My guest today is Dave Girouard, co-founder and CEO of Upstart, a lending platform that leverages AI to make loans more accessible and affordable. Dave started in Silicon Valley as a Product Manager at Apple and later spent eight years at Google, where he built their suite of cloud apps. In our discussion, we cover the lessons Dave has learned about building speed into a habit, the intricacies of training an AI model to predict the future, and what it was like to start a fintech business as an outsider. We also discuss the past, present, and future of lending, why Dave and his team have no plans to build a super app and the differences between public and private market investors from a founder’s perspective. One of the tropes you hear these days is that lending has become a customer acquisition tool for FinTechs, but as Dave explains, the market and opportunity set in lending itself should not be underestimated. Please enjoy this great conversation with Dave Girouard.
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[00:02:54] - [First question] - Lessons learned about adopting speed as a habit
[00:05:39] - Knowing which decisions require your attention and are worth it as a CEO
[00:07:00] - What slows down decision-making execution and overcoming it
[00:09:34] - Ways to persuade partners to move as fast as you do
[00:10:44] - One of his most valuable lessons learned from his time at Google
[00:12:20] - The key insight that first lead him to the idea of creating Upstart
[00:15:10] - The early days of learning about the financial lending space
[00:16:49] - Figuring out how to improve on an age-old rigid and regulated system
[00:18:42] - Credits scores, what drives them, and why they’re suboptimal
[00:20:57] - Overview of building an AI learning model and applying it to loans
[00:23:24] - Surprising findings on predictions and evaluating loan applicants
[00:25:16] - Machine learning algorithms and interwoven programmer bias
[00:26:49] - The role interest rates play in their business model
[00:28:34] - Revenue model and transactions that fund Upstart
[00:31:43] - Who the typical customer is and their user experience
[00:33:09] - Ways in which they can compound their AI models for other services
[00:35:10] - The biggest hurdle encountered when building Upstart
[00:36:55] - How he’s seen the FinTech space in his area change over time
[00:38:39] - A pie chart on revenue for financial services today
[00:40:24] - Why there are more profits in lending than payments
[00:41:25] - Major loans types and how they might change in the future
[00:44:12] - Disruptive aspects of the buy now pay later consumer movement
[00:46:09] - How much Upstart could change the future of lending over a decade
[00:48:17] - Inefficiencies of the lending space that still exist today
[00:49:43] - The most important decisions he’s made while building Upstart
[00:51:59] - Things to know when building a business that sells to banks
[00:52:49] - How it feels to interact with hired CEOs versus founder CEOs
[00:55:05] - Thoughts on cryptocurrency and AI writ large
[00:57:00] - Areas that have his attention and get him excited lately in FinTech
[00:58:58] - State of the art AI growth and what lingers over the horizon
[01:00:36] - What he’s learned about being a public market CEO versus a private one
[01:02:38] - Differences between public market and private market investor philosophies
[01:03:53] - Major battle scars from raising capital for Upstart
[01:05:12] - The kindest thing anyone has ever done for him