← From the Ground Up
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- [00:00]
A
Hi and welcome to this special podcast series in partnership with Chase for Business. I'm your host, Ben Baer with Ink Custom Studio. In this episode, I sit down with Chicago based artist and entrepreneur Louis de Guzman at Chase's make youe Move Summit to talk about how he turned his creative passion into a growing business and what he's learned along the way. And then I have a conversation with John Freirerichs, Managing Director of Global Small Business Payments for Chase for Business, to get the latest updates on digital payments and how small businesses can take advantage of the latest innovations to help serve their customers. But first up, my conversation with Louis de Guzman. Welcome to the podcast, Louis.
- [00:33]
B
Thank you so much for having me.
- [00:34]
A
So for those in our audience who are not familiar with your art, how would you describe it?
- [00:39]
B
My art, I would say it's a little bit of modern contemporary. I call it geometric attraction. It's a very.
- [00:46]
A
So explain that. What's that?
- [00:47]
B
Yeah, so pretty much kind of developed a style where I take fragments and I love to like freeze frame them. And pretty much like my work revolves around. It started to revolve around like a lot of pop culture references and IPs that I've gotten to work with. But eventually it's evolved into this new, like, universe that I've developed all along the way. And it's about discovering, rediscovering the things that matter the most to you. And from there it's like I always feel like this energy and the sense of urgency, whether high or low, and being able to capture those essence and marks of how the painting looks and how the sculptures feel with these shards and these fragments of your imagination and the things that you don't see around your energy and your Yourself.
- [01:27]
A
Yeah. So this being a podcast, and how would you sort of like describe like one of your, like, you know, early pieces that you created? What, what does it look like?
- [01:36]
B
My early piece or early pieces I've created? You know, I grew up first generation Filipino American. My mother loves and still to this day arts and crafts. And she was very attached to floral arrangements and baroque esque finishes and just really intricate, you know, designs and ribbons and stuff. So when I was a kid, she would take me to craft shows and I would try to emulate what I saw. Patterns and symmetry and, you know, geometric shapes that created new, like just images. And so from there it was like I always tried to emulate that, but it put it towards things that people were familiar with. So whether it was like doing like before I got to really take this seriously, it was like doing the Chicago Bulls logo and things that get on from Chicago, so sports teams and sports. Like, that was like my first introduction into culture as a child. You know, if you were a fan of the Bulls or the Cubs or whatever, like, you automatically had friends. And so I would try to, like, redo those things and the style and it kind of elevated from there, and now it's like, you know, 10, 15 years later, and we're here now.
- [02:40]
A
So is it kind of a blending, emerging of sort of some of these, you know, sort of iconic logos and characters and things, and then reimagining them, reinventing them in new way through your art?
- [02:52]
B
Yes, absolutely. Yeah. So it was a lot of that. Blending those styles and aesthetics towards things that people are familiar with, just to kind of get people comfortable with the work. But, you know, as time has evolved and we are present day, been able to create my own narrative, you know, our own stories, and kind of take things that are more vulnerable and personable to how I feel in seasons, you know, and. And when I say seasons, like age, you know, I just turned 36 yesterday, so it's like, as we get older, it's. You know, I've been grateful and gracious enough to experience a lot of different things, but putting those. Putting those. What is it? Pictures and just things in line with how I'm feeling or what I've seen, you know, being able to travel the world and kind of redepicting of, like, what my universe looks like.
- [03:39]
A
So, yeah, and imagine that's evolving, too, as you sort of. You grow and you experience new things. What ins. You know, what was sort of the inspiration to turn your art into a business? Was there a moment when you said, you know what I want? Obviously, you wanted to do this as a career, but when did you decide, okay, or when did you learn that you could make this into a business?
- [04:00]
B
You know, I always was always so cutthroat as a child and as a teenager and then as a young adult to adult now. And I've always felt this sense of peace and presence in my life, of like, hey, I want to be an artist. You know, if I had, you know, if I could choose another path, I can't. I've always wanted to be an artist. I've always wanted to learn how to design. Whether it was fashion, create art, painting, sculpture, everything, I just knew, and I kind of got integrated. And, like, I think I understood that it was something that I could do, because my parents, to this day, like my dad, I remember Telling me when I was in freshman in high school, you want to be an artist, be an artist. That's your dream. They always supported me, surprisingly enough, you know, growing up in a Filipino family, like, my cousins and family friends, you know, they're all. They all have, like, really good, steady, respectable jobs that I admire. But for me, I was always like the black sheep of the family. I wanted to be an artist. And I just kind of knew because, like, my mom, you know, selling crafts on the weekends to make ends meet and, you know, just fast forwarding because it is a long story, I guess it's been eight years professionally. Eight years ago, you know, I just knew. I was like, hey, like, there's something here that, you know, I see that my best friend, business partner, Austin Neely, you know, saw and our other team member, Amy Tran, saw. Like, we just saw it together and we're like, hey, like, this is not just becoming a hobby to showcase work. It's becoming a business where people are starting to even just invest in work. Whether it was a T shirt, a print, anything. It's like they wanted something because there was a story there. You know, when I tell people all the time, it's like, it's not about making money. It's about selling your story, the people that connect. And that's when I knew it was a business. Because, like, we're not just. We're not just like. And I. I feel like this to this day. Like, I'm not just trying to sell you products. I'm selling you my life, and I'm selling connect, connection, especially in the world we live in today. And I knew it just turned into something that, like, oh, people live off of this for goodness and faith, and that's the business standpoint. It's like, all right, cool. Like, if we could connect with people that human connectivity and real conversations and real support, There's a business right there, so why not fill that void?
- [06:17]
A
Yeah. And I think I'm glad your parents encourage you to follow your passion, because I think that's, you know, usually universal to. Especially for the Inc. Audience, like being passionate about the business you're going to be in. Because it's work. Like, if it's a. It's work. It's a 24.7Gig. Sometimes it's. It's a lot of hours. And if you're not passionate about what you're doing, it will lead you to have a lot of challenges in making it successful.
- [06:41]
B
Absolutely.
- [06:42]
A
Imagine also the authenticity of what you're doing is important to your Business, if you can speak a little bit too, it's sort of like, okay, when did you sort of realize there was a market for what your art was and that it was truly a sustainable business after you sort of got started?
- [07:01]
B
Absolutely. I want to say it was 2017. I started applying color to my work, you know, before it was black and white. And I started using. Using actual things, info color towards my paintings and drawings and digital illustrations and all the stuff I made. And people started getting attracted to it. And I think, like, from there, people are asking to collect it. And from there I was like, wow, like, people are paying X amount of dollars for a print that I, at the time, got made at Kinko's. I'm like, okay, there's something here. You know, like, I don't have much in my bank account, but let me invest in having people want to buy stuff for me or pre order. And then from fast forwarding from there, it's like, this is when there was a boom in collectibles, and we did our first sculpture called Elevate. And from there, it was like, you know, never took that. Never knew how the business worked as far as collectibles go, but saw that there was an audience for that globally of people trying to buy things that were limited. And we took the jump and we developed something that literally within the first one minute of release online, we sold thousand of them. And I was like, wow, there's an audience here. So let's keep doing this, and let's see where we could go in this marketplace of being an artist but offering a style and having people attached to it because they're already kind of getting familiar with you. And I'm like, okay, cool. Like, my saying is, every time it's like, yo, we're like, I always tell the team, and we're always together. I'm like, yo, like, it's. We're in too deep to stop now. We've invested so much of our time, our money, our effort. We have to keep going. And you just show up every day. And if you show up every day for yourself, you eventually catch traction and stride. It can be good or bad days, but at the same time, you're making something that you've always believed in yourself, and now you have others around you believe in you. That's where your. That, like, leap of faith goes with business. I feel like. You know, because now it's opening new doors of opportunity to help invest and fund what you need to do next. You know, we always have this conversation of, like, what can we do that's bigger?
- [09:05]
C
What?
- [09:05]
B
There's so much I still want to do. I'm still early in the game as an artist, but there's so much I want to do. And I know it requires that ethic and work and funding from the right partners or partnerships or even ourselves to make something happen. You know, sometimes you just got to take the risk.
- [09:21]
C
So.
- [09:22]
A
That's a good question. There's always this healthy tension between creativity and commercial success, right? Absolutely. You've partnered with a lot of brands on the art that you've done. Talk us through sort of how that first partnership went and what you learned from the business side of it. Of all right, I'm going to work with somebody else with my art and it's going to be a partnership rather than just purely my art.
- [09:47]
B
Yeah, absolutely. The first one that opened our eyes into like, wow, like we're reaching further heights into the business of art or just partnerships, it was with Viacom, with SpongeBob and J. Balvin. You know, you have three entities. You have myself, you have J. Balvin, who's this mega reggaeton superstar, dear friend of mine, and you have spongebob squarepants. Something that we grew up as kids. And so to bring those three entities together, like, you know, I was still living at my parents house at the time. You know, we didn't have much, like we were working in between. Like, we didn't have a studio yet. And I'm like, wow, like we have this opportunity with a big company. And that's when we went to New York for the first time to meet with Viacom in Times Square. And they're like, hey, this is how it's gonna go. We're gonna create this, this, this, and there's gonna be apparel, there's gonna be collectibles, and we're gonna reach these markets. And I'm like, me being the artist that I am, I was like, oh, wow. I didn't really think of it as of like, again, going back to like, I always, it's not about the money, it's about the integrity of the art. It's about who you are and how you can push it through to make it the best of the best and whatever it makes it mix. But then I did understand, you know, learning about percentages and royalties and this and that. And thankfully I got my best friend with me who's very keen on like, making sure we're good and afloat. That was like, all right, this is how it's going to run. So that was a big Learning curve, too, how to sell the product, who gets what, and respectfully, you know, it's. And for me, too, it's like, I think business owners to this day, and people need to realize, like, yo, you.
- [11:17]
C
Got to be fair.
- [11:19]
B
It's not about trying to take the most. It's like, what Know your worth, you know, and that was the first challenge, was like, okay, we have this big opportunity. I'm not a big artist, but there's two big entities that believe in us, and so we believe in them, and let's just put the best foot forward. And that's like, the whole thing that created to, like, all right, now we have this new business plan and thing that, like, literally led us to, like, taking this risk. And now because of that project, we got our first studio. Because of that project, we were able to travel. Because of that project, we were able to invest more of the earnings from that into things that we never imagined.
- [11:54]
A
So what advice would you give to other younger entrepreneurs? Because here you are, you're flying in New York. You're in a boardroom with marketing people from a major corporation. You're in there with a bigger, you know, bigger brands and names, and you got to represent your own interests in this partnership.
- [12:11]
C
Yeah.
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A
What did you learn from that experience? And what advice would you give to other younger entrepreneurs that maybe are pursuing a partnership and it's their first time?
- [12:20]
B
Absolutely. I would say be your true, genuine self. Walk into the room like you own it, but then also walk into the room like a student. You know, you have to walk in and have the confidence level, but the respect level to understand and be willing to learn. You know, you're never going to know it all you think you do. I don't know it all. I'm learning every day. And I would tell the younger entrepreneurs and aspiring artists, because you can do it too. You literally can. It sounds cliche, but you can make it happen. And just believe in yourself so much, and no one's going to ride for you as hard, as hard as anyone is for you yourself. We live in an age where social media. Keep posting your stuff, keep sharing your stuff. The right opportunities will come. You know, at the time, I didn't even have a big following. It's not even about followers. It's about your heart and work ethic. And if you show up and walk into the room and just be so gracious and realizing that, like, hey, like, this might seem like your end all, be all, not end all, be all, but this might seem like, dang, this is like, the biggest thing that's ever happened to me. I felt like that. But then you gotta understand, too. It's like you were meant to be there, and bigger things are gonna happen, and you just keep learning. And I would also say this to a lot of people. It's like your first partnership, always, always treat the people you work with as family, too, and understand them, have real conversations. It's not a transaction. It's about, you know, just being a good person. Good person. Being yourself and being a good person could literally take you further into rooms and people speaking about you. Years later, it still happens for us. We got people we've worked with at Viacom who still reach out to us, who are no longer there, but believed in us. And like, oh, you guys, we should do this together for this new thing. And I'm like, it's years later. It's like eight, nine years later. I'm like, oh, my gosh. You know, it's about purpose.
- [14:08]
A
Yeah. Building those relationships. Because, listen, I mean, business transactions and discussions and partnership agreements can sometimes, I'll use your word, getting a cutthroat.
- [14:16]
B
Yeah.
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A
In terms of, like, everyone is looking out for their piece of the partnership. And sometimes it can get tricky, especially when you start involving lawyers and accountants and others about things that are important, like money. So briefly, and then we'll move on to some other topics. How did you navigate that, those business part of these partnerships, to make sure that your ip, your brand, your art was protected and that you got what you needed out of it along with your other partners?
- [14:46]
B
Absolutely. So, you know, it literally started down to, like, trademarking everything. And, you know, I have a signature logo, and we trademarked it, got with friends, and luckily, we've been in this space where we've worked with a lot of great people in this industry, whether it was like, art, design, fashion, food, that we just rely and we, you know, it's always like. And I would say this, a lot of people, if you have friends in the industry, whether it's similar or not from you, but, like, reach out to them too. See how they've handled their business deals. And luckily for Austin and I, like, you know, I've worked with him. I've known him for almost 15, 20 years. He's my best friend, and he's my business partner manager. It's like, cool, let's reach out to the people that we know that are handling these deals already. So it's like you kind of learn and rely on your resources. Rely on your resources and your friends. Is really important, you know, And I think, yeah, getting the signature, like, our trademarks, making sure that we were protected, starting the business account right. You know, at first it was just like my own personal checking, Austin's personal checking. But then, like, that's when we started lab experiences, you know, like, all right, cool. Let's just make an entity and let's put under Chase and let's start that so we could have everything flow, like, the right way instead of having to, like, you know, I think, too, it's like just establishing every incremental thing about your business and yourself as an artist is really important, so you don't have to go back later and, like, try to clean up the mess you could have. You know, excitement comes, but once it turns into a business and it becomes more serious, you need to have your tracks covered.
- [16:19]
A
Yeah. How important is it to have the right team and business partners around you for growing your business, Especially as an artist, when you're trying to focus on the creative side of things, but you also want to make sure the business side is taken care of.
- [16:29]
B
Oh, it's very important. It's very important, you know, and it's like a cliche. There's no I in team. And I'm very grateful and honored to have such a strong team who's not just my team, my family, too, my friends. You know, we get to travel together, we get to work together, but we believe in each other. They believe in me. I believe in them. You know, it takes a really solid team to make things happen. You know, as an artist, like, yeah, like, I'm always focusing on the creative. I'm lucky enough to have that, where I'll focus on the creative, we'll have some assistance, and we'll have logistics. Like, we're a small but mighty team, but we're able to make it happen. And I think people need to understand, like, if you want to travel the world, show work, if you want to handle business deals, if you, you know, you can only filter so much through it once, because before I was doing that alone. But then, you know, I'm very lucky that I've been led down the path to have people believe in myself as much as I believe in them and putting the right people together to make bigger things happen. I wouldn't be where I am without the team. I always say that. Yeah.
- [17:29]
A
Bring us forward to today. Where are you now? And so where is your business operating and. And. And share a little bit about sort of that business growth to where you are and where you hope to Go.
- [17:38]
B
Absolutely.
- [17:39]
C
Yeah.
- [17:39]
B
I mean, right now, you know, 20, 25, literally next week we're going. The business has grown to an international. International business, I would say, because now, like, you know, this is the. Probably the fifth time we're actually traveling next week to Hong Kong. We have two shows out there. We're doing one in designer kind of Hong Kong, and then we have another show that we had to ship some paintings out to work to. They call it the Porcelain City. It's all the porcelain's made. So there's a new museum out there that we're going to be going to. But yeah, the business has grown to being able to connect internationally with people and just the fan base out there, you know, And I love that art is beyond a language barrier. It's how people feel when they see your work. So we've been able to bring that forward and muscle that through. So before it was like, keeping it local, Chicago or going to New York or la, little things in Miami. But now it's like, cool, let's take it global.
- [18:35]
A
So are you doing basically, like, shows at galleries and museums and is there a business piece of this, or is this purely to showcase the new work and the business comes later? Can you talk a little bit about that?
- [18:46]
B
Yeah, no, there's a business piece to it. You know, we had a show. We had our first solo show in Seoul in Korea this year, earlier this year. And it was crazy because, like, I mean, the marketplace for art in the US Is kind of. It's steady, but people in Asia, they're eating it up like crazy. Like, you know, before the show even started, we sold like, four paintings already.
- [19:07]
A
Congratulations.
- [19:08]
B
Thank you so much. It was very humbling. It was very humbling. Like, wow, we don't even speak the same language. People saw the work and they were moved by it. And, like, they want to buy it for a particular price point that I'm like, I never thought I would be able to sell work at this price point. I never thought I would be able to show work through this level. And, you know, it's like that field of dreams. If you build it, they will come. And if you don't give up and do it, like, you'll be able to travel and see the world. And, you know, these, like, even for next week, this show, like, we're gracious enough to have these people believe in us so much that they're helping us. Like, they're investing in us, they're investing in our business because they're flying us out. They're putting us up. They want us to be there. So what can we do? Put our best foot forward and show.
- [19:49]
A
Up for our audience. If they want to buy Louis de Guzman work, how does that work for them? Do they have to go through artist agent or can they come to your site? How do they invest?
- [19:59]
B
There's different ways. You know, I would say there's three ways. Obviously, through lewisingham.com, my website, which we have a direct contact email, infoewisteguzma.com which goes through my manager. Also Instagram. You know, I'm always getting DMs from collectors, and I'm. I'm an open person. You know, I don't think I'm ever too big or anything for anyone. Like, I'll always be gracious for people to reach out because, like, I know it takes a lot. So I'm always trying to ask, answer any questions I can or, you know, and it's just like social media. Use it as your portfolio. Use it for the right reasons. But then also have your personal website and make sure that's seamless too. But then also pop up galleries, you know, shows, exhibits. Like anywhere, any opportunity you have to show something that was so near and dear to you. Take that.
- [20:46]
A
Yeah, we met, we talked briefly about partnerships earlier. Can you just share a little bit about the partnership journey and who else you've done partnerships with and then any upcoming that you can maybe share with us that are. It may be in the works.
- [20:58]
B
Absolutely. Man, it's been a crazy eight years of partnership, dream partnerships. You know, we got to, we got to work with, obviously, SpongeBob, Viacom, BBC ice cream, which is owned by Nigo and Pharrell, two of my idols. Looney Tunes for Warner Brothers, which is crazy. New Balance, we got to work. We got to develop two shoes with New Balance, A bathing ape from Japan. Bape was insane being a Chicago kid, working with the Chicago Bulls, the Chicago Cubs. We have a permanent sculpture at Wrigley Field, and that was insane. And I'm very humbled by that. And this year we got to design the jersey that they gave away to the fans for API Heritage Month, which is awesome. Tezuka, Astro Boy, Uniqlo.
- [21:44]
A
You do some things with as well?
- [21:46]
B
Yep.
- [21:46]
A
Anything upcoming that you can share with us?
- [21:49]
B
Absolutely. We're working with this other entity. He's a very creative guy named Plastic Plant. He's like a visual mood board on the Internet, but he's a very positive force that connects people together through just positivity and good energy. So we're Working with him. Soon Bun B and my good friend Andy Nguyen, they own Trill Burgers in Houston, so we're doing something with them. As you mentioned, Uniqlo is still going on. We have a part two dropping. We are actually working with Netflix for Stranger Things, So a few pieces there. And next year we have some big ones. I can't announce yet, but I'm very excited that it's been part of the journey.
- [22:25]
A
And for the entrepreneurs out there, say, like, all right, that's an amazing lineup of partnerships. How do I seek out a partnership with a company if I don't know how to? What's been the process? Obviously, originally, people reached out to you, but what do you recommend to folks that are saying, you know, I think it'd be interesting if I could partner with X. Yeah. X brand. How should I do it?
- [22:48]
B
What do you.
- [22:48]
A
What do you recommend?
- [22:49]
B
I'll give you a scenario here. You. And this happened two years ago or two. Two and a half years ago. You just got to sometimes shoot your shot. DM them. Like, don't be afraid to message people. I don't know who's listening to this. If everyone's heard of Pop Mart, the Labubus. Yeah, it's a company that Labubu is by an amazing artist, casting lung. But Pop Mart, they produce Labubus and they sell other artists, too. I came across them at a convention two and a half years ago in California, and I became a big fan of them. I was like, oh, this is crazy. Like, this ip. What is this? And they're from Asia. They weren't big here in the west yet, you know? And I remember being in a hotel with my partner at the time, and she loved them, and I did, too. And I was like, hey, like, can I. I wonder if I can work with them. I literally opened up Instagram, went to their Popmart Global Instagram account. I DM'd them like, hey, my name is Lucy Guzman. I'm an artist from Chicago. I love what you guys do. I would love to partner with you guys. And I got a DM back, and it was crazy. And they're like, oh, my God. Like, yeah, we're familiar with your work. We love who you are. And what would you like to do? We have Space Molly, which is the IP we did. We have Labubu. I didn't know how big Labubu was going to get. We have Hirono and Skull Panda. Like, partnership grew from there. We connected with them. They connected us on email, and next thing you know, we Produced this space Molly, our version of it. And I think it was the most we've ever sold of a collectible, about 10,000 units globally.
- [24:21]
A
Well, good advice. You heard it here from Louis dm. Don't be shy about doing it.
- [24:27]
B
Shy? Shoot your shot, knock on the doors. No one's gonna ride for you as hard as you do.
- [24:30]
A
Well, I think you're definitely no longer the black sheep of your family. And I would say you're in a very respectable business. So glad to pursue that. Thanks for Jen for joining the podc, sharing your insights with our audience.
- [24:40]
B
Yeah, thank you guys so much for having me honored. Thank you.
- [24:42]
A
And now my conversation with John Frerich, Managing Director of Global Small Business Payments for Chase for Business. John, welcome to the podcast.
- [24:48]
C
Yeah, thanks for having me, Ben.
- [24:50]
A
So for small business owners to start now, what are some of the key factors to consider when choosing a digital payments platform? Your area of expertise?
- [24:58]
C
Yeah, absolutely. That's a good question and one that we have thought a lot about. So I would boil it down to three primary characteristics. The first is probably security. So you want to work with a platform that is safe, secure and reliable. That's sort of table stakes. Next up, we focus on simplicity because that's what we hear our small business owners want. They don't want complex systems, they don't want multiple logins, they don't want to have to manage a bunch of different relationships. So we try to make things as simple as possible. And then last, I would call it the ability to grow. So you want a payments platform that can grow with you when you're a sole prop taking a single payment on a Monday to becoming a full blown multi store location. Those are different payment needs. You want to have somebody that can grow with you. Better yet if they can help you grow. There are now payments platforms, ourself included that help with demand generation or customer insights. So if you can nail all three of those security, simplicity and then growth orientation, I think you've got a good, you've got a good partner.
- [26:05]
A
And it's been a definite evolution. Right. Of payments. Right. It used to be, hey, it was cash and then, oh, maybe you started taking credit cards. And now there's so many more options. It's almost the reverse now where it's like, okay, cash is becoming less and less of a payment type and it's more and more other types where you see places that are just digital only, that don't take cash anymore. Yeah, what are you seeing out there and what does that journey looked like since Your time, you know, in the payment space.
- [26:31]
C
Yeah, don't want to date myself too much. But I mean, tremendous dynamic innovation in this space, really going back 15 years. So that is great for the small business owner. They're getting better services at a lower price. It is hard if you're an operator like me because you have to keep up with a very competitive marketplace. So three things that I've seen really kind of take hold over the last few years. We talked about simplicity, but think of like omnichannel accepting payments through in person, online or through mobile device. Customers want that to all be from the same provider. They don't want to have multiple systems. The next big sort of trend or evolution I've seen is what we're calling embedded payments. So we are increasingly seeing, and we are doing it ourself, where you embed payments into where a small business owner is going to be anyways. We know they're going to visit their bank account through their mobile application. Why not just put payments directly in their Chase for Business online mobile app, which we've done. Other folks are embedding payments in their point of sale software or their accounting software. So I think you'll increasingly see providers like us try to drive simplicity in the ecosystem and then finally everything's faster. Now people want to make payments faster and they want to receive payments faster and they want payments in their bank account faster. So those are probably the three things that come to mind in terms of like rapid acceleration over the past probably two, three, four, five years.
- [27:59]
A
How do you do it in a way that takes complexity out of the system? Because obviously small business owners, entrepreneurs, they're not, they want to handle the payments, but they don't want to necessarily deal with a lot of it technical work to make it happen. What are some of the things that have evolved as like overcoming the challenge of the complexity issue?
- [28:16]
C
Yeah, you nailed it. So we talk to small business owners all the time, more often than we hear. Save me money, they say, save me time. So we treat that as like a need or a job to be done for that small business owner. So when we looked at what we provided to our small business owners, you know, we have credit cards, we have bank accounts, we have payments. Sometimes we were underwriting customers three times, but we're the same institution. So back in sort of 2020, 2021, we said, well, that's not efficient for our small business owner. So now when you get a bank account, a complete banking bank account, you get your payments built in, you click two buttons, all Of a sudden you can accept payments, you can tap your card on phone, you can send a payment link. That was just one small way that we are trying to make small business lives easier. We're also putting everything in our mobile application so they just go to one portal with one set of login credentials and they can see all their payments activity in the same place that they see all their bank account activity. So small things like that that we hope save time.
- [29:19]
A
So along with the speed dynamic, it's balancing security.
- [29:24]
B
Right.
- [29:24]
A
And I think one of the challenges always is like you want to be faster, but you also want to make sure that the payment is legit. And I think for small business owners and entrepreneurs, they're always sort of say, yes, I want to be faster, but I also don't want to be giving money back when it's not a legitimate transaction. What's been the evolution on the security fraud front? Because it's a common a concern for all business types from the entrepreneur up to enterprise. What are you seeing as sort of the improvements and innovations to help tackle that and what are some of the challenges still to be overcome?
- [29:55]
C
Yeah, you're hearing what we're hearing as well. So fraudsters, as we call them are just increasingly sophisticated. They are doing, they're changing their tactics real time based off of the environment around them. So what we are trying to do is protect our customers as well as we can. We don't want them to be subject to a social engineering scam where someone gets their credentials, then gets into their account and starts to wreak havoc with their financials. That's a worst case situation for us and the customer. So what we are doing is we're upping our game on authentication. We want to make sure you are you. So when you're logging into your application, when you're walking into a branch, when you're opening an account, we want to do everything that we can, maybe even through biometrics, to make sure that you are you next. We are doing a lot of investment on our back end to do real time fraud monitoring. So we have incredibly smart people that are spending an immense amount of time and resources running models to make sure that the behavior that we're seeing foots with the behavior that we think we should be seeing. And then lastly, we are feeding that back to our customers in the form of real time alerts. If we see something suspicious, we're letting our customers know and saying help us out. Was this you? If it was you, this looks suspicious. Can you send them some more Pieces of information. The last thing that we want to do is send funds or send money to the wrong place.
- [31:16]
A
So what does that look like for a business owner? Because as a consumer, obviously, yes, you'll get an alert on your phone saying, hey, was this transaction yours? How does that look for an entrepreneur, a business owner that's dealing with maybe the same, same types of things. Do they get an alert as well? What does that look like?
- [31:31]
C
Absolutely, absolutely. So imagine that you're a small business owner who has told us when you onboarded to your account that you're in a certain industry generating a certain amount of revenue with a certain ticket size, transaction size, and then all of a sudden we get a transaction that totally does not match that profile. Say you usually say, okay, I'm going to take $20 transactions and all of a sudden you have a $10,000 transaction. We will say, that doesn't seem right. Hold the money, reach out to the small business owner and say, please tell us more about this transaction. Is there a corresponding invoice, Is there a corresponding receipt or other pieces of information that will help us do the necessary due diligence to make sure that it was the right people making a transaction for the right amount and that we can then put the funds in.
- [32:17]
A
The right place and so are you. How's your optimism level on sort of this battle against fraudsters? I know it's. You hear headlines every day. It seems like it's. It's a stalemate. But obviously innovation can sometimes rule the day.
- [32:30]
C
We have equally smart people fighting both battles. So I think it is not a problem that will be solved. I wish I could say yes. I think in three years there'll be no more fraud in the payments ecosystem. That would be a very naive thing for me to say. What I can say is that we are fighting fire with fire. So we are hiring incredibly smart people. We are putting incredible amounts of resources behind this. I want to say that we'll do better than a stalemate, but I think this is going to be an ever evolving battle. It is not something that will be complete or done or final at any point in time. There's just too many smart people out there trying to game the system.
- [33:08]
A
Yeah. And thankfully, too many smart people also trying to prevent them from getting to it. Let's talk a little bit about data. It's sort of the lifeblood for most entrepreneurs and small businesses. How is the evolution of the data that you can get from a transaction changed, let's say in the last five years from where it Used to be you had your receipts at the end of the day and now you're able to get more. What is happening in the innovation on the data space that has, you know, that is would be of interest for the entrepreneur and small business owner crew?
- [33:40]
C
Yeah, great question and one that I am passionate about and we're passionate about as a firm. So you said it. Payments transactions create a tremendous amount of data. There's good and bad sides to that. The good side is there's real gold in that data in terms of insights and how you should run your business. The downside is it's incredibly hard to harness. So we know that small business owners don't necessarily have a dedicated analytics staff to parse all this information, but we do. So what we have done is we've taken some of those very smart people that I talked about a second ago and said take all this payments data and then feed it back to our small business entrepreneurs in a way that they can understand and action. So we will take transaction data, anonymize it, and then feed it back through our mobile and web application and give them trends on their sales or we'll tell them about customer demographics, or we'll tell them about transaction periods in their shop. Then what we've actually seen, which is very cool, we've seen small business owners make real time decisions how to market, where to place a store, how to staff their store to save money. So it's been very fun and we have some great anecdotal stories from our small business owners taking that information and then changing and improving their business because of it.
- [34:57]
A
Is there a specific anecdote you'd like to share about that in terms of like what, what's helped a business owner grow from using this data? Because I know in the past you would get a spreadsheet of your data, your sales for the day, but then you would have to kind of analyze it yourself and look for the trends in it.
- [35:11]
C
So two small business owners actually here in the Chicago area running a retail business, were one of our first sort of test users of what we call customer insights. That's the name of our feature or application that we're giving our small business owners. They're hesitant, small business owners hesitant at first, but they really got into the data and what they actually did are two of the examples that I mentioned. They changed their staffing levels because they were seeing peaks and troughs in terms of when people were coming in and they adjusted their staffing models accordingly. And then second, based off of the customer demographics and locations of who they were attracting. They changed the marketing tactics so they actually went into different neighborhoods and used different modes of communicating or finding merchants than they were before. And according to them, they've seen real improvement in their business operations. So very fun way to have impact at a very nitty gritty level with some of our most trusted customers.
- [36:06]
A
And saving some time, I imagine, in the process, as you mentioned.
- [36:09]
C
Absolutely.
- [36:10]
B
All right.
- [36:11]
A
As you look ahead, I'm sure get pitched by a lot of different innovations and technology providers out there to come at you to say here's the next greatest thing. As you look out and say let's say the next one to three years, what are the innovations that you think will be sort of key towards driving growth for small business owners, but also just growth in the space overall? What has you excited?
- [36:31]
C
I'll double down on something I said before in terms of a trend that I think is going to accelerate, which is accessibility. Right now we want to meet customers where they are and where they're doing business. So that might mean on your phone or that might mean online or that might mean in your brick and mortar store. You probably talk about it too much. But think of AI, all the new LLM tools that are out there, that's going to increasingly run into commerce interactions and banking interactions. So I think you are going to see providers like ourselves figure out a way to meet a small business owner's needs when they're using tools like that. Could be shopping across the web, could be agentic AI, which you may or may not have heard of. I think that's where this is headed. And a trend that will probably increase in speed, probably sooner rather than later.
- [37:22]
A
When you say where they are, is there an example of that of like, you know how that's changing and what's this technology is enabling business owners to do more of which they couldn't do before?
- [37:31]
C
Yeah, absolutely. So I have the fundamental belief that there will always be bankers and there will always be branches. Money is a very personal thing. They're going to want to have a real human to talk to at certain points of time. So there's always going to be a model for bankers and branches. But increasingly a small business owner isn't going to want to have to go to a branch to see what their payment information is or get their customer insights. So we have started with feeding as much as we can into our mobile application and then our online application. So say you're a small business owner working at 2 in the morning, branch might not be open, but you can go online and see where your payments are at. You can see that check on your invoices that you have sent. You can check on your cash flow. That's what I mean by meeting payment, meeting customers where they are. We have a small anecdote, but a mobile tattoo owner in Dallas who frequently does his work in the middle of the night and he wants to check on his payment status and he wants to know whether we're up and how many payments came in. Yeah, he doesn't have the ability to go to a branch or call a human. So he just goes online or checks on his phone and can see the activity that he needs at 2 in the morning in Dallas.
- [38:41]
A
Yeah. Entrepreneurs can say business is not a 9 to 5 thing, it is a 24 7, depending on what industry you're in.
- [38:47]
C
His was an eye opening experience for us for sure.
- [38:50]
A
Absolutely. Well, John Ferris, thanks for sharing your insights with us and thanks for joining the podcast.
- [38:54]
C
Yeah, thank you, Ben. I appreciate it.
- [38:56]
A
That's all for this episode of the Experience. Thanks again for joining us. I'm Ben Baer for In Custom Studio. My producer is Blake Odom.
- [39:05]
B
Panoply.