Accrued: After Hours - Episode 19

In Fintech Confidential’s Accrued podcast’s latest episode, hosts Tedd Huff and Colton Pond are joined by Timothy Li, CEO of LendAPI, his new startup focused on making onboarding faster and more affordable.

Together they discussed the innovations behind LendAPI and what other changes the fintech industry and new startups especially need to focus on.

Stick around to get caught up on the basics of the episode or get the full experience by listening to the Accrued podcast in all of the usual places:

Here’s what went down

Tedd, Colton and Timothy talk (and laugh together)about these central topics:

  • How onboarding should be (minutes instead of months): To keep customers focused on their businesses, onboarding needs to be fast and efficient. New technologies and better integrations make that possible.
  • How fraud detection is and always has been needed: Online banking fraud has always been an issue. New technologies for fraud detection can fill the gaps, but the possibility of fraud will always be there.
  • What fintech’s future might look like: We’re in an ever-changing industry, and this is only going to happen more in the coming years. This is going to leave a lot of room for things to break, but also for fun new opportunities.

How onboarding should be (minutes instead of months)

Your customers aren’t all in the business of building technology, and as Timothy explains it, some of them really just want to sell mattresses. Being able to get these businesses quickly integrated with new technologies without making a long and expensive process of it, is exactly how onboarding should be.

This is the same sort of thinking that led to Timothy’s newest startup, LendAPI. LendAPI aims to bring down the cost and complexity of onboarding, having the process literally take minutes instead of months. This new technology allows those businesses to be able to offer financing with new systems but always leaves room to focus on their core products and services.

How fraud detection is and always has been needed

Though we have come a long way in detecting and preventing it, fraud is still one of the biggest issues we face in the fintech world. Those methods of committing fraud are continually developing and we need to be able to figure out solutions just as quickly. Even with multi-factor authentication (MFA), fraudsters can still get access to customer credentials and accounts.

Timothy started his career with banking technology and when building LendAPI he knew that fraud detection was a big challenge. He has implemented new technologies such as keystroke biometrics, which can determine by the way a password was typed if the real owner of the password typed it. These technologies are amazing, and new innovations are going to keep coming.

What fintech startups need to keep in mind

As a founder of six successful companies, Timothy Li has unique insight on how to hit gold as a fintech startup. He breaks it down into three, seemingly simple, truths: sell products instead of features, find good partnerships, and talk to your customers.

  • Products instead of features: Prospective founders are being taught the mindset of “pivoting” (to alter an idea until something sticks) but end up losing track of real products in favor of stand-alone features. Part of a good startup is always having a product to sell, so as a founder you need to keep your head up and keep with a complete product instead of letting funders and other companies convince you to focus on just one key feature.
  • Finding good partners: It takes a village to start and keep a company afloat. A key to your success is finding partners who share your ideals and have products that will help you scale and stay competitive. Find partners you can trust to do what they say they’ll do.
  • Use customer feedback as a roadmap: Don’t be afraid to speak with your customers. Negative feedback can sting, but knowing your weakness and what pain points your customers are still experiencing is the first step in fixing them.

What fintech’s future might look like

Colton asks what might fintech’s future be, what things are going to change in the next five, seven, or ten years. Most things will. Companies are popping up to fix what is broken and fill gaps in the fintech industry, but as they do so more things break and more gaps form. The market is going to change, with core providers breaking down and then rebuilding their processes to fit these changes.

One thing our hosts are sure of is that AI alone won’t solve this. These market-wide future problems are going to be solved by new startups, and by new minds. There will be so many new opportunities as current technology is broken by new ways of thinking. As Timothy said, “The next batch of people is going to have a lot of fun with this.”

Key takeaways

Here’s the five key lessons we took from this episode:

1. Don’t forget your customers

It takes a very humble CEO to take time to speak one-on-one with their customers, but that is the best way to grow your business. Listen to your customers, find out what parts of their businesses could be made easier, and what areas could be simplified. Fixing these issues for your customers is what makes you a business and not just a hobby.

2. Solve real problems with real products

Don’t get distracted by one good feature. Individual features are neither backable nor sellable. Put your focus into making a solid product that is composed of many complementary features that you can sell and profit off of. A real product is always going to be more successful and more scalable.

3. Find partners you can rely on

Running a business truly takes a village. In this market we cannot do anything on our own and we shouldn’t want to. Find and invest in people with passion, the right skill sets, and the mentality of execution instead of just idealization. Do your due diligence when finding partners, figure out the goals of a company and its founders, and find people who will help you execute new ideas.

4. Prepare for fintech’s future

Just as there are so many new ideas floating around the market now, new ideas are going to continue to crop up and change the way we view things. Being ready for change, and having a positive attitude about the breaking down and rebuilding of the foundations of fintech is going to allow for many growth opportunities.

5. Get excited about new opportunities

There are so many great innovative minds in this industry and new ideas are always coming. Timothy, for one, wants to tackle the struggles of international banking, whereas right now we have to go through the back roads of exchanging crypto currencies and block chain our way to make transactions. Ideas to tackle that and other issues are in the works. Keep up with new innovative leaders and get excited about what they are working on.

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