Speaker 1: I'm will Lucas and this is black Tech, Dream Money.
Speaker 1: Ronnie Williams is a three time venture founder currently serving
Speaker 1: as president and co founder of Solo Funds, the largest
Speaker 1: community fintech platform for everyday Americans, providing an opportunity to
Speaker 1: access and growth capital and establish financial independence. He's also
Speaker 1: co founder Listener and Ultratonic Data over Sound Technology Leader,
Speaker 1: and he's an aspenc Institute Henry Crown fellow. Solo Funds
Speaker 1: recently reached a major milestone achieving a million users, So
Speaker 1: I'm interested if he had to rank the most important
Speaker 1: factors in achieving that milestone, between a the demand for
Speaker 1: the solution solo Funds provides, or be his ability to
Speaker 1: build community. What would Rodney say is the most important
Speaker 1: to reaching the MILLI.
Speaker 2: I think it's the right answer is probably a combination
Speaker 2: of both. I don't think that one outweighs the other.
Speaker 2: I think what made it so difficult is the concept
Speaker 2: of a community as it released to financial services is
Speaker 2: very very new. Right, That's not when you think about
Speaker 2: financial services, you don't think about community, and and so
Speaker 2: I believe that has to be a part of the
Speaker 2: growth story, not just the demand part, Right, I think
Speaker 2: I think the demand has always been there. I think
Speaker 2: the community is what makes it unique and special.
Speaker 1: You had said in another interview, the system is somewhat
Speaker 1: discriminatory or selective in that it's extremely expensive to start
Speaker 1: a financial services company. To that end, like, what are
Speaker 1: some of the most.
Speaker 3: Effective ways for people.
Speaker 1: Who are trying to build fintech, you know, whether in
Speaker 1: whatever vertical, but particularly in fintech, whatever solution. I'm sorry,
Speaker 1: you know, what are some of the best ways to
Speaker 1: create MVPs, like minimum viable product when it's so tough
Speaker 1: to get into this industry.
Speaker 2: Yeah, you know, I would I would say that I
Speaker 2: think the way in which we did it was, you know,
Speaker 2: was probably the cheapest, most efficient way to do so.
Speaker 4: It is expensive, probably more expensive.
Speaker 2: Than any other of the technology company outside of hardware,
Speaker 2: in my opinion, because of the required amount of legal
Speaker 2: work prior to launching compliance and then the ongoing regulation
Speaker 2: or compliance that's necessary that to maintain whatever the idea
Speaker 2: you have.
Speaker 4: So it's actually pretty pretty substantial upfront costs.
Speaker 2: But the way in which we did it was using
Speaker 2: the accelerators, using the the those were those were incredible,
Speaker 2: you know, launching pads for Solo. I think Solo participated
Speaker 2: in three prior to launching yet alone, maybe probably about
Speaker 2: three additional after launch.
Speaker 4: So you know, those those accelerators were huge for for
Speaker 4: not for.
Speaker 2: Trying to just leverage resources despite the uphill battle of
Speaker 2: the of the costs that it takes to do.
Speaker 1: So, you know, for I love this conversation because you know,
Speaker 1: you talk about it's really expensive to do compliance. It's
Speaker 1: heavily regulated industry, and I was reading something where you said,
Speaker 1: you know, at the end of the day, the pattern
Speaker 1: matching that vcs do when they're looking for the next
Speaker 1: billion dollar exit, there's not a number of people who
Speaker 1: walk in looking like you. You know, there's not a lot
Speaker 1: of people who have attained that level of success and
Speaker 1: look like us.
Speaker 3: You know.
Speaker 1: But when you put numbers on the board, you went
Speaker 1: on to say, people start to wake up. And so
Speaker 1: in order to get that VC attention. To your point,
Speaker 1: you know, you have to put some numbers up on
Speaker 1: the board. How do you do that if you're not
Speaker 1: Rodney Williams.
Speaker 2: Well, I think, let's be very clear. I think that
Speaker 2: I think everyone is capable of delivering on a concept
Speaker 2: in a way that they need to.
Speaker 4: I think that some.
Speaker 2: Of the most the most important things that the founder
Speaker 2: needs to do is persevere and get it done.
Speaker 4: And to do so, you.
Speaker 2: Got to learn, you know, coming from our first venture
Speaker 2: and to this venture, myself and Travis didn't get here
Speaker 2: by knowing all the answers or assuming that, you know,
Speaker 2: because I've had success in the past, it's going to automatically,
Speaker 2: you know, lead to success here.
Speaker 4: I think we we've attacked.
Speaker 2: It from the from from the position of not knowing
Speaker 2: anything right and and what that means is we need
Speaker 2: to know everything and and when when you know us
Speaker 2: standing here today reaching the numbers that we have, is
Speaker 2: that we have become the experts at what we do,
Speaker 2: and we're the best in the world at it. You know,
Speaker 2: every predecessor that has ever tried to do peer to
Speaker 2: peer finance has failed or has has never reached the scale.
Speaker 2: And you know, what we didn't know, we learned and
Speaker 2: what we knew and anchored in the community in which
Speaker 2: we serve to be quite frank we're black, we're African American.
Speaker 4: And.
Speaker 2: Fortunately I'm part of a community or we're part of
Speaker 2: a community that has been taken advantage of by financial
Speaker 2: services since the beginning of time and a lot of
Speaker 2: the we know the dos and don'ts of our community.
Speaker 2: We know the nuances of what the product needs to enable.
Speaker 2: We know the nuances and what's going to encourage users.
Speaker 4: To pay back. These are some of the things that
Speaker 4: we knew.
Speaker 2: All of the things that we didn't know is what
Speaker 2: we learned to put those numbers on the board. So,
Speaker 2: and to be clear, I think you know, we don't.
Speaker 2: I don't think we get on the stage enough to
Speaker 2: talk about the numbers on the board. But we're doing
Speaker 2: something that has never been done before, at a scale
Speaker 2: that has never been done before, and and and and
Speaker 2: there's a lot of there's a lot of what I
Speaker 2: would call pain and suffering and scar tissue and getting there.
Speaker 4: But we're excited about what's.
Speaker 1: Next coming to the game. Not knowing a whole lot,
Speaker 1: you said, to your point, but you had to learn
Speaker 1: a lot so that you could know everything about this.
Speaker 1: I'm obviously I'm sure you came in with some assumptions
Speaker 1: about things because I read your story and you and
Speaker 1: Travis both come from very successful corporate careers and having
Speaker 1: that you know, personal income, that revenue, you had people
Speaker 1: around you who didn't have it, and so in order,
Speaker 1: you were one of the people that people went to
Speaker 1: the family, like, you know, if I need one hundred dollars,
Speaker 1: I can go to Rodney.
Speaker 3: Well, so obviously other people have that issue as well.
Speaker 1: But what what are some of the things that we're
Speaker 1: surprising to you about some of the assumption as you
Speaker 1: made that may not have been turned out to be correct.
Speaker 2: You know, I used to think that it was just
Speaker 2: my friends and family, meaning that you know, mostly you know,
Speaker 2: the group of Americans that you know had limited savings
Speaker 2: and didn't really have access to short term credit, whether
Speaker 2: it's a credit card or a painting loan. I kind
Speaker 2: of you know, I originally thought that it was focused
Speaker 2: in African American communities.
Speaker 4: I'm still somewhat shocked that.
Speaker 2: No, it's it's it's it's something that's spread across all
Speaker 2: middle class Americans.
Speaker 4: You know, over.
Speaker 2: Over over one hundred and ninety million middle class Americans.
Speaker 4: Yes, it's filled with the underserved.
Speaker 5: Communities are filled with communities that you would think of
Speaker 5: like LGBTQ or you know, Americans with disability, for example,
Speaker 5: but it's also filled with black ground and women Americans
Speaker 5: who tend to be taken advantage of by financial services.
Speaker 2: So said differently, financial service companies haven't necessarily built products for.
Speaker 4: The needs for their needs.
Speaker 2: So that's probably, honestly, that one of the most incredible
Speaker 2: assumptions that that continues to shock me. And and I
Speaker 2: give you an example of that. Ten percent of our
Speaker 2: borrowers make over one hundred thousand dollars a year. You know,
Speaker 2: this person isn't financially illiterate. This person understands finance, this
Speaker 2: person has a credit card. Why has the financial system
Speaker 2: been built to whereas though they need two hundred dollars
Speaker 2: and they can't get it. And that's the biggest question.
Speaker 2: The bigger question isn't how we did it, it's why
Speaker 2: is it successful? Why is it growing? Why is there
Speaker 2: such a demand for this? Why isn't more people talking
Speaker 2: about it? You know, there's a lot of regulators and
Speaker 2: government agencies and politicians are always talking about reducing the
Speaker 2: wealth gap and increasing the access to capital. You're always
Speaker 2: talking about it, but where like, who are the people
Speaker 2: that are doing it? And why aren't you supporting them?
Speaker 2: And those are the questions that I now I sometimes
Speaker 2: perplexed by. But I'm up for the challenge as well.
Speaker 1: You know, so historically we've leaned on the big three
Speaker 1: credit companies Experience, Eco Fax, TransUnion to determine a large
Speaker 1: part of our financial situation, whether we can get loans,
Speaker 1: whether we can get a car, whether we can get
Speaker 1: a house. So many other alternatives to that have come
Speaker 1: into the conversation over the last few years, like.
Speaker 3: A social credit score and et cetera.
Speaker 1: How do you think how does Solo Funds think.
Speaker 3: About the evolution of the credit score.
Speaker 4: Well, it's somewhat broken.
Speaker 2: If you think about an missed of COVID and thinking
Speaker 2: sometime in twenty twenty one credit scores, what are all
Speaker 2: time high where.
Speaker 4: No one will working?
Speaker 2: Well, you know what that What we're ultimately talking about
Speaker 2: is that you know, the way the credit score currently
Speaker 2: works is that it's an incredible measure of historical behavior,
Speaker 2: but it doesn't necessarily give you a snapshot on the consumer,
Speaker 2: the consumer's economic position today. It gives a snapshot of
Speaker 2: what it was right and and and there's waste. There's
Speaker 2: so much technology available to you at our fingertips that
Speaker 2: it needs to it needs to be way more real time,
Speaker 2: and it needs to have a forward looking out look
Speaker 2: and and I think that's that's that's some of the
Speaker 2: nuances in which and how we made our solo score,
Speaker 2: which again takes into account real time cash flow to
Speaker 2: to to assess, uh, who who that borrower may be today,
Speaker 2: right and and and then try to under saying.
Speaker 4: What they can do in a near term.
Speaker 2: So it's a very different thing, you know what you
Speaker 2: know when when you talk to anyone about the credit
Speaker 2: report or the credit agencies, and there's a ton of
Speaker 2: secrecy on how it's scored. There's some things that we know,
Speaker 2: but it's a ton of different misconceptions about how it's scored.
Speaker 2: We actually just tried to remove all of the misconceptions.
Speaker 4: You know.
Speaker 2: The way our score works is on cash flow. When
Speaker 2: you pay something back on time, your score gets better.
Speaker 2: When you don't, your score gets worse.
Speaker 4: That simple.
Speaker 2: No, no, no magic, saw us, no nothing that the
Speaker 2: consumer can't understand.
Speaker 4: I wish our credit score was that simple.
Speaker 2: Meaning if I have a bill and I paid it
Speaker 2: on time, it should maintain or get better. But it
Speaker 2: kind of doesn't. You know, it seems that get worse
Speaker 2: if I miss a payment. I make a ton of payments,
Speaker 2: and it doesn't necessarily reflect that successful payment history in
Speaker 2: the score at least, and and and no form of immediacy.
Speaker 4: So these are some of the things in which what
Speaker 4: we leveraged to create our score.
Speaker 2: I will tell you the traditional credit system is built
Speaker 2: on that, on the credit burd and agency. So it's
Speaker 2: a necessary evil, but it is an evil that is
Speaker 2: not widely understood and and that's been been a challenge.
Speaker 1: There are many people who might have just fell on
Speaker 1: hard times or have an unexpected situation and need help.
Speaker 1: And SOLO find is that assist others who might just
Speaker 1: be financially unsaddened. How the solo funds man those behaviors
Speaker 1: on this platform to be sure both the bowers assisted
Speaker 1: and the lender is protected.
Speaker 3: Rodney speaks on it.
Speaker 4: Yeah, I will tell you where we see much far less.
Speaker 2: Than we see far less a percentages are examples of
Speaker 2: consumers bad with money.
Speaker 4: We see.
Speaker 2: Much more examples of consumers operating on extremely tight budgets.
Speaker 1: You think that then it's like a negative stereotype that
Speaker 1: they've said about us, that we just can't manage money.
Speaker 2: It's not true. It's actually really incorrect. It really bothers
Speaker 2: me because in part they're talking about my mom. When
Speaker 2: we talk about my mom, it's gonna be a problem.
Speaker 4: But I'm going to try to paint a picture for you.
Speaker 4: For of our bars are college.
Speaker 2: Educated, mostly women. They tend to have multiple children, They're
Speaker 2: gainfully employed. They live in cities like New York City,
Speaker 2: San Francisco, Miami, Atlanta. These are high cost of living cities,
Speaker 2: and they live on extremely extremely tight budgets. What I
Speaker 2: mean by extremely tight budgets is that they have less
Speaker 2: than eight hundred dollars.
Speaker 4: Of stavings in their bank account.
Speaker 2: Despite being college educated, savvy. To give you perspective, this
Speaker 2: consumer can take twenty dollars and somehow.
Speaker 4: Figure out how to live off at that point an
Speaker 4: entire week when they need to.
Speaker 2: They know every day that the bill is coming out
Speaker 2: of their checking account. Literally, they know when Netflix is
Speaker 2: coming out. Okay, this is how focused they are and finances.
Speaker 2: So what we're talking about is the cost of living
Speaker 2: is concern in a wage concern that's creating very very
Speaker 2: tight constraints on budgets. And in a time like this
Speaker 2: where inflation is happening all all of a sudden, my
Speaker 2: gas to fill my tank when from forty dollars to
Speaker 2: fifty dollars.
Speaker 4: I need that.
Speaker 2: So what happens is these consumers, despite that eight hundred
Speaker 2: dollars savings, will have a financial emergency one to four
Speaker 2: times every twelve months. And it looks very simple. My child,
Speaker 2: my child is sick. I can't go to work for
Speaker 2: three days. That's three days of pay.
Speaker 4: Wow.
Speaker 2: This is also when I now have a medical deductible
Speaker 2: because my kid is sick, and even surgery that's five
Speaker 2: hundred dollars. And the combination of the medical deductible and
Speaker 2: the fact that I'm not going to work means I'm
Speaker 2: going to be short on rent in two weeks.
Speaker 4: That's it. Eight hundred savings is gone like that.
Speaker 2: So all of a sudden, you know, you're like, you
Speaker 2: know what, I'm gonna be late on the rent. I'm
Speaker 2: gonna make sure my kid gets better, but I'm gonna
Speaker 2: incur late fees on my rent and I don't have
Speaker 2: any extra cash. Really, I'm just gonna be late. I'm
Speaker 2: just gonna make sure I got food on the table.
Speaker 2: Let me just borrow two hundred dollars to make sure
Speaker 2: I got food on the table. That's not mismanagement of money,
Speaker 2: that's a lack of cash.
Speaker 4: But that's a lack of salary.
Speaker 2: Given the cost of living and ef person lives in,
Speaker 2: there's no scenario that this person can access short term
Speaker 2: capital cheaper or more efficiently except for going to friends
Speaker 2: or family or if you talk to a lot of
Speaker 2: these consumers.
Speaker 4: I mean, what I love about this consumer is.
Speaker 2: That they're they're they're wet Americas built off of right.
Speaker 2: We see teachers who sell t shirts on Etsy. We
Speaker 2: see police officers who also drive Uber, We see you know,
Speaker 2: I mean, we see multiple streams of income, especially in
Speaker 2: moments of type and constraint moments, they actually dig themselves out.
Speaker 2: The problem is we're trying to make sure that whole
Speaker 2: isn't as deep as it would be what a subprime
Speaker 2: credit card or paying loan, we're solo. That whole is
Speaker 2: not deep at all. But it is a misconception that
Speaker 2: I hate that this group of Americans is not, you know,
Speaker 2: financially illiterate. It is not true.
Speaker 4: It's not true.
Speaker 1: Talk more about that the long term cycle of debt
Speaker 1: that many of us, not many of us, may not
Speaker 1: be aware of that the traditional emergency lenders put us
Speaker 1: in because you know, you talk about yes, there there
Speaker 1: may be some predators or a percentage race that those things,
Speaker 1: But what is this real cycle that it gets people
Speaker 1: into that's negatively affected our communities.
Speaker 2: The cycle isn't even the APR. The APR is an illusion
Speaker 2: that's inaccurate. So I'm gonna give you too truth about
Speaker 2: the APR, which causes problems for for for many Americans.
Speaker 2: Number One, the APR is as a specific fee based
Speaker 2: on the condition of credit. It is a fee that
Speaker 2: they're supposed to communicate. It's it's a it's a fee
Speaker 2: that takes the kind of like average rate and annualizes it.
Speaker 4: But I give you an example.
Speaker 2: When someone says, oh my god, that payday loan costs
Speaker 2: four hundred per the consumer is not technically paying four
Speaker 2: times what they borrow. It's an annualization relation based on
Speaker 2: the short term. It's even difficult to understand as I'm
Speaker 2: explaining it. Yeah, right, So that's that's problem number one.
Speaker 2: Problem number two, which is more important than problem number one,
Speaker 2: in my opinion, is that APR does not include subscription fees,
Speaker 2: annual fees, late fees, origination fees, instant cash fees. I
Speaker 2: give you an example, when you look at like subprime
Speaker 2: credit cards or payday loans. I only think like twenty
Speaker 2: percent of consumers actually paid them more time, so that
Speaker 2: means what a consumer is really paying should then also
Speaker 2: include the late fee, because most consumers are paying late fees.
Speaker 4: That gets into the predatory nature.
Speaker 2: And giving an example, a subprime credit card, which is
Speaker 2: an average of about five hundred dollars, is your how
Speaker 2: much credit they'll give you it will happen the highest
Speaker 2: APR that's allowed in that state, plus the an annual fee.
Speaker 2: There's a late fee, a flat late fee assessed every
Speaker 2: month that you're late for the rest of the time.
Speaker 2: Now they have caps, but for a while there's also
Speaker 2: instant cash fees that you also don't care. So when
Speaker 2: we actually we actually try to we call it total costs.
Speaker 2: We actually commission the research projects or understand what are
Speaker 2: consumers really paying?
Speaker 4: Not sure math.
Speaker 2: If a consumer takes one hundred dollars today, what are
Speaker 2: they paying twelve months from them?
Speaker 4: That's it. It's everything plus.
Speaker 2: One hundred dollars, no offens and bucks, and the data
Speaker 2: is really really upsetting.
Speaker 4: Subprime credit cards are.
Speaker 2: Actually more expensive and paying the most, which are a
Speaker 2: subprime credit card of basically one thousand dollars, the average.
Speaker 4: Consumer is going to pay like nineteen hundred dollars.
Speaker 3: Fees on top of the thousand, on top of it.
Speaker 4: Principle, Yeah, it was, it was. Actually it's actually really bad.
Speaker 2: So, you know, these are some of the things that
Speaker 2: aren't necessarily talking about, but mainly because who's who's the
Speaker 2: who's the folks in the in the room arguing about
Speaker 2: APR or talking about what consumers are really paying. Number One,
Speaker 2: that they're too far removed. I know, I know, my my,
Speaker 2: you know, the too far removed from the plight. They've
Speaker 2: they've made their money a long time ago, they're doing
Speaker 2: pretty well. They're not understanding what these consumers are really
Speaker 2: paying for. And and if they're from non underrepresentative groups,
Speaker 2: so underserved groups, it's just perpetuating a lack of understanding, right,
Speaker 2: and and and and this is one of the biggest
Speaker 2: reasons why we're we published as Total cross Support. Now
Speaker 2: why again, we kept trying to figure out why we're growing,
Speaker 2: you know, like maybe you know, because you start to
Speaker 2: question yourself, like maybe we aren't so affordable, maybe we
Speaker 2: aren't such a benefit. But when we surveyed our consumers
Speaker 2: and they're like, I was like, why didn't you why
Speaker 2: don't you?
Speaker 4: Do you have a credit card? Yes, well, that's shocking.
Speaker 2: They told us that they didn't have a credit right,
Speaker 2: why don't you use your credit card?
Speaker 4: It's too expensive? And I was so confused by that.
Speaker 2: Because my credit card isn't that expensive, but their credit
Speaker 2: card is.
Speaker 4: And these are just some of the things that you know.
Speaker 2: I think that's one of the best things about being
Speaker 2: who we are as founders and entering this space within
Speaker 2: financial services is that we it's I think it's our
Speaker 2: duty to be a voice of who we represent and
Speaker 2: to start to bring data and facts and start to push,
Speaker 2: you know, are our leaders to answer these questions and
Speaker 2: and and to and to start to create some level
Speaker 2: of reform. I'm proud to say, and I think you know,
Speaker 2: we're about a fifth of the cost of subprime of
Speaker 2: subprime credit cards, the average consumer spends about thirteen point
Speaker 2: four percent in addition to their principle after twelve months.
Speaker 2: And then I'm gonna tell you the only reason is
Speaker 2: that we don't compound fees. Not the only reason, but
Speaker 2: we don't believe we don't give you like if you're
Speaker 2: late every month, we don't charge you late fees every month.
Speaker 4: There's a one time fee that that's going to dig
Speaker 4: a hole.
Speaker 2: And you got to understand, there's no what we have been,
Speaker 2: what we have learned is that we actually have significantly
Speaker 2: better repaying the rates.
Speaker 4: No, I it's easier to get out the hole.
Speaker 2: It's really hard to pay back one hundred dollars loan
Speaker 2: that is now two hundred and fifty bucks versus one
Speaker 2: hundred dollars loan that's now you know, one hundred and
Speaker 2: thirteen dollars.
Speaker 3: Yeah.
Speaker 6: Yeah, it's really that simple when we think about it, right,
Speaker 6: like you don't dig the hole too much, so it's
Speaker 6: still in reach of a payment.
Speaker 2: But again, these are just some of the nuances that
Speaker 2: we decided to do, and I mean to be honest,
Speaker 2: we took it the extra step. We're one of the
Speaker 2: few lenders in the space that is a benefit corporation
Speaker 2: a certified benefit.
Speaker 4: Corporations via the b Labs. B labs is a nonprofit.
Speaker 2: Think of it like a governing body who certifies companies.
Speaker 4: To attain B CORP status.
Speaker 2: B CORP status is a combination of their certification as
Speaker 2: well as like literally we submit we actually you know,
Speaker 2: register with the government as a benefit corporation, which what
Speaker 2: that ultimately means is that we balance the need for
Speaker 2: profit alongside for people and we don't.
Speaker 4: We don't. That's that's important.
Speaker 2: So they come in and they look at all of
Speaker 2: our finances, They look at how much money we make,
Speaker 2: they look at how we play pay our employees, they
Speaker 2: look at, you know, in terms of how we even
Speaker 2: promote within and they give scores. But not only did
Speaker 2: they assess all those different things, they assess our business
Speaker 2: model and they assessed that, you know, how we're handling
Speaker 2: our consumers, and it came back very, very positive.
Speaker 4: But I mean, that's the piece.
Speaker 2: I'll tell you another piece, the average mps's net promoter score.
Speaker 2: It's how you know you can judge consumer experience. Most
Speaker 2: financial services companies are around forty. Bank of America is
Speaker 2: at a twenty two. Our average net promoter score is
Speaker 2: a ninety.
Speaker 4: These are these are.
Speaker 1: That for the people who don't really understand what that means,
Speaker 1: like what factors go into creating that score.
Speaker 2: It's it's really just about it's it's a measure of
Speaker 2: its basically a measure of the amount of consumers that
Speaker 2: are having a happy experience. So it's a random survey
Speaker 2: that's distributed across all of our users, and it's it's
Speaker 2: just them being happy. Companies that have really high net
Speaker 2: promoter scores are companies like Apple and Nike, Patagonia, you
Speaker 2: know what I mean. These are something not financial service companies.
Speaker 2: Put it that way. So we we are extremely proud
Speaker 2: of having an MPs like that.
Speaker 4: But that's the community part.
Speaker 2: Going back to your first question, it's it's because of
Speaker 2: that why where we continue to reach the scale that.
Speaker 1: We are you you said earlier and I've read you said,
Speaker 1: there's a few times, you know, you're innovating and thriving
Speaker 1: where companies have failed. You guys are the first company
Speaker 1: in this vertical, particularly black owned company, to find success.
Speaker 3: Why do people fail?
Speaker 1: Why is their line of you know, dead startups previous
Speaker 1: to you guys?
Speaker 2: Well, I think a lot of people were making products
Speaker 2: for middle class America and they're not middle class America.
Speaker 2: One day, I'm going to start a VC firm, and
Speaker 2: our goal is to invest in founders who are uniquely
Speaker 2: positioned to be experts at the consumers they serve. That's it,
Speaker 2: you know, And I think when you look at a
Speaker 2: lot of the fintech innovation. Just look at a lot
Speaker 2: of the fintech innovation, even the the what everyone talked
Speaker 2: about for crypto is going to democratize finance for the people.
Speaker 4: You know what I mean, we're not going to talk
Speaker 4: about that.
Speaker 2: Or you know, you know, credit builders and this this,
Speaker 2: These are all Harvard, m I T and Stanford Dies
Speaker 2: building products of people that look like you and I
Speaker 2: and they're just where where where I truly believe they
Speaker 2: failed is you know, not understanding the consumer. And it
Speaker 2: makes perfect sense. I think people got to understand my background.
Speaker 2: I'm a trained brand manager from Procter and Gamble.
Speaker 4: I spent five years becoming an expert at a consumer, being.
Speaker 2: Relentless at shipping cases. All right, I worked on Pampers.
Speaker 2: Wasn't a dad. But the way I got good is
Speaker 2: becoming an expert at who we serve. And I think
Speaker 2: sometimes in fintech's we kind of or you know, we
Speaker 2: kind of get we kind of get excited about the
Speaker 2: opportunity and you miss the point.
Speaker 4: We at Solo are obsessed.
Speaker 2: With middle class America to the point where I live
Speaker 2: down the street from a payday long London. Trust me,
Speaker 2: I can live a lot of places, but I want
Speaker 2: to drive past that line every Friday. I want to.
Speaker 2: I want to. It does something to me, you know
Speaker 2: what I mean? And my co founder lives also down
Speaker 2: the street. We're doing these things because we've learned why
Speaker 2: our success well, we've learned or we know why some
Speaker 2: of our success has happened, and it's definitely because of
Speaker 2: how anchored we are in the consumer we serve.
Speaker 1: You said something similar about community banks before and that
Speaker 1: they weren't really doing what they're designed to do. You know,
Speaker 1: so you said, I think about what the community bank
Speaker 1: is supposed to do, and they're supposed to be lending,
Speaker 1: allowing lending and borrowing in the community. You know, I
Speaker 1: think about if we look at almost any deeply embedded
Speaker 1: institution or industry, we can find where they failed to
Speaker 1: live up to their promise. How did you know finance
Speaker 1: was one you wanted to tackle and what was your insight?
Speaker 1: You talked about being from middle of America, But there's
Speaker 1: a lot of things you could have done. There's a
Speaker 1: lot of places you could have lived. To your point,
Speaker 1: there's a lot of things you could have put your
Speaker 1: efforts and resources into. Why finance.
Speaker 4: You know.
Speaker 2: I wanted to make an impact, and I saw I
Speaker 2: wanted to make a financial impact.
Speaker 4: And you know, Travis and I.
Speaker 2: We saw a lot of effort pushing capital to small businesses,
Speaker 2: entrepreneurs of color, and we were still driving past the
Speaker 2: woman who served me coffee, person who served me a drink,
Speaker 2: and I was still getting picked up in ubers and
Speaker 2: they needed support and help too. And for me, I
Speaker 2: grew up in a working class family, and working class
Speaker 2: family is who built me. I also know that my
Speaker 2: working class family is so working classes no more. They're
Speaker 2: doing pretty damn well. It's funny how people who work
Speaker 2: really hard tend to dig themselves out of it.
Speaker 4: Right, So I figured, you know, one of the things.
Speaker 2: Really the innovation that I would say that's really important
Speaker 2: for us, and I usually glance over it. But our
Speaker 2: solo score, our underwriting model is impressive. It's currently performing
Speaker 2: about four times better than the industry average.
Speaker 4: That's all built in house.
Speaker 2: All built on a few AI models. Taking we used
Speaker 2: to call it the hustle score. It's we're trying, We're
Speaker 2: really met. We really designed an underwriting score that measures
Speaker 2: a consumer's ability to make and to figure it out
Speaker 2: and and that in combination with what we call our
Speaker 2: real time or payment product or real real time payment solution,
Speaker 2: we h we've kind of removed all of the dumbness.
Speaker 2: And I'm going to give you an example. I sign
Speaker 2: up for a system I didn't have to pay you
Speaker 2: in a month. Instead of just pre scheduling it or
Speaker 2: make it easy to pre schedule, we let consumers miss it.
Speaker 2: That's a that's there's enough technology for every bill that
Speaker 2: we have today to be automatically connected to us, right.
Speaker 2: But that I'm ultimately getting is that we built our
Speaker 2: repayment product to continue to monitor out borrowers accounts. So
Speaker 2: never have we ever overdrawn, but we're we're we become
Speaker 2: a partner in their finances, not a predator in their finances.
Speaker 2: And that's that gives a little bit to our repayment product.
Speaker 2: It's actually the code names get Money. The one of
Speaker 2: the final things that we did, and we were the first,
Speaker 2: one of the first companies to do so. We built
Speaker 2: our entire payment structure on real time rails way before
Speaker 2: FED now better than Zel, but we built it on
Speaker 2: something called Visa Direct and Master Christ saying it's their
Speaker 2: proprietary real time debit infrastructure. We were and are still
Speaker 2: one of the few lending companies in the world that
Speaker 2: are built.
Speaker 4: That's why follow me on Instagram.
Speaker 2: I'm always in Visa's office and these are some of
Speaker 2: the reason why we're always in their office. What does
Speaker 2: that allow us to do? That allows us to move
Speaker 2: money faster and more efficiently when someone's in need and
Speaker 2: when someone needs going to pay alone. Put yourself in
Speaker 2: that single mom that I talked about, who knows exactly
Speaker 2: when her.
Speaker 4: Netflix built is gonna come out.
Speaker 2: So if she says, solo, you need to pull this
Speaker 2: money on the fourth, if you pull it too late,
Speaker 2: you're not gonna get it.
Speaker 4: That's what she's also telling us.
Speaker 2: So we needed a real that's nobody, honestly, quite frankly,
Speaker 2: no one who looks like me really understands that that
Speaker 2: you need to pull money exactly when it's available.
Speaker 4: It cannot be a delay because all of that.
Speaker 2: You know, when things get pending in the ach, something's
Speaker 2: gonna fall short.
Speaker 4: And that goes both ways.
Speaker 2: So we spent a lot of extra capital spending this
Speaker 2: real time product.
Speaker 4: And I will tell you that's some of the I.
Speaker 2: Just kind of gave you the three part secret sauce
Speaker 2: to why we exist.
Speaker 1: It was a quote I read where you said, our
Speaker 1: goal is not for borrowers to remain borrowers. I think
Speaker 1: Travis said this, Actually, our goal is not for borrows
Speaker 1: to remain borrows on this platform forever. So how do
Speaker 1: you think then about retention and which metrics matter to you?
Speaker 2: Since pretty early in the in the in the life
Speaker 2: of the company, our bars.
Speaker 3: Have also lent, so they've graduated.
Speaker 4: They graduated. I'm pretty happy about that rate.
Speaker 2: It's fantastic because it goes back to the original assumption.
Speaker 4: They're not illiterate.
Speaker 2: They just have a cash need today, right, and and
Speaker 2: if you give them a way to get out of it,
Speaker 2: and they're not only just going to get out of it,
Speaker 2: they're going to thrive.
Speaker 4: In six months. I mean, we we have examples of.
Speaker 2: One of my favorite examples, it was in the CNBC
Speaker 2: article is an engineer at San Francisco. He lost his job.
Speaker 2: He used US for a couple months three hundred, four hundred,
Speaker 2: five hundred bucks. Eventually he got a huge six figure job.
Speaker 2: He became a prolific lender on the platform.
Speaker 4: Is that if that's not everyday Americans? I don't know
Speaker 4: who that is, right, this person.
Speaker 2: I mean, that's the life of an average American is
Speaker 2: that at the end of the day, job.
Speaker 4: Security is not what it meant twenty years ago.
Speaker 2: Like no one's at GM working for twenty five years.
Speaker 2: Job security today is fleeting for every American, especially if
Speaker 2: you're fresh out of college. You know what I'm saying,
Speaker 2: under thirty five years old, you haven't really got your
Speaker 2: footing and your career. You're in and you're in and
Speaker 2: out of jobs despite being.
Speaker 4: Very, very educated.
Speaker 2: So these are just some of the nuances that we
Speaker 2: eventually know that you will land, and you're going to
Speaker 2: land and do really well, and you're going to be
Speaker 2: a thriving member of the society. And and you know what,
Speaker 2: you for some reason have a connection with Solo that
Speaker 2: no one can break because Solo.
Speaker 4: Was there when you needed them most. No other financial
Speaker 4: institution was.
Speaker 1: Wow, I want to dig into your mindset a little bit.
Speaker 1: I've always been fascinated by the way you think. And
Speaker 1: I learned this and doing research for this conversation, that
Speaker 1: there was a time just a few years ago before
Speaker 1: the surgeon users that you know, Solo Funds was almost
Speaker 1: out of business.
Speaker 3: I mean it was expectively out of money.
Speaker 1: You know, I want to know about your mindset in
Speaker 1: those moments where you're facing existential threats to your business
Speaker 1: and you've gone head to head.
Speaker 3: With major players at your.
Speaker 1: Previous companies and when those were still startups.
Speaker 3: Who do you put yourself?
Speaker 1: I want to like how Rodney's mind works. Who do
Speaker 1: you put yourself around? Or what is your mindset when
Speaker 1: it feels like all the moves in front of you
Speaker 1: have to be played precisely, incorrectly in order to stay alive.
Speaker 1: Much less fine success, but just to stay alive, like
Speaker 1: so many people don't come back from that. And so
Speaker 1: I'm interested in how Rodney thinks about these sorts of threats.
Speaker 2: You know, looking back at them, I would tell you
Speaker 2: that they are very expensive. And what I mean by
Speaker 2: that is they're expensive on your social relationships. They're expensive
Speaker 2: on your romantic relationships because it's a bit irrational, too empty,
Speaker 2: they account like, I don't know what else to tell you.
Speaker 2: It's a bit irrational. It's a bit irrational to say
Speaker 2: I'm not to you know, to your significant other, I'm
Speaker 2: not giving you Christmas gift this year. You're gonna have
Speaker 2: to wait or you know we're gonna you know, we're
Speaker 2: not gonna go home for the holidays. These are things
Speaker 2: that I've had to do so and unfortunately, most of
Speaker 2: the time, most of the network don't really understand this
Speaker 2: kind of belief that's rooted in data. I've never made
Speaker 2: these decisions. I've never made these decisions based off of gut.
Speaker 4: I'm a p and ger. Don't let my wildness fool anybody.
Speaker 4: We lead on paper, and I don't need as much
Speaker 4: paper as most pgs. That's what I said.
Speaker 2: I don't give me two sentences in a bullet point
Speaker 2: and I'm probably gonna I can do the rest. But
Speaker 2: what I'm ultimately saying is that you know, at some
Speaker 2: point you get to a conclusion that the opportunity outweighs
Speaker 2: the risk and the cost, and that little bit of
Speaker 2: information is something that you are the only person in
Speaker 2: the world that knows.
Speaker 4: So you just have to get through this moment, and
Speaker 4: if you can get through the moment, it will pay
Speaker 4: for you. I wish it was easier, you know.
Speaker 2: I look at my counterparts will get to go and
Speaker 2: raise hundreds of millions.
Speaker 4: Of dollars because they.
Speaker 2: Know someone at andresen or their father is an executive
Speaker 2: at Goldman Sachs. I wish that I had those level
Speaker 2: of security, but I don't. So that means you swing
Speaker 2: for defenses. But I will not lie to anyone listening
Speaker 2: on this call. The cost is expensive. There's a lot
Speaker 2: of relationships I had to sacrifice to get here.
Speaker 4: There are a lot of.
Speaker 2: Moments that I had to miss to get here, and
Speaker 2: and and if you want to be an entrepreneur and
Speaker 2: be a founder, and you're not willing to do those things, you.
Speaker 4: Should do something else.
Speaker 2: You know you should, because you may you may waste
Speaker 2: someone's money, and you're definitely gonna waste your time.
Speaker 5: M H.
Speaker 1: Black Tech Green Money is a production of Blavity, Afrotech
Speaker 1: on the Black Effect Podcast Network and I Hire Media
Speaker 1: and it's produced by Morgan Debonne and me Well Lucas,
Speaker 1: with the additional production support by Sarah Ergan and Rose
Speaker 1: mc lucas.
Speaker 3: Special thank you to MICUs David Sapping. That's a Serrano.
Speaker 1: Learn more about my guests and other tech dissent innovators
Speaker 1: at afrotech dot com. Enjoy your black Tech three money,
Speaker 1: Share this with somebody, Go get your money, Peace and love,