beyond the hype: ai for smb fintech...smbs are the backbone of the us economy 30m smb’s in us 98%...
TRANSCRIPT
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Beyond The Hype: AI For SMB FintechPrashant Fuloria, FundboxApril 11, 2018
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Hello! ● COO, Fundbox● SVP Advertising Products, Yahoo!● CPO, Flurry● EIR, Mayfield● PM Director, Facebook● PM Director, Google
● Lecturer, Stanford, Berkeley & Cornell● MS / MA / PhD, Stanford
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The Story Of Tina Paclebar And Jane Nacelli
● Co-owners of RevEx Logistics ● Annual revenues > $1 million● Customers of *** bank for 17 years● Denied $75K loan due to single late
payment, many years prior● Unfortunately, common SMB
experience
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SMBs Are The Backbone Of The US Economy
● 30M SMB’s in US● 98% US businesses are SMB’s● Employ 57.9 million people, or
49% of private sector workforce● Generate 1.4 million new jobs
annually
Reference: SBA - https://www.sba.gov/sites/default/files/advocacy/All_States_0.pdfReference: Fundbox - https://fundbox.com/blog/unpaid-invoices/
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And Yet...SMB’s Struggle Financially
● 82% small businesses fail due to lack of cash flow
● Most SMB’s wait at least 21 days to get paid
● 81% of SMB’s have $84K in unpaid invoices over 30 days
● Aggregate of unpaid invoices is $825 billion (5% of US GDP)
Reference: Business Insider - http://www.businessinsider.com/why-small-businesses-fail-infographic-2017-8Reference: Fundbox data - http://35.226.251.24/the-unpaid-invoice-economy/
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The SMB Credit Conundrum Is Real
● Heterogeneity in business data; traditional underwriting approaches manually intensive
● Smaller loan sizes discourage commercial lenders; cost of underwriting often exceeds revenue
● Lack of innovation; continued use of FICO and personal credit scores
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How Can AI Help Solve This Issue?
AI is 1% inspiration, 99% perspiration
1. Leverage secular data trends2. Combine data in new ways3. Resist the temptation to “rule”4. Invest in first-party observations5. Design product for virtuous data loops
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1. Leverage Secular Data Trends
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2. Combine Data In New Ways
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3. Resist The Temptation To “Rule”
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4. Invest In First-Party Observations
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5. Design Product For Virtuous Data Loops
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OK...So What?
● Simplest SMB credit
application process
● Only “FICO optional” 3rd
party SMB credit provider
● Fastest credit decisioning
time, median <1 minute
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Let’s Revisit Tina And Jane
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What Does The Future Look Like?
● Optimizing SMB2B commerce through combined credit and payment solution, aka Fundbox Pay
● “Virtual CFO” recommendations to help SMBs optimize financial performance
● ...and many other products!
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AI is 1% inspiration, 99% perspiration