Latest / Leaders In Payments / Lamine Zarrad, CEO of StellarFi | Episode 259

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Lamine Zarrad, CEO of StellarFi | Episode 259 · Leaders In Payments

• 0:01
  Speaker 1: Welcome to the Leaders in Payments podcast, where we talk to C-level leaders from across the payments landscape.
• 0:06
  Speaker 1: We'll be discussing the products and services that impact the payment space today, as well as trends and predictions for the future of payments.
• 0:14
  Speaker 1: We will also hear stories from our guests about their journeys to the top.
• 0:18
  Speaker 2: What we do.
• 0:19
  Speaker 2: We don't report alternative history.
• 0:21
  Speaker 2: We use our money to pay your bills, so we make those bills conventional credit transactions, because a consumer basically borrows money from us and then they pay us back.
• 0:33
  Speaker 2: Instead of reporting the fact that you've had good credit history or good rental history or good history of paying utilities, we actually pay those bills for you and then you pay us back.
• 0:43
  Speaker 2: As a result, we're able to then propagate our data, not until I turn the models, but into every single credit model out there, across FICO, across Vantage and, of course, across three of the big bureaus.
• 1:00
  Speaker 3: That was Lameen Zarad, the founder and CEO of StellarFi, and he is my special guest this week on episode 259 of the Leaders in Payments podcast, and I'm your host, greg Myers.
• 1:10
  Speaker 3: Stellarfi helps consumers build credit with every bill that is paid.
• 1:14
  Speaker 3: Stellarfi works with you on something you already do pay your bills, but most of your bill payments go unreported because they are not made on loans or credit cards.
• 1:23
  Speaker 3: Stellarfi's unique solution reports payments like your phone bill, rent yoga class or favorite streaming services to experience TransUnion and Equifax.
• 1:32
  Speaker 3: We've got a great episode ahead, so let's get started.
• 1:35
  Speaker 3: Hi Lameen, thank you for being here and welcome to the Leaders in Payments podcast.
• 1:45
  Speaker 2: Thanks, greg, it's great to be here.
• 1:46
  Speaker 3: Great, so let's dive in.
• 1:48
  Speaker 3: If you don't mind, tell our audience a little bit about yourself, maybe where you grew up, where you went to school, where you currently live, just a few things like that.
• 1:54
  Speaker 2: Greg.
• 1:54
  Speaker 2: I'm an immigrant.
• 1:55
  Speaker 2: My family escaped an ethnic conflict, now in the country of Azerbaijan.
• 1:58
  Speaker 2: We fled at the time to Moscow and then undocumented across Europe, seven countries, across into Netherlands, and they came to US.
• 2:07
  Speaker 2: When we landed in US, landed in Georgia, a town called Augusta, georgia, outside of Atlanta.
• 2:12
  Speaker 2: Shortly after I joined the Marines and spent the rest of my life traveling all over the place.
• 2:18
  Speaker 2: I went to the Marine Corps.
• 2:19
  Speaker 2: I went to college.
• 2:20
  Speaker 2: I studied business and finance.
• 2:22
  Speaker 2: I was always very passionate about finance.
• 2:24
  Speaker 2: Finance was always a mystery to me and my family.
• 2:26
  Speaker 2: Most of our problems were of financial nature, so I wanted to really crack that nut and the study, like I said, business and finance landed in financial services with Merrill Lynch.
• 2:36
  Speaker 2: At the height of the financial crisis, which was another fascinating experience.
• 2:39
  Speaker 2: I decided that I was a bit disenchanted in the way capital markets work and wanted to understand the role of banks play and how we can manage those institutions.
• 2:48
  Speaker 2: So I left the private sector and jumped back into public sector with US Treasury and became a bank regulator.
• 2:54
  Speaker 2: That's where I got all of my good ideas for what I do today.
• 2:57
  Speaker 2: I left the Treasury or the OCC off the control of the currency to start my first company back in 2016, and I'm on my third company now.
• 3:06
  Speaker 3: Great, and we'll dive a little deeper into some of that in a few minutes.
• 3:09
  Speaker 3: But let's talk about the company.
• 3:11
  Speaker 3: So let's talk about StellarFi and what you do Give us kind of the high level overview.
• 3:17
  Speaker 2: Yeah, of course.
• 3:18
  Speaker 2: So StellarFi is a financial management platform at a very high level.
• 3:22
  Speaker 2: What we do today is credit building, but unlike other credit builders and, by the way, there are many credit bills out there that the concept existed for decades, Credit unions sort of pioneered the concept of a secured loan.
• 3:34
  Speaker 2: So if you don't have a good credit or not credit at all, what you do is you put a deposit down with your credit union or bank and they've set up a separate financial instrument, deposit secures, and now you sort of pay it back and if you don't pay it back it will take your money.
• 3:48
  Speaker 2: It's really inefficient, but it works, and we thought we want to help people and I'm happy to tell you the background story behind the idea of how we came to building what we built but we wanted to do this the right way, and what I mean by that.
• 3:59
  Speaker 2: We wanted to address the problem of bad credit at its root, versus treating the symptom, because a secured product just treats the symptom.
• 4:06
  Speaker 2: It doesn't make a person, a borrower, into a better borrower.
• 4:09
  Speaker 2: We wanted to make sure that we did just that.
• 4:12
  Speaker 2: We made our customers into better borrowers by helping them pay their bills on time not just one bill that is associated with us, but rather all of their bills.
• 4:23
  Speaker 2: And so what we did is we built a bill payment platform where our customers can sign up, link all of their bills that they're currently paying online bills mostly and we remit payments on those bills using our money and then they pay us back.
• 4:36
  Speaker 2: That's what we do today.
• 4:37
  Speaker 2: Our vision is to basically use that as a platform and to build on top of that, build an entire marketplace where the experience is really circular.
• 4:46
  Speaker 2: If you will, you join us, join our platform, you link your bills, credit improves, it gets better, and then what you do is then you borrow money for things that you need by a house, car and so forth and we help you pay on those bills as well.
• 4:58
  Speaker 2: That's the big vision we want to be kind of a new gen marketplace where people are going to borrow money for things that they need for really everyday expenses and when you say a bill pay platform so basically their utility bills, their mortgage, their rent, anything like that that they're typically paying online you're consolidating that.
• 5:22
  Speaker 2: That's right.
• 5:22
  Speaker 2: Really, any bill that you pay online.
• 5:25
  Speaker 2: You can get really creative, and we've seen the most creative things you possibly imagine.
• 5:28
  Speaker 2: People pay all kinds of things online.
• 5:29
  Speaker 2: Yes, everything from your subscriptions, like Netflix, to your rent utilities.
• 5:33
  Speaker 2: These are pretty common in our platform.
• 5:35
  Speaker 2: We've seen all of them.
• 5:36
  Speaker 2: But people pay other things online.
• 5:38
  Speaker 2: For example, a lot of the e-commerce retailers now have special memberships, like we've seen Walmart, for example, copying Amazon, like Amazon Prime.
• 5:47
  Speaker 2: Walmart has this thing called Plus and many others, and so whatever you're paying today, we want you to pay it through us so we can help you and we can ensure that you pay these things on time, so don't get yourself in trouble.
• 5:58
  Speaker 3: Well, you said it was an interesting backstory, so I'd love to dive into that and hear what brought this idea to your mind and how you executed on building the company.
• 6:06
  Speaker 2: Of course, as I mentioned, I'm an immigrant.
• 6:08
  Speaker 2: So when we came to this country when I say we, my family and I had no idea how any of this stuff worked.
• 6:13
  Speaker 2: My mother struggled to even write a check and balance a checkbook.
• 6:17
  Speaker 2: And you know I made some decisions as a young man and, frankly, it's not unique to an immigrant experience.
• 6:22
  Speaker 2: A lot of Americans make some very similar decisions and mistakes by borrowing money they really can't manage in terms of paying back.
• 6:29
  Speaker 2: I've done that several times and I've got myself into some serious credit troubles as a young man, pre-college and even while in college and in the military Also, I had an interesting military experience I deployed while I was in the Marine Corps and it happened to a lot of service members as a glitch where I didn't get paid for several months, even though I got my money back.
• 6:48
  Speaker 2: Eventually I got paid back.
• 6:50
  Speaker 2: My credit was in shambles and in any case, I've learned what it's like to live with bad credit and how all the doors are closed when your credit is bad, and I've always sort of was acutely aware of that condition.
• 7:03
  Speaker 2: It's like being shackled.
• 7:04
  Speaker 2: You really can do things that you want to do.
• 7:06
  Speaker 2: It prevents your phone from doing all kinds of different things.
• 7:08
  Speaker 2: It limits your opportunity and you know people don't realize this, but bad credit affects your ability not just to borrow money but also to do things like get a job and various other things.
• 7:18
  Speaker 2: And so while I was running my last company so I sold my company to a legal tech company and we built out this platform that helped entrepreneurs launch businesses and manage those businesses I realized that entrepreneurs in general have bad credit scores and it was a very, you know, sort of a personal thing.
• 7:33
  Speaker 2: I'm an entrepreneur.
• 7:34
  Speaker 2: I used to have a bad credit score, so I started digging deeper and I stood up a relationship with Experian at that company and Experian gave me access to a lot of their research, and this is when I had this massive revelation that it's not entrepreneurs or marginalized groups, it's everyone.
• 7:51
  Speaker 2: 150 to 170 million Americans, depending on the study, have bad credit scores.
• 7:57
  Speaker 2: I mean, that's even high income earners.
• 7:59
  Speaker 2: That's when I said I have to do it, I have to figure out a way to solve this problem.
• 8:03
  Speaker 2: It's a massive societal problem, especially in the economy, that it's grounded in credit, and United States is unique in the sense that no one cares whether you have savings or not.
• 8:13
  Speaker 2: What's important is your ability to borrow money to move the economy forward.
• 8:17
  Speaker 2: This is why we have things like monetary policy right, and what the Fed says we're going to raise interest rates to slow things down or lower interest rates to speed things up.
• 8:25
  Speaker 2: It's because they're controlling people's ability to borrow money, and borrowing money is an essential mechanism for sort of economic mobility.
• 8:34
  Speaker 2: And lo and behold, two-thirds of the adult population in this country has bad scores.
• 8:39
  Speaker 2: It just doesn't add up right.
• 8:40
  Speaker 2: And so this is when I started to dig even further and realize that primary driver it's not that people don't have the money to pay their bills, and this is why they have bad scores Is that people are just generally habitually late because they're mismatching their bills.
• 8:52
  Speaker 2: And an interesting fact to a bone, average Americans pay their bills 45 days of the due date, so one and a half pay cycles off right.
• 9:03
  Speaker 2: It's kind of crazy and we thought, well, let's fix that.
• 9:06
  Speaker 2: We can realign a misalignment and it's a total order.
• 9:09
  Speaker 2: But if we can do this, not only are we building something really interesting and valuable, but we also helping the society become much more efficient and help millions of people live better lives.
• 9:20
  Speaker 3: And not to get into any kind of political conversation, but we've seen or heard, at least I have on the news about people's credit.
• 9:29
  Speaker 3: The amount of debt that people are in let alone the country but people are in is higher than it's ever been over a trillion dollars or some crazy number.
• 9:39
  Speaker 3: I would assume that a lot of those are probably your target customers and they're going to pay higher interest rates with lower credit scores.
• 9:48
  Speaker 3: Can you speak to that a little bit about how you're helping to solve that?
• 9:52
  Speaker 2: Of course.
• 9:52
  Speaker 2: Of course You're right, absolutely.
• 9:54
  Speaker 2: I'm like mind blowing how much debt we have in this country.
• 9:56
  Speaker 2: Forget business related debt or government debt there's 17 trillion in consumer debt in the United States.
• 10:03
  Speaker 2: That's amazing Probably was.
• 10:06
  Speaker 2: And here's another interesting fact to it Approximately 500 billion of it is delinquent.
• 10:11
  Speaker 2: So 17 trillion, meaning people borrow a lot of money and this is for various different things, everything from like homes to buying clothes with your credit card, and 500 billion of it is delinquent.
• 10:24
  Speaker 2: It's on people's reports, credit reports as late or unpaid or whatever.
• 10:30
  Speaker 2: If you think about it this way, if our country is an ecosystem of sorts, right, you have an ecosystem that rotates.
• 10:35
  Speaker 2: You have people borrowing money, buying stuff, paying that money back, using that stuff, borrowing more money, getting more stuff.
• 10:44
  Speaker 2: It makes the economy move forward and it affects all the pillars of economy, everything from federal government to capital markets.
• 10:50
  Speaker 2: Everything is affected by consumers being able to borrow and pay back, and when you get that delinquency on your profile, you're cycled out of that cycle.
• 10:59
  Speaker 2: Right, that circle.
• 10:59
  Speaker 2: You sort of like float to the bottom, dead matter, so to speak.
• 11:02
  Speaker 2: And we're doing this to two-thirds of the adult population, like pushing them out, so making their economy very, very inefficient, and so when we think about this problem, we see ourselves as kind of a recycling mechanism, if you will, rehabilitating those people who have these profiles that keep them outside of the economic circle and getting them back in there, giving them the ability to borrow more money, this time more responsible, using our tools and managing that money.
• 11:28
  Speaker 2: So that's very much our big vision.
• 11:30
  Speaker 2: How we do it, there's not like one solubility, there's so many different things that we do Everything from incentives to pay your debt on time, disincentives if you're late to the way we even acquire customers is very, very unique.
• 11:42
  Speaker 3: That was one of the questions I wanted to ask is how do you target these consumers?
• 11:47
  Speaker 3: I mean, obviously that can be very expensive, so what is it that you're doing there?
• 11:51
  Speaker 3: That's unique.
• 11:51
  Speaker 3: We do many different things.
• 11:53
  Speaker 2: We started out in a very sort of conventional way, like everyone else when on social media and got a bunch of customers by running ads on Facebook, Instagram and so forth.
• 12:02
  Speaker 2: We always knew that this is an expensive, not particularly efficient way of doing things, but sometimes you have to get out there and test the waters, and we did, and we built a, I think, very solid pipeline there.
• 12:12
  Speaker 2: And then we said we really need to start thinking about unique ways of acquiring customers more advantageous to the way our product works, versus just any other financial technology out there that's competing for that same pair of eyeballs, and so we want to influence our route first.
• 12:26
  Speaker 2: That was interesting, Kind of a mixed bag.
• 12:28
  Speaker 2: Some influencers are really good in helping.
• 12:30
  Speaker 2: They have loyal followings and really good at converting people, Others not so much.
• 12:34
  Speaker 2: So we tried that, still testing waters with various different individuals.
• 12:39
  Speaker 2: And then we said why not go and see if we can partner up with nonprofits?
• 12:44
  Speaker 2: There are a lot of organizations that have philanthropic dollars or use philanthropic dollars to solve various different societal problems.
• 12:52
  Speaker 2: In this country especially.
• 12:53
  Speaker 2: It's a massive sector and there's a lot of money floating around that is seeking an outlet that would help someone and, in many cases is to help someone climb out of debt.
• 13:03
  Speaker 2: There's a lot of sort of debt forgiveness type initiatives and we thought, well, what if we partnered up with those organizations and, as they're sort of like forgiving debt and doing all these amazing things, we're there as a partner to then pick up those customers and help them become sort of better and more responsible.
• 13:23
  Speaker 2: And not only are they sort of like taking in money and paying off the debt that couldn't manage before going forward, now they have to use our product to be able to repay that money, and that's the acquisition costs there are dismally low.
• 13:34
  Speaker 2: It's pretty exciting.
• 13:35
  Speaker 2: It is a very young initiative for us internally and we think that this is going to be a massive pillar for our growth in the next 24 months.
• 13:43
  Speaker 3: In the payments and fintech industry.
• 13:45
  Speaker 3: Before a transaction takes place or money is ever moved, there's a plethora of activity that takes place.
• 13:51
  Speaker 3: So, in collaboration with NMI, the fully integrated payment solution built to scale, we've launched the Be Solid campaign where, in this series, we're exploring everything that happens before the transaction with guests from leading companies like Count, mastercard, trustly and more.
• 14:06
  Speaker 3: To listen to the latest episodes, visit leadersandpaymentscom or NMIcom.
• 14:12
  Speaker 3: Slash resources, slash podcasts.
• 14:14
  Speaker 3: In a world full of squares and stripes, be Solid.
• 14:18
  Speaker 3: What would you say?
• 14:20
  Speaker 3: Differentiate your company as a whole from the competitors you have out there, the people trying to do the same thing.
• 14:27
  Speaker 2: When you think about credit building as an industry, you should think about just the methods of building credit.
• 14:34
  Speaker 2: What is credit and credit score?
• 14:36
  Speaker 2: Let's start there.
• 14:36
  Speaker 2: Credit score is a numerical value derived from algorithmic evaluation of your past repayment behaviors.
• 14:45
  Speaker 2: It deals specifically with your ability to pay back the debt, the money that you borrowed.
• 14:50
  Speaker 2: So that's great and it worked really well.
• 14:53
  Speaker 2: And there's a lot of criticism when it comes to scores.
• 14:55
  Speaker 2: But truly, if you look at it purely quantitatively, fico scores still probably one of the most effective ways to predict whether a person is going to pay back the new debt or not, based on their history.
• 15:05
  Speaker 2: But at the same time, people are misusing those scores.
• 15:09
  Speaker 2: Like I said, outside of finance and outside of the bar people use it for to evaluate you as a renter or to evaluate you as a potential employee, and that gets really dicey.
• 15:18
  Speaker 2: And so credit scores expanded, it's reached and it's becoming diluted, it's misused, and so companies out there realizing that consumers have this need to have a better score and they created these three formats of how to improve scores.
• 15:32
  Speaker 2: Format number one I mentioned it earlier that's a secured loan and there are many different wrappers around it today.
• 15:38
  Speaker 2: Some of them are cards, apps and so forth, but really, at the end of the day, a consumer is forced to put some money down.
• 15:44
  Speaker 2: It works, but it doesn't work very well.
• 15:46
  Speaker 2: It's very expensive to consumers.
• 15:48
  Speaker 2: You have to allocate some capital for this thing to work.
• 15:51
  Speaker 2: It's usually a person who doesn't have the money to put aside right and so, and then on top of that you pay an interest in fees.
• 15:57
  Speaker 2: We said that is treating the symptoms.
• 15:59
  Speaker 2: It's not helping them become better borrower and at the end of the day, it's actually hurting the consumer.
• 16:04
  Speaker 2: We don't want to do that.
• 16:05
  Speaker 2: That's most popular way.
• 16:07
  Speaker 2: Format number two is a traditional credit card.
• 16:09
  Speaker 2: So someone gets out there and says hey, I'm going to take some risk on you, greg, you don't have a good credit score and therefore we're going to offset our risk by limiting your spending ability, by basically giving you a credit card $100 or something like that and we're going to charge you crazy interest rates usually rates.
• 16:27
  Speaker 2: And it makes sense, right, because we don't know you, you may not pay us back.
• 16:30
  Speaker 2: So we have to create a business model that works at scale, and that's how they do it.
• 16:34
  Speaker 2: We don't want to do that either.
• 16:35
  Speaker 2: It's predatory.
• 16:36
  Speaker 2: It's also very conventional.
• 16:37
  Speaker 2: There's a lot of competition there.
• 16:39
  Speaker 2: So, like, pragmatically it doesn't work as well either.
• 16:42
  Speaker 2: So that's second.
• 16:43
  Speaker 2: But it works.
• 16:43
  Speaker 2: You know, like if you have a credit card.
• 16:45
  Speaker 2: It impacts your credit score not by a lot, especially if it's a very small card like $50, $100, but it will affect your score to an extent.
• 16:52
  Speaker 2: So that's two.
• 16:53
  Speaker 2: Three is a new thing that materialized over the past four years and we thought it was really interesting.
• 17:00
  Speaker 2: But after evaluating the efficacy of this method we realized it doesn't actually work.
• 17:05
  Speaker 2: But it sounds very sexy.
• 17:06
  Speaker 2: It actually sounds a lot like our company on a surface.
• 17:09
  Speaker 2: So what some of the companies out there do?
• 17:11
  Speaker 2: They're third party reporters.
• 17:13
  Speaker 2: So they look at your profile and say, okay, based on your bank account history, looks like you've been paying utilities and your rent on time.
• 17:21
  Speaker 2: It's usually those two things.
• 17:22
  Speaker 2: Those are not necessarily transactions related to credit, because you're in borrow money, you live somewhere so you're paying rent or use electricity so you've been paying on it.
• 17:30
  Speaker 2: It's invisible on your profile credit report and what they do is they furnish that data to the bureaus and they sell that service.
• 17:37
  Speaker 2: Sounds great, right?
• 17:38
  Speaker 2: So suddenly those things were not reported before being reported.
• 17:42
  Speaker 2: But what the bureaus do with this data?
• 17:43
  Speaker 2: because it's not credit data put them in these alternative models that don't ever see the light of day and, as a result, you're paying for that service and your credit is not really improving.
• 17:53
  Speaker 2: Whatever model it's improving is not a model used by lenders.
• 17:57
  Speaker 2: That's problematic, right?
• 17:58
  Speaker 2: So consumers are very disappointed after using something like this for a while, and so we said we really love the approach of taking something that's not being reported historically and reporting it, but we don't like the fact that it goes into these alternative models.
• 18:13
  Speaker 2: And we thought about this for a couple of years and thinking how do we take this and make those bills count toward all of your credit models?
• 18:21
  Speaker 2: And that's our differentiator.
• 18:23
  Speaker 2: Is that what we do?
• 18:24
  Speaker 2: We don't report alternative history.
• 18:26
  Speaker 2: We use our money to pay your bills, so we make those bills conventional credit transactions, because a consumer basically bars money from us and then the pay us back.
• 18:38
  Speaker 2: So, instead of reporting the fact that you had good credit history or good rental history or Good history paying utilities, actually pay those bills for you and then you pay back and, as a result, we able to then propagate our data, not until I turn the models, but into every single credit model out there, cross fight, go across vantage and, of course, across three of the big bureaus Makes a lot of sense and it's interesting because, as you were explaining that, I've heard of those programs.
• 19:06
  Speaker 3: I think some of the credit bureaus actually have those programs right, the bills you pay for utilities or whatever.
• 19:13
  Speaker 3: You add those to your credit report and they're supposed to affect your score.
• 19:17
  Speaker 2: Yeah, exactly, experience has a cold product boost.
• 19:20
  Speaker 2: What's interesting?
• 19:22
  Speaker 2: That nine million approximately users on boost.
• 19:25
  Speaker 2: A lot of people are traffic to the concept.
• 19:28
  Speaker 2: What you have to do is like sign up for boost your link, your bank account.
• 19:31
  Speaker 2: They use a third party product and call finicity to pull the history from your bank account and then build your credit score.
• 19:38
  Speaker 2: But really in reality what you're building is five, eight inside of experience that no wonder will ever see and that's fundamentally problematic.
• 19:47
  Speaker 2: Right, because to them it makes sense, to them it's an acquisition tool.
• 19:51
  Speaker 2: I don't really care like the second I get you.
• 19:53
  Speaker 2: They start marketing to you and the market the hell out of those consumers and sell you something else.
• 19:58
  Speaker 2: It's not designed to truly help customer right, that makes perfect sense.
• 20:03
  Speaker 3: I love the differentiation.
• 20:05
  Speaker 3: So the spaces Kind of unique in the payments world.
• 20:09
  Speaker 3: But where do you see it headed, say in the next three to five years?
• 20:13
  Speaker 2: Credit going.
• 20:13
  Speaker 2: Specifically, I will say some consolidation is happening already.
• 20:17
  Speaker 2: There's a can be an explosion of various different types of credit builders.
• 20:22
  Speaker 2: There's so many gimmicks out there, so many silly things the floating around when, like you, buy audio books and that's how you build credit.
• 20:29
  Speaker 2: All that's gonna get washed out.
• 20:30
  Speaker 2: The thing is consumers are getting educated rapidly because of this, so that's the solar lighting.
• 20:35
  Speaker 2: Consumers are getting information from all kinds of different angles.
• 20:38
  Speaker 2: Sometimes there's a lot of noise, but generally speaking, they start to understand what works and what doesn't work.
• 20:43
  Speaker 2: We already seeing this company is going out of business or joining other companies and creating something much more stable and conventional.
• 20:51
  Speaker 2: I think we'll see expansion of credit score usage Beyond, even like landlords, property managers and employers into other things.
• 21:01
  Speaker 2: I know this is gonna sound very dystopian, is not something I wish would happen, but I think we're headed in that direction.
• 21:08
  Speaker 2: I think there's gonna be some sort of a social score that most of us will have that is based on today's credit score, can you use for many different things.
• 21:18
  Speaker 2: It's basically gonna give you access me, if you think about it like our society is already very algorithmic and that nature what makes your good citizen versus a bad citizen.
• 21:25
  Speaker 2: You can measure those things fairly easily schools you want to and jobs you had and so forth, and you can quantify it.
• 21:32
  Speaker 2: And it's unfortunate because it's gonna create the delineation between the have nots and has.
• 21:37
  Speaker 2: It's gonna really further the rift, but that's what's gonna happen.
• 21:41
  Speaker 2: So, as a result, I think a lot of organizations out there gonna become more aware of the scores and gonna help people present information maybe opaque, not available, and it's not being factored into the scores, and so we think that we're at the vanguard of that movement where we can be providing the decision makers who are gonna be using various types of scores with information that historically hasn't been factored into the scores.
• 22:08
  Speaker 3: Yeah, that makes a lot of sense.
• 22:09
  Speaker 3: Well, let's switch gears a little bit and talk about you, and you talked a little bit about your professional journey.
• 22:14
  Speaker 3: But let's go back to I think it was 2016.
• 22:17
  Speaker 3: You said when you started your first company, so maybe Tell us about that entrepreneurial journey.
• 22:22
  Speaker 3: Said you had two companies before this one, so maybe walk us through those and a little about your personal professional journey.
• 22:29
  Speaker 2: Of course, my journey officially started was a US treasury, which is a place to become an entrepreneur.
• 22:35
  Speaker 2: I was surrounded by very smart people.
• 22:37
  Speaker 2: My colleagues were all Public servants, care about banking space, about making things better, and all I could see is deficiencies in a system, and I started to build different calculators.
• 22:49
  Speaker 2: I wanted to help financial institutions automate things.
• 22:51
  Speaker 2: I told you my approach like work smart and not harder, and so while treasury, I sort of identified many different deficiencies financial institutions had when it comes to using data, using automation, using various different tools to make decisions faster.
• 23:07
  Speaker 2: I was in the right place at the right time with the treasury.
• 23:10
  Speaker 2: When Colorado legalize cannabis, we as an organization had to figure out how to let our financial institutions are banks deal with that space, because our Community banks are, by nature, sort of charter to serve their communities, and if their community allows for commerce that is, by all accounts, high risk, we have to figure out how to support them, and so we came up with this laundry list that allow banks to engage with legal cannabis businesses and suppliers and provide them with services.
• 23:42
  Speaker 2: But they had to do this really, really, really engage type of surveillance, transactions surveillance and I knew that things that have the tools, then have a no-hound resources.
• 23:51
  Speaker 2: But they were just happy that there's a way to do it and so I decided that I could actually help them build that technology, and it was a really interesting opportunity.
• 24:01
  Speaker 2: So I left the Treasury to start my first company called Token.
• 24:03
  Speaker 2: We built just that.
• 24:05
  Speaker 2: We built a point of sell system, a mobile wallet.
• 24:08
  Speaker 2: We built a core baking component to it.
• 24:10
  Speaker 2: Everything's actually built on blockchain, interestingly, very, very early on, where we would stamp transactions into this indelible ledger to basically certify everything that it's on, off and off and what we do, like our own investigations and all that stuff.
• 24:23
  Speaker 2: So that was very interesting.
• 24:25
  Speaker 2: However, after 2016, a new regime in Washington and the DOJ's position completely changed on what's allowed, what's not allowed and the banking net space.
• 24:34
  Speaker 2: It was just a rest of development.
• 24:36
  Speaker 2: It was just completely halted and our business became, frankly, useless at that stage because there's no desire to serve those businesses anymore.
• 24:45
  Speaker 2: So we ended up selling all of the assets.
• 24:47
  Speaker 2: The business itself hit the wall.
• 24:50
  Speaker 2: It stopped, but we built a lot of tech.
• 24:52
  Speaker 2: So we sold the tech and then I was able to seed my next company using the proceeds itself, and that was a NIO bank.
• 24:58
  Speaker 2: So we built a bank for freelancers and creatives, folks who are sort of non-traditional and had non-recurring revenues and for traditional financial institutions very difficult to deal with them.
• 25:07
  Speaker 2: So we built that as a company called Jaust.
• 25:10
  Speaker 2: Jaust was acquired by a legal tech company called Zem Business.
• 25:14
  Speaker 2: Zem Business was sort of like legal Zoom but, younger and with Jaust acquisition I took over as head of product.
• 25:20
  Speaker 2: I sort of pitched to the leadership team there that what we need to do is we need to shift gears.
• 25:25
  Speaker 2: We need to reposition our entire operation to focus on holistic nature of running a business.
• 25:31
  Speaker 2: Instead of helping businesses form and help them with some compliance, Now that there's a NIO bank in the fall, let's help them do everything from starting the business to running the business to growing the business.
• 25:42
  Speaker 2: Let's incorporate everything from formation and compliance to accounting and voice management, marketing, advertisement and so forth.
• 25:50
  Speaker 2: That was a really exciting and really fun opportunity.
• 25:53
  Speaker 2: After the acquisition of business grew over the year and a half to nearly $2 billion in valuation, it was a rocket ship.
• 26:00
  Speaker 2: That's when I had my idea for Stellify and ended up resigning at the height of the growth there, walking away from a lot of value to do this just because I was convinced that this is the right thing to do.
• 26:14
  Speaker 3: Great Thanks for sharing that.
• 26:15
  Speaker 3: Well, what are some things that you're passionate about?
• 26:18
  Speaker 3: Maybe one work-related passion and one personal passion.
• 26:22
  Speaker 2: I have a personality that is passionate about a lot of things, that I'm constantly cycling these things and I'm excessively pursuing one thing at a time.
• 26:29
  Speaker 2: Work-related passion for me.
• 26:31
  Speaker 2: I've always been passionate about inclusion.
• 26:34
  Speaker 2: When it comes to finances economic inclusion, if you will, it's a really abstract concept.
• 26:38
  Speaker 2: For me, it just means giving people access to money because I think it's the most efficient way to include someone is giving capital.
• 26:45
  Speaker 2: It is one of the most difficult things to do.
• 26:47
  Speaker 2: How do you give someone money that couldn't get money elsewhere?
• 26:51
  Speaker 2: There's usually a good reason why they couldn't get money elsewhere.
• 26:54
  Speaker 2: You have to pull your ego out of it and thinking that well, we do better underwriting, we know this person better, and really figure out a way to do it without losing your pants in the transaction.
• 27:04
  Speaker 2: That's my professional passion.
• 27:06
  Speaker 2: It fills gaps here in the company and we're certainly moving in that direction.
• 27:09
  Speaker 2: We're trying to figure out how to extend more credit to our customers.
• 27:13
  Speaker 2: Like I said, my desire kind of definitely pushes it forward.
• 27:16
  Speaker 2: When it comes to personal passions, I want to understand human nature, which, by the way, ties closely to my professional interests too.
• 27:22
  Speaker 2: The more you know about the human behavior, the easier it is to craft marketing strategies, communication strategies and much of them.
• 27:29
  Speaker 2: But I'm just obsessed with understanding what makes us tick, what makes us do things.
• 27:33
  Speaker 2: I've crossed so many different cultures in my experience and people in different parts of the world do things slightly different, but we're world-same.
• 27:42
  Speaker 2: We have very similar approaches to problem-solving.
• 27:46
  Speaker 2: Generally speaking, humans follow patterns.
• 27:49
  Speaker 2: We were world-some, similar in that way.
• 27:51
  Speaker 2: To me it was always fascinating because if there's a pattern that you can reverse engineer, there's a really interesting gold mine, an opportunity of sorts.
• 27:59
  Speaker 2: I study everything from evolutionary biology to organizational psychology.
• 28:03
  Speaker 2: I follow especially those two domains pretty closely because it's very interesting to really understand the foundation of human existence that is inherently biological and physiological, and then how we build on top of that, using abstract social concepts and creating a whole other, alternative reality that is, a pure social construct, concepts that are created by human ideas that are not necessarily grounded in our physicality and physiology but are informed by our physical experience of the world.
• 28:33
  Speaker 2: That's what I do in my free time, which I don't have a lot of these days, so it's definitely taking a backseat to work.
• 28:41
  Speaker 3: I get it, totally understand that Obviously you've been in this kind of financial services space for a while and doing many different things.
• 28:50
  Speaker 3: So curious your thoughts on this.
• 28:52
  Speaker 3: What advice would you give someone say they're coming right out of college and they're interested in building a career in financial services or FinTech or payments, whatever you want to call it?
• 29:02
  Speaker 3: What would you tell someone if they came up to you and said, hey, what do I need to do to be successful in this space?
• 29:08
  Speaker 3: What would you tell them Be useful when you have a finance degree.
• 29:12
  Speaker 2: it's a pretty practical degree.
• 29:13
  Speaker 2: I think across most academic establishments they still train you up in very conventional but very sort of like pragmatic way.
• 29:20
  Speaker 2: So if you graduate with a finance degree, any company can pick you up and train you on the nuances of their domain, but generally speaking, they know that you understand how to add numbers and subtract them, and so what I recommend doing is actually starting very early, even pre-college or sometime in college, and pick a few veins of finance and follow them pretty closely.
• 29:41
  Speaker 2: For example, if you're starting finance you may develop a passion for corporate finance and something very specific within corporate finance.
• 29:48
  Speaker 2: When I was in college, treasury management was fascinating.
• 29:50
  Speaker 2: To me Sounds boring, but treasury management is the sort of a beating heart of the company.
• 29:55
  Speaker 2: It's how you direct or lifeblood.
• 29:57
  Speaker 2: How you direct your money.
• 29:57
  Speaker 2: How do you optimize what you do with your money?
• 30:00
  Speaker 2: How do you leverage various different tax strategies to not lose money, especially when you're an international company?
• 30:06
  Speaker 2: Where do you put money?
• 30:07
  Speaker 2: Where do you get taxed?
• 30:08
  Speaker 2: Last and so forth.
• 30:09
  Speaker 2: It's just an optimization play cross-bord.
• 30:11
  Speaker 2: So if this is something niche and that's something you're passionate about, select your curriculum to really tailor that experience and then select anything outside of college and this is very important.
• 30:20
  Speaker 2: Get those experiences early on, Get those internships.
• 30:23
  Speaker 2: I wish I did that.
• 30:24
  Speaker 2: I actually deprioritize internships in lieu of really heavy academic load, and that was a mistake.
• 30:31
  Speaker 2: You, as a young person in college and school studying, say finance is a topic.
• 30:37
  Speaker 2: figure out what you want to do.
• 30:38
  Speaker 2: Find employers that you'd like to work for, or employers will give you sort of a stepping stone to an employer that you want to work for.
• 30:45
  Speaker 2: Get that experience.
• 30:47
  Speaker 2: College degree has a very strong signal to hiring managers, but it's not going to move you over the line.
• 30:53
  Speaker 2: Experiences is what's going to get you there.
• 30:55
  Speaker 2: Very specific experience, bag by bag of degree, we'll open a lot of doors.
• 30:59
  Speaker 3: Yeah, I agree with that.
• 31:00
  Speaker 3: Well, I mean, we've covered a lot of ground so far, obviously, about your background, your company, the industry as a whole.
• 31:06
  Speaker 3: Is there anything else you'd like to add before we wrap up the show?
• 31:09
  Speaker 2: I think we covered it all.
• 31:10
  Speaker 2: I just want to.
• 31:11
  Speaker 2: But all of the listeners know that Stelify is there for anyone who pays bills.
• 31:16
  Speaker 2: It's not just a credit building product for folks who want to improve their credit.
• 31:21
  Speaker 2: If your credit score is great, it's always good to link your bills and have your bills paid on time and maintain a good score and also get rid of the headache of managing all of those different online websites where your bills are being paid.
• 31:34
  Speaker 2: Have it all in one place.
• 31:36
  Speaker 3: Love the concept.
• 31:36
  Speaker 3: Thank you so much for being on the show today.
• 31:39
  Speaker 3: I know your time is very valuable, so I really appreciate you being here.
• 31:42
  Speaker 2: My pleasure.
• 31:43
  Speaker 2: Thank you for having me.
• 31:44
  Speaker 3: Absolutely, and to all your listeners out there.
• 31:46
  Speaker 3: I thank you for your time as well, and until the next story.
• 31:50
  Speaker 1: Thank you for joining us this week on the Leaders in Payments podcast.
• 31:53
  Speaker 1: Make sure you visit our website at Leadersinpaymentscom, where you can subscribe to the show and where you'll find our show notes.
• 32:00
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