E681: Tala founder Shivani Siroya on transforming microfinance & loans in emerging markets

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Hey, everybody! Welcome to This Week in Startups. I'm your host, Jason Calacanis. You can follow me on the Twitter and the Instagram @Jason, uh, Snapchat @JasonCalacanis. I don't really do much there, to be honest. I should. Um, and You can find us on the web, thisweekinstartups.com, or you can type This Week in Startups into any podcasting app. If you love the show, go ahead and write a review. If you don't like the show, email me, jason@launch.co, and tell me how I can make it better. But we're 600 or 700 episodes in, so what you see is what you get. Um, every week we do 2 episodes. Usually on Friday, we do the news roundtable, and on Tuesdays, we do an interview with a fascinating founder. And the way I find— Fascinating Founders is not through people pitching us. In fact, when people pitch us, hey, I'd like to have my founder on the program, we generally put them in the throw their hat in the ring category, which is, we're not gonna have them on. Nope. The way we pick guests for the program is Emmy Award-winning producer Jackie talks to our friends who angel invest and invest alongside us and say, hey, what's interesting in your world? Anything you've invested in that you think is brilliant? And, uh, one of the most uh, savvy investors I know is Chris Sacca and his partner, Matt Mazzio. They've been on the program before. And they said to me, uh, you need to meet Shivani Siroya. I got that right?

Yep.

Shivani Siroya, welcome to the program. She is the CEO and founder of Tala, which is tala.co. Do you just call it Tala?

Just Tala.

Uh, .co. And she's brilliant. And Chris told me, hey, I never join boards. I know that about Chris. Uh, even though a lot of people have wanted him to be on very famous boards, in fact. Um, he doesn't think that's a great idea or use of his time, but for some reason he joined your board, and he's really into your business. In fact, he said this is the business that he thinks is the biggest upside and the most impressive in his entire portfolio. You've heard him say this?

I have.

Why does Chris Sacca think this? Welcome to the program, by the way. Uh, what is it that Tala does, and why is Chris Sacca so bullish on it, do you think?

Uh, so I'll get— maybe I'll go into the, the bullish part first. Um, I think the first reason is You know, the problem that we're tackling, it's massive, right? So there are 3 billion people around the world that are currently underserved from financial services. And so, I mean, when you think about the market opportunity of a startup in, you know, Los Angeles that's focusing on Americans here, right, or just the US market, you're looking at maybe opportunity size of like $70, $100 million.

Sure.

And when you look at what we're dealing with, I mean, yes, it's a massive problem, but if we solve it, the opportunity is 3 billion people.

So you have 3 billion people who Who are underbanked, is the term you used, or the term they're using?

I used underserved.

Underserved. These are people without bank accounts, without ways to transfer money, is that correct?

So it's everything from they don't have bank accounts, they don't have access to formal credit options. So it's not just, oh, I don't have a checking and savings account. It's actually, I don't have access to traditional loan products, to small business loans, to insurance products. And then the last thing is actually, it's even if you have a bank account, it's the fact that you actually can't move up the system. So you're pretty much just kind of landlocked.

And this is important. Why? And which countries are you addressing? I guess when we talk about these 3 billion people, is it India? Is it China? Is it Africa? I'm assuming it's, you know, Europe and the West seems to have done pretty well in terms of banking products. Seems like we have too— our problem is we have too many, right? People have too many credit cards. We're talking about a group of people who have too few options to get money advanced. What regions are you talking about?

So we're talking about emerging markets, uh, but we are really talking about all of the above.

Oh, okay.

Yeah. So currently we're working right now in East Africa, and then also Southeast Asia, um, but exploring Mexico, India, looking at Eastern Europe, Latin America. I mean, the problem exists everywhere.

Okay. So what is the product then? How do you get this group of people who are underserviced, underbanked is what I hear other people say. You like that word underbanked, or is it just too narrow?

I mean, I think it— when you say underbanked, it focuses really on just the people that are outside of the financial system. And I think when we think about it, it's people even who have bank accounts are accessing our product because they're just fed up with traditional banking.

Got it. So what is the product you're building for these underserviced, underbanked, underloaned, underfinancial-instrumented, as it were?

Right. What we've built is an Android application that allows us to score someone in about 20 seconds. Just using the data on their phone. And then, in addition to that, our company makes a credit decision to lend to them in that 20-second timeframe, and we act as the lender.

Okay.

So, all within your app on your phone, you download it, we get— we score you, you answer about 8 questions, and then in about a minute, you have money in your account.

So, I take out my Android phone, you get some permissions, you examine my phone, and then you determine how creditworthy I am. In other words, my FICO score, Is determined by— my credit score is determined by my phone in some way, and I guess these 8 questions, uh, and then you give me money within a minute. So does that mean you're looking at how the model of my phone, and if I have a Samsung 7, I'm worth getting a $1,000 loan, and if I got a Samsung 3, I'm worth a $10 loan? Or— Kind of.

I mean, so it goes a little further into it, right?

Yeah, take me into it. Um, what signals are on my phone Yeah. That let me be bankable. It's bizarre and interesting.

So what I did previously before starting this, I did a lot of interviews. So I did about 4,500 in-person interviews.

4,500?

Yeah. Even more actually.

Wow.

Across West Africa, Sub-Saharan Africa, and in South Asia. And what I started to think and realize was that, you know, the way that we score people, right, it should be really based on their daily life. Because if you're thinking about short-term credit and kind of what we're talking about, which is the equivalent of our credit cards, right?

Yeah.

I don't really want to think about what happened 3 years ago. I want to know if at the end of the month you can repay this loan, right? And so in that way, I became kind of like a walking QuickBooks. I wanted to know what people did with money, how much money they made, and then from there, actually going to the grocery stores with them, going to the market, you know, following money around. And then over time, started to realize, hey, a lot of the data I'm collecting is now actually sitting on their phones.

Got it.

So in emerging markets, when someone pays their electricity bill, or they get paid from their employer, um, they're actually getting a receipt that's sitting on their device.

Ah, so in their email—

In their email, their text messages.

Or text messaging is some piece of information. So if you can go in there, you can say, hey, I know that this number, this SMS came from Whatever the Bank of America is there. So you've confirmed it. And you'll know my GPS locations. Does that play into it?

It does.

Where I go? So if I'm going to a bar until 3 in the morning, I don't get a loan or I do?

Not— I mean, again, it's not mutually exclusive, right? So where your location may play into it is, let's say you say, I'm a small business owner and I run a food stall in this particular area. If we never see you in that food stall, you know, what we're doing is really verifying what you tell us and the other data points using location data.

Got it. So there are privacy issues, I guess, in a way, but I'm opting into it.

Totally.

So when you get your FICO score, whatever, you're opting into the examination, which is going to be deep and thorough. But this is a level that's deeper and more thorough than maybe a traditional one, or just different, I guess.

Well, and the reason for that is these kinds of records on customers like the ones we're targeting just don't exist, right? So there is no FICO score equivalent for them right now, right? Um, and that's why they're facing these problems. They don't have credit histories or even paper receipts to actually prove.

Okay, so from what I understand, I'm looking at my notes here, you've made 449,000 loans. That's accurate, or is accurate at some point?

Uh, I think back in during the summer.

During the summer. Okay, so about a half million loans.

Sure.

Um, They're worth, um, $3.2 million. Is that monthly loan value? So every month you do $3 million loans?

Right. So a little more now, but we've done, uh, a little over $22 million in about 11 months.

Got it. Now here's where it gets interesting. 40% of the people who borrowed money were referred by somebody who had already borrowed money.

Yep.

So that means I'm putting my name on the line. For somebody else, that's got to help in terms of— but 92% repayment rate. That is extraordinary for this region. How does it compare? I'm assuming it's extraordinary for Africa.

It's extraordinary for—

How would it relate to America?

Oh, it's actually much higher than what we see here. Really?

So Tala is overperforming, has better performance in Africa than a regular loan company would have in America.

Yeah.

So we've actually done some benchmarks against traditional credit scoring companies, so specifically TransUnion, and we outperform them. But I think the other piece here is the fact that we don't even meet customers in person or pick up the phone, and these are completely unsecured. And so to achieve a repayment rate like that using completely untraditional data, that's the stuff that's really exciting to us.

So you're not even meeting them in person. You're using an automated process. The people in the United States would be meeting them in person, getting them to fill out forms, asking for an ungodly amount of paperwork to give a loan.

Yep.

In the equivalent type of loan, is that about it?

In the equivalent type of loan, yeah.

Yeah, because these are small business loans or mortgages? What are they?

These are small business, primarily working capital, um, and then about 20% is consumption or consumer.

Okay, so I need money because I'm going to go on vacation, or I had an unexpected expense, so I just need, like, almost like a payday loan, would you call it?

I would really think about it as our credit cards, right? So, I'd really think of it as this is a revolving line of credit. The majority of customers use it as a working capital loan. So, they are using it to go get inventory, whatever expenses they may have related to the business. And then on the consumer side, which is, again, the same owner can be a business owner and a consumer.

Yeah.

They're using it as purely for, you know, consumption or personal reasons.

All right. When we get back from this important partner message, I want to know, um, how you handle all the government regulation in these parts of the world, where if it is underdeveloped, and it's the developing world, I'm going to assume that the governments might not be as enlightened as other parts of the world, and how you deal with navigating giving loans to hundreds of thousands of people in the developing world. When we get back on this, we interrupt. Hey, everybody! I'd like to welcome a new partner to This Week in Startups. Our family continues to grow as our ratings and the viewership program continues to grow. All these great guests, and, uh, our latest partner is Dollar Shave Club. I love this product. I have been shaving every day with the Executive Blade. I love it. I've never gotten such a clean shave. Uh, I've been using this Dr. Carver's Shave Butter that they do. It's the smoothest I've ever had. It's like this really thick, buttery— you rub it into your beard, and And then this executive blade, I have to say, I've had to adjust my shaving because my old blades, I had to like really dig in there. Now I just glide it right down with that executive blade and love it. You can go to Dollar Shave Club right now, pick a razor from the lineup of amazing blades, and you never have to deal with the drugstore hassle or get these locked-up razor fortresses ever again. You can just very easily get them delivered right to your door. And it's really cool. The packaging is very tiny. It's very discreet. You have this nice little bag. You open it up. And it— I don't feel like it's wasting any, uh, environmental problems or anything. It's just very efficient. And never having to go to the store again or think about my shaving again and just having that daily routine taken care of. And I'm throwing the blades away and I'm using fresh blades on a very consistent basis. I've locked in to Dollar Shave Club. It is the answer, uh, if you want to get a great price and have quality. You're not gonna make a decision over quality or price. You're gonna get Incredible quality at an incredible price. I absolutely love it. So here's your call to action. This is what you got to do if you're a super fan or if you shave. Dollar Shave Club is so confident in the quality of all their products that they're going to give you the first month free. That's right. Just pay the shipping. After that, it's just a few bucks a month. No long-term commitment. No hidden fees. Get the first month free. dollarshaveclub.com/twist. T-W-I-S-T. dollarshaveclub.com/twist. dollarshaveclub.com/twist. I absolutely sincerely love the product and been using it every day. You will look, smell, and shave like a million bucks without paying for it. Literally, you know, I don't need to read commercials for a living. I've done okay as an angel investor. I would not steer you wrong. I genuinely have gotten the best shave of my life with their executive blade. It is amazing. Go ahead and go to dollarshaveclub.com/twist. And Get the best shave of your life at a really fair price. And just think of the cognitive overload. You never have to think about shaving again. I love it. All right, let's get back to this amazing episode. Hey, everybody, welcome back to This Week in Startups. My guest is Shivani Siroya. She is the CEO and founder of Tala.co. Tala is the name of the company. Tala.co is the domain name. And her company extends credit to people in the developing world. And it turns out, it's one of Chris Sacca's favorite investments. Chris, as you know, is a co-investor with me in the first round of Uber, and he also did Twitter. And he says it's the most exciting company in his portfolio. And when I left our hero, we were talking about working in these regions. How do you— navigate emerging markets? My understanding is that a lot of these markets are not super friendly to new products or services. Is that correct, or is that just, uh, you know, the imperial West's view of it?

Yeah, it's actually, I think, our point of view.

Okay.

Um, when we look at the U.S. regulatory market, it's actually way more cumbersome. When you look at Kenya, it's actually become kind of this hotbed of innovation. And so in terms of doing this kind of lending product, there is actually not a lot of regulations around it.

Wow.

They want innovation. And so I actually think of it as governments are saying, hey, look, we know we have huge populations of the market that are underserved or underbanked. And what we want is for new innovations and companies to come in. And so it's not necessarily, like, going to be the same across all markets. Uh, but what we do on our side is, is very similar to the Ubers of the world, create a playbook, and kind of tackle the ones that are going to be easiest first, um, where the most opportunity is, and then start to think about, like, what are our long-term plays?

And so is Kenya the, the, the foothold? Is that where you have the most loans? Is that like the majority of your activity?

It is. Yeah. It's where we first launched.

Got it. And so how long have you been operating there?

Uh, it's been 2 years.

Got it. And you have people on the ground there?

We do.

Yeah. So what percentage of the pop— I'm not sure how big Kenya is, but how many people in Kenya have been touched by the product so far, and what has the impact on Kenya been? Is there a discernible impact on certain communities or certain towns? Has this, like, changed people's fate and lives?

Definitely. So the population of Kenya is about 44 million people. In terms of, you know, where we are in the market, we've had over 500,000 people now go through this platform.

Wow.

In addition to that, I think when we get into some of the fun data points, you'll see how this is really applicable across the entire market. And so on our end, we've actually been able to now build models that allow us to score everyone, which is the thing that kind of takes what we do to the next level.

Score everyone means everybody in the country, not just the underbanked or underserviced.

Yeah. And what we think of is not just people who have an Android device, Ah. Um, but actually anyone with any kind of mobile phone number.

Got it.

Um, which is very stunning.

So you can find somebody who has an iOS device, who would be higher end by definition, especially in that region of the world where an iOS device is what, 5 times more expensive?

Totally.

10 times? I'm not sure.

5.

5. Yeah. So that is a signal that you're much more affluent.

Yes.

Almost 100% of the time, but you don't have the ability to read the core data on an iPhone. Is that the issue?

Yes.

So that actually works out for you in an interesting way. Android is what the people who most need these services use, and it's the most open platform. So on iOS, because of the closed ecosystem, you can't rip out the data you need, or you can get half the data. What percentage of the data can you get on an iOS device?

So you can get— I mean, again, it'll be application by application. Um, but it all— I mean, you'll be able to get some of the underlying device data, and then the operating Operating system data, and then whatever you're collecting through your own app, or your own channel, but not anything from other applications.

Got it. Does it matter who my friends are? Because I've been pitched on many times, people saying, we're gonna make a FICO score based upon your social graph. That, to me, sounds a little suspect, because I have a lot of friends who are mooches, and I've loaned money to, and never paid me back. Or, you know, just, I wouldn't go I might add you as a friend on Facebook or Twitter or follow you, but I have no idea how creditworthy you are. Is the friend graph part of this, and is the social graph a good measure, or is the phone's behavior and your location a better indicator?

Financial transaction data is always going to be the most useful. Those things that I was mentioning— your utility bill payments, merchant transactions, payroll data— That gives us just the capacity. Then this other stuff, it really predicts your likelihood to repay us. So are you just like someone who's not going to be fraudulent?

Yep.

And kind of a good person, right? And then that gets into more of the behavioral features of— like a really fun one that we have is how do you organize your phone book, right? So if I was to look at your phone book right now, if more than 40% of your contacts are listed with first and last name, you're actually 16 times more likely to be a good borrower.

So if I'm more detail-oriented in putting people into my phone, as opposed to just putting Siroya or Jason or whatever, Jason C. or Chris S., I'm less creditworthy.

So again, that's one variable in isolation.

I'm less creditworthy. My phone book is a mess.

But I mean, it's really interesting, right? Because it gets you to start to realize it's not just the data, but it's It's the stories and the context behind that data.

Yeah, because for me, I just have so many imported with so many different social networks that it's just a huge mess, and I don't have the time because I'm too busy to actually clean it up. But for people who are loosey, that could be a sign that you're kind of loosey-goosey.

Or it could mean, you know, maybe English isn't your first language. It could also mean that you have a kind of crappy Android device, and so it's cumbersome to actually type in all those letters.

Interesting.

Um, or the, the kind of job you have doesn't warrant it, you know.

So financial transaction is number one. That's the majority of what you look at, or half of what you look at?

I mean, we bring in about 10,000 different data points per customer.

Wow. How many of them are relevant, does it turn out? Have you gotten to that point yet, 2 years in, that you've actually learned, like, this signal, we're never gonna get anything conclusive, but these signals are the conclusive ones?

Mm-hmm. So what we've done is interacted variables.

Uh-huh.

And so we have about About 350 that go into the model now.

So basically, if it wasn't for big data and the ability to manipulate large amounts of data and the open platform nature of Android, you couldn't actually do this business, could you?

No.

Fascinating. When did you first have this realization that— I mean, a lot of people had the realization that people are underbanked, and it's a problem. People are hiding money under their mattress, and they can't save, and they're getting predatory loans. I mean, that was pretty clear to anybody who who's been paying attention that this is a problem on the world stage. It wasn't clear that this would be the solution. So when did you actually make that realization that, hey, if I had access to their device, that I could actually make some kind of a judgment about the person and their ability to repay?

Yeah. So that was actually a— it was a real-life story.

Yeah.

Let me hear it. So what we had created right before this version was actually a system where customers could input their own data.

Right.

So they could actually put in revenue and expense data and tell us about themselves. And we were using that to then, you know, create the credit score. In 2013, I was training a customer in Kenya, actually, on the product. And he's like, hey, this is super cool. Thank you so much. I'm really excited. I'm going to use it. And I was like, is there anything else you want to tell me about yourself before I leave? He's like, yeah, you know, It would be really helpful and so much easier for me. And he pulls out his Android phone. He's like, if you had an app for this. And I was like, well, what? I just spent the last hour with you. Why didn't you tell me you had another phone? And he's like, well, you never asked. Right.

You just assumed he didn't have an Android smartphone.

Totally. And so ever since like that meeting, I, the rest of my trip, I just started asking everyone.

Yeah.

And started to realize these phones were so prevalent in the market.

Yeah.

Um, and then as we started actually getting into the device and thinking about what are the receipts and confirmations that people are receiving, then it was kind of a no-brainer.

Yeah.

So between the end of 2013 and March of 2014, we developed the app and got going.

Was it originally just the idea of being like, oh, this is just a quicker way to get the financial transactions in? It's sort of like auto-import, like Mint lets you authenticate and Yeah. Upload everything. But when did you make the realization that behavioral data on the phone could also play a part, or the model of the phone, or whatever other, you know, indicators, what apps were on the phone? When did those variables come into play?

Pretty soon after we started lending. But, I mean, we started by doing totally blind lending. So, actually, speaking of Chris, we went to him in our board meeting, and I said, you know, look, I've got this experiment I'd like to run.

Yeah.

We have no idea if these, uh, features are going to be relevant or not, but we've got to put money out there and actually see if it works. And there is a correlation.

So you just started giving money away to see if there was anything related to apps or location or phone book, and then you started seeing it.

Right. And obviously, I mean, I think given all the interviews I had done before, I knew that, you know, inherently having behavioral or daily life data Coupled with the financial transaction data. That's what I was doing manually.

Right.

And so then it was just how—

It's like being a detective, isn't it? Like when you're a loan— is it called a loan originator or a loan officer?

Yeah.

So they're almost like detectives. They're trying to figure out, like, is this going to get me a return or not? If this person defaults, it looks bad.

Exactly.

Yeah.

You can think of it as a scientist, even, you know, they have a hypothesis going in. And then, in a way, you become sort of an anthropologist, too, because culturally, every market you go into is going to be a little different.

Interesting. So, um, do apps play a role? Like, if I have a lot of games on my phone, am I less creditworthy or more creditworthy? If I spend a lot of time in social networks, am I more or less creditworthy? If my social graph is bigger or smaller, am I more creditworthy?

Again, uh, it all matters together, right? But a fun one that we have is, we found this actually in the Philippines. We saw that people who had zombie games on their phone as an app, neutral correlation to repayment. Racing games on their phone, again, neutral. But zombie racing, bad.

Interesting. This is good news for me because I have the zombie— I've had a zombie game or two, but I don't have any racing games.

Yep.

So I'm good. So I wonder if that correlation is they're just too adrenaline junkies, or they're just too into games, because they're into 2 categories of games. So maybe they're just too distracted to be productive in society.

Exactly. And, I mean, think of the, the person that's going to search for the zombie racing game.

Oh, I see. It's a zombie and racing game?

Yeah, it's combined. Zombie racing. So it's zombies racing.

Got it. Interesting. So, oh, I thought it was like 2 different categories of games. We have racing games and zombie games. No, specifically the zombie racing game, no good.

Yeah.

Yeah, you're just— you know what? Pick one.

Exactly.

You're just too intense.

That's too much time on your hands.

Way too, too much time on your hands. All right. When we get back from the second break, uh, and our last break, uh, I want to ask you about the possibility of moving this to the United States and to other developed markets. It seems to me that if you can figure this out for those markets, in these markets, there might be even more data to go on. And if that might, uh, eventually lead Tala, which you can go visit at tala.co— T-A-L-A dot C-O, sorry, not dot com, dot C-O— um, if that might lead you to eventually bring this to the United States, when we get back on This Week in Startups. Hey, everybody. Let me talk to you today about underwriting. Yes, Underwriting 101. You see, in business, you need a partner who can accept payments for you, right? Credit cards, or Apple Pay, Bitcoin, whatever it is. But before a payments platform can actually begin processing your transactions for you with your very important customers, they need to actually underwrite your business. What that means is that they are now financially liable for the losses you face. That's good for you. They are taking the risk on your behalf. However, they need to understand the risk. So they're gonna ask you a bunch of questions. They need to know, how risky this is, if they're gonna underwrite you. And, uh, they're gonna look at some docs, and they make sure your business model checks out. Well, Braintree's approach to underwriting is incredibly thorough. Unlike others, the underwriting team looks at merchants individually. They really do get to know you, and they believe it— that every single business— they believe in every single one that they invest in. They really think about it. They're not just saying, we're gonna give everybody this. They're gonna underwrite people that they believe in only. And that's why they get to know you. And they'll stay by your side for many years to come, because there will be times when there's chargebacks or disagreements, That's just life. We all know that. We've all had this experience, either— on either side of the table, let's face it. So, if you want to learn more about underwriting and Braintree, go to braintreepayments.com/twist. Braintreepayments.com/twist. Braintree is used by all of my startups when they want to do payment processing. It is the gold standard. It's the standard that everybody uses, because it's so easy to do. You put a couple lines of code in, and all these complicated issues become easy. Uh, you know, the team over there is incredibly responsive and supportive of startups. I know this because I don't just read this, uh, ad read for them. I actually use the product. All of my startups use it. I hear about it. I hear how great it is and how quickly people can implement it. So go ahead and visit BraintreePayments.com/TWIST. BraintreePayments.com/TWIST. Very important that you put the /twist so that we get credit for the visit, and they like to know how loyal, uh, and productive our partnership is, and how great our startups are. So when your startup needs payments, go to BraintreePayments.com/TWIST. All right. Let's get back to this amazing episode. Hey, everybody. Welcome back to This Week in Startups. My guest is Shivani Siroya, S-I-R-O-Y-A, and she is the CEO and founder of Tala.co. And they're using your phone and transactions and app usage to figure out if you're creditworthy. We left our hero, Before the break, I was wondering, is this going to work in the United States? Have you run any tests here? Are you going to replace FICO next?

It's definitely something we think about.

Yeah.

We have had a lot of credit unions and other larger institutions reach out. I don't know if we will do our own lending here, mainly just because of the regulatory challenges.

Ah, it's hard to give money.

It is.

Yeah.

But we would like to help in some way and open up I mean, there's about 70 million people here in the US that are underserved and underbanked.

So you could give people a score, and then just sell the scores, like— is that what FICO does? Is FICO just a scoring agency?

Yep.

And Klout actually had this idea. You must have followed Klout.

I did.

What did you think of Klout's approach? Because that was a social-first approach, and they seem to— I know from looking at my Klout score, the more I added social networks, the bigger I became, and my Klout score did seem to correlate. But I did know people who were kind of knuckleheads, and didn't have big followings, who somehow got their Klout scores up. People have figured out how to game it. Was Klout a worthy kind of approach, or do you think it's too gameable, the social space, for what you do?

I do. We believe more in primary social networks versus secondary.

Explain the difference.

So, your secondary social network is Facebook, Twitter, um, Snapchat. It's kind of what you want the world to see. So I can go out and friend 1,000 people, and let's say 40% of them accept my friend request.

Reciprocation effect. Right.

Um, but your primary social network, which is really your text messages, your phone logs, your phone book, that's actually what we think of as the world interacting with you.

Right. Much more fun.

Which you can't game as well.

Yeah. Hard to game. Um, and so what have you learned from doing all of this? you know, in terms of finance in the developing world. We live in a world where credit, uh, where the ability to— money has become free, essentially. We have negative rates in some places, where you put money in a bank and it goes down over time because of inflation and just people not willing to give loans. Monetary policy seems to be not equally, um, distributed. And, you know, although all this money is being pumped into the system, it seem to make it to your audience. What is, what is the impact this is going to have on communities and just the world over the coming years?

Um, just one simple example is the fact that there's currently a $3.1 trillion unmet need for credit in emerging markets. And so if we think about just, if we can actually start to open up these markets, I mean, you're changing these economies, right? You're unlocking massive amounts of capital and tons and tons of spending power, which is going to lead to more jobs. And it's going to lead to a lot more commerce as well.

Interesting. Why, why haven't the big companies gone to these countries and, you know, taken this market yet? Why are they just— is it they're too busy making money in the West?

I think it— I mean, I think it, it does seem risky on the outside, right? So had I not actually been in the market, I may not fully believe in it.

Yeah.

I think that's one aspect. I think these customers are hard to reach, or people think they're hard to reach. And then there is the piece that we're talking about, which is, you know, until now, technology hasn't been available to make it so easy, so automated, and to really uncover all these different data points in the daily lives of these customers.

And so what impact is it having on people's lives in those regions? Like, so when they originate these loans, are they just buying themselves a TV set or a laptop, or are they using it primarily to buy another goat? Or like, we think of Kiva and those kind of things out there in the world. What is the impact on the individuals? Is it making entrepreneurship more tenable or more increasing the velocity of entrepreneurship in these regions?

About 70% is working capital. And so people—

For businesses?

For businesses, yep. I always think of it as each person that we work with usually has a side hustle. And so, for instance, in the Philippines, right, we're primarily, you know, the people that are using our app are college-educated, they're salaried, and what they're doing is using the capital to actually start something.

Ah, so they have a job maybe, and they want to do something on the side, they want to start a business?

Mm-hmm.

What are the typical loan sizes in the Philippines or in Kenya?

So you're looking at, uh, in Kenya, you're looking at about $40. Um, in the Philippines, you're looking at probably closer to $60 to $80.

These are tiny.

These are tiny.

But they could actually accelerate a business.

Yeah, because the purchasing power kind of comparison to the US, you can almost think of it as like 100 to 1.

Oh, so $50 here is $500 there. So, they could buy a goat, or they could buy a sewing machine, or they could buy another bicycle, or whatever it is.

Yep.

And they just pay back based on the goodness of their heart, based on their social belief that they should pay back.

Well, I think it goes a little—

Is there a ramification to not paying back?

Yes. I mean, there is—

What is the ramification? Because you're able to put a lien against them or file in the government to, you know, or send them to a collection agency? How does it practically work?

So we do all the servicing and collections ourselves. Um, but what we have done is actually started to do positive and negative reporting to the credit reference bureau. So what we're also trying to do is, is give them that pathway to getting into a traditional institution or really having that choice and control. over their financial lives. And so we believe it's important to do the reporting. In addition to that, I mean, like other lending companies, if you don't pay us 3 months after the fact, at that point we do charge you a penalty. But really, I mean, customers pay us back in, you know, 27 days usually.

Wow. So there are credit agencies there in some way. Are they government agencies or third parties, or it depends on the country?

You've actually seen a lot of Western agencies agencies coming in and trying to establish themselves. So you will have kind of a government regulatory body. In Kenya, you've got this thing called the Credit Reference Bureau, and then they are partnered with the TransUnions, the Experians of the world.

Okay, so if I don't pay back, I can get my credit dinged, as it were.

Yep.

So as good as you are originating the loans, there could be a bigger ramification for them down the road. They realize that, and then they can act accordingly.

Exactly. And we do a lot of education within the app. And so we want to make our customers fully aware that this reporting is happening. And we share kind of the ramifications and stories to make them understand, like, why is it good to create a credit history? Why is it good to repay?

I've heard that women repay more than men. Is that true?

It is traditionally true. At least that's what a lot of people have seen in microfinance. I think for us, we've actually seen about 50/50.

Oh, really? So why in microfinance has it become the common sort of knowledge that women repay much better than men, and in this category, it's equal? It's counterintuitive.

I think it could do with the fact that, you know, we're focusing on Android devices, and so you're already picking a segment that may have kind of the liquidity or the income to be able to pay for a phone like that. But I think the other piece is, you know, in traditional microcredit, women were being put into these groups of 10 to 15 women at a time. And so it was actually using the social pressure system. And so a woman is not going to let her whole group down.

Got it. So they would, as a group, say, we want to get a loan for all 15 of us, or we're somehow going to be related. How did that work?

Yeah, so each one of them could have a loan out.

Uh-huh.

Um, and if one of them defaulted, then the other members of the group were actually liable for that.

Oh, that's interesting. So that's an interesting peer pressure, kind of, we can't let each other down. But if one person does let everybody else down, it's not the end of the world either, because it's 1/15th of whatever the loan is, so it's not that big of a deal. Are these— what do these loans pay back? Because people are looking at Kiva and some of these places as a way to— and I don't know if anybody else ever hit scale. Has anybody else Have nonprofits in this microloan space hit scale at all?

Yeah, I mean, if we look at some of the traditional institutions, um, I mean, you are seeing very large numbers in these markets, um, but nothing to the global scale, I think.

Right. So they return— people are looking at them as not only a way to do good in the world, but to do well, to get returns. What are the returns like when you do these loans? Are they predatory loans, or Are they average loans? How— what percentage do people pay each month, each year? What would the annualized rate be, I guess?

We dynamically price.

Ah.

And so, again, it goes anywhere between 5% up to 11%. And then we also—

Is that per year or for the 90-day period or something?

Yeah, it'll be for the term.

For the term. So if you extrapolated, it'd be 4x that. So it's 20% to 40%. It could be—

It could be, right.

Yep.

So it's not predatory, but it's not cheap.

Well, the average APRs in these markets are about 350%. So it's dramatically cheaper.

Wow. So they're getting charged 20% a month by certain people. That's insane.

Yeah. And so, I mean, what we're doing is over time, as you have taken out capital, your rates actually continue to come down. And so there's a lot of incentives in there towards repayment as well.

So if I take out a loan and I'm at some high rate, 20%, Next time I take a loan, I might be at 15% or 10% over time.

Yep.

But you dynamically, based on the score, will give them a better rate. Yep.

So we'll dynamically price the interest rate, the size, and the term.

Huh. Fascinating. What do the governments in these local places, you know, think about— I mean, you said before they're unregulated, and they want something, so they're kind of skipping a whole generation and moving to these more advanced sort of services. Well, how do they look at you guys, uh, operating in their markets? Do they— are they supporting you actively, giving you funds to originate loans? Because people want to give stimulus. We always hear in the United States about giving stimulus, but it always goes to, like, some big construction company or to a big bank, and it never seems to make it down to the rank and file. You seem to be this, like, great hack to get the rank and file of the middle— lower middle class, it seems like. I don't know where you would categorize these people.

We, we call them the emerging middle class. So people that are now kind of moving out of subsistence and really focusing on quality of life.

I like the way you say it, because the way I would have said it would have been, these are poor people who are about to become part of the lower middle class. That's a little more blunt.

Right.

But that would be accurate.

Yeah.

It's how most people think of it. You said they were emerging middle class. Very magnanimous of you. And they're coming out of the— what did you call the poor in these areas?

Subsistence.

Subsistence. It's a more politically correct term for poor.

It's kind of saying the, the day-to-day needs.

Right. So you're just surviving.

Right.

Interesting. Yeah, I had to get, uh, some clarity. We don't call it the Third World anymore. We call it emerging markets. It's very politically correct. Uh, and so these, uh, people are coming out of, uh, just sustaining themselves on a day-to-day basis, but are in the lower middle class. It seems to me this is a great hack And a great vehicle, because we give so much money to the big people hoping for trickle-down, but we never have a way to get people in the rank and file to start understanding, or the emerging, you know, lower class, or middle class, or whatever we're going to call it. This group of people— so that, to me, seems like something that would work really well for the West, in the United States, or places we want to see the world become a little more just, and it'd be nice to see people be able to— take a $1,000 loan and repay it here. Are people doing Kiva in the United States, or is it just not allowed because of regulation?

Yeah, I mean, Kiva does exist here.

They do in the United States?

Yeah, they do. The difference is that Kiva is not a lender. So they, you know, provide capital to lenders, but someone else is making the credit decision. And so I think it could be really interesting if we could get products like this into the hands of consumers. It just puts a lot of that control in your own pocket, in your own hands, right? Instead of having to worry about what a retail bank is going to give me.

Retail bank would not bank these people in the United States, period.

They would not.

They would not. So this is very interesting. I wonder if you can nail these other markets. How do you make that decision as an entrepreneur of like, gosh, here we are in the United States. It's a smaller number of people, but they really could use this service. And then there's people halfway around the world. How do you make that decision of which market to go after?

I mean, I think it was kind of to your point. It's also thinking about the regulatory hurdles. And so as a startup, you know, what, what can we take on? You know, we're rebuilding the entire financial system and credit scoring. And so in that sense, I think that's our core focus and saying, how can we get this out into the most number of people? And that's going to be emerging markets.

This may sound like a dumb question, but I'm curious, what Android phones do people use in Kenya? Like, what are the brands and the models of these phones? Are these Nexus 6s, or are they like, um, how was it, Huawei? Or, you know, like Huawei?

Huawei?

Yeah. Are they Huawei phones, or what type of phones are they? How do they compare to the phones that we see here in the United States?

Yeah. I mean, you've got, you've got everything from Samsung, HTC. Um, you've got the Huawei phones. Uh, There is— I mean, there's a few other Chinese brands that are also in those markets. But, I mean, you can see really low-end Samsung devices.

$50, $25 is what they pay for them?

Yeah, $25, $50.

It's amazing when you think about the impact Android has had. And just— we're all— everybody here in the United States is lamenting, like, God, the iPhone 7 is so disappointing. It's like dual cameras, you know, and, oh, it's waterproof, who cares?

Right, the extra headphones.

Yeah, the extra headphones. It's like, ah, like, everybody here is just so entitled. And it's like, it's an $800 device, I think. I think $750 is the entry price for the new iPhone. I think it's probably more likely $850 if you're gonna buy the decent amount of memory. These phones are like $50, $25, and they function.

And they function, and they now give people access to credit. And I mean, it's, it's the things like WhatsApp, it's all these other, you know, simple apps That have totally changed the game, right? And that make it possible to run on $25 Android devices.

Oh, really? Because WhatsApp is just so slim and thin. It's such a thin client.

Yeah.

That you can actually use it without needing a massive processor or display. Facebook also makes thin clients in all these places, I guess.

Now they've also created Facebook, uh, I think Facebook for All. So it's actually zero data.

Oh, so they pick up the cost of the data or they pay the I think they carry—

yeah, the telco.

What do they pay on the telcos to have a phone in these regions? And what are the speeds like?

Uh, that is also remarkably cheaper.

Yeah.

Yeah. So like on our side, what most people are paying about $90 a month, at least for their phone bill.

It's unbelievable. I literally want to kill Verizon. I got like a $400 bill the other month. It's crazy.

And there you're looking at somewhere between $10 to $30.

$10 to $30, which is a lot because you're making $10 a day, $30 a day there.

Right.

Is that what people are making there? $2 an hour or something?

Uh, you're looking at, I mean, I would say about $30 to— I would, yeah, $10 to $30 a day is pretty accurate.

Right. So it's one day. I guess it's very similar for us then, in that $90 would be minimum wage here, essentially. Maybe, maybe it's just they base it on one day of labor and what it would—

I mean, but again, a lot of people— I mean, one of our really interesting signals is, you know, when we know someone has access to Wi-Fi, do they actually use it? And then we look at that in comparison to how much they spend on data plans. So we also want to understand, like, are you frugal?

Yeah.

And where does your money go, right? How do you decide?

That's another reason not to loan me money, because I'm like, literally was in my hotel last night, and I was like, should I connect to the Wi-Fi? That's gonna take me 7 seconds, and I have a data plan. I got dinged by Verizon for all these overages last month. OK, I'll take the time. But usually I don't take the time to log in, because I'm just like, I don't know if I want to be on somebody else's network. I'd rather be on the Verizon. I feel safer on the Verizon network for some reason. It feels more encrypted than a hotel one, which could be easily intercepted. I'm probably watching too much Mr. Robot.

You also have choices.

A lot of choices.

Yeah.

Um, so, where do you take the business from here? I understand that you've originated a decent amount of loans. Is that— are those loans like a separate entity, or is that venture money that you're loaning out? Or do you go get some Goldman Sachs or some marauding banks to give you money? That's my words, not hers. But to give you just money to loan out, and then you fund the business on venture? How do you put out $20 million on the street in Kenya?

In both ways. So we do our own experimental loans still, and we do downsampling, just to continue to refine the credit model.

Downsampling? What does it mean?

Lend to intentionally bad borrowers.

Wow. So you do a little— you know they're a bad borrower, how? Historically, or with you?

So on the spectrum of what our features are, they're on the very low end. So people that we don't want the model Um, but we want to know, are we right?

Oh, that's so brilliant. So you look at it and say, we are absolutely certain these people will be the worst.

Yeah.

Do you let them know that they scored the worst, and that you're giving them money anyway? Because that would impact the test, obviously, if they knew, right? By the way, you're— we've rated you as terrible, but we're gonna give you money anyway, just because we're testing it.

Well, we have, uh, different tiers in the app, um, and so a customer can actually see see their badge and kind of where they fall on the spectrum. Um, but they don't know the exact score. So they know, okay, I'm in the bronze category.

Yeah, you're in the bronze. So they're like, wow, I am. See, that's a very interesting thing. I think if you knew that people thought less of you, you might want to step up. Is that the case or no? They just, you correctly ranked them, they're bronze, and they're going to remain bronze.

No, I mean, it does improve over time. And so again, if If you keep repaying on time, and you're paying your other bills on time— because we score people at every loan. So we're not actually just keeping the score static.

And what about cryptocurrency in these regions? I know— was it M-Pesa? That's not Kenya, is it?

It is.

It is Kenya, has M-Pesa. So that is— explain to people what M-Pesa is and what impact that's had on the region.

Sure.

So M-Pesa is incredible. In the population of 44 million people in Kenya, 27 million people are on M-Pesa and are using it as a transaction method. M-Pesa is literally just a payment rail, or what you can think of as a mobile wallet, similar to Apple Pay, Venmo, any other mobile wallet you're using here.

It's run by the government or by a carrier?

It's run by a carrier.

A carrier created M-Pesa? M-Pesa as a way to have their own Venmo. And my understanding is, is people who run around who are like M-Pesa brokers, agents, agents, and you give them cash that you made at your job to buy M-Pesa. Uh, no, or just it puts cash in your bank account in Kenyan dollars, right?

So you can think of them as an in-person ATM. So there you're like cash in and out of the system.

And they're They get, what, tipped, or they get a little piece of the action?

They get a transaction fee.

Yeah, a couple of points or something. And then once you put it into your wallet, your digital wallet, then you can spend it.

Yeah.

How do you get— where do they spend it? Can they buy a cup of coffee or dinner with it, M-Pesa?

You can, yes. You can buy coffee, you can go shopping.

How do you do it? Do you touch your phone with NFC, or do you, like, type in a code and send the money to that code, or an email address like PayPal? How does it work? Actually, how do I put in the destination of the money?

So, uh, we actually have what we call a Paybill number. Uh, it's a 5-digit code. And so literally, you just punch in the code. Yeah, send it in.

So they can put money in and pay you off by putting in that 5-digit code. So it's almost like an SMS.

Yep.

Or is it an SMS?

It's, uh, it's USSD.

Ah, okay. So they're sending a message, and they just say, pay Whatever, $1,100 or $100, whatever it is, to this code, and then boom, they're done.

Yep. And they get a confirmation message letting them then— let them— letting them know that it was a successful transaction.

And if you want to get cash from your M-Pesa, you just go to the agent as well, the human ATMs that run around. How do you find a human ATM? Are they wearing M-Pesa shirts and walking around town?

I mean, there are a lot of them. Yeah. So I think there is about—

You've seen them? You've worked with them?

Yeah. There's about 200,000, I think, right now all over Kenya.

Yeah, that's insane.

Yeah, I mean, it's the same thing. I mean, if you think of it, if they are an ATM, you need to have a lot of them.

Yeah, and in this case, you have one for every 200 people. 1% would be— yeah, you have one for every 200.

And then in addition to that, there are these machines that can also act as them. So you can go— a lot of banks are also making it so that you can pull out cash from your M-Pesa wallet using a regular ATM.

I'm an investor in a company called Abra that's doing, like, over-border transactions with Bitcoin, and they're using the same model in Mexico. They have agents who will come, and it's very interesting. The agents set their own percentage fee. So you might be like, oh, there's one right next to me in Santa Monica, but they're charging this percent, 5%. I want to go to somebody who's charging 2%, but I have to go to them, and it's an hour away or half hour away, but I want to save that money because Shipping Bitcoin from one place to another. And they're like, oh, how come they don't get robbed? And it's like, well, the person authenticated them with an app. Like, it's much easier to just rob somebody randomly on the street than it is to randomly call somebody on a phone with your identity.

Right.

And then try to transact with them. Like, they know who you are.

Yep.

Unless you stole a phone or something. That doesn't make much sense. So what has the reaction been in terms of investors to the company?

Uh-huh.

You have— I know you have lowercase capital. Who are the other investors in the company? And are people attracted to an entrepreneur working in Kenya, developing world, in the developing world, um, working on these kind of problems? Or is this like, you've kind of ghettoized yourself into the, like, you know, uh, compassionate capital groups, the, you know, do-gooder capital, the P.R. Omidyar kind of the world? Um, or do people look at this as, hey, this is gonna be a great way to make money? Like, you're a C corporation, or a B corporation, or a nonprofit? You're a C corp?

We're a C corp.

You wanna make money. Uh, so, who are the type of investors, and how have you been received over the last 4 years of— you've been doing this for 3 or 4 years, right? So, how have you been received in terms of raising capital for it as a venture business?

So, uh, earlier, uh, I think in our seed round, I think it was very much around the market opportunity, massive vision, and a very scalable solution, right? So Google Ventures, Collaborative Fund, Mesa Plus, others like that.

Legit people who like to make money.

Sure.

Great.

Right? Invested in our seed round. In terms of our A round, we had Data Collective, which is a big data venture capital firm, and they led the round.

Data Collective is Who is that guy?

Uh, it's— so our board is, uh, Zach Boag.

Zach Boag, Marissa Mayer's husband.

And Matt Acko.

And Matt Acko. Yeah, I know Matt Acko as well. Yeah. So Data Collective did it. Oh, that's great.

Yeah.

Matt's spoken at our event. He's really good.

Yeah. And so I think it is really this combination of the opportunity size, and then the fact that, I mean, we are using technology that everyone here in the US knows about too.

Yeah, they're aware of it. And so the— it's interesting. I was curious, because I hear a lot of these businesses, and they, they tend to be, um, run by people who are trying to save the world, but not make a profit. How do you balance that? I mean, VCs need to get a return on their investment. So how do you balance the need of venture capital returns with working in the emerging market and trying to do well? Which is more important?

I think for us, it's actually just baked in.

Yeah.

It's not as difficult. I think the way that we think about it is if we think about the customer lifecycle of financial services, you're not looking to make all your money on your first loan, right? You're really thinking about this as, what is my long-term LTV with this customer? And so, the same things that everyone thinks about, which is retention, you know, churn, churn on your platform, repeat rates, all these kinds of things, that's just as important to us. And so, I mean, I think we want to provide a very quality product, and a product that kind of gets better and better over time, because that's going to then increase our LTV. And so that's how we think of it.

So you got the Series A closed, you got 10, 20, 30 people working on this?

We have a total of 45 now.

45 people?

Yeah.

How many here in the United States versus over there?

So 30 here in the US. And then we've got a team of 13 in Kenya, and then now a new team in Manila.

Oh, wow. So the teams over there, are they like customer support? Or did you move your development over there? I'm curious.

No. So data science, engineering, and portfolio and growth are here. And then in-country, we've got BD, we've got customer experience, customer service, and then Interesting.

Well, listen, it's, uh, it's a fascinating business, and I can see why Chris is so excited about it. He said he met you at TED.

He did.

Yeah, he said he was, uh, didn't eat his dinner. He told me he was so enthralled with his conversation with you and like the potential of this. It's really— I understand now after talking to you for almost an hour why he was so excited. Um, the company is Tala. You can go to tala.co. How can people— people can't really be involved in this. It's not like Kiva where I can go put money in and try to help people. Um, and I can't use it here, but people can go check it out.

Yeah, people can go check it out. We are recruiting heavily.

Ah, yes, jobs. The old— I'm guessing Shivani@tala.co goes to you, and if you are an amazing engineer into data science who wants to save the world, I mean, it kind of is. Like, if people can get control of their finances, it's, like, really the— it's a pretty important thing. I guess education is important, too. I'm trying to think about, like— well, first you have to have water, and shelter, and food, and not die from a disease. But then shortly after that, you get to banking and education.

Yeah. I mean, if you think about it, if you have income, and kind of have the disposable income to start spending money on education, on health, on improving your quality of life. That's kind of how you progress.

How come Bill Gates isn't involved in this? I would think he— oh, maybe you're too far up the stack. He wants to, like, stop people from dying from malaria first. I think you're kind of like the next level up the stack.

I think it all goes back and forth, right? So if you have more jobs, then you can kind of trickle down the economy even further.

Is Africa— um, how far is Africa from being You know, sort of part of— if the Third World was a very derogatory term, I don't know what— I've never heard the term the Second World. That's not a term, right? Is it?

I've never heard it.

I've never heard anybody say, like, the Second World, so I don't know exactly how you would define that. And then we have the First World, which we know what that is. How far has Africa moved out of this sort of perception? I know, obviously, it's a large number of countries, but in general, you spent a lot more time there. I've never been there. Does it feel like the world is progressing there, and then that the people are going to live in more just societies with more opportunity? And does it feel like it's accelerating and getting towards the first world at a very quick rate, or does it feel still very sad and desperate and broken?

No, I mean, if you look at, you know, these kind of microcosms of— if you look at Kenya, you look at Nigeria, you look at Ghana, These are places where innovation is happening. Again, I just keep going back to the fact that there is so much more open-source technology, and with these mobile devices in people's hands, I think it's just speeding things up. I mean, the fact that 27 million people are using mobile money in Kenya, and I think the fact that Apple Pay and Venmo are just kind of starting.

Yeah. It does show you how quickly this stuff can get adopted. That's one thing people— when you just think about, you know, we're going through this whole language policing of like, hey, let's refer to it in a less derogatory way. But what it really is more about is people forget that the street finds its own use for technology. If you put a smartphone in somebody's hands, and they have time, and they're inquisitive, and they want a better life, like, they're gonna spend some time on that device to try to figure out, how can I use this tool—

Mm-hmm.

—to improve my lot or my family's lot? Lot, or, you know, whatever it is. So the fact that the tools can even get over there now, right? Like, the fact that the $25 and $50 phones are being made, yeah, is miraculous. Yep. Like, Samsung thinks there's money to be made over there.

Definitely.

It's really fascinating. They were gonna put a— Zuckerberg was gonna put a satellite up, huh? So exploded on the rocket. He was gonna try to put more internet. Yeah, I don't know if that was Kenya or not. Do you know where that was?

I think it was across Africa.

It was across the lower part of Africa. I'm not sure if it was—

I'm not sure. Yeah, there was an article last week that he tried to buy M-Pesa.

He tried to buy M-Pesa?

Yeah, that's what, uh, rumors were, that he was trying to look into it.

Fascinating. It's kind of subtle. He's like, hi, I'm calling, my name is Zark Muckerberg. I was wondering if I could talk to the person who owns M-Pesa. That's fascinating. What did you think of 'Cause you're Indian. I believe you're Indian, yeah?

I am.

Um, what did you think of Internet Basics and giving everybody, like, Wikipedia and Facebook? You're making— for people who are not watching, she's making a little bit of a frown and she's being politically correct. I thought that was a totally heavy-handed jerk move. You're saying, hmm. Do you think it was heavy-handed?

Well, I mean, I think, kind of, uh, I think opening up the internet would have been amazing.

Yes.

But making it so that you have to go through only Facebook to get the internet seems, you know—

You're being— you're so diplomatic. I thought, my God, what a jerk. I only— I thought it was, for somebody like Mark, who's been so successful, and is giving away $50 billion, right? He's gonna give away all his money. It's such a clueless move. It's like, you have absolutely no emotional I don't wanna make it personal, but there is a cluelessness to this that is disturbing in that if you're gonna give somebody a gift, if you're like, I'd like to give you a gift. I'd like to give you some food. And you're like, really? You're gonna give me food? I'm fucking starving here. That's great. And you're like, yes, I'm gonna give you food. And there's like a whole table of food, and then they're just like, this food and this food. And you're looking at all the food on the table, and you're like, They point to the olives, and they point to, like, the butter, and you're like, any chance I can have some tomatoes too? Nope! No tomatoes for you! Just bread and olives. It's like, well, I appreciate the bread and the olives, but I— you're showing me salami, and the chicken looks good too. It's just—

Right. I mean, I think the way they were going at it was saying they had over 1 billion people on Facebook. So they were trying to use it, I think, as their channel to say, hey, this is the fastest way to be able to get to people. But, yeah.

I'm so proud of the people of India for being so savvy and understanding when somebody is trying to get over on them. The people in America didn't— I guess because it's an American company, people are just like, oh, you're taking all my information and selling it, and you're changing the settings. Like, they're like, OK, whatever. Facebook's cool. I got the filters. I like the filters on the photos. It's like, people don't really actually think about it. People in India were really up in arms about this. They were like, how dare you come here and treat us like children? It was like treating them like children. And Marc Andreessen is like defending it, and he's like, oh, we're giving something for free. And it's just like, you still don't get it. Like, you're oppressing— it's oppressive, and it's not generous.

Right, it's condescending.

That's the word I'm looking for. Thank you. It's so condescending to be like, I want to give you something that really is about me being dominant over your culture by getting my product into your hands. By forcing you to use my product, I'm going to give you something. It's like, really, dude?

Mm-hmm.

I mean, if they had just said, we're gonna give us— you can— you have to log— super simple solution. We're gonna give free internet. All we ask is that you log in with your Facebook credentials.

Right.

Because we just want to know who's using it, how much. We just want to know, because listen, hey, we're gonna pay for all the stuff. We just want to get a little behavioral data, and we want to know that you at least, um, you know, we know who's on the network, because it's our network. So we just want to know who's— that would be perfect. We just want to know who's on the network, so it's not being abused. Even that's a lie, because it would be really to study data, and know how many times you logged in, but at least it would be a, you know, reasonable one.

And I think that makes sense, right? That'd be a give and take.

Give and take. Not oppressive. So clueless. And then where have they gone with that? Have you been following it? Have they even backtracked and said, we're gonna, like, just give it to everybody?

I think that— I haven't followed that piece as closely. One thing that they have rolled out is kind of an OAuth for a lot of apps in these markets. And so making it so that, you know, a lot of the data that they have on potential customers, I think giving some basic demographic or identity data to apps that they think are That's interesting.

Yeah, they're also very, um, persnickety with that access to the Graph. They're like, oh, you're starting to scale, and you're possibly in our market. We're going to turn off— like, they turned off Path.com's access to the Graph. And Dave Moran worked for him, you know, tirelessly for years. And they're like, yeah, Path's a little too competitive. We're threatened. We're gonna turn it off. It's crazy. Anyway, um, as I always tell people, listen to the last 10 minutes. That's when things get really real on the program. Um, the company is Tala.co. Shivani is the CEO, and they're hiring. So if you're into data science and you're into saving the world, it seems like a pretty cool place to work. And if Chris Sacca and Matt Acko and, um, those kind of folks are investing, you know that this company has great potential. Um, thank you so much for sharing your story. Thank you. It was nice meeting you. We'll see you all next time. Bye-bye.

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