Prashant Fuloria: Most traditional companies that do not leverage technology extensively cannot profitably serve customers whose needs are small. If I were a large enterprise and I came to you to get a $5 million line of credit, you could deploy a small team of experts for two days to go through all my books, have a discussion, interview people, and then come back with a line of credit.
That $5 million line of credit will make you a lot of money over time. If I came to you with a $5,000 line of credit, you’d be able to spend about two minutes of your time to make it worth your while. That’s where technology needs to come in. This is where having a technology-first, AI-based approach is very important. That’s a macro view.
The other part is, if this is true, you might push back on me, “This was true 10 years ago. SMBs have been hurting for so long. What has changed now?” Some of the trends that we are seeing today are as follows. More and more small businesses are putting a greater part of their business in some sort of a software system. Accounting is moving from paper to Quickbooks.
Sramana Mitra: Which makes it possible to plug in your side’s algorithm to apply the heuristics.
Prashant Fuloria: Exactly. There are two things that need to happen for it to materialize. These systems are now getting more open with well-developed and robust APIs. I could have data sitting in Oracle 20 years ago. It would be very hard for a third-party software provider to access the data, because robust API’s didn’t exist. If you talk to the people at Intuit, they think of QuickBooks as a platform with a developer community. They will tell you that Fundbox is an awesome developer on their platform.
The third thing that needs to happen goes back to the customers. People need to get comfortable with the idea of sharing that data with a service. Over the past 10 years, services like Facebook or operating systems like iOS and Android have made you comfortable with sharing information about yourself in exchange for getting some benefit. If I share my Facebook with my Spotify, Spotify is going to give me personalized music streams.
In the same way, by sharing my accounting data with my Fundbox, Fundbox is giving me a service that I find extremely valuable. It’s also a change in how people think about sharing their data. Today’s consumers and business owners think of this as an exchange of value. Of course, there’s the growing sophistication of being able to handle large data sets and also to use that data through AI for a variety of things ranging from image recognition to recommendation systems. That’s another big trend.
Sramana Mitra: It’s huge actually. The impact is huge.
Prashant Fuloria: Just to ideate on opportunities, let’s start with a small business and compare it to a large enterprise. Think about the small mom-and-pop store and compare it with a giant retailer. Think about what that retailer has access to which that small store does not. You can go through it function by function. Let’s take marketing.
Retailers have large armies of marketers but also access to a very sophisticated marketing technology around customer acquisition and customer relationship management. A small store doesn’t have access to that. While large retailer may run and optimize a $5 million ad campaign, what do I do as a small business owner if I could only spend $500 on my Facebook ad campaign? Another function would be procurement.
You’ve got sophisticated procurement systems for enterprises. You can go down the list of functions and think about the armies of people and the extremely sophisticated technology stacks that enterprises have, then think about the equivalent for small businesses. You can think about democratizing technology a little bit by making those services available to small businesses.
Sramana Mitra: Excellent. That was a very good discussion. I found it fascinating. Thank you for your time.