

a16z Podcast: Fintech for Startups and Incumbents
Apr 4, 2019
Alex Rampell, a general partner at Andreessen Horowitz and co-founder of TrialPay, dives into the shifting fintech landscape. He discusses why established giants like Visa should be wary of agile startups and offers insights on how incumbents can adapt. Topics include the importance of customer risk pools in insurance, leveraging positive selection in lending, and how machine learning is reshaping credit assessments. Rampell also emphasizes innovative strategies for customer engagement and collaboration between startups and traditional financial institutions.
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Fintech Customer Dynamics
- In financial services, more customers doesn't always mean more profit, unlike other industries.
- Good customers subsidize bad ones, creating an opportunity for startups.
SoFi's Approach
- SoFi targeted high earners not rich yet (Henrys) with student loan refinancing.
- They exploited the unfairness of uniform loan pricing, attracting low-risk borrowers.
Health IQ's Strategy
- Health IQ uses health quizzes to identify and attract healthy individuals for life insurance.
- This positive selection bias improves profitability by focusing on lower-risk customers.