to stop wearing the dad pants?”
That probably hit home.
It resonated, for sure.
Which lessons learned in your time at Twitter have you brought with you to the CEO seat?
What it means to be at a mission-driven company and how powerful culture can be. Twitter had a culture of anarchy. I would interview job applicants and say, “Are you comfortable in a culture where people may not do what you’ve asked them to do, or what the team has decided to do?” And they would look at me like I was crazy. I would use the analogy: Imagine you’re about to go to war, you’ve been training for months, and before you leave, you say, “Make sure the little things don’t catch us off guard. Make sure we have enough oil, gas, water.” You take off, it’s three in the morning, and your vehicle runs out of oil. You say, “Didn’t I say to check the oil?” The response is, “Yes, sir, and I checked the oil. But you didn’t say to put oil in.” That’s what it was like leading at Twitter. You had to earn trust and get buy-in no matter your title.
Then, iterating. A lot of people think innovation is a path that reflects the following: I have a great idea, I work on that great idea, it becomes a great product. That’s very rarely the case, and I’ll give you an example I use all the time at SoFi. The light bulb is one of the greatest innovations in the world. What got the light bulb invented wasn’t the idea. It was the thousands of iterations of the different filament, of different voltages, of different currents. The light bulb is still being improved today because of iteration.
At Twitter, there were always ideas that wouldn’t work — not because they weren’t great, but because it was a culture where there were so many other ideas that we would try the next one instead of iterating until the current idea worked. One of our core values at SoFi is to iterate, learn, iterate, learn. If you don’t have a culture of iterating and learning, you’ll never drive innovation. You’ll just have a bunch of ideas that fail.
Let’s go back to the leadership challenge. How do you reach those people who don’t follow direction?
In an environment like that, you have to bring the team in, define the problem or opportunity, and spend time thinking through all the solutions. If they’re part of developing the plan, then they own the plan. When they hit roadblocks and get knocked down, they are motivated to get back up and persevere because it’s their plan, just like it is my plan. The most important thing is, they participate in developing the strategy and the plan, and it’s not dictated to them.
How do you view the state of Twitter/X today?
About two years after I left, the amount of innovation slowed down. So many things we planned never launched. For Twitter to be successful, it takes a leader with a vision and a strong point of view that’s almost Machiavellian — a leader that has authority and control to drive that iteration and learning. Elon [Musk C97 W97] has that. I think he’s doing a lot of great things, but he has to be relentless and gritty, which he’s proven he can do. He has to never stop trying to get that light bulb to turn bright. I think if anyone can get there, he can get there.
You joined SoFi in 2018. Fintech was growing rapidly, but the company faced serious challenges and was not a household name. Why leave Twitter for this role?
The first time I was asked about it, Jack [Dorsey, Twitter co-founder] and I were really jelling as a CEO and CFO, the board was stable, and I felt like I was having fun for the first time in four years. I wanted to be a CEO of a company at some point, but it wasn’t the right time. The more I thought about SoFi, I saw it as a chance to do something that no one had ever done in financial services — what Amazon had done in retail and what Netflix had done in entertainment, which was completely disrupt the industry and become the incumbent leader as the winner that takes most.
That’s when I put together the strategy and the mission that I presented to the SoFi board in December 2017. If we could teach people how to invest better — which requires that you save better, that you spend better, and that you borrow better — we could help them achieve their dreams. But we had to be a one-stop shop. We couldn’t just do checking and savings, or mortgages, or student loans. We had to be there for all the major decisions in their lives. And then all the days in between, to make sure they were spending less than they made so they had something to invest, because investing is the crown jewel of getting to financial independence.
The reason I came to SoFi was also emotional. I thought about my life, and how I could help people like my mom, who struggled financially when I was young. My parents divorced when I was three; my mom hadn’t graduated from high school and worked two or three jobs. I had an older brother and a younger brother. There was a period of time when we received food stamps and welfare. I didn’t realize until middle school that every kid didn’t get their lunch for free. So I just started to think about my childhood and what my mom helped us accomplish. If our company existed back then, we could have helped my mom. It became this opportunity of a lifetime to build what’s not been done in financial services and also to help people in this profound way.
SoFi went public in 2021. Was scale the biggest challenge on the road to that IPO?
There were a multitude of challenges. There was a governance challenge, a capitalization challenge. There was an evolution challenge — we were growing quite rapidly, so we had to hire a massive amount of people to build all these products. Then we had to build the brand. But what turned out to be the hardest was convincing people who had $2.9 billion of preferred equity to hand it over in exchange for common stock. How to navigate the regulatory environment and get a bank license while the administration switches from Republican to Democrat. Then when COVID happened, our first, largest, and most profitable product basically got put out of business when the President said, “If you have student loans, you don’t have to pay them.”
We’ve never really been in an environment where the weather has been perfect, and hopefully, we’re about to enter that time period. But we’ve still done incredibly well. When I joined in 2018, we generated around $250 million in revenue with 600,000 members, and by the end of 2024, we expect to generate close to $2.5 billion in revenue and nearly 10 million members. I was talking to the team yesterday, and someone was explaining a problem we had and was complaining a little bit. I said, “You like hard. You wouldn’t be here if you didn’t like hard, so no complaining.”
How critical was the naming-rights deal for the Los Angeles football stadium in creating the brand recognition you needed?
I have said that for us to truly be successful, we need people to trust us, and the best way to measure trust is unaided brand awareness. SoFi Stadium was 100 percent about becoming a household name, getting our native brand awareness to 20 to 30 percent instead of two percent. At 20 to 30 percent, we’ll be a top 10 financial institution in the United States. The variables I had in the equation of success were capital, regulatory, and great product, but the fourth variable is building trust. Our whole marketing effort over the last seven years was about that last variable. We’re up four times from where we were but still only halfway to where we have to get to.
I assume you are all-in on the potential of artificial intelligence. How has that technology informed this business? What impact do you see it having on SoFi and on fintech moving forward?
I think AI has all the promise that has been publicized. It’s as profound as the internet itself — the mobile platform, the social platform. It’s another wave of technology innovation. It will enable companies like SoFi to innovate in ways that financial-services companies never have. One of the things we want to do is answer three questions for you every day. When you go to SoFi’s home feed, we’re trying to show you what’s happening in your financial life that day but also proactively say to you, “Anthony, this is what you must do today to achieve your goals. This is what you should do. And this is what you can do.” Generative AI will allow us to generate the answers to those questions based on all the information we have on you and all the products you use, but also based on the other eight million-plus members or 12 million products or 150 million accounts with data we have to train those models. That’s incredibly hard to do without artificial intelligence.
What concerns you about AI?
The real risk is that it’s used for nefarious things. But I do think it’s one of those markets with an equilibrium between the good and the bad, and there will be companies that focus on preventing the bad. There’s essentially mutually assured destruction: If the bad things prevail, the people that are being destroyed realize they have to spend time on the good things. We’re already investing in cybersecurity, but after what happened with CrowdStrike and Microsoft, there’s going to be more money invested in the venture capital world for solving those problems. This may not be a moment of great equilibrium and an efficient market, but over time, it will be. And when there isn’t an efficient market to offset the bad with the good, regulation will.
You once said that you were the kind of person who’s driven by fear of failure rather than striving for success. You said, “I tend to go to bed scared and wake up terrified.” Is that still accurate?
It is. As a leader, the ideas I have, the things we’re executing against — those are knowable things. The things that I go to bed scared about and wake up terrified about are the things that I don’t know. And they’re the things I’m worried about that I might not have answers to. It’s not that I lack ambition or I don’t want to achieve success. But I know the critical success factor is solving the things that I don’t know, not reveling in the things that I do know.
Where do you see the financial-services industry and SoFi headed in the next five years?
You’ll see more safety and security, more iteration and innovation. SoFi is on the path to be that winner who takes most in the transition of the financial-services industry to a digital leader. As it relates to the industry, for the first time in the history of banking, we’re on the precipice of being able to force big incumbent banks to innovate. Why? Because until now, they didn’t have to; they haven’t faced disruptive competitive forces. Companies like SoFi and Robinhood and Affirm are starting to reach the scale where the incumbents are going to have a come-to-Jesus moment. They will have to decide whether they want to actually become innovators and fight or just let the ice cube continue to melt. My hope is that more incumbent financial leaders stand and fight versus hanging up their gloves. The next five to 10 years will bring profound change in financial services, and nothing would impact our people, our way of life, and our country more than instability and unreliability in this industry.
Published as “Anthony Noto WG99 Sees the Future of Finance” in the Fall/Winter 2024 issue of Wharton Magazine.
