In this edition of The Digest, we’re zooming in on a topic making headlines in the world of collections: the new CFPB debt collection rule. We sat down with TrueAccord’s Chief Compliance Officer Tim Collins to get his initial thoughts on what the new rule will mean for the collections industry, and how it may open new doors for better relationships between collectors and consumers. Tim, thank you for sharing your thoughts on the long-awaited new CFPB debt collection rule. It's the first big change to the FDCPA since 1977, and it provides new “rules of the road” for collections. What are some of the top takeaways for the collections industry? As you said, this is the first major change to the FDCPA in over forty years. The new rule is meant to help the collections industry adapt to all the exponential changes in technology, communication, and consumer behavior that have happened since then. To some degree, there is still a focus on regulating the more traditional world of call-and-collect agencies. There are new guidelines around call caps. They also put in a clearer definition of limited content messages, which was a topic that the industry was looking for guidance on. In general, there are now clearer instructions on the means by which a collector can reach a consumer. Beyond the world of call-and-collect agencies, the new rule opens doors for better digital communications with consumers—email, SMS, etc. There’s a huge focus on consumer preference. The new rule is clear: the consumer has the right to tell you when is a good time for them to be contacted, and they have the ability to tell you what communications channels work best for them. All of that is very much in line with what we already do—and have always done—at TrueAccord. The new rule is clear: the consumer has the right to tell you when is a good time for them to be contacted, and they have the ability to tell you what communications channels work best for them. I know TrueAccord was influential in issuing comments that were ultimately incorporated into the rule. Can you tell us a bit about that? We’re proud to have been involved in providing public comments to the rule around the use of email in collections. We were able to share our insights on how emails should be sent, why email is convenient for consumers, the advantages of email with opt-out, and other dimensions of a successful, compliant email program.[Editor’s note: for more insights from TrueAccord on using email in collections, check out our new whitepaper co-authored with Experian: What to Know When Adding Email to Collections: The Ultimate Guide] It’s important to note that the new rule won’t take effect until late 2021, and there’s a lot that could change between now and then in the United States. So, there’s still some degree of uncertainty about how the rule will be implemented. That’s right. There's a lot of things that could happen between now and when the rule becomes effective. Also, we’re still waiting for part two of the rule to come out. That will likely happen in December. So yes, there’s a lot that we still don’t know, and a lot that could change. There’s even a chance the whole rule could be tossed out, though that is unlikely. But right now, the new rule gives us a vision and a direction about where the industry is headed— and that is towards better alignment with consumers, more protection for consumers. That’s part of the CFPB’s mission, and that’s part of our mission as well. This interview has been edited and condensed for clarity. *TrueAccord's compliance and digital collections experts are available to talk more about the CFPB’s new debt collection rule and what it will mean for the collections industry. Start a conversation with our team to learn more.

In this edition of “Between Two Fintechs,” TrueAccord founder Ohad Samet interviews Dan Quan, Managing Partner of Banks Street Advisory and formerly the Senior Advisor to the Director at the Consumer Financial Protection Bureau (CFPB). Dan led its fintech office, Project Catalyst, the first of its kind in the world, inspiring regulatory agencies across the globe to set up dedicated innovation hubs to promote financial innovation. At the CFPB, Dan focused his work on consumer-permissioned data access/open banking and the use of AI and alternative data in credit underwriting. A nationally recognized fintech thought leader, Dan serves as a bridge between Silicon Valley and the Beltway, and we’re honored to feature him in this series. This transcript was conducted in October 2020 and has been edited and condensed for clarity. You can see all the interviews here. Ohad Samet: Welcome Dan, we’re so excited to speak with you today about your experience working with fintechs at the CFPB and your perspective around regulation, technology and consumer financial services. Dan Quan: Thank you. Fintech companies, like yours at TrueAccord, are a really exciting sector. In the earlier days at the Bureau, I remember walking into the office the first day, and it was a conference room with 20 computers. We had to work or have meetings in the hallway or kitchen. The Bureau's staff mindset was, this is once-in-a-lifetime thing. I believe the Bureau was the first agency that recognized the promise of fintech. We got a lot of good information and data from folks like you to help the Bureau write better rules and make better policies. OS: Yes, it's been very interesting to work with the Bureau’s research department, and be able to provide anonymized aggregate data to support the Bureau's requests for comment. But it's not like you guys were very gentle on the enforcement side. There were a lot of inspections of FinTech companies, so without asking you to comment about specific issues, I'm wondering about how you found the balance between encouraging innovation but also enforcing regulation? DQ: I think it's really a balancing act, right? I will say there's one common misconception about the CFPB: that there was never a "human side of the Bureau." When we talk to companies, we also recognize that enforcement is a very blunt tool. It's very effective, it shows results immediately, but at the same time it also can crush a business. It also doesn't really help the market come up with better solutions. How can you come up with better products to not only comply with the regulations, but also serve people better? Obviously, the work we did at Project Catalyst, the innovation office was trying to do that. Informal conversations, interactions or idea exchanges with market participants are just as valuable. If you ask me what I'm most proud of that I did at the CFPB, it was the effort to push open banking in the United States. It involved so many conversations and research from various market participants from financial institutions, from think tanks, data aggregators, users, nonprofits and consumer advocates. OS: Yes, I think it’s very satisfying for me, and I hope by extension to the team in general. The work that we're doing gave federal regulators enough data needed to make these decisions. That was a very positive experience of being involved in federal policy even if we're just a tiny cog in the machinePivoting a bit, there are a lot of new fintech solutions, such as microlenders like Dave, or those giving employees access to their payroll early, like neobanks and Earnin. What are you seeing in terms of trends in federal policy and how they're thinking about this new crop of solutions. DQ: You mentioned companies like Dave, Earnin, PayActiv, starting with earned wage access—allowing people to get to their paychecks anytime on demand with a small fee or sometimes just a tip or for free. Chime and Varo started doing this too, plus adding overdraft protection programs. They are all challenging the status quo. That’s going to be bad news for banks who rely on fee income. What’s interesting is that these new product offerings from such fintechs are merging to offer solutions that try to make their customers live a financially healthy life. A lot of conversations are actually at the state level, whether these are payday lenders, or whether they actually are a better alternative to consumers. We shall see how things are going to play out in the next couple of years. OS: You mentioned state-level attention, which reminded me of the discussion in the last few years around, if the CFPB is less active, state AGs are going to pick up the mantle and be more active. No one is an oracle, but what are some possible scenarios from your perspective for the CFPB after the elections? DQ: I would imagine if President Trump is re-elected, we'll see the status quo where there will be continuous fights between federal and the state regulators. States may think the CFPB is not doing an adequate job, whether that’s true or perception and will want to come in and fill the gap, which is manifesting itself in California, right? But I also want to point out one thing we should still realize is that there are still a lot of collaborations between the CFPB and the states. If Biden becomes the president, I think you will see more collaboration. In the case of California, once their consumer finance agency is set up, they are not going to walk that back. I believe it's always better to talk to regulators, to help them understand what you do, as long as you're a good actor—rather than operating in the dark, and have no idea what kind of rule is going to come down at you in the future. OS: For our last question, can you talk about the challenges for regulation regarding machine learning? I think we've spent a lot of time trying to build a system that is not overly complex and is reasonably easy to explain. But there are machine learning techniques, like deep learning, for example, that are almost impossible or very hard to explain. DQ: Explainability is really a key thing. If the practitioner cannot explain to a regulator, I think it will make a regulator feel extremely uneasy. But obviously if you go back to the old ways where everything is explainable, you obviously lose all the upside the machine learning can bring, so it's a very delicate balance. What we really need is more exchange of ideas, information between the CFPB, the financial regulators and the companies that are experimenting in the space. I think the CFPB started working with Upstart, for example, on how to strengthen the compliance management system, so I hope the CFPB will publish that in the near future so that everybody can take a look and say, "This is what they did and it looks like it worked." OS: I would say from our perspective, we've always tried to do something that's within the bounds of the law, collect the data, then go to the regulator and say, "Here, this is how it's working, so we think this should be the direction." The worst results I have seen in terms of rules that have come out were when industry participants went to regulators and said, without context, "Hey, give us clear guidance" and the guidance always came back not as expected. DQ: Exactly. OS: Dan, thank you so much for your time. I'm sure we will continue to be in touch and maybe work together in the future. DQ: Absolutely, I will look forward to it! Thank you so much for having me.

During times of change, it’s more critical than ever for companies to embrace an innovation strategy to continuously deliver on changing customer needs. This has long been a guiding principle for technology startups. But it hasn’t always been a common practice in the debt collections space, where incumbents have historically lagged in adopting new approaches. That was one of the takeaways of a recent webinar we hosted with Laura Marino (Chief Product Officer), Roger Lai (Director of Product), and Tim Yu (Product Manager). These three product leaders made the case for why, now more than ever, debt collections providers must function like high-tech startups in order to thrive. Read on to get an overview of the key insights shared, or check out the full recording of the webinar here. The Innovation “Flywheel”Laura began by introducing TrueAccord’s philosophy of innovation. She observed that tech companies rarely wait for inspiration (like the next big flash of genius around a new feature or service) to strike. Rather, they use a repeatable, data-driven methodology to ensure that they’re always exploring new opportunities. TrueAccord organizes its efforts using an innovation “flywheel”: a repeatable cycle that ensures continuous improvement. At any given time, the product team is engaged in one of these steps across a portfolio of different features and initiatives: • Define the problem: Analyze data to identify an area for improvement• Generate a hypothesis: Conduct user research to generate ideas for how to solve the problem• Test the hypothesis: Implement a controlled, randomized experiment to test the idea• Go live: Roll out the winning idea or improvement• Monitor and optimize: Continue to track performance and identify opportunities for improvement At TrueAccord, the flywheel is designed to work alongside our built-in compliance system designed to meet and exceed the requirements of debt collection laws and regulation. Three Ways TrueAccord is Propelling the Industry ForwardThe flywheel isn’t just a theoretical model. Particularly over the past few months—a time of unprecedented change in consumer behavior and needs—it’s a tool that has helped the team rapidly deliver new features to market. To demonstrate how the flywheel is used in practice, the TrueAccord product team walked through a series of case studies that demonstrated the value of an innovation methodology: The TakeawayThe future of digital debt collections is one of superior results for creditors enabled through relevant, personalized, and empowering experiences at scale for consumers. Forging that future requires a true innovation strategy: one that blends data analytics, deep consumer empathy, industry expertise, and continuous focus on compliance. TrueAccord has long been fortunate to be on the frontier of the possible, creating new ways to add value for both consumers and creditors. Ultimately, the debt collections companies that embrace the “constant innovation” mindset of a tech startup are the ones best positioned to lead the industry forward. * Make sure to check out the full recording of the webinar for more insights on the future of debt collections, or schedule a demo with our team to see our products in action.

For this edition of The Digest, we’re taking stock of what we’ve learned so far from the economic impacts of COVID-19, its implications for collections and emerging fintech trends. Here are some headlines that caught our attention: What to keep an eye on: The New York Times recently published a fascinating data visualization report that shows that the number of job losses that are permanent is increasing, providing “a view of the dynamics shifting beneath the surface...of potentially lasting consequences of the crisis.” The future of upcoming stimulus payments remain uncertain, with this timeline of events explaining how we got to where we’re at today. There may be some movement made this month, as McConnell stated on Tuesday that the Senate will vote on a limited coronavirus stimulus bill.We’ve seen the rise of many “buy now, pay later” providers, and on the heels of its $500M Series G round, Affirm has now confidentially filed to go public. Affirm will join Afterpay as the second pay-later fintech to hit public markets. While there haven’t been many fintech IPOs this year, Affirm’s listing could encourage others to do the same via IPO, direct listing or SPAC route.In a long time coming, the CFPB is getting ready to update its rules around collections and technology, with text messaging and emails formally recognized as communication channels. We’re waiting with bated breath, and proud that the work we’re doing in pioneering digital collections meets consumers on their preferred channels. What we’re excited about: We’re honored that our very own Sheila Monroe has been recognized as one of the Top 25 Women Leaders in Financial Technology of 2020 by The Financial Technology Report.We’re hosting a webinar next Wednesday 10/21 on the future of digital collections. TrueAccord’s Chief Product Officer Laura Marino & our team of product experts will give a behind-the-scenes look at TrueAccord’s latest product features that deliver peace of mind to consumers and enhanced results to creditors.

Back in 2019, TrueAccord pledged to hire 50 new Lenexa team members every year until reaching our goal of 150.  But thanks to a huge growth in business, TrueAccord has accelerated its hiring, adding 84 employees working remotely across the nation and from its Lenexa, Kansas office since the beginning of March alone.  Overall, the Lenexa office has grown from 12 employees to over 118 people in under two years, and we’re still actively hiring across many functions. Lenexa is home to many team members across various roles, ranging from customer engagement, finance, operations, legal & compliance to engineering.  TrueAccord has been particularly well positioned to adapt quickly when it came to shifting our employees to work from home by being a technology-forward company. Like many companies across the nation, our employees had to undergo major changes in their daily routines when adapting our workforce to operate during COVID-19. The majority of Kansas-based employees work from home, while those who need to come into the office are able to do so with appropriate social distancing. “While the pandemic has disrupted so many people’s livelihoods across the country,” says CEO Sheila Monroe, “I continue to be proud of TrueAccord’s commitment to change the experience for consumers in debt for good. We’re driven by our mission to improve the customer experience for everyone throughout the credit lifecycle, and recent events have only strengthened the need for the way we do business.” TrueAccord is hiring across the board—in Lenexa and remotely. Check out our open positions here.

In this edition of The Digest, we’re looking towards the future. After all, Q4 is right around the corner, and after that, 2021 will be here before we know it. Here are the headlines we’re thinking about as we look ahead. The future of call centers is remote work, even post-pandemic. According to a recent J.D. Power study, 86% of 124 customer service organizations surveyed say they plan to implement permanent work-from-home models even after the pandemic passes. TrueAccord CEO Sheila Monroe gave her thoughts on what’s next for collections in the latest episode of one of our favorite financial services podcasts, Credit Eco 2 Go.  Sheila shared her optimism on the potential efficacy of multimedia collections communications and emphasized how “the one-size-fits-all approach” is no longer a viable option for reaching out to consumers in debt.   Chime is now the most valuable consumer fintech company. Speaking to Chime’s appeal, CEO Chris Britt noted, “Nobody wants to go into bank branches, nobody wants to touch cash anymore, and people are increasingly comfortable living their lives through their phones. We have a website, but people don’t really use it. We’re a mobile app, and that’s how we deliver our services.” The future of mobile banking is looking brighter than ever. Affirm, a “flexible and transparent alternative to credit cards,” recently raised a $500M Series G round. As we’ve noted before, flexible payment options are a real win-win: better for the customer experience, as well as a positive for payment plan retention as well. We hope that Affirm’s recent success signals a trend towards more flexible, personalized payment solutions in the future. What does the financial future of American families look like? If the present is any indication, there may be painful times ahead. A new NPR poll finds “very substantial proportions of households reporting that their savings have been depleted by the pandemic (if they had any savings to start with).”  Robert J. Blendon, executive director of the Harvard Opinion Research Program, predicts that “it's going to get worse because there is nothing for the people we surveyed who earn under $100,000 a year to fall back on."  In positive news about the (very) near future: LendIt begins on 9/29. If you’re attending, make sure to check out our virtual booth and the panel New Approaches to Collections in Times of Crisis, on which our founder and CEO Ohad Samet will be speaking. Here’s our round-up of other can’t-miss sessions.

The LendIt Fintech USA 2020 conference is just around the corner on September 29 through October 1, with an exciting lineup of industry experts from leading traditional banks, fintech platforms, and tech companies discussing innovations in lending, digital banking, embedded finance, and more. Here are the three sessions we’re most excited to attend: 1. The Next Level of Fintech: Building your Customer Ecosystem When: September 29, 11:30am-12:00 pm EDT The speakers: Craig Boundy, CEO of Experian North America, and Peter Renton, Chairman at Lendit Fintech Why we’re excited: Customer loyalty and meaningful engagement matter more than ever as the landscape of consumer fintech products and services becomes increasingly crowded. Experian North America CEO Craig Boundy will discuss how his team leverages data and technology innovation beyond just customer acquisition but to also earn consumers’ loyalty for the long haul. 2. New Approaches to Collections in Times of Crisis When: September 29, 4:20-5:00 pm EDT The speakers: Ohad Samet, CEO of TrueAccord, Jacob Corlyon, CEO of Capital Collection Management, Hersh Shah, Sr. Director - Transaction Advisory at RSM US LLP and Praveen Kombial, Global Product Head of Business Applications at EdgeVerve Why we’re excited: As the economic ripples of the pandemic continue, the collections industry is facing unique challenges. We’re looking forward to our CEO Ohad Samet sharing how TrueAccord has adapted to consumer needs during these times as well as learning from the other panelists on how they’ve rolled out new initiatives spurred by this crisis. 3. New Insights into Consumer Financial Resiliency Amidst Current Market Dynamics When: September 30, 2:00-2:30 pm EDT The speaker: Dave Shellenberger, VP of Product Management, Scores and Analytics at FICO Why we’re excited: While we have insight into our consumer behavior in response to COVID-19, we’re interested in learning more from FICO on how they’ve developed a new analytical framework that can be used across the consumer lifecycle to better understand consumer financial resiliency. 

Last week, Sheila Monroe, TrueAccord’s COO, was the featured guest on “Credit Eco To Go,” a consumer finance podcast hosted by Joann Needleman, a leading financial services attorney at Clark Hill. The theme was putting the “consumer” back into consumer financial services. Sheila had the opportunity to share TrueAccord’s perspectives and experiences working with consumers throughout the credit ecosystems. Here are some highlights from the discussion. #1 Flexibility is still the key to helping consumers during the pandemic With the pandemic still dramatically changing daily life and the economy, it’s no wonder that many banks and creditors are concerned about revenue and profitability. A way to address that and help consumers simultaneously is to offer flexibility during these difficult times. Sheila cites how TrueAccord’s first reaction was to think of ways to help people impacted by the pandemic who may not be able to afford their repayment plans.“TrueAccord was born with this mission, not to maximize recoveries for clients (though we definitely do that), but how to help the 77 million consumers who are in debt in a humane way,” she said. Sheila references how TrueAccord sprang into action, immediately sending out content to consumers on payment plans letting them know they could change the number of remaining payments to lower the monthly charge. She also notes how COVID-19 affected consumer behavior, such as when the government stimulus payments spurred an uptick in increased payments as consumers prioritized resolving their accounts. #2 Consumers need urgent support throughout every step of the credit lifecycle  TrueAccord is not just interested in helping consumers through its collections business. The company sees an opportunity to bring its industry-leading collections experience to all consumers in debt.  “Consumers [that TrueAccord serviced in collections] say, gosh this was painless—I want to pay all my bills through TrueAccord. Well, the only way we can make that possible without clients giving us all their debt is to create a direct to consumer product, Engage, which allows consumers to come onto the platform, list their creditors and start making payment offers,” says Sheila. “They don’t want to be coerced into something over the phone that they didn’t feel comfortable with. They want to make offers to settle their debt or to pay monthly installments.” #3 Banks and creditors need to leverage machine learning to meet the consumer preference for personalized communication With video conferencing and digital communications becoming more prevalent as companies work from home, the financial services industry needs to better utilize technology to keep up customer engagement. Sheila predicts that consumer preferences will play a much bigger part in spurring technological change, especially with machine learning crafting unique customer experiences for each person.  “A ‘one size fits all’ approach is not right,” says Sheila. “The current best thing that needs to happen is using machine learning, which enables us to know the consumer at a more personalized level.” This approach, according to Sheila, can help turn unwanted outbound communication (like disruptive phone calls) into communication that is welcomed by the consumer — and empowers them to resolve their debt.   In addition, the use of multimedia communications is emerging as a more meaningful way of interacting with customers that naturally mimics conversations. For example, Sheila envisions, “We might start a conversation through a two-way text that then moves to a phone or even video call, where you can push a disclosure notification. A customer can upload a copy of their information that’s backing his dispute and we’ll handle it at the same time over the phone.” This mixed-channel, personalized approach gives the consumer an easy way to self-serve. While the pandemic has certainly changed many things, including how many companies conduct business, one thing remains the same. There has never been a more crucial time for the finance industry to rise to the challenge of shifting consumer needs with innovative technology applications. Check out the full recording here, and check out the other episodes from the Credit Eco To Go podcast.

As we begin to round out an unprecedented year, things remain…well…unprecedented. The world of collections is weathering the storm with new strategies and technology, all while staying focused on the rippling economic effects of the ongoing pandemic. Here’s the news we’re following at TrueAccord. What to keep an eye on • Slowdowns at the USPS will have ramifications for the debt collection industry. Longer mail delivery times may disrupt the arrival of collections notices, which will shorten consumers’ 30-day window to pay, which may cause chaos for collectors and consumers alike. (A possible workaround? Working with TrueAccord and sending email instead of snail-mail.) • As of last month, debt collection profits soared. As we noted in our report Consumer Debt in the Age of COVID-19, consumers flocked toward paying off their debt in full, as a result of the cash payments of the CARES act. But with a lack of additional stimulus payments coming, the next few months will be unpredictable. We’ll be watching this news closely. • In response to the coming economic uncertainty, many banks are “bracing for impact” by adopting new technology to help streamline debt collection. But beware of the challenges. • Proposed updates to The Fair Debt Collection Practices Act (FDCPA) are likely to take effect in October. Read up on these changes to understand how they might affect you and your debt collection processes. • About 30 million Americans are “at risk” of being evicted in coming months. Debt collectors in the real estate industry may need to look towards new tactics to help tenants tackle their housing debt and avoid evictions. What to look forward to • The fall conference season is around the corner. And this year, for better or worse, we’ll be doing our panel-watching, swag-getting, and networking from home. We’re especially looking forward to LendIt and CBA Live, which have been seamlessly adapted into a virtual format. Our founder Ohad Samet will be speaking at Lendit in the panel, “New Approaches to Collections in Times of Crisis.” If you’re interested in attending, reach out to marketing@trueaccord.com for a code for discounted registration.

In our second installment of “Between Two FinTechs,” an interview series with leaders in financial technology, we have Hunter Walk, co-founder and partner of seed stage venture fund Homebrew. Previously at YouTube and Google, Hunter uses his startup and scaling expertise to help founders articulate their product/market fit, recruit stellar teams and build well-defined cultures. In this conversation with our CEO Ohad Samet, Hunter shares how he started his venture fund, his thoughts on major developments in fintech and his investment philosophy. This transcript was edited and condensed for clarity. You can see all the interviews here. Ohad Samet: Hunter Walk is one of the early believers in our company and one of the most outspoken leaders in the venture capital community, so we’re really excited to have you, Hunter. Can you start us off by telling us about the beginnings of Homebrew?Hunter Walk: Thanks so much for having me!  Homebrew came out of a partnership with my co-founder. Satya Patel and I had worked together at Google  and always wanted to work together again. At the end of 2012, I was thinking about leaving Google after almost a decade, most recently having run the Product team at YouTube. Satya had recently left Twitter where he had been running Product, so we finally started to talk about what we wanted to do together. "We didn't assume we were relevant just because we'd been around the Valley for awhile and had the ability to write checks." We didn't assume we were relevant just because we'd been around the Valley for awhile and had the ability to write checks. We wanted to make sure we were committing to a relatively small number of companies that we would get up every morning and put sweat and reputation behind them, not just capital. My objective is to be able to look back and think about the impact the people we backed made.  We think about who we're going to be proud to be associated with—and TrueAccord checks off those boxes.OS: You recently tweeted that your team is “big on banking as a service.” Can you tell us more about how you’re thinking about that sector? HW: When we started Homebrew in 2013, we believed industries would experience innovation from how data that used to be siloed can now be pooled. Data analysis that used to be impossible or expensive had become more open and available for companies of all sizes. Despite having no specific background in financial services, we were fascinated by the potential there as a tremendously large industry where its consumers didn’t feel empowered by them. We realized there were people taking a very low net promoter score industry to create something that was thought of more positively by its customers. We knew there would be very tough challenges. It's hard as a startup to navigate around regulations. The incumbents have spent a ton of lobbying dollars. Old technology platforms are difficult to work with, and you essentially have to figure out how to partner with them or route around them. But the people who could do it successfully would build incredibly durable, important, and valuable businesses. We've invested in and continue to invest in that sector. It's an industry where depth of knowledge will really help you in a lot of areas. We're always happy to bet on first time entrepreneurs, but no entrepreneur should underestimate the complexity that you encounter in this sector. That type of knowledge, mentality and accrued experience, makes a competitive moat as well. "[Fintech] is an industry where depth of knowledge will really help you in a lot of areas. We're always happy to bet on first time entrepreneurs, but no entrepreneur should underestimate the complexity that you encounter in this sector. That type of knowledge, mentality and accrued experience, makes a competitive moat as well." We also look for that little crazy gleam in the founder's eye that says "Oh, if we can do this, then we can do that." I call those iceberg startups. The 10% that's above the water looks impressive, but then you realize there's another 90% below the surface.  Maybe the metaphor is that the ship is the incumbent, and the startup is the iceberg. And that's utterly horrifying if you're a ship. I don't know what makes the investor. Maybe like a happy penguin on the iceberg! OS: That’s a really interesting point. How do you feel about companies expanding into new businesses? How do you think about balancing the legacy business, expanding that, doubling down, and then working on value-added services as a way to expand the product? HW: Sometimes people assume that as companies grow, they're de-risking themselves. And I actually don't think that's true of the best startups. I think the best startups choose to re-risk their business at various milestones because they know that they have the opportunity to expand the set of services or products they offer against a consistent mission. During my decade at Google, I saw that if you are a successful company, in the near term it is always worth putting more resources on your core business and not in new opportunities because you already know that the ROI will be positive. But the reality is that that's actually the right time to start placing those next bets because you have the stability of something that's working. And so you say, "Well, what does that put us in a position to do next?" Is expanding into this new service aligned with the mission? Is it consistent with the capabilities and brand of the company? And is it a big enough problem worth solving?OS: What’s your take on “lending as a service” type companies? HW: It's a very interesting and obviously a tremendous area. There are definitely challenges for companies trying to break into that. I think some of those horizontal plays and those essential infrastructure plays are interesting, but you have to figure out how to run a very lean, tight ship because it's only going to make sense if you can get to a certain scale. You need to decide what sort of risk you're taking on, what sort of value you add, and if that value actually catalyzes the underlying business of your partners. But looking at the Affirm’s and so forth of the world, it’s clear that there are very smart people in this space who can get and preserve some margin because they’re doing something their partners probably can't do for themselves, and increase revenue by taking on some of that processing risk. We think it's one of those businesses where value is going to accrue to a very small number of players.We've seen some other areas that we think are less competitive that are more emerging in the infrastructure space of banking, insurance pricing, and reinsurance. When it's an area like this, I get really excited when I hear somebody with a contrarian take. If that person is right, they are going to potentially have an outsized result versus a bunch of people who are like, "Oh, I'm going to do Square credit for influencers, or I'm going to do credit for Patreon." I don't think those are, by themselves, interesting, discernible big businesses. They don't have the same vision mission objective that, for example, TrueAccord does. Sometimes if you build the right platform, what other people are calling companies, you can call features and products. "Sometimes if you build the right platform, what other people are calling companies, you can call features and products." OS: Can you tell us more about your investment philosophy and what’s next for Homebrew: How do you balance pattern recognition and Diversity & Inclusion when making early stage investments?  HW: We believe it really starts by being accessible—we respond to every cold email, work to meet new people and communities that weren’t just based on our own work histories, and bring a ‘pay it forward’ attitude to working with underrepresented segments in tech. That said, there’s still plenty of work to be done—while we’ve historically invested in female-founded companies at a rate 4-5x the industry average, I don’t believe our portfolio is yet representative of our ambitions when it comes to other underrepresented segments such as Black founders. Hopefully I’ll update this a year from now and we’ll have more to say there!