By Paul Nemirovsky
My company, dMetrics, was selected as part of the 2017 FinTech Innovation Lab cohort. Since wrapping up the program with Demo Day in June, I’ve had a chance to reflect on exactly what we got out of the program.
Unlike most of the Lab’s companies, dMetrics wasn’t started to serve financial clients. Neither my partner Ariadna Quattoni nor I have a financial services background. We have never worked for a bank. We started dMetrics out of MIT, where we got our PhDs in machine learning. Until we entered the Lab, our knowledge of banking and its problems could be summed as “banks got a lot of money, and suffer from a lot of fraud”.
Unsurprisingly, our AI platform is not bank-specific. We pride ourselves on having the most accurate NLP algorithms, outperforming every market leader, let alone the small guys, but we knew nothing about the banks’ problems or their ways of doing business. Our experience as a company up to June 2017 had been primarily in the healthcare industry—delivering patient insights to large pharma. In healthcare, our platform sifts through millions of websites and extracts every minute decision and motivation of anyone reporting a medical event or experience. So, while we did have the largest repository of patient reported outcomes, we weren’t a fintech company, by any stretch.
This is the picture that we presented in our Lab application – clueless about the industry, with some ideas of how our fully functional, best-in-class AI platform could deliver a real paradigm shift in how banks work, were it trained for their purpose.
I learned about the program and applied to it after continued prodding by one of my good friends from Enigma, whose company went through the program a couple years prior. We applied without any expectations given the gap between our knowledge and the complexity of the financial industry. I was also hesitant about the 0.5% equity grant required by the Lab (that said, this is nothing compared to the larger amounts, sometimes tenfold, asked by other well-known incubators).
Was it worth it? Put simply, it was the best bang for the buck we could’ve hoped for. The program is a down-to-business, drink-from-the-fire-hydrant stream of knowledge we used to take a platform and convert it to a solution banks need. Imagine refining your pitch not with VCs or well-meaning friends, but with the very people that will buy from you – and without incurring the risk of losing them as future clients. Our very first meeting in the program, I pitched a large bank only to be told by the senior person in the room “I did not understand a thing you said —but let me repeat it back to you the way that would excite me”. And he did. We’ve had the opportunity to try literally dozens of iterations of our pitch during the program, and get immediate and frank feedback.
Imagine having an SVP with 15 years at a particular bank listen to your pitch and list on a napkin seven group heads that should hear your pitch. And then setup the meetings with all of them over the next three weeks, including two for 10AM tomorrow. If you’ve ever worked in a bank, you know that this scenario is nearly science fiction — but it has been our experience in the Lab. It’s also an obstacle—you’ll need to come prepared to take it all in very quickly. But that pace refined our approach. These days, when meeting with banks, nobody seems confused — our value proposition is clear.
Another intriguing aspect of the program is intimate meetings with some of the major financial players. We met Henry Kravis for a long and surprising chat; James Gorman for a very frank view of how to work with a company of Morgan Stanley’s size; we met leaders of four of the financial regulators in a single daytrip to DC. For someone like me to go from not knowing anything about finance to having a continued conversation with a cofounder of KKR in the space of a couple months is eye-opening, exciting, and a way to stimulate thinking into overdrive.
The relationships we formed continued after the program. I keep in regular touch with a bunch of bank leaders I met through the program. Of the 10+ banks, insurance companies, and hedge funds we’ve interacted with during the program, only one conversation went dead. There is no chance that we’d have anywhere near this kind of access without the Lab.
A word of caution: FinTech Innovation Lab is not an incubator program, nor does it present itself as one. If you have no product, and are still in the ideation phase, you might not be ready for the Lab. If your product is already in production at 10 banks, and you are looking to get into 10 more, much of what the program offers might not be a good fit. Those of you in-between, where your product is real, and ready to be scaled in the financial market, I’d strongly encourage you to apply.
Paul Nemirovsky is the CEO & Co-founder of dMetrics.