Last week a new poster brought this great interview to the board: https://discussion.fool.com/new-interview-with-upstart-ceo-34855…
Many have mentioned several of the promising things the CEO said, but this one passage (around 23:45) was so good I figured I would type it out:
We’ve built what we consider to be very a sophisticated AI model in one particular product area and one particular market which is generally unsecured personal lending in the US. That represents in the grand scheme of credit, like, a rounding error, right? If you think of all the products and all the places in the world. Our view generally is that AI will enable pretty much all flavors of credit everywhere because the economic advantage of it doing so is so huge…so if you’re sitting where we’re sitting and you’re going, wow, we have what we feel is a compelling advantage in this one category. It’s gonna take a lot of work to port into more categories and take it outside the US, etc, but at the same time even the two categories we’re in right now, which is unsecured personal lending and (increasingly) automotive lending, which is our newest category – we could grow into those for the next 5 years without even coming close to running up against a TAM ceiling, if you want to call it that – but the bigger question for is, yeah you might be able to grow into these two categories because they’re already enormous, but are you just gonna vacate the rest of it and just let someone else fill in the blanks in other markets, or do you want to plant flags and establish yourself much more broadly? So you get into this question of like, you can do things incrementally or you can place some big bets and say look, We want to be the biggest player in AI lending in the world. And that player is necessarily gonna be an extremely large company in 10 or 20 years operating globally and in many flavors of credit. So that’s the kind of thing where we sit here and say look, we’ve had some success, we’ve gotten where we are, but let’s not be incremental. The opportunity for AI in lending is so enormous, we need to leverage our strength into becoming what we think will be one of the biggest fintech companies in the world.
Just thought it was really cool to hear him lay it out. I really like the approach. We’ve done well with companies that are in land-grab situations where the only constraints are how fast the companies themselves can scale up and grow. That’s kind of what AI lending seems it could be.