Tearsheet Podcast: Exploring Financial Services Together

Brought to you by Tearsheet, Compound Influence is a podcast that explores the power of influencers in the financial services industry. The hosts, Zack Miller and Josh Liggett, discuss the rise of influencers and their impact on private investing and traditional financial services. They focus on the OG influencer, Jim Cramer, and his use of social media, particularly Twitter. They highlight the importance of finding the right platform for your business and going all-in on that strategy. Josh and Zack also discuss the credibility and street cred that Jim Cramer brings to the table, as well as the importance of providing education and tools to your audience. They conclude by mentioning the Inverse Jim Cramer Twitter account and the academic research on the inverse strategy. Takeaways Influencers have become powerful players in the financial services industry, particularly in private investing and traditional financial services. Finding the right platform and going all-in on that strategy is crucial for success as an influencer. Credibility and street cred are important factors in building influence, and having a background in the industry can enhance credibility. Providing education and tools to your audience can help establish trust and loyalty. The Inverse Jim Cramer Twitter account and the academic research on the inverse strategy highlight the impact and influence of Jim Cramer.

Matt Oppenheimer, co-founder and CEO of Remitly, shares his remarkable journey of expanding from a single corridor to over 5,000 global pathways for financial services. He emphasizes how building customer trust is key to their growth strategy, showcasing the complexities of market launches and seamless money transfers. Oppenheimer also reflects on his personal leadership evolution, highlighting the importance of feedback in nurturing both product and company culture as Remitly continues to transform lives worldwide.

On today’s episode, we sit down with Sol Lax, the CEO of Revenued, to dive into the intricacies of small business lending. Lax shares his journey from managing Merchant Cash Advances (MCA) to leading Revenued, a company focused on providing financial solutions for small businesses, particularly those with subprime FICO scores. With a background rich in financial innovation and a keen understanding of small business needs, Lax offers insights into the challenges and opportunities in the subprime lending space. “Merchant Cash Advances (MCA) were a necessary but imperfect tool for small businesses,” Lax explains. “We saw an opportunity to create a more flexible and tailored financial product.” The Big Ideas Lax emphasizes the need for flexible financial products. “MCAs are too rigid,” he says. “Our Flex Line offers more controllable, predictable, and available capital.” The PPP era was instrumental in refining Revenued’s operations. “Processing a million PPP loans taught us anti-fraud and scaling,” Lax recounts. Revenued is harnessing the power of data to provide actionable insights that help in decision making. “We can show small businesses how much they’re spending on bank fees and help them find better options,” Lax explains. Lax acknowledges the difficulties in subprime lending but sees opportunities. “Subprime small businesses find it challenging to access credit,” he notes. “With a different credit perspective, we can make it happen for them.” Revenued is looking to expand its offerings through strategic partnerships. “We’re partnering with companies to provide business insurance quotes and other services based on our data,” says Lax. Through the tumultuous times of the Paycheck Protection Program (PPP), Revenued pivoted and leveraged its platform to process over a million PPP loans. This experience honed their skills in anti-fraud measures and scaling operations, setting the stage for their current offerings. It’s a candid conversation that you won’t want to miss! Sol Lax is my guest today on the Tearsheet Podcast.

At Tearsheet, we've been following the growth and maturity of neobanks over the past few years and all in, with the billions of dollars invested, products launched, and customers acquired. The path to good unit economics has been elusive for some. Joining me on this podcast today is Stuart Sopp, CEO and co-founder of Current. In this episode Stuart gives a behind-the-scenes look at how Current has managed to thrive throughout the fintech winter, by adjusting the dial on its marketing spend without compromising its growth. Stewart also delivers a masterclass in product development and finding the right product-market fit for digital financial products. Sopp dives into Current’s development pipeline and the go-to-market strategy behind its new Earned Wage Access product and credit builder card, as well as what he's seeing in demand for these new products. It's a conversation about what it takes to build a neobank that doesn't only survive, but thrive.

I had the pleasure of speaking with Jameson Troutman, Head of Product at Chase for Business. With over 20 years of experience in financial services, Jameson shared valuable insights into the current state of small and medium-sized businesses (SMBs) in the U.S. and the innovative solutions Chase is offering to support them. As Jameson puts it, “Small businesses in general are optimistic. They love supporting their customers and have a strong belief in their ability to power through any challenges.” This optimism is crucial, especially as SMBs navigate macroeconomic challenges such as inflation and cash flow management. The current state of SMBs in the U.S. Jameson emphasizes that despite economic challenges, the overall sentiment among small businesses remains positive. “We survey about 500 small businesses on a regular basis every month,” he explains. The data reveals that while 63% of SMBs are feeling the impact of macroeconomic forces like inflation and cash flow issues, they remain confident about their growth prospects. This optimism is fueled by their passion and creativity in overcoming daily challenges. Addressing SMB’s cash flow challenges One of the perennial issues for SMBs is managing cash flow. Jameson highlights that Chase is actively working to provide solutions that help businesses manage their receivables and payables more efficiently. “We’re bringing out new invoicing solutions and additional abilities to get paid faster through some of our real-time payments capabilities,” he shares. These innovations are designed to help SMBs maintain a healthy cash flow, which is critical in today’s economic environment. Innovative payment solutions Chase has recently launched several new capabilities aimed at simplifying financial operations for SMBs. One such solution is the faster payments capability, which allows businesses to choose how quickly they want their payments to be processed. “The flexibility gives them a lot of control,” Jameson notes. This feature helps SMBs manage their cash flow more effectively and can even provide preferential treatment from suppliers due to immediate payment options. Enhanced invoicing capabilities for SMBs Chase’s new invoicing capability is another new impactful product for Chase clients. This tool allows business owners to create, customize, and send invoices directly from their digital experience. “It saves them time because they don’t have to do manual reconciliation,” Jameson explains. The system supports multiple payment methods and auto-reconciles transactions, streamlining the entire invoicing process and improving cash flow management. Leveraging customer insights To help SMBs grow and drive revenue, Chase is launching a new data-driven product called Customer Insights. This tool provides anonymized transaction data to help businesses understand sales patterns and customer behavior. “It allows them to figure out how they tighten and get smarter about their marketing dollars,” Jameson says. This valuable data helps businesses make informed decisions about staffing, marketing, and other operational aspects.

On our exploratory journey of what it takes to build world-class products in financial service, today we have a conversation with Herman Man, the Chief Product Officer at Bluevine. We sat down with him to discuss how the fintech company is revolutionizing small business banking. He shares how Bluevine aims to serve as a comprehensive financial OS for small businesses, providing a suite of solutions that includes business checking accounts, accounts payable solutions, and lending and credit services. "Our goal always was to really be the financial OS, if so to speak, for these small businesses," Herman explains. The conversation delves into Bluevine's origins, the evolving needs of small businesses, and the innovative approaches they are taking to meet those needs. This narrative weaves together Mann's insights, providing valuable guidance for industry professionals and stakeholders. Herman Mann is my guest today on the Tearsheet Podcast.

In this episode of the Tearsheet Podcast, I am joined by Irana Wasti, Chief Product Officer at BILL. Irana has a background in product management and a strong passion for serving SMBs worldwide. Throughout her career, Irana has focused on developing tools to assist SMBs in starting, growing, and thriving. She emphasizes the importance of scalable and user-friendly technology solutions that cater to the evolving needs of SMBs. As the fintech industry continues to grow and adapt, Bill.com stands at the forefront of providing integrated financial operations solutions for SMBs. In this episode, discover more about how Irana Wasti and the team at Bill are impacting financial management for SMBs through software and payment solutions. Learn about the impact of AI on decision-making processes, the evolution of SMB tech stacks, and the strategies employed by BILL to empower SMB owners in optimizing their cash flow.

Earlier this year, we first heard news from Revolut and then Nubank launching mobile services. At the time, it just seemed like a story about cross marketing and selling. Both neobanks have large audiences, and selling a mobile plan would likely make some ancillary money. A few years ago, things were happening in the reverse direction – it seemed the big US telephony companies were all interested in getting into banking. A few offerings were launched but not much really came of it. But it feels like something is different now. Both Revolut and Nubank partnered with Gigs, which has been referred to as the Stripe of mobile. As co-founder and CEO Hermann Frank said in TechCrunch, these firms are working to “create an ecosystem where banking acts as a hub for multiple value-added services.” “Bundling mobile plans represents a powerful lever for neobanks to turn irregular users into monthly paying subscribers, encourage upgrades to premium features, and create an ecosystem where banking acts as a hub for multiple value-added services,” he said. Hermann joins us on the Tearsheet Podcast. We explore how traditional phone plans, once mere commodities, are transforming into extensible platforms for innovation. Hermann shares insights on how programmable connectivity enables neobanks to create sticky, world-class digital experiences that surpass the limitations of conventional telecom services. Hermann Frank is our guest on the Tearsheet Podcast.

We’re continuing on this exploration of what it takes to build world-class products in financial services. Today, we have a fascinating conversation with Melissa Douros, the Chief Product Officer at Green Dot. Green Dot is an interesting amalgamation – it’s one of the first banking as a service companies. But it’s also a bank. With a configurable platform, Green Dot has carved out a kind of a unique space in the industry, as an OG fintech/bank. In this episode, Melissa shares her insights on digital transformation, product development strategies, and the role of emerging technologies in the fintech space. With over 20 years of experience in financial services, she brings a wealth of knowledge and a forward-thinking approach to her role at Green Dot. We delve into topics such as what it takes to build the best banking experience, accelerating partner onboarding, leveraging data for strategic insights, and exploring cutting-edge technologies like AI and biometrics. Melissa's passion for delivering exceptional customer experiences shines through as she discusses the pillars of a successful product strategy. Whether you're a fintech enthusiast, a product professional, or simply interested in the future of banking, this conversation is sure to provide valuable insights and thought-provoking perspectives. The big ideas Focus on delivering the best customer experience. "Our real focus is having people giving people the ability to transact with us the way that they want to." Have a clear long term vision while executing short term goals. "How do we create that roadmap within each one of those that’s going to deliver on our vision?"  Understand partners' needs and build tailored solutions. "We build out the solutions for them. So while we're showing them the things that we have, and the things that we can do, we're truly understanding where their problems are and their pain points." Build reusable features to accelerate delivery. "We want to make sure that we have this fantastic reusable architecture, we actually have a team right now and an offsite figuring out an exact way to do that for a partner opportunity." Use emerging tech like AI to solve specific problems. "I want to know what problems we have to solve? And then how are we going to use an emerging technology to do so."

Joining us today is Cory Kampfer, President of Small Business Lending at Enova, which operates the leading small business lending brands OnDeck and Headway Capital. Cory has been immersed in the small business lending space since 2011 when he joined OnDeck. Over his tenure, he's witnessed the evolution of fintech lending and how it has transformed access to capital for Main Street businesses like retailers, contractors, accountants and more. In this episode, Cory provides his unique perspective on the key financial needs and challenges facing small businesses today based on data insights from Enova's $18 billion in originated loans. He discusses how fintech lenders like OnDeck are able to better service this market compared to traditional banks and other financing sources. Cory also shares how the borrower experience and application process has progressed over the years to become quicker and more digital-friendly. We'll learn what metrics and approaches Enova uses to continually improve that journey. Whether you're a small business owner, entrepreneur, or just interested in the lending landscape, this is an insightful discussion you won't want to miss. Let's dive in! The big ideas SMBs struggle to access financing from traditional banks: "There still is a real gap in terms of traditional banks and financing sources lending to small businesses, not because I don't think they may want to, but they're just not calibrated to do it very well." Online lending has become more accepted and appealing to SMBs: "What we see more that's very different from what we started with is, people, in many cases, go first to an online lender, because the application process is just so quick and easy. And they can get the answer that they need." Using technology and data analytics is key to efficiently underwriting SMB loans: "We need to leverage technology. We have lending algorithms that help us through machine learning to give offers in a much more automated way...you need to leverage the data and the analytics, which our teams ingest, and then can give you a loan offer in the matter of minutes or hours." A smooth application experience is crucial for attracting and retaining SMB borrowers: "In the application process, we want it to be a quick and easy process for them to be able to get through it...it's great to see that kind of repeat traffic because obviously what we did is working to help them grow their business." SMBs are optimistic about growth despite challenges: "The survey we just did, what it screams is that small businesses are very optimistic. They're hiring – you can see that in the data in terms of their investing more in employees. That's kind of putting their money, where their mouth is."