Sign New York Banking RFP Computer

Industry sign banking new york rfp computer

[Music] hello and welcome back to equities techCrunch's venture capital focus podcast I'm TechCrunch reporter Kate Clark and I'm joined by my co-host Alex Wilhelm of crunch based news how's it going Alex it's going good cold out here on the East Coast looking forward to fall but otherwise in good shape and I'm really excited about our guest this week yeah we have a special guest with us today Sarah Smith a partner at Bain Capital Ventures thanks for joining us thanks for having me here we have a couple of fun facts about you first of which is that you were a competitive strategy board game player and before the show I actually got some tips on stuff to buy I'm pretty excited about but more importantly to me you are a Packers fan yes big Packers fan I didn't grow up a huge Packers fan even though I'm from Wisconsin but when I moved to Austin funny enough that's when I really became a Packers fan there was a bar there called the Star Bar but on Sundays it became the BART star bar and that was pretty great nice all right well I won't make Packers jokes but it's not really a sports show so I'm gonna hold really it's sometimes a sports related show but today is not one of those days so I'll just say fly eagles fly and we can move on to a really great peace cake that you wrote this week that I'm honestly I loved reading it I learned a lot so do you want to take us through liking and subscribing as a venture capitalist sure so yeah I wrote a story about venture capital investment and the creator and influence our economy or maybe more about how I think there'll be more of it coming I want to ask a question about creators versus influencers because as someone who's no longer on Instagram I'm a little bit cut off in this world and I know that it's gotta be very large and very important very culturally impactful but an influencer is someone who is essentially famous in the modern sense and therefore has an impact on the markets view of certain products but a creator is different Kate is that true yeah so there definitely are differences between the two and I know some people are really sensitive about that there was a lot of good stories I mean Taylor Lorenz who has covered the space obviously she's a prolific reporter on the internet culture she's written a piece you should read it the real difference between creators and influencers as explains it and I think influencers people do a suit associate that term with um people who post on Instagram for ads and then creators for people who are artists producing content on know across platforms but I think I think you're pointing like what are influencers like I think that's expanded dramatically over the last few years like we used to think of only like Selena Gomez or Kim Kardashian being influencers and now I think people with like you know even a few thousand followers can start making money online so they would they would also call themselves I think an influencer if they can monitor there's a big spectrum because they're celebrities who are certainly influencers there's even athletes who are now kind of thrown that you know there are influencers but then there's people like you mentioned who have a few thousand and that those are referred to as micro influencers people with like I think maybe more than 3000 that's a constantly changing definition but going back in time the idea of micro influencers isn't entirely new because there was a service that would pay you to post on Twitter way back in the day like five seven years ago yeah and you could get on I think Isaiah or something like that and you could do a paid post for a very small dollar amount back then with only a smallest mattering to followers so I feel like this is just the same idea but much better and more professional it sounds like from a product perspective Kay had a bunch of companies in the post like mo assist which and I was raised 1.2 million Kay and that was the product management side of this so what goal there was the trying to do so that one's interesting because it's actually created by an influencer which is something I noticed there are I mean there's so many things happening there's like entrepreneurs who are more classic Silicon Valley techies we're building in the space and then there's influencers like like people who for the last five years have been you know doing digital ad campaigns on their instagrams and made enough money that they decided to build some sort of company related to it and so that one was founded by a woman named Danielle Bernstein who was like a street style photographer blogger turned like super influencer turned now she's starting a tech startup and yeah I mean it's just a like I said project management paint payments platform to just specifically help influencers because they have sort of unique business needs and haven't they need support in a different way than you know many entrepreneurs would so the point of that is just going to help out people that she's yeah it's pretty interesting it's like I was looking at the site they you know a lot of these influencers that let's say they have like five hundred thousand followers like they were on The Bachelorette like five years ago or something and and and so then they they have a lot of like spent there's a lot of specs so they have to fulfill in order to actually get the bounty so if they're doing a sponsored ad for like Walmart or TOMS shoes or whatever they'll get almost like a mini RFP from the brand saying like hey take a photo with this product or make a video and then make sure you mention these two things and then send them to the site and if you cross all these boxes we'll pay you X Y Z and so that's hard for them to keep track of all of the specs for all of these different little you know these posts that they're doing and then for them to actually go invoice afterwards right that's the part that was interesting to me about this company kind of to the point of like everyone's kind of getting into payments and so forth but times is a big part of I think what the value prop is probably for the influencers yeah they need to get paid and I think there's such an unreliable industry as is any kind of like creator job like if you're a freelance journalist or any kind of contractor so that's meant to help with that yeah I mean I think another lesson learned is a lot of these founders I talked to ones that have successfully or unsuccessfully raised said there's still a lot of skepticism from VCS particularly those outside of LA where I think there's less talk about this influence their economy and there's a lot of funny quotes like one guy basically was like just talk to your kids about it they'll hope they'll explain to you the value prop here if you won't you know listen to me but I think um I think and you I'm sure you have insights into this I think there's more conversations happening around it yeah there's a lot of I mean I think to your point in your article to I mean there's a lot of people starting businesses around this cuz you know definitely you see when there's a consumer way of happening a lot of people kind of go I know I'll fix this problem I had and start a company so we see a lot of people trying to solve the same problem I think fundamentally the challenge I have is that it is it is very fragmented so I mean this is like not even SMBs this is like SSS right it's like very very very tiny folks so then you have to wonder like if they're making a few thousand dollars a year or how much of that can you get them to funnel towards your product like where's the money gonna be how big is the market and I think you mentioned there's something like 8 billion dollars or something this year will be spent on online are on influencer marketing which is you know it sounds big but when you look at all of online marketing this year it should be about three hundred thirty billion dollars of Spence it's still a relatively small two to three percent now my guess is actually just from early days at Facebook you know we definitely saw that that brands would feel like they got a lot more value out of people influencing their friends then just like the right brand voice so the impact of the dollars they're spending a billion dollars might actually be higher than average and so you would expect that that might rise but still relative to the entire ecosystem it's a pretty small amount of total marketing spent so I think that's where probably a lot of venture capitals are still kind of sitting back wondering is you can be able extract and really can you get 200 bit like I was looking her numbers can you get two hundred million dollars in revenue she's charging twenty eight dollars a month these microf losers and creators $3.00 a year it's like you got to get to three thirty thousand plus any questions certainly that VCS are gonna ask an another thing that came up a lot when I was asking investors about it is they said that all if they keep seeing the same thing over and over again they keep seeing basically two sided marketplaces blant brands and influencers which i think is a lot less interesting than like these new ones that are sort of like services built on top for like you know built on top of those so even more tailored and unique things I think the influencer marketing platform sort of came in like years ago and at this point we don't really need any more of those yeah but the dollar amounts were seen here are pretty small like 1.2 million here for some podcast like the amount of money it's commensurate with the size of the market back to your point and that feels intelligent and good I think in 2019 we've gotten so accustomed to seeing such large checks land wherever there's the possibility of some growth question though if this first round does well for VCS that these companies that Kay mention in this piece do you think we could see a relatively rapid increase in VC investment in space or do you think they'll still be enough doubt in the market about the viability of this economy in fact of a better term that investment would remain modest for another 12 18 months I think it really depends how much how many dollars total are funneling over the system so even though 8 billion is being Marketing if those people are generating hundreds of millions of dollars right sorry hundreds of billions of dollars of Commerce then that's really interesting because then you can start getting into the payment side of things it kind of reminds me a little bit of like you think about like Shopify when Shopify was earlier there were tons of pools available to a tiny e-commerce folks or even like Etsy there's a lot of these like brands that you know just through great UI UX and like consistently but delivering an awesome product they just became a dominant market leader so if there's definitely a clear winner in this space I think you could see some of that moving forward but it's all gonna be how many how much purchasing are you know are these people actually driving and a nice thing for the influencers is but we're still kind in a world of a lot of last click attribution and so they do get a lot of credit if their son rating people there and so if they can get so much you know each of them generating you know million or $2 of that then and the banking and payments side becomes really interesting yeah I mean I think it's very early days still for so many of these companies obviously like carrot for example is probably maybe a couple months old I mean I don't know I mean certain it's brand new and they're just building but um I think there'll be a lot more activity whether it's just a lot of entrepreneurs building projects or influencers turning into entrepreneurs it'll be interesting ton of watchin see what happened by the way the K it's try carrot calm because there's also a recruiting tool there's a lot of character security a fertility start up to it there's a lot of girls I'm not losing my mind thinks I was like I thought I heard of a different company called carrot that was much bigger than this there's a startups get new name it's called zucchini come on honestly that's much more memorable a carrot I would not forget a company called zucchini or Z which is probably not great for surgery trail yeah I think we can leave that there let's talk about another millennial issue focus company called deserve now deserve raise fifteen million dollars this week led by Goldman Sachs which always kind of catches my eye when I see Goldman hop into around I presume the company is sufficiently financially matured to have a viable exit path in the next couple years so as exciting to see it implies that it won't go all we work in the and a 50 million dollar odd is always notable as general data point Sallie Mae aspect ventures pelion venture partners and mission Holdings also took part and then I dug into what the company does and if you're not familiar deserve is big in the student credit card space helping people with non-traditional kind of like credit backgrounds and get access to their first credit cards and it also provides services to other organizations to let them issue cards to kind of like their group if you will and I think they call it Cass which is cards as a service which I think is three demerits for abuse of disappears my confession I hadn't heard of this company before it raised and so I'm kind of curious if either of you had heard of it before this news broke I had not but it wouldn't surprise me if my partner Matt Harris in New York had because he does most of our FinTech investing and I'm putting a lot of time into the space in general but no it's definitely not a household name I definitely don't have like billboards up at Caltrain like singer companies I don't think I actually just Google to see if I'd written about it because I wanted to make sure I hadn't written about it before I answered that I'd never heard but I or cafes I it looks so much like other company there's a lot of consumer card companies that are raising money in last couple of years I've definitely written about many of them this seems the same and it looks the same so it's pretty difficult to say whether I mean I don't know if I've heard of it before I understand that it's kind of kind of a dis but I mean I suppose what sets it apart from you and I know fundraising is not a metric of success but it can be a proxy for progress at times if you're in our chairs and you're not seeing access to comes financials so my impression is that because it did manage to raise this amount of money from whom it did it must be larger than a lot of the other companies that we've seen in the space over the last couple of years so we could be looking possibly with a lot of caveats at kind of the market leader I just I'm kind of curious how big they can grow the business the business a business side of their business because if it's all just consumer oriented cards they kind of do it in a one by one basis yeah that's a really competitive market but helping other companies give out cards could be much more lucrative bigger contracts to me there's more growth there I don't know it's kind of a weird hybrid consumer b2b play I don't know the VCS are like that sort of thing these days I mean we love in tech in fact and we're in the place now where my partner Matt I mean we're in a place where we think like then you won't even call it FinTech is a vertical anymore to be like saying it's an Internet company like almost every company now is doing something with embedded payments or some way to capture part of the value chain we actually invested in coming called Phoenix that's doing specifically this like helping software companies do more with embedded payments and having basically FinTech be part of the stack so we're huge fans of the space in general I think the point on the consumer side is like you do wonder just about customer acquisition costs and that's actually the reason why so many other companies are going in - it is that they've paid all this money to acquire customers and then now oh here's another whole huge pot of potential revenue to take advantage of these customers you've already spent so much to get onto your platform okay let's talk about for a minute because I think it was Green Dot which is a public bank was publicly traded Bank I should say um and I think it was one or two earnings cycles ago noted that their growth rate on consumers and the customer side was slowing because so-called neo banks were spending so much money to acquire new customers that they were struggling to compete at a higher load higher CAC price point for lack of a better phrase um how material is that trend and from your perspective and then also is it gotten worse lately like it comes up more often now than it used to yeah I think our views has gotten much much worse I mean online spend like well basically la people were free riding for a long time on really Lok acts I mean I was at Facebook early days when we first launched the auction system and people were paying pennies a click for you know really high value conversions and so just took awhile for essentially the market to shake out and so but as a result of that people kind of used to the old days of low kak and you can kind of work your way through growth by just spending more and more and more in online ads I think that party is over so now people are looking for alternative means and that's where you know a lot of these software companies it's sort of like hey we brought you in for an influencer tool but why don't we also sell you a credit card or extend the line of credit for you and then they can get that bounty from a financial institution or in this case maybe even have their own card right which is I think the idea behind this right well this is a perfect segue into kind of does no one talk about today which is almost exactly that it's companies that started off in kind of one part of what I would call fin tech defense services and it expanded their product line to include things like quote high yield savings accounts everyone wants to give you a debit card and my read of this was there's just so much available revenue there that why wouldn't you go after those other things but I didn't think of it from the perspective of we already spent all the money I'm acquiring the customers let's just juice that revenue I was thinking more forward but that makes a lot more sense financially because you already have people there to use the stuff as it is if your betterment or if your wealth front or I don't know Robin Hood or whatever huh yep it's like some costs so you might as well just continue to monetize and add to it like Shopify's and we talked about a little bit earlier but that's like a really interesting example if you look at their business and what they were monetizing in the early days was software well now payments is actually payments and payments facilitation has become actually we think will be the majority of the revenue very very soon so we think that trend is going to continue across like many many companies because Shopify has two main revenue streams they have a general kind of SAS product which is like the service that you pay for and then they also take a cut I presume or some take rate okay that's right so they're like a non pure SAS business that looks better than a SAS business in some ways then which is a weird turn of events cuz usually that's not the case huh well unless that turn of events that spin tech started to pay attention to this part of the market in the last like I don't know two weeks so I'm very behind all this I've onion or on an activity that I just wasn't paying any attention to and I gotta catch up on it's because chime everyone knows right would just be I don't know I want to say they not the o GE neo Bank but certainly one of the biggest ones buy a total number of kind of current customer accounts but I don't know I was slowed to catching on to everyone else driving into this so as a question how long ago did this pylon into savings accounts and debit cards kind of begin in your perspective also good question I mean we've we've really been talking about this in earnest as a thesis I would say this year but my partner that's been investing in fin tech for like over ten years so I think he saw this kind of rightfully so a lot sooner than the rest of us I don't think you're like that that far behind you shouldn't feel too bad but I think what is interesting is you will start to see more and more like almost every company that you look at will have some angle on payments or embedded payments as part of their business plan IV and and increasingly in earnings calls to like I think like ubers talked about uber money right it'll starting to add that and you know I invested in Limon looking at the scooter space interestingly there was a company down in Brazil called yellow they ended up merging with Britain to create grow but part of the most interesting about the business was actually they were collecting payments in order of people to ride scooters and that involve people going to small kiosks to pay for I like a little like basically a debit card almost to ride a scooter so the payments becomes actually and just more interesting than the scooter business in that case so it's just like it's just this thing that's happening and kind of all over all over the world not just in like the US but also another like underbanked um yeah yeah I mean uber was has been a financial - tech coming from the beginning and has always had one of his best products is its expression list payment capability we Alex did we talk about this last week because I don't want to have the same conversation again but if we talk about uber money last week no nope so yeah uber money um I mean this kind of fits into the conversation they announced they have a team in place I mean that I think I was reading over some reports and people had noticed for a long time but they had been hiring in New York basically hiring really smart former Wall Street people are so people people with financial acumen to bring on to actually build out their financial services products and build better products with our drivers to sort of incentivize drivers and give them better abilities to actually track their payments and then um bank essentially bank with uber so that's interesting too because I think we'll see over do a lot more now that they've kind of have publicly and now it's the team working on the stuff yeah I was a similar to the influencer like this rise of a bunch of small platform Sprint's influencer tools same thing with the gig economy there's a ton of stuff to trying to help yep the economy workers manage their taxes their payments their you know cash inflow and outflow I think it's kind of similar fragmentation so I got a question about this before we talk about ubers earnings and then wrap but like when people pile into a space generally speaking the price that they had the good they sell goes down because competition lowers the price for consumers if everyone's piling into high-yield savings accounts I presumably see rates for consumers go up which is a good thing but can payments revenue that everyone's chasing with interchange and so forth kind of only the piece of the stack as you said will that be a race to the bottom or do you think there's enough defensible w there that even if everyone piles in it'll still be kind of a lucrative idea or a lucrative play for these companies yeah I think the I mean the pies are gonna grow a bit but in general the pies just getting split up I mean I think was pretty concentrated for a long time with the incumbents and so people are just eating away at the accumbens but there was a lot of money to be had there so we we believe that there's a lot of big companies still to be made so that this year according to a pitch book it was by far the most funding and different tech companies which broad but believe it certainly do you do you think that's going to keep happening for several more years in that before it sort of geeks that's a good question when will it peak I mean we believe it's really early innings I would say in general like this is not like to your point you kind of always really started hearing about this I mean we think there's a lot more room for innovation and there's also just lot more data now so like the whole risk profile of how you think about offering credit a lot of these models are based on new metrics the old banks you know never felt like how do you quantify Instagram followers as like something that you could probably monetize I mean they're just a lot of interesting new data streams that could come into play here okay you talked with that in your story about carrot right did they were gonna do why they said when do you base done yes all right no exactly um and I I never talked talked to the company directly because I think they probably didn't want to respond to me because so really but their website does say things like um you know what if you could use your tick-tock following our YouTube following to you know as evidence of whatever it was to be able to get a loan of course you can't do that today they want to see your w-2 they want to see these other traditional statements but this company is saying you know if you want to borrow money from us um we can look at that and use that as as you're good not to be rude about the idea but Kate you and I have more Twitter followers than the average person I don't know how many you have I mean but that's the thing I don't think I don't think of our following went up by 10 percent Kate and I that we would have 10 percent more money or 10 percent more credit worthiness yeah I know Neri of these things yeah and you're you're not the first person to have the reaction today I've I've heard from a number of people who said who made who said things like that or made a joke of it I mean clearly there's there's more than just that they would be looking I'm not defending the company cuz I actually have no idea how they're gonna do this but I don't think they're going to be like oh you have 25 thousand followers okay here's your here's your two million dollars I mean there's going to be a lot to it and we're not creators or influencers we're like an old-fashioned thing called reporters I don't know what box that I read here we are creating an inflow I know they could do something like clear bank though if you guys have seen a third bank right where they say hey hook us up to your you know let's yeah to your mo account and we want to see how much a revenue-generating then we'll you know grant you credit based off that yes definitely because it they want to they want to invest in high-growth creators and influencers they don't want to just invest in anybody that has a big tick tock tick tick tock tick tock there has to be some evidence there that you're kind of I mean the theme of the article at the point I was trying to get across is like these startups are treating influencers like they are a small business and they're giving them the tools they need to be a small as a successful business small or medium or whatever and in some cases that means you know venture backing in other cases I think it means revenue share in other cases maybe it's a grant I don't know you know because patreon I mentioned in there is now doing like a 50k grant to certain people who you know have the right metrics or whatever it is so there's just a lot of different I think ways people are innovating to support I mean the other last thing that's pretty interesting about this though is that also I would guess that the average age of these influences is also pretty young so some of it's capturing these consumers like early in their frankly like decade many many decades long financial life cycle so that's also a super valuable group of consumers to have yeah go ahead oh I just finally going back to what I was in earlier I don't think it's dumb that people might have a higher credit worthiness and more followers if you can find way to math that out that's yeah I don't mean to make fun of it I'm just saying personally how do you under edit yeah yeah totally it's there's a lot to there's a little mind-boggling not a lot of historical data to show you've got like some models built out yet yeah okay she'll be close with 30 seconds on uber zarin's take it away all right what is spelled uber and is down 7% today look it's Superstock bad day this is my transitions when I make them up on the fly and oh hey laughs and me blushed terribly under you all right over socks down after reporting earnings today because the company had lost more than expected although unadjusted profited beet and it did beat on revenue on the only thing I want to bring up is that the growth business over is particularly profitable so ubereats was the the fastest-growing piece of it's adjusted net revenue and it turned if I recall my notes about 3.6 billion in gross spent into negative 315 316 million and adjusted keep it off which is not great I'm just don't know things we covered their IPO so much and if you on demand company that's not what you want to see today from uber the lock-up also I think is over today or tomorrow very see yeah so that's also gonna probably wreak a little havoc that will be interesting to see how that yeah he's out all right I think that's it for this week okay don't see you thank you for announcer yeah great to be with you guys thanks for every month alright see you sometime soon [Music]