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Hi. I'm Aaron Weinman. Today I want to highlight a deep dive about Marcus. This is Wall Street giant Goldman Sachs' foray onto Main Street.
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1. High turnover, tensions between executives, and mounting losses at Goldman Sachs' Marcus have stifled the bank's efforts to encroach on Main Street. It's fast becoming a defining moment for Chief Executive David Solomon.
Executives had grand plans for Marcus — an online bank, named after founder Marcus Goldman, that offers high-yield savings accounts. Marcus was set up as a standalone entity with a popcorn machine and denim-wearing employees — a nod to the informal startup culture evident in places like Silicon Valley.
Despite the forward-thinking initiative, Solomon has grown increasingly frustrated as Goldman's share price did not seemingly reflect the promise of building a digital, consumer bank.
Analysts have also argued that management teams — who are sometimes too close to a project — grow enamored by its potential without seeing the same risks that investors might. And when you have the bank account of Goldman Sachs, it's easy to continually throw money at a loss-making exercise, compared to a startup that needs to source third-party capital.
Now, five years since it launched, Marcus is burning cash with little sign of a profit. Executives expect it to lose another $1.2 billion this year.
The ballooning expenses have frustrated Goldman's No. 2, President and Chief Operating Officer John Waldron, who now holds regular meetings with Marcus leadership to discuss how to get costs down.
For the full story, check out this feature from Insider's Chief Finance Correspondent Dakin Campbell.
ICYMI - here's more on Marcus:
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