96% of the employees of the 15 highest rated machine learning startups would recommend their company to a friend looking for a new job, and 98% approve of their CEOs.
Across all machine learning startups with Glassdoor ratings, 74% of employees would recommend the startup they work for to a friend, and 81% approve of their CEO.
There are over 230 cities globally who have one or more machine learning startups in operation today with Crunchbase finding 144 in San Francisco, 60 in London, 69 in New York, 82 in Tel Aviv, 22 in Toronto, 20 in Paris, 18 in Seattle and the remainder distributed over 223 global locations.
These and many other insights are from a Crunchbase Pro analysis completed today using Glassdoor data to rank the best machine learning startups to work for in 2020. Demand reminds high for technical professionals with machine learning expertise. According to Indeed, Machine Learning Engineer job openings grew 344% between 2015 to 2018 and have an average base salary of $146,085 according their Best Jobs In The U.S. Study. You can read the study shows that technical professionals with machine learning expertise are in an excellent position to bargain for the average base salary of at least $146,085 or more.
In response to readers’ most common requests of which machine learning startups are the best to work for, a Crunchbase Pro query was created to find all machine learning startups who had received Seed, Early Stage Venture, or Late Stage Venture financing. The 2,682 machine learning startups Crunchbase is tracking were indexed by Total Funding Amount by startup to create a baseline.
Next, Glassdoor scores of the (%) of employees who would recommend this company to a friend and (%) of employees who approve of the CEO were used to find the best startups to work for. 79 of the 150 machine learning startups have 15 or more Glassdoor reviews and are included in the analysis. 41 have less than 15 reviews and 30 have no reviews. The table below is a result of the analysis, and you can find the original Microsoft Excel data set here.
I am currently serving as Principal, IQMS, part of Dassault Systèmes. Previous positions include product management at Ingram Cloud, product marketing at iBASEt, Plex Systems, senior analyst at AMR Research (now Gartner), marketing and business development at Cincom Systems, Ingram Micro, a SaaS start-up and at hardware companies. I am also a member of the Enterprise Irregulars. My background includes marketing, product management, sales and industry analyst roles in the enterprise software and IT industries. My academic background includes an MBA from Pepperdine University and completion of the Strategic Marketing Management and Digital Marketing Programs at the Stanford University Graduate School of Business. I teach MBA courses in international business, global competitive strategies, international market research, and capstone courses in strategic planning and market research. I’ve taught at California State University, Fullerton: University of California, Irvine; Marymount University, and Webster University. You can reach me on Twitter at @LouisColumbus.
Its 9 a.m. two days before Thanksgiving, and Walmart executives are dragging their suitcases around a windowless Arkansas office building in search of a large conference room. They settle on an interior lunchroom with dull gray carpet, claiming one side of a long table in the corner and gesturing for their guests to sit opposite them.
Ellie Bertani, Walmart’s director of workforce strategy, says she’s struggling to find qualified people to staff the company’s expanding network of 5,000 pharmacies and 3,400 vision centers. Her fellow Walmart execs are silent, but Rachel Romer Carlson, 31, cofounder and CEO of Guild Education, sees her opening. Without hesitation she says her team can work with Walmart and find a solution fast. “You guys and us,” she says, “let’s do it!”
Carlson flew to Bentonville from Guild’s Denver headquarters the day before. Dressed in a sensible navy blazer and black slacks, she’s hardly bothered with makeup. Since 7:30 that morning she’s been huddling with teams of Walmart brass, going over options to train workers for those new jobs. They range from a one-year pharmacy technician certificate program offered by a for-profit online outfit called Penn Foster to an online bachelor’s degree in healthcare administration at nonprofit Southern New Hampshire University.
Carlson’s groundbreaking idea when she launched Guild four years ago: help companies offer education benefits that employees will actually use. Many big employers will pay for their workers to go to school (it’s a tax break), but hardly any workers take advantage of the opportunity. Applying and signing up for courses can be cumbersome, and in most instances employees have to front the tuition and wait to be reimbursed.
Meanwhile, many colleges are desperate for students because they have small—or nonexistent—endowments and are financially dependent on tuition. Many nonselective online programs spend more than $3,000 to attract each new student. Carlson charges schools a finder’s fee (she won’t say how much) for the students she delivers from her corporate partners.
So far Guild has signed up more than 20 companies, including Disney and Taco Bell. Guild gets paid only if students complete their coursework, so a full 150 of the company’s 415 staffers serve as coaches who help employees apply to degree programs and plan how to balance their studies with work and family.
When a company like Walmart requests a customized training course, Guild solicits proposals from as many as 100 education providers (nearly all of them online) and recommends the programs it deems best. It also negotiates tuition discounts and facilitates direct payments between employers and schools, a big plus for workers who would otherwise have to wait months to be reimbursed.
Carlson, an alumna of the 2017 Forbes 30 Under 30 list and a judge on the 2020 list, says she has already channeled more than $100 million in tuition benefits to workers this year alone. Forbes estimates 2019 revenue will top $50 million, and Guild investor Byron Deeter of Bessemer Venture Partners predicts 2020 revenue of more than $100 million.
In mid-November Carlson closed her fifth round of financing, led by General Catalyst, bringing her total money raised to $228 million at a $1 billion valuation. In the sleepy, well-intentioned world of edtech, Guild is one of only a few startups whose values have soared, says Daniel Pianko, a New York-based edtech investor with no stake in the company.
“I can see a path for Guild to be a $100 billion company,” says Paul Freedman, CEO of San Francisco venture firm Entangled Group, who has known Carlson since she was in business school and was one of Guild’s earliest investors.
When asked to detail Guild’s inner workings, like its strategy for soliciting custom courses, Carlson eschews specifics and delivers what sounds like a political stump speech: “The economy’s moving so fast,” she says. “We can’t let higher education dictate the skills and competencies that we need five to ten years from now.”
There’s a reason she talks this way. Her grandfather Roy Romer was a three-term (1987–1999) Democratic governor of Colorado before spending six years as superintendent of Los Angeles’ public schools. Carlson started riding along on his campaign bus when she was 6 years old; occasionally she would even speak at his rallies. When her father, Chris Romer, a former Colorado state senator, ran unsuccessfully for mayor of Denver in 2011, she served as his finance director. (“The loss was devastating,” she says.)
Along with politics, the Romers were committed to increasing access to education, especially for working adults. Roy Romer helped start Salt Lake City-based Western Governors University, a pioneer in online adult education. In the wake of Chris Romer’s mayoral bid, in 2011, he cofounded American Honors, a for-profit company that offered honors courses at community colleges (the company struggled, and the brand is now owned by Wellspring International, a student recruitment firm).
After graduating from Stanford undergrad and working briefly in the Obama White House, Carlson launched her first venture, Student Blueprint, while getting her M.B.A. (also at Stanford) in 2014. Student Blueprint sought to use technology to match community college students with jobs.
It was a noble idea, but she decided to finish school and sold the software she had developed to Paul Freedman’s Entangled Group in 2014 for a negligible sum. In 2015, after she wrapped up her M.B.A., she pitched the idea for Guild to one of her professors, Michael Dearing, and to seed investor Aileen Lee, of Cowboy Ventures, raising $2 million.
After relocating to her home turf in Denver, she landed her first major corporate partner in the summer of 2016 when she sent a LinkedIn message to a Chipotle benefits manager that played up the fast-food chain’s “strong Denver roots and social mission.”
With help from Guild, Chipotle’s $12-an-hour burrito rollers are now pursuing online bachelor’s degrees from Bellevue University in Nebraska or taking computer security courses at Wilmington University in Delaware. In October 2019, Carlson persuaded Chipotle to lift its cap on tuition benefits above the $5,250 the IRS allows companies to write off.
Guild’s biggest competitor is a division of Watertown, Massachusetts-based publicly traded daycare provider Bright Horizons, which has offered tuition benefit services since 2009. It works with 210 companies including Home Depot and Goldman Sachs. Under Bright Horizons’ system, the companies—not the colleges—pay. Much of the genius of Guild’s business model is that it correctly aligns incentives: The colleges are the most financially motivated party, so they foot the bill. Another competitor, Los Angeles-based InStride, launched in 2019 with funding from Arizona State University, and like Bright Horizons it charges the corporations.
“I see our competition as the status quo,” Carlson says. “Classically, employers have offered tuition-reimbursement programs, but no one is using those programs.”
The nonprofit Indianapolis-based Lumina Foundation has done five case studies showing returns on investment as high as 140% for companies that offer tuition-reimbursement programs. “We saw powerful impacts on retention,” says Lumina’s strategy director, Haley Glover.
“Walmart and Amazon are in a death struggle,” proclaims Joseph Fuller, a professor at Harvard Business School. “If a Walmart worker can say, ‘I got an education that allowed me to get promoted,’ they’re going to be someone who speaks generously about Walmart and they are more likely be a Walmart shopper.”
Like a good politician, Carlson is working to please everyone. “We found a win-win,” she says, “where we can help companies align their objectives with helping their employees achieve their goals.”
As an associate editor at Forbes, I cover young entrepreneurs and edit the 30 Under 30 lists. I’m particularly interested in companies finding unique ways to make our world more sustainable. I previously wrote for The American Lawyer, Corporate Counsel and the Weekend Argus in Cape Town, South Africa. I graduated from Northwestern University where I studied Journalism, Environmental Policy and Political Science. Follow me on Twitter @AlexandraNWil.
Plenty of entrepreneurs adhere to the mantra of “hire slow, fire fast” and for good reason. Then there’s Melanie Perkins, the co-founder and CEO of Sydney-based design software company Canva. She spent a year trying to find her first technical hire.
While Perkins didn’t intend to spend so much time filling her first engineering position, looking back on it now, she wouldn’t have done it any other way. The year-long quest informed how she’s made every other hire since. And it’s hard to argue with the results: With 700 employees, Canva is a hiring machine, and it’s been doubling in size every year.
In an industry that sees engineers switch jobs with frightening speed, many of Canva’s early technical hires are still with the company. While Canva won’t discuss revenue, Perkins, the company’s co-founder and CEO, says the company has been profitable since 2017. Canva has 20 million monthly users in 190 countries. In October, Canva announced an $85 million investment, with a valuation of $3.2 billion.
This is going to be bigger than yearbooks
When Perkins started the predecessor company to Canva in 2007, she was just 19. She was frustrated by how hard it was to use design software. When she started teaching design at university, she noticed that her students were similarly frustrated. With her boyfriend (now fiance), Cliff Obrecht, she built a website called Fusion Books that helped students design and publish yearbooks.
It did well–becoming the largest yearbook company in Australia and moving into France and New Zealand. Perkins quit university to work on it full-time. By 2011, Perkins and Obrecht realized Fusion Books could be much more: an engine to make it easy for anyone to design any publication. But to build that more ambitious product, they’d need outside investment.
Perkins headed to San Francisco to visit angel investor Bill Tai, who is known for making about 100 investments in startups that have yielded 19 initial public offerings. She’d met him in Perth a year earlier, where she had collected an award for innovation. “If you come to California, come see me,” he remembers telling her. “Without me knowing exactly what she was doing, she engineered a trip. She’s a very ballsy woman, if that makes sense. And I’m thinking, you know, I should help her. I know hundreds of engineers.”
Early in her San Francisco visit, Tai introduced her to Lars Rasmussen, the co-founder of the company that became Google Maps. Tai told her that if she could hire a tech team that met Rasmussen’s standards, he’d invest. “I didn’t realize at the time what that meant,” says Perkins. She bought an Ikea mattress, and planted it on the floor of her brother’s San Francisco apartment. “Obviously, that was free rent,” she says. “I had food to get by and I felt safe.”
Perkins set out initially to hire by doing the obvious: She went to every single conference she could get into. She’d speak if the organizers let her. Tai invited her to his MaiTai Global networking event in Hawaii, even though, for most attendees, a big draw was kitesurfing, which she’d never attempted. “It was great fun,” she says gamely. Then, “I really don’t like it. I have the scars to prove it. I’ve … retired from kitesurfing.”
Back in San Francisco, Perkins passed out flyers, trying to pique people’s interest. She cold-called engineers, and approached suspects on buses. She scoured LinkedIn, but Rasmussen wouldn’t even deign to meet most of her finds. “He didn’t think they had enough startup gumption or experience with a world-scale company, or with complex technology,” she said. She says fewer than five LinkedIn finds ended up interviewing with Rasmussen. He’d give them a problem-solving challenge that, inevitably, they flubbed.
After a year of this, Perkins was thoroughly frustrated. Surely it’s better to at least make some progress, she told Rasmussen, than to continue to do nothing. But he was adamant.
The perfect candidate and the bizarre pitch deck
That same year, Rasmussen introduced her to two candidates that he thought might be a good fit and recruitable. The first, Cameron Adams, a user interface designer who had worked at Google, was busy trying to raise money for his own startup. The second, Dave Hearnden, a senior engineer at Google, initially said he wasn’t interested. In 2012, both had a change of heart.
“We were absolutely over the moon,” says Perkins. Adams came on board first, as a co-founder. Hearnden, on the other hand, started to have second thoughts: Google wasn’t happy with his leaving, obviously, and was trying to get him to stay. He worried that his project would be abandoned without him, and he didn’t want to disappoint his team.
At this point, Perkins sent him something that has since become known as the Bizarre Pitch Deck. In 16 slides, the deck tells the story of a man named Dave, who longed for adventure but was torn by his loyalty for Google. In the pitch deck, as in life, Dave eventually joined Canva. It helped that Google had already poached his replacement.
In 2012, Perkins was able to raise a seed round of $1.6 million, and got another $1.4 million from the Australian government. Tai finally agreed to put in $100,000. “It was really hard for her to raise,” he says. “You’ve got a young girl in her 20s from Australia who had never worked at a company, with her live-in boyfriend as COO. People would say to me, What if they break up? I didn’t have a good answer.” Now, things look much different: Tai says Obrecht is Canva’s “secret weapon,” and that “Cliff has just blown me away.”
Keeping the bar high, hundreds of hires later
While Tai drove her nuts at the beginning, Perkins appreciates his stubbornness now. “We’ve been able to attract top talent across the globe,” she says. “It wouldn’t have been possible without setting such a high technical bar early on.” Tai says he hasn’t made exactly this condition with other startups. But he’s done it in reverse: He’s backed highly technical people without knowing what, exactly, the business opportunity would turn out to be.
The experience also showed her, the hard way, just how much effort she’d have to put into hiring if she wanted to build a successful tech company. By Canva’s second year, the company had a recruiting team. “We knew we needed to invest heavily in hiring,” she says. Now, each open position gets a strategy brief. That document lays out the goals for the person in that role and the project they will be working on. It also identifies the people who will be involved in the hiring process. “Getting everyone on the same page is really critical,” says Perkins. “It sets that person up for success.”
And like Rasmussen looking for the first technical hire, Canva asks each candidate to take a challenge. Candidates have a choice of doing a four-hour challenge or a one-hour challenge. “Maybe they’re working parents and they can do it in an hour,” says Perkins. “Other people prefer to have a longer time and work at their own pace. We’re looking for people happy to take on challenges and who get a real buzz out of being able to solve hard things.”
In in-person interviews, someone on the Canva team will almost always ask the candidate, “How would your previous boss or manager talk about your work or rate you?” Perkins says people are “surprisingly honest” in their responses. The answers help her get a window into what type of leadership allows a particular candidate to thrive. Some people require a lot of structure or hierarchy, she says, and Canva doesn’t have much of either.
“One of the things I believe quite strongly is having a really strong idea of where you’re going,” says Perkins. “I have this visual metaphor. Plant 100 seeds. Until eventually one flowers or sprouts. For most people, if you’re rejected, you feel really hurt and don’t want to continue. The reality is that you have to push through. If I had given up quickly, I certainly wouldn’t be here today.”
The sky is the limit,” gushes MoneyLion founder and CEO Dee Choubey as he strolls into Manhattan’s Madison Square Park, the oak and ash trees turning color in the October sunshine.
Choubey, 38, is taking a midday constitutional from MoneyLion’s cramped offices in the Flatiron District, where 65 people labor to reinvent retail banking for the app generation. He ticks off a couple businesses he looks up to—ones that have fundamentally changed the way money flows around the world—putting his ambitions for his six-year-old startup into sharp relief. “PayPal,” he says. “Square.” Two companies worth a combined $150 billion.
“The promise of MoneyLion is to be the wealth manager, the private bank for the $50,000 household,” Choubey says.
At last count, MoneyLion’s app had 5.7 million users, up from 3 million a year ago, and a million of those are paying customers. Those people, many from places like Texas and Ohio, fork over $20 per month to maintain a MoneyLion checking account, monitor their credit score or get a small low-interest loan. In all, MoneyLion offers seven financial products, including unexpected ones like paycheck advances and, soon, brokerage services. Choubey expects revenue of $90 million this year, triple last year’s $30 million. His last round of financing, when he raised $100 million from investors including Princeton, New Jersey-based Edison Partners and McLean, Virginia-based Capital One, valued the company at nearly $700 million. By mid-2020, he predicts, MoneyLion will be breaking even. An FDIC-insured high-yield savings account will be rolled out soon, while credit cards are on the schedule for later in 2020. To retain customers, he says, “we have to be a product factory.”
Like most other entrepreneurs, Choubey thinks his company’s potential is essentially unlimited. But having spent a decade as an itinerant investment banker at Citi, Goldman, Citadel and Barclays, he’s also a guy who knows how far a horizon can realistically stretch. And he is far from the only one to see the opportunity for upstart digital-only banks—so-called neobanks—to transform retail banking and create a new generation of Morgans and Mellons. “I just heard a rumor that Chime is getting another round at a $5 billion valuation,” he says.
Leading the Neobank Pack
In 20 years, these VC-backed startups could dominate consumer banking, but they’ll face plenty of competition. Fintech companies that originally offered investing are rushing to add bank services.
Sources: the companies, CB Insights, PitchBook.
Globally, a vast army of neobanks are targeting all sorts of consumer and small-business niches—from Millennial investors to dentists and franchise owners. McKinsey estimates there are 5,000 startups worldwide offering new and traditional financial services, up from 2,000 just three years ago. In the first nine months of 2019, venture capitalists poured $2.9 billion into neobanks, compared with $2.3 billion in all of 2018, reports CB Insights.
Underlying this explosion is new infrastructure that makes starting a neobank cheap and easy, plus a rising generation that prefers to do everything from their phones. While it can take years and millions in legal and other costs to launch a real bank, new plug-and-play applications enable a startup to hook up to products supplied by traditional banks and launch with as little as $500,000 in capital.
“Now you can get your [fintech] company off the ground in a matter of a few months versus a few years,” says Angela Strange, a general partner at Andreessen Horowitz, who sits on the board of Synapse, a San Francisco-based startup whose technology makes it easier for other startups to offer bank products.
Using such middleman platforms, tiny neobanks can offer big-bank products: savings accounts insured by the FDIC, checking accounts with debit cards, ATM access, credit cards, currency transactions and even paper checks. That frees fintech entrepreneurs to concentrate on cultivating their niche, no matter how small or quirky.
Take “Dave.” Dave (yep, that’s its real name) is a little app that rescues folks from the pain of chronic bank overdraft fees. Created by a 34-year-old serial entrepreneur named Jason Wilk who had no prior experience in financial services, Dave charges its users $1 a month and, if they seem likely to overdraw, instantly deposits up to $75 as an advance. Nice little business, but nothing to give Bank of America jitters.
Betterment cofounder Jon Stein at his New York City startup. It took a decade to get 420,000 clients for its robo-advisor business managing stocks and bonds; as a neobank newcomer, Betterment already has 120,000 on a waiting list for a checking account.
But then Wilk decided to turn Dave into a neobank. In June, using Synapse, Dave rolled out its own checking account and debit card. Now it can make money on “interchange,” the 1% to 2% fees that retailers get charged whenever a debit card gets swiped. These fees are split between banks and debit-card issuers like Dave. Wilk optimistically predicts Dave will bring in $100 million in revenue this year from its 4.5 million users—up from $19 million in 2018, the year before it transformed itself into a neobank. Dave was recently valued at $1 billion.
Established fintech companies that didn’t start out in banking are getting into the game too. New York-based Betterment, which manages $18 billion in customers’ stock and bond investments using computer algorithms, recently rolled out a high-yield savings account. It pulled in $1 billion in deposits in two weeks. “The success has been unprecedented. In our history we’ve never grown this fast,” marvels Betterment CEO and cofounder Jon Stein. Now he’s launching a no-fee checking account with a debit card, and credit cards and mortgages might be next, he says.
Neobanks are swiftly emerging as a huge threat to traditional banks. McKinsey estimates that by 2025 up to 40% of banks’ collective revenue could be at risk from new digital competition. “I don’t believe there’s going to be a Netflix moment—where Netflix basically leapfrogs Blockbuster—where fintechs basically put the banks out of business,” says Nigel Morris, a managing partner at QED Investors, an Alexandria, Virginia-based VC firm specializing in fintech. “[Traditional banks] are really complicated businesses, with complex regulatory issues and consumers who are relatively inert.” But, he adds, “If [neobanks] can get people to bundle, [they] can get more of a share of a wallet of a consumer. [The] economics can move dramatically. It changes the game.”
Diwakar (Dee) Choubey was supposed to be an engineer, not an investment banker. Born in Ranchi, India, he came to the U.S. at 4 when his father was finishing a graduate degree in engineering at Syracuse University. The family ended up in New Jersey. Choubey’s mom taught autistic children, while his dad worked as an engineer at Cisco—and plotted his son’s future.
When Choubey started at the University of Chicago in 1999, he signed up for a bunch of computer science classes picked by his dad. But after earning a couple of B-minuses, “I cried uncle,” Choubey says. He became an economics major, strengthening his grades and job prospects by taking corporate finance and accounting courses at the business school. After graduating with honors, he went into investment banking, where he remained for the next decade.
From an insider’s vantage point, he saw that traditional banks were excruciatingly slow to respond to the preferences of their customers and exploit the power of smartphones. That, plus a never-ending series of bank scandals, convinced him that there was an opening for a digital “private banker.” In 2013 he walked away from his near-seven-figure salary to start MoneyLion.
Choubey raised $1 million in seed funding and started out offering free credit scores and micro-loans. But he struggled to raise more money. Forty venture investors turned him down, deeming his vision impractical and unfocused. “I was laughed out of a lot of VC rooms in our early days,” he recalls.
While Choubey banged unsuccessfully on VC doors, MoneyLion putt-putted along, bringing in a little revenue from loan interest and credit card ads and collecting a bunch of data on consumer behavior. Finally, in 2016, he persuaded Edison Partners to lead a $23 million investment. That enabled MoneyLion to add a robo-advisor service allowing users to invest as little as $50 in portfolios of stocks and bonds. In 2018, it added a free checking account and debit card issued through Iowa-based Lincoln Savings Bank.
Managing rapid growth, while striving to keep costs low, has proved tricky. MoneyLion was hit with a deluge of Better Business Bureau complaints over the past spring and summer. Some customers experienced long delays transferring their money into or out of MoneyLion accounts and, when they reached out for help, got only computer-generated responses. Choubey says the software glitches have been fixed, and he has bumped up the number of customer-service reps from 140 to 230.
Other neobanks have had operational growing pains too. In October, San Francisco-based Chime, with 5 million accounts, had technical problems that stretched over three days. Customers were unable to see their balances, and some were intermittently unable to use their debit cards. Chime blamed the failure on a partner, Galileo Financial Technologies, a platform used by many fintech startups to process transactions.
Tim Spence, Fifth Third’s chief strategist, in the regional bank’s downtown Cincinnati headquarters. Most of his neobank competitors are losing money, but “the lesson . . . learned from Facebook and Amazon and Google . . . is that the internet is amenable to a winner-take-all market structure.”
On a warm fall day Tim Spence speed-walks his 6-foot-3 frame through the towering, 31-story Cincinnati headquarters of his employer, Fifth Third, a 161-year-old regional bank with $171 billion in assets. Clad in a plaid sport jacket with no tie, Spence doesn’t look like a traditional banker. And he’s not.
A Colgate University English literature and economics major, Spence, now 40, spent the first seven years of his career at digital advertising startups. He then moved into consulting at Oliver Wyman in New York, advising banks on digital transformation. In 2015, Fifth Third lured him to Ohio as its chief strategy officer and then expanded his mandate. He now also oversees consumer banking and payments, putting him in charge of $3 billion worth of Fifth Third’s $6.9 billion in revenue. Last year, he brought home $3 million in total compensation, making him the bank’s fourth-highest-paid executive.
Fifth Third has 1,143 branches, but today Spence is focused on Dobot, a mobile app the bank acquired in 2018 and relaunched this year. Dobot helps users set personalized savings goals and automatically shifts money from checking to savings accounts. “We reached 80,000 downloads in a matter of six months, without having to spend hardly anything on marketing,” he says.
Scooping up new products is one part of a three-pronged “buy-partner-build” strategy that Spence has helped devise to combat the neobank challenge. Partnering means both investing in fintechs and funding loans generated by the newcomers. Fifth Third has a broad deal with Morris’ QED, which gives it a chance to invest in the startups the VC firm backs. One of Fifth Third’s earliest QED investments was in GreenSky, the Atlanta-based fintech that generates home remodeling loans (some funded by Fifth Third) through a network of general contractors.
The best of these partnerships provide Fifth Third access to younger borrowers, particularly those with high incomes. In 2018, it led a $50 million investment in New York-based CommonBond, which offers student-loan refinancing to graduates at competitive interest rates. Similarly, Fifth Third has invested in two San Francisco-based startups: Lendeavor, an online platform that makes big loans to young dentists opening new private practices, and ApplePie Capital, which lends money to fast-food franchisees.
Global venture capital funding for digital banks is exploding. This year, it’s on pace to exceed 2017 and 2018 combined.
Source: CB Insights
“The thing I’m most envious of, when it comes to the venture-backed startups that we compete with, is the quality of talent they’re able to bring in. It’s really remarkable,” Spence says.
But while Spence envies them sometimes and partners where he can, he isn’t convinced the neobanks will make big inroads into traditional banks’ turf. “None of them have shown that they can take over primary banking,” he says. He also argues that having physical retail branches is still important for building long-term relationships with customers. In a recent Javelin survey of 11,500 consumers, an equal number rated online capabilities and branch convenience as the most important factors when deciding whether to stick with a bank.
Fifth Third has been reducing its overall number of branches an average of 3% a year, but it’s opening new ones designed to be Millennial-friendly. These outlets are just two thirds the size of traditional branches. Instead of snaking teller lines, there are service bars and meeting areas with couches. Bankers armed with tablets greet customers at the door—Apple Store-style.
That raises the question of whether any of the neobanks will be so successful that they’ll eventually open physical outposts, the way internet retailers Warby Parker, Casper and, of course, Amazon have done. After all, it’s happened before. Capital One pioneered the use of big data to sell credit cards in the early 1990s, making it one of the first successful fintechs. But in 2005 it started acquiring traditional banks, and today it’s the nation’s tenth-largest bank, with $379 billion in assets and 480 branches.
I cover fintech, cryptocurrencies, blockchain and investing at Forbes. I’ve also written frequently about leadership, corporate diversity and entrepreneurs. Before Forbes, I worked for ten years in marketing consulting, in roles ranging from client consulting to talent management. I’m a graduate of Middlebury College and Columbia Journalism School. Have a tip, question or comment? Email me email@example.com or send tips here: https://www.forbes.com/tips/. Follow me on Twitter @jeffkauflin. Disclosure: I own some bitcoin and ether.
Dear banks, Game Over. Disruptive challenger banks are here to wipe the floor with traditional banks, who have, according to Chad West, head of comms and marketing at challenger bank Revolut, failed to make their offering open and transparent to customers, and failed to give them control over their money. Digital bank alternative Revolut has scaled to 1.8 million customers in three years – and now offers cryptocurrency processing. ABOUT WIRED SMARTER Experts and business leaders from the worlds of Energy, Money and Retail gathered at Kings Place, London, for WIRED Smarter on October 9, 2018. Discover some of the fascinating insights from speakers here: http://wired.uk/V29vMg ABOUT WIRED EVENTS WIRED events shine a spotlight on the innovators, inventors and entrepreneurs who are changing our world for the better. Explore this channel for videos showing on-stage talks, behind-the-scenes action, exclusive interviews and performances from our roster of events. Join us as we uncover the most relevant, up-and-coming trends and meet the people building the future. ABOUT WIRED WIRED brings you the future as it happens – the people, the trends, the big ideas that will change our lives. An award-winning printed monthly and online publication. WIRED is an agenda-setting magazine offering brain food on a wide range of topics, from science, technology and business to pop-culture and politics. CONNECT WITH WIRED Web: http://po.st/WiredVideo Twitter: http://po.st/TwitterWired Facebook: http://po.st/FacebookWired Google+: http://po.st/GoogleWired Instagram: http://po.st/InstagramWired Magazine: http://po.st/MagazineWired Newsletter: http://po.st/NewslettersWired
The latest example of the copy from China innovation trend comes from former Uber CEO Travis Kalanick and his new startup CloudKitchens, a kitchen sharing concept for restaurants and take-out orders.
This shared kitchen model originated in China, with a Beijing-based startup named Panda Selected. Little doubt that Kalanick saw this idea at work in China. He has China experience and some scars to show from his ventures a few years ago with Uber in China doing battle with Chinese ride-sharing leader Didi and eventually selling to the rival.
These shared food preparation services are part of the sharing economy that has blossomed in China. Sharing has extended from taxi rides to bikes to even shared umbrellas and battery chargers.
The shared kitchen could disrupt the traditional restaurant business. It caters to a young on-the-go population who order food by mobile app and get quick take-out deliveries. No need for large dining areas or kitchens that serve just one restaurant. The shared model lowers the cost of doing business for commercial restaurants and makes it easier to do business around the clock in a hurry and manage operations.
The model has already caught on in China, where new business ideas particularly for mobile gain traction quickly and have no problem in attracting customers. Panda Selected, which was started in 2016 by CEO Li Haipeng, has more than 120 locations in China’s major business hubs.
This shared kitchen concept could gain quick uptake in the U.S. too. On-demand instant delivery for take-out food ordered by mobile app hasn’t yet caught on in the U.S. like it has in China’s congested cities but that doesn’t mean that the model can’t work in the U.S.
Venture capital investors have already decided the business could scale quickly and have funded the shared kitchen business model. CloudKitchens has funding of $400 million from Saudi Arabia’s Public Investment Fund on top of initial seed capital from Kalanick. Panda Selected has attracted $80 million in funding from DCM Ventures, Genbridge Capital and Tiger Global.
It is interesting to see successful serial entrepreneurs like Kalanick trying their hand at new ideas they’ve seen work in China. No doubt more ideas from China’s advanced digital economy will filter into the U.S. Already, we have digital entertainment app. How long before we see the social commerce model that Pinduoduo has perfected in China get transported over to the U.S.?
Rebecca A. Fannin is a leading expert on global innovation. As a technology writer, author and media entrepreneur, she began her career as a journalist covering venture capital from Silicon Valley. Following the VC money, she became one of the first American journalists to write about China’s entrepreneurial boom, reporting from Beijing, Shanghai and Hong Kong. Today, Rebecca pens a weekly column for Forbes, and is a special correspondent for CNBC.com. Rebecca’s journalistic career has taken her to the world’s leading hubs of tech innovation, and her articles have appeared in Harvard Business Review, Fast Company and Inc., and Techonomy. Her next book. Tech Titans of China, is being published this year. (Hachette Book Group, 2019).Rebecca’s first book, Silicon Dragon: How China is Winning the Tech Race (McGraw-Hill 2008), profiled Jack Ma of Alibaba and Robin Li of Baidu, and she has followed these Chinese tech titans ever since. Her second book, Startup Asia (Wiley 2011), explored how India is the next up and comer, which again predicted a leading-edge trend. She also contributed the Asia chapter to a textbook, Innovation in Emerging Markets (Palgrave Macmillan 2016). Inspired by the entrepreneurs she met and interviewed in China, Rebecca became a media entrepreneur herself. In 2010, she formed media and events platform Silicon Dragon Ventures, which publishes a weekly e-newsletter, produces videos and podcasts, and programs and produces events annually in innovation hubs globally. Rebecca also frequently speaks at major business, tech and policy forums, and has provided testimony to a US Congressional panel about China’s Internet. She resides in New York City and San Francisco, and logs major frequent flier miles in her grassroots search to cover the next, new thing.
Business Insider reports that former Uber CEO Travis Kalanick is making progress with his food-delivery and “dark kitchen” startup. CloudKitchens is the venture, it’s one of the units of Kalanick’s company City Storage Systems. The CloudKitchens unit builds kitchens for chefs who want to start food-delivery businesses. CloudRetail builds facilities to support online retailers. The company has hired dozens of people including former Uber employees. Employees are being asked to keep mum about it all, not even publicly acknowledging they work there. Kalanick is said to be focused on growing his food delivery fast as he did with Uber. https://www.businessinsider.com/stock…http://www.wochit.com This video was produced by YT Wochit Tech using http://wochit.com
I was barely getting any sleep,” Umar Afridi, cofounder and CEO of Truepill, says of the tech-enabled pharmacy company’s early days. From 9 a.m. to 4:30 p.m. each day, he worked at Truepill’s distribution center in Hayward, California. Then he drove to his job as a pharmacy manager at a 24-hour CVS in East San Jose. On the side, he studied for a dozen state pharmacy exams so that Truepill, which at the time had no other pharmacists on staff, could legally ship to those states. “It was a pretty crazy first year,” he says with characteristic understatement.
That craziness has paid off for Afridi, 37, and his cofounder, Sid Viswanathan, 35, who hope to upend the staid, heavily regulated pharmacy business with technology. Truepill, which is based in San Mateo, California, shipped its first prescriptions in 2016. Last year its revenue reached $48 million, helped by the fast growth of direct-to-consumer customers like Nurx, which sells birth control, and Hims, which focuses on remedies for hair loss, erectile dysfunction and acne. This year Truepill could double its revenue to $100 million, as it expands its customer base beyond direct-to-consumer medications to prescriptions that treat more serious illnesses.
Those revenue numbers gained Truepill a spot on Forbes’ Next Billion-Dollar Startups list this year, despite its having raised just $13 million in venture funding led by Initialized Capital at a valuation of $80 million in its last round. That valuation makes Truepill an outlier on the list, as does the fact that Afridi and Viswanathan own the majority of the business and plan to continue to do so after raising the next round of capital, expected before the year’s end.
Afridi and Viswanathan—and their investors—are betting that Truepill will see a big payoff as consumers move away from in-person doctor visits and to a new model of telemedicine. “This is the building block of digital health and the future of healthcare,” says Initialized managing partner Garry Tan.
Pharmacy is a roughly $400 billion business in the United States, yet only recently have entrepreneurs begun tackling the market. In 2013, two young founders launched PillPack, a retail pharmacy startup that was acquired by Amazon last year for around $750 million. Other newcomers followed, including New York City’s Capsule, which grabbed $270 million in funding to do same-day prescription delivery refilled via text.
Truepill’s difference: Its business-to-business model makes it a behind-the-scenes player, invisible to retail customers, who will never have reason to know its name. That’s by design, and it allows Truepill to sign agreements with drugmakers and pharmacy benefit managers, those industry intermediaries that sit between insurers and drugmakers, without directly competing with them. “We’re not a traditional mail-order pharmacy,” Afridi says. “We’re way more than that.”
Afridi was born in Salt Lake City and grew up in Manchester, England, where his mother’s family was from. He studied pharmacy at the University of Manchester and worked as a relief pharmacist, filling in for those who went on vacation, in England. After passing the tests to practice in the United States, he took a job at Fred Meyer near Seattle. Unlike the typical pharmacist, Afridi always had an entrepreneurial side gig. During college, he imported performance cars, like the Mazda RX-7 and the Mitsubishi Evo 5, from Japan and sold them at a profit.
While working as a pharmacist, he taught himself computer programming and began playing around with the idea of an on-demand pharmacy. His goal: to ease customers’ frustrations with waiting in line to pick up medications and to cut back the phone calls and faxes required for pharmacists to do their job. “I’ve always had a passion for technology, and every time I see a problem, I think, ‘How can technology fix this?’” he says.
Viswanathan, an Indian immigrant, had worked at Johnson & Johnson, then cofounded CardMunch, a business-card scanning app. In 2011, LinkedIn bought the startup for a reported $3 million. Viswanathan stayed at the larger company after the deal, and when LinkedIn went public the stock he owned made him wealthy for the first time. “It was fairly life-changing coming from no money to having some,” he recalls. After nearly four years at LinkedIn, he was ready to leave and work on another startup. “My only criterion was what do I want to spend the next 10 years of my life on,” he says.
While he was pondering what to do next, he stumbled upon Afridi’s profile on LinkedIn—where Afridi had changed his header to “startup founder, pharmacist”—and messaged him cold to talk about healthcare. Soon the two were meeting regularly and brainstorming ideas for a business to start together.
By then, other startup pharmacies, like PillPack, were making inroads with retail customers. Rather than compete in what had become a crowded space vying for retail customers, Afridi and Viswanathan figured they could operate in the background, using technology to build an extremely efficient pharmacy distribution center. “Truepill is what you get when you put together a pharmacist and a software engineer,” Viswanathan says.
“This is the building block of digital health and the future of healthcare,” says Initialized Capital’s Garry Tan.
Their idea coincided with the rise of new direct-to-consumer health brands that needed a distributor that could follow all the pharmacy regulations. To consumers, these Instagrammable health products don’t look like drugs, and often their subscription boxes contain a mix of both prescription and over-the-counter products. But if there’s even one vial of prescription pills going out in the mail, the startup sending it needs a pharmacy to fulfill the order. In talking with Nurx, Viswanathan says, “we came to find out they were literally picking up the phone to mom-and-pop pharmacies in different states.” They gained a customer by offering a better way.
In 2017, Andrew Dudum cofounded Hims, the fast-growing direct-to-consumer therapeutics startup for men, and he, too, signed up with Truepill. “We knew from the beginning we were going to grow very fast,” Dudum says. “We expected 30 to 50 orders per day, and that was the scale we communicated to Umar and Sid that we needed to be prepared for. In the first week, we were getting 500 orders per day.” Today, Hims, which is valued at $1.1 billion, does thousands of orders per day and is one of Truepill’s largest customers. “They figured out a way to scale with us,” Dudum says.
At Truepill’s Hayward distribution center, all orders come in electronically. When Hims sends a prescription for finasteride, the male hair-loss treatment, for example, it goes through electronic vetting and then a robotic machine pulls the 1-milligram tablets from custom-made 1,000-count bottles into a small pill vial that gets labeled with Hims branding. That automation allows Truepill to work more efficiently than a traditional retail pharmacy. So, too, does its focus on a small number of medications: Ten medications, including finasteride and the erectile-dysfunction drug sildenafil, represent 80% of its volume. Its scale in those allows Truepill to turn over its inventory every few days and gives it the power to negotiate prices with drug manufacturers and pharmacy benefit managers on those products.
“Truepill is what you get when you put together a pharmacist and a software engineer,” says cofounder Sid Viswanathan.
For Afridi and Viswanathan, direct-to-consumer medications are just the beginning. They are starting to sign agreements with drugmakers and pharmacy benefit managers, though they won’t name those larger partners yet. This shift comes none too soon, as Hims has announced that it would open its own pharmacy in Ohio to shift a portion of its distribution in-house—a move that Viswanathan says will begin to impact Truepill in 2021. “Hims is a large part of the business in quantity, but not in revenue,” he says, noting that medications reimbursed by insurance are higher cost than lifestyle meds that consumers pay for out of pocket. Truepill currently has two distribution centers and is adding another five.
Afridi and Viswanathan’s next step: building a nationwide network of doctors in every state that will enable their pharmacy startup to play a bigger role in the shift to telemedicine. Those doctors will allow it to work directly with makers of specialty medications, say, so that they can distribute their medications to consumers more easily. Over time, Truepill figures its orders could rise from 5,000 to 10,000 per day to 100,000.
“Lifestyle and ED [erectile dysfunction] medications have allowed us to build the infrastructure to all these other areas,” Afridi says. “There is a lot of innovation that needs to happen in the space.”
I’m a senior editor at Forbes, where I cover manufacturing, industrial innovation and consumer products. I previously spent two years on the Forbes’ Entrepreneurs team. It’s my second stint here: I learned the ropes of business journalism under Forbes legendary editor Jim Michaels in the 1990s. Before rejoining, I was a senior writer or staff writer at BusinessWeek, Money and the New York Daily News. My work has also appeared in Barron’s, Inc., the New York Times and numerous other publications. I’m based in New York, but my family is from Pittsburgh—and I love stories that get me out into the industrial heartland. Ping me with ideas, or follow me on Twitter @amyfeldman.
Hi, I’m Garry Tan, venture capitalist and cofounder at Initialized Capital. We were earliest investors in billion dollar startups like Coinbase and Instacart, and we’re spending time with some of our best founders to learn the secrets of their success and see the future they’re building. Today I sat down with Sid Viswanathan, cofounder of Truepill, an API for all needs for telemedicine. Telemedicine has the potential to bring down costs and make high quality care more accessible for every person on the planet. We’re headed to Hayward, California, their west coast HQ and fulfillment center out of which they provide pharmacy services for dozens of telemedicine startups and practices large and small, shipping to all 50 states. Come learn about how as a founder, you need to choose a problem space that you could want to work on for 10 years or more. Please like this video and subscribe to my channel if you want to see more videos like this with top founders. Find Sid on Twitter at https://twitter.com/sidviswanathan Find Garry on Twitter at https://twitter.com/garrytan Learn more about Truepill at https://truepill.com Learn more about the companies we fund, and how we work with them at https://initialized.com
In October 2018, microbiome testing startup uBiome was riding pretty high. Less than a month before, the company had announced a shift to more therapeutic products, raised $83 million in a venture capital round, and added a former Novartis CEO to its board.
The San Francisco-based company was founded in 2012, and its first product was an at-home kit where people could provide fecal samples and send them in for genomics testing. The company then purported to provide a report about its customer’s microbiome—the bacteria present in the intestines that can have a big impact on people’s health.
The company then began offering a test for irritable bowel syndrome and a test for vaginal health. These tests required a doctor’s order. The company’s practices involving doctors who ordered those tests are reportedly under scrutiny by law enforcement, and its Chapter 11 bankruptcy filing included notes about millions of dollars owed to insurance companies as refunds. In July, the company’s cofounders and co-CEOs, Jessica Richman and Zac Apte, resigned from the company.
During the company’s Chapter 11 filing, the company had indicated that it would be looking into a sale. However, according to the motion it filed in court today, the company wasn’t able to secure lending that would enable it to continue operations. As a consequence, it has requested the court allow it to cease operations and liquidate its assets in order to pay off its creditors.
The bankruptcy court still needs to approve the motion. If it is accepted and the company moves to Chapter 7, the liquidation of uBiome’s assets will happen under the supervision of a court-appointed trustee.
Sun Tzu meets software in mid-August at downtown Denver’s Crawford Hotel. The floors are terrazzo. The chandeliers are accented with gold. And Dean Stoecker, the CEO of data-science firm Alteryx, has summoned his executives for the annual strategy session he calls Bing Fa, after the Mandarin title of The Art of War. “Sun Tzu was all about how you conserve resources,” says Stoecker, 62. “How do you win a war without going into battle?”alteryx
Stoecker knows something about conserving resources. He cofounded Alteryx in 1997, when the data-science industry scarcely existed, and spent a decade growing the firm to a measly $10 million in annual revenue. “We had to wait for the market to catch up,” he says. As he waited, he kept the business lean, hiring slowly and forgoing outside investment until 2011. Then, as “big data” began eating the world, he raised $163 million before taking Alteryx public in 2017. The stock is up nearly 900% since, and Stoecker is worth an estimated $1.2 billion.
“People ask me, ‘Did you ever think it would get this big?’” he says. “And I say, ‘Yeah, I just never thought it would take this long.’ ”
Alteryx makes data science easy. Its simple, click-and-drop design lets anyone, from recent grads to emeritus chairmen, turn raw numbers into charts and graphics. It goes far beyond Excel. Plug in some numbers, select the desired operation—say data cleansing or linear regression—and presto.
There are applications in every industry. Coca-Cola uses Alteryx to help restaurants predict how much soda to order. Airlines use it to hedge the price of jet fuel. Banks use it to model derivatives. Data analysis “is the one skill that every human being has to have if they’re going to survive in this next generation,” says Stoecker. “More so than balancing a checkbook.”
Alteryx’s numbers support that forecast. The company, based in Irvine, California, generated $28 million in profit on $254 million in revenue in 2018, and Stoecker expects to hit $1 billion in annual sales by 2022.
Stoecker grew up the son of a tinkerer. His father built liquid nitrogen tanks for NASA before quitting his job to sell “pre-cut” vacation homes in Colorado. He made them himself. “It was literally just him nine months of the year, and he would cut wood for 50 buildings,” Stoecker recalls. As a teenager he joined his father, and by the time he arrived at the University of Colorado Boulder to study economics, he was able to pay his own way.
After graduating in 1979, Stoecker earned his M.B.A. from Pepperdine, then took a sales job in 1990 at Donnelley Marketing Information Services, a data company in Connecticut. There he met Libby Duane Adams, who worked in the firm’s Stamford office. Seven years later, the pair founded a data company of their own, which they cumbersomely named Spatial Re-Engineering Consultants. (A third cofounder, Ned Harding, joined around the same time; Stoecker, who came up with the idea, took the lion’s share of the equity.)
SRC’s first customer, a junk mail company in Orange County, paid $125,000 to better target its coupons. “We were building big-data analytic cloud solutions back in 1998,” says Stoecker, when many businesses were barely online and terms like “cloud computing” were years away.
SRC was profitable from the outset. “We didn’t spend ahead of revenue. We didn’t hire ahead of revenue,” says Adams, sitting in a remodeled 1962 Volkswagen bus at Alteryx headquarters, theoretically a symbol of the company’s journey. “We never calculated burn rates. That was a big topic in the whole dot-com era. We were not running the business like a dot-com.”
In 2006, as part of a pivot away from one-off consulting gigs, SRC released software to let customers do the number-crunching themselves. They named the software Alteryx, a nerdy joke for changing two variables simultaneously: “Alter Y, X.” Stoecker made Alteryx the company name, too, in 2010.
The market was still small. To grow revenue, “we just kept raising the price of our platform,” Stoecker says. In the beginning, Alteryx sold its subscription-based software for $7,500 per user; by 2013 it was charging $55,000. The next year, as Stoecker felt demand growing, he slashed prices to $4,000. Volume made up for the lower rate. Today Alteryx has 5,300 customers. “We immediately went from averaging eight, nine or ten [new clients] a quarter to north of 250,” he says.
Although data mining and data analytics is a long-established field, encompassing a slew of startups as well as giants like Oracle and IBM, “we see almost no direct competition,” Stoecker insists.
“It’s a pretty wide-open field,” says Marshall Senk, a senior research analyst at Compass Point Research & Trading. “The choice is you buy a suite from Alteryx or you go buy 15 different products and try to figure out how to get them to work together.”
Inside Alteryx’s offices, Stoecker pauses in front of a time line depicting his first 22 years in business. “The good stuff hasn’t even occurred yet,” he says. “I’m going to need a way bigger wall.”
I’ve been a reporter at Forbes since 2016. Before that, I spent a year on the road—driving for Uber in Cleveland, volcano climbing in Guatemala, cattle farming in Uruguay, and lots of stuff in between. I graduated from Tufts University with a dual degree in international relations and Arabic. Feel free to reach out at firstname.lastname@example.org with any story ideas or tips, or follow me on Twitter @Noah_Kirsch.
You’ve disrupted the status quo, dissolved data conventions and altered everything we knew about analytics. This year, we invited you to put your groundbreaking insights on the main stage at our annual user conference. Revisit the fun in Nashville as we celebrated the game changing stories that educated leaders and motivated a community of data experts to shatter more barriers than ever before. This year was all about You.Amplified.
Tala, a Los Angeles startup that makes microloans to consumers and small business owners in emerging markets, is announcing today that it has raised $110 million in funding. The new Silicon Valley venture capital firm RPS Ventures, cofounded by Kabir Misra, former managing partner at Softbank’s $100 billion Vision Fund, is leading the round. Tala’s backers include PayPal, billionaire Steve Case’s VC firm Revolution, Chris Sacca’s Lowercase Capital and Data Collective, among others. The new funding values Tala at nearly $800 million, according to an investor. Tala has raised more than $200 million in equity investment to date.
Shivani Siroya, 37, founded Tala in 2011 after stints as an investment banking analyst and as an analyst at the U.N. Population Fund, where she did socioeconomic research. Tala’s mobile app lets people in Kenya, the Philippines, Tanzania, Mexico and India take out small loans ranging from $10 to $500. Most use the app to invest in their small businesses, like shops and food stands. To evaluate borrower risk, Tala uses cell phone data instead of credit scores, looking at loan applicants’ habits, like whether they pay their phone bills on time.
Siroya first launched Tala’s app in Kenya in 2014. Today it has more than four million customers who take out three to six loans a year at a 10% average monthly interest rate. Its 600 employees are spread across offices in Santa Monica, Kenya, Mexico, the Philippines and India. The company made Forbes’ Fintech 50 list earlier this year.
Tala’s closest competitor is Branch, a five-year-old San Francisco company led by Matt Flannery, who previously cofounded donation crowdfunding platform Kiva.org. Branch has four million customers and an average monthly interest rate of 15%. Earlier this year, it raised $70 million in equity financing from investors like Visa and Andreessen Horowitz, plus $100 million in debt. Tala also raised $100 million in debt over the past year to help fund its loans.
With its new capital, Tala plans to make a bigger push into India and expand to new countries, potentially in regions like West Africa, Southeast Asia and Latin America. It also plans to launch new products. In Kenya, Tala has already tested a micro health insurance offering that would cover customer visits to a hospital. It expects to launch its first microinsurance product in the next 12 months. It has also piloted a financial education and coaching program, and it plans to test additional products over the next year.
I cover fintech, cryptocurrencies, blockchain and investing at Forbes. I’ve also written frequently about leadership, corporate diversity and entrepreneurs. Before Forbes, I worked for ten years in marketing consulting, in roles ranging from client consulting to talent management. I’m a graduate of Middlebury College and Columbia Journalism School. Have a tip, question or comment? Email me email@example.com or send tips here: https://www.forbes.com/tips/. Follow me on Twitter @jeffkauflin. Disclosure: I own some bitcoin and ether.
Trust: How do you earn it? Banks use credit scores to determine if you’re trustworthy, but there are about 2.5 billion people around the world who don’t have one to begin with — and who can’t get a loan to start a business, buy a home or otherwise improve their lives. Hear how TED Fellow Shivani Siroya is unlocking untapped purchasing power in the developing world with InVenture, a start-up that uses mobile data to create a financial identity. “With something as simple as a credit score,” says Siroya, “we’re giving people the power to build their own futures.” TEDTalks is a daily video podcast of the best talks and performances from the TED Conference, where the world’s leading thinkers and doers give the talk of their lives in 18 minutes (or less). Look for talks on Technology, Entertainment and Design — plus science, business, global issues, the arts and much more. Find closed captions and translated subtitles in many languages at http://www.ted.com/translate
Some time back, in my infographic on 51 Business Mistakes that most Entrepreneurs Make, I had outlined that one of the biggest mistakes is that you do not give any thought as to what you consider would be a great startup culture. And, without good policies or HR to keep things in check, the startup begins to develop a toxic business culture.
You will find this problem in businesses in Japan a lot. The Japanese culture is that people should work harder and if any employee goes home early, or finishes his work faster than the other, they usually get snitched on to their bosses by their co-workers. Since, you are growing a startup, you may want to avoid all these hullabaloo as time is limited and money is precious. Your workforce is your primary foundation and you want to build it strong as everything else you do is going to be supported by your employees.
Therefore, here is what you do to streamline the company’s functions and develop a strong and great company culture:
Step #1. What are the values that you hold dear and want to be reflected by your startup?
Yeah, you are the boss, you are the man of the show. Since you run the startup, you need it to reflect the type of entrepreneur you are and the entrepreneurial qualities you have as best as possible. That way, you can run it better!
So, ask yourself, what quality do you want for your startup to be its brand identity? It can be anything. For example – if you think hustle is the best quality of a startup (although, I disagree), it can be – “being the hardest worker in the room”, or if you want your employees to have a quality personal life, it can be something else.
Now, when you have landed on some values which you hold dear, make sure everybody in your business knows it – the employees, your partners, the directors and even the janitors!
Step #2. Make Sure Employees (Both Present and Future) Reflect those Ideals
If all you look at when hiring employees is whether they have the requisite skills or not, then you could be doing a grave mistake. Studies have proven that employees who are not a cultural fit with your business shall not work their best.
Heck, they can even become toxic in nature and do more harm to your company culture than good. Suppose you have an open-door policy wherein any employee can talk to you directly; however a mid-level executive doesn’t want that and shouts at and harasses his juniors for going to you without passing through him first – what do you think is going to happen?
Your startup culture will be in-operational for just one worker and can hinder performance among all your employees. That’s why mistake #1 in my post on business mistakes showed that you need a good HR even if your business is new. An HR has relevant skills and expertise in hiring the best workers so that can be a breather for you and help your business focus on, where it is truly necessary.
Step #3. Make Sure Everyone’s Voice is Heard
In order to truly know whether every employee is resonating according to your business ideals, you have to make sure that the voice of employees at even the lowest level is heard. That way, you can be sure the startup culture has truly sunk in.
In order to create a culture that actually motivates the employees, you also have to make sure that they understand that their voice matters and that if they have any grievances to tell or advices to offer, it has a good chance to be acted upon.
Also, this step that is to make everybody’s voice heard should not be made only in a vertical direction that is only from down to the top; rather it should be made laterally. Colleagues should know what their teammates think and feel.
That way, it can promote good communication and the workplace is going to remain energized. You need to also support lateral feedback even if means you have to go above and out of what you should be doing.
Step #4. Give Feedback
Now, the above step will be quite redundant without this process in place. Your employees will stop saying what they feel if they believe that what they say will not be acted upon. Therefore, you have to be proactive in giving feedback to employees. Show them that their work counts and learn to motivate them. Hold interactive sessions, talk one-on-one with employees who have addressed their grievances to you and also share your thoughts on any input they have given.
That way, you actually know whether your company culture is striving or whether the employees have just put up a facade to please you. Now, an even more important point – there will always be some employees who go against the company culture or even rebel against them.
There are three ways to handle them which you must note and be careful of:
Firstly, by providing gentle feedback about how you want things to be and remain in your business. This works against employees who unknowingly have strayed from the path and need just a gentle pat to return back on track. For example, if you have a company culture on wearing formal attire and being extremely disciplined but you see a guy who is trying to break free, because he feels the clothes are very restrictive, you can guide him to a middle path.
Secondly, by actively supporting him in his endeavour. You know, some people are really creative and can’t be bounded. While, it can do a lot of damage to your company culture, if you feel that the guy has got a lot to offer, you can let him be a wild horse. This usually applies to some very creative overachievers. These guys are usually rebels and if they don’t actually harm the way other employees do their work, it is best to keep them and encourage their habits! Seems rather odd, right!?
Lastly, by firing him. Some people just poison the company culture. Toxic employees who are constantly fighting their peers or are late in finishing their work almost always need to be eradicated or else you risk the chance of demotivating your other employees.
While, it looks rather simple, it is the simple things that have the most effectiveness. Executing these principles at your startup can be the separating factor from just a startup and a startup with a workforce who are optimized to win!