Financial Inclusion

Zogo: How A 21-Year-Old Duke University Grad Is Reinventing Financial Literacy

How Zogo Aims To Make Financial Literacy Fun

When Bolun Li was in high school, a local bank came in and offered a heavily branded PowerPoint presentation about financial services and money management to students who reacted pretty much the way one would expect.

Since it was an ungraded class with no immediate connection to their lives, students mostly looked at their phones, texted each other and waited for the presentation to be over. It wasn’t until Li became a Duke University student that he got his first real financial education — and the inspiration to found Zogo, which brings a gamified approach to financial education.

Li said that while financial health is a terribly important thing, people almost never discuss it with each other in casual context. He’s never had a single friend start a conversation with an announcement that the person doesn’t know how to do their taxes or plan for retirement.

“To be honest, this started with me and my friends sitting there not knowing how to do our taxes or how any of these things work,” he told Karen Webster in a recent conversation. “It was very frustrating, and I thought, ‘There's got to be [a solution] for this, and level the playing field so that everyone knows what’s going on.’”

But he noted that “where there is a problem, there’s usually an opportunity, too.” So, while still in college, Li started building a solution that today is known as Zogo — an early stage startup that’s already attracted roughly 50,000 users who have collectively completed 1 million financial-education modules.

Gamifying Financial Education

Zogo is an app-based financial education tool that Li described as something like a Rosetta Stone language course, except for personal finance. It’s designed to break down the bigger topics in a typical consumer's financial life into “bite-sized” teaching modules that are easily consumable.

The first thing Zogo did as a company was create about 300 modules, each designed to be completed by a user in about two minutes. But Li said that what sets Zogo apart is its realization that learning to be financially literate isn’t as immediately appealing as, say, learning to speak French.

He said that while financial literacy will net one a lot of money over a lifetime in terms of dollars saved and optimized, that’s not a benefit that people feel immediately. So, Zogo designed its modules to attract Generation Z and millennial users for whom the promise of a more stable retirement in 40 years isn’t much of a motivator.

The startup has added a direct incentive. Do a module to earn points (pineapples). Then get enough pineapples to receive a low-value gift card as a reward.

Initially, the promise of a free gift card was powerful in driving users to the site — even those not primarily motivated to build up their financial health, Li said.

“[With] a lot of these people, when they first downloaded Zogo, the only reason they did that is to make money,” he said. “But as they keep going through the lessons in the app, they start to realize how little they know about this stuff. And that helps them become inspired to believe they need to start learning this stuff — because that's the way to become wealthier rather than just make five bucks in an app.”

That proposition is sticky with consumers, and thus far has been highly shareable, Li said. Zogo has yet to spend any money on marketing, and 75 percent of its user base has come to the site via direct referrals. The company has also launched the service via partnerships with credit unions (CUs) and FinTechs, which have been Zogo’s main funding sources so far.

The company hasn’t yet set about raising funds via venture capital. Instead, CUs and FinTechs pay licensing fees up front to use the platform. They also set up a fund to pay for the gift cards that users within a firm’s ZIP code earn.

Li said that for CUs in particular, the Zogo platform serves as a customer acquisition tool, particularly for Gen Z and millennial consumers who, in many cases, hardly know that CUs exist.

What’s Next?

By the numbers, the financial literacy picture in the United States isn’t terribly encouraging. Roughly two-thirds of American consumers can’t pass a basic financial literacy exam. That figure is particularly disturbing when paired with data from research provider Raddon, which found that 44 percent of American consumers said they are “very” or “extremely” literate. It’s not just what most Americans don’t know that’s getting the problem; it’s what they don’t know they don’t know.

And yet, those wide and largely invisible gaps in financial literacy, Dr. Annamaria Lusardi told Karen Webster in a recent conversation, shouldn’t come as a surprise to anyone, considering only 21 states even require financial education in the U.S. — meaning what the majority of consumers learn about finances during their young lives will come care of their parents at the family kitchen table. People, she noted, can’t pass on knowledge they don’t have, which means most people simply enter adulthood without any kind of financial education.

Zogo is operating at a time when CUs and FinTechs see the opportunity to fill these gaps and are looking to dramatically expand their digital offerings for a post-pandemic world. So far, the company has worked entirely with the money it has made through those partnerships, but Li said Zogo is beginning to scale up.

That means some changes will be coming. For instance, he said the firm knows it will have to modify its rewards program, as handing out gift cards for successfully completing modules isn’t broadly scalable (even though he admits it is broadly appealing to its users).

But changes or not, Li said Zogo is committed to building the service out and bringing them to a wider swath of Americans, as many consumers are making terrible financial moves.

When Zogo polled customers about the worst financial decisions they’d ever made, the company got some remarkable answers. One young man moved all his student loan debt onto his credit cards. Another woman paid off all her husband’s debts — only to get divorced about a month later.

“Soon we'll be ready for a big push and really trying to get … millions of Americans onto the app and learning about this together,” Li said.

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