The Chris Voss Show - The Chris Voss Show Podcast 242 Nathan Stevenson, CEO of Forwardlane Inc.

Episode Date: December 4, 2018

Nathan Stevenson, CEO of Forwardlane Inc.

Hi, this is Foss here from thechrisfossshow.com, thechrisfossshow.com. Hey, we're good here with another great podcast. We certainly appreciate you guys tuning in. Thanks for always being here with us, and we certainly appreciate it. We've got a wonderful guest today on the show, Nathan Stevenson. Nathan, how are you doing today? Fantastic. Hi, everyone.

Thanks so much for having me today, Chris. Thank you for coming. And Nathan Stevenson is the CEO of Forward Lane Incorporated. Give us some plugs, Nathan. Tell us where to look at Forward Lane, etc, etc. Yeah, absolutely. You can find our sites at www.forwardlane.com and uh we've actually just released a netflix style show uh so go to the media page on uh on our websites it'll be up tomorrow and uh you'll you'll get to see the first 12 episodes of pathfinders our series on ai digital innovation and the fintTech ecosystem in New York. Awesome.

Awesome. Now, you're a serial entrepreneur. Give me your bio. Give me a readout of some of the background that you have and what brought you to the point of starting this company. Sure. So I spent the past 15 years of my life initially starting out in financial services. I worked in investment banking at BNP Paribas, the French investment bank in Europe. I also worked in a hedge fund called CQS,

which is one of the top five large global macro hedge funds based in London. I then spent a bit of time in a stock exchange, the Jansberg Stock Exchange, taking large-scale technology projects with the likes of NYSE, NASDAQ, CME Group, from ideas into production, things like high-frequency trading, ultra-low latency speeds, capital controls, things like this. I moved out of finance and spent about four years working on other startups, a music business, a travel technology business called Hotels by Day. And that brought us to Forward Lane, an artificial intelligence company focused on helping people become smarter with personalized investment insights. And so you guys work with asset managers it's basically an API AI power platform for wealth managers asset managers commercial banks and it helps them interact better with their

customers yeah the the key area of focus is is processing things like news research and other types of unstructured content. And we read this with our NLPs, our Natural Language Processing AI, the same level like an analyst would. And then what we do is we build a holistic digital picture of clients. So things like transactions, portfolios,

other areas of interest. And then we come up with these personalized insights. And the general idea here is that it takes quite a lot of time for a financial advisor, a relationship manager that is selling funds or a commercial banker to figure out what is relevant for you and why. And that's what the Forward Lane platform does. commercial banker to figure out what is relevant for you and why. And that's what the Forward Lane platform does. It helps you come up with a good story to share with the clients. And also it helps you determine who you should speak to today and what the next best action might be. So what sort of information does it collect or gather about a person?

Does it gather their social stuff or their signals? or what sort of signals does it gather off of? Yeah, absolutely. Good question. So we take security very seriously. So we don't actually touch any personally identifying information. What we do do is gather things like transactions that might be linked to an ID. Other things like if you've been browsing the websites, Salesforce activities, like CRM notes, things like that. And it does this all on an anonymized basis. So it's in essence, it's it's it's making recommendations based on the actions and activities, but it doesn't know it's necessarily you. So in a way, this is a way to get you high-quality information without snooping on your behavior and without hurting your privacy.

Yeah, I wouldn't want to get investment advice on some of the things I look at on different websites and browsers I already have that problem on YouTube where you know if I'm looking on Amazon at buying some shampoo you know I get all these Facebook ads with shampoo on yeah we try and avoid the shampoo effect yeah um but I guess that's smart because you know when you when I I grew up as a salesperson. I think a large basis of what I do as a salesperson, you probably do as well, coming from your serial entrepreneur background. And certainly being able to have information on what people's either buying habits are or what their interests are or who they are, for that matter matter can be very helpful in selling to them and sometimes you don't have a lot of time to do a lot of research especially if you're banging through a lot of customers and sales calls and stuff like that um and i was looking over the

video that you guys have for your guys's product it looks pretty cool i mean you can it can track the discussions they're having it can track track compliance issues, which is, of course, a big thing with, you know, keeping the SEC happy in stock trades and what you told the client. You know, I've done business deals with clients that they've gone, you know, I've said, well, you know, here's what we're going to do and here's how we're going to do it. And then later they're like, well, Chris never told that to me. And you're like, we specifically had that conversation. And so it looks like with your guys' software,

they're able to track that, the recommendations they're making and all that stuff. So that if, you know, anybody ever questions the, you know, the, the,

you know, the data is there. Yeah, that's absolutely it is, is that, you know, in this day and age, for one,

because we work with large financial institutions, we need to show them that we can track all of your data, whether it's necessarily attached to your name or not. We need to show a full audit trail of all of that. And then also, if you think about it from, say, and then also if you if you think about it from from like the say i'm an investor if you think of it from the customer's point of view you know i don't necessarily want my financial advisor uh to be calling me up about things that i've already spoken about you know or are old or you know i'm just no longer interested in i'd much rather have

a conversation about something that's fresh, exciting, new, something that's happened in the markets, and it's kind of in my general interest profile, kind of like the long-term memory. But then really it's addressing things that are happening to me in the short term, and it's going to be topical, trend-worthy, on point. So I'm having a better experience because my time is not being wasted.

I'm not having to rehash of old things. And I'm getting a lot of new ideas and fresh insights and new angles on things that I'm seeing happening in the world around me. So what inspired you to found Forwardlane? It actually, the nexus of this really started just after the financial crisis. And, you know, from my times working in institutional finance and a hedge fund, you know, we could see we effectively did that big short trade just like the movie. And we could see this happening from a long way out, this kind of unfolding of this crisis. And yet there was millions and millions of people that lost 30 to 40% of their investments over that period of time. So we kind of said, well, what if it's possible to

use AI and technology to bring these insights that are sitting in these firms and get them right out to you in a way that is quicker, faster, more efficient, timely, so that you can actually act on it and you're not caught off guard the next time something comes around. So that's what we did. And we worked with a large private bank here in New York. And what we found is that they weren't easily able to cover many of their customers, because there's just too many of them, 200 customers per wealth advisor. And so what we said is, let's use AI to read for you, and kind of gather all that data together and then help you be more effective by kind of teeing up some good stories that could be relevant. So at the end of

the day, you own the relationship by sharing that information with your clients. So it's not taking anything away from the human experience. It just means that you can be a lot more effective and empowered with the right information so that the client is happier most definitely I mean it's it's so important in sales to make things seamless for the for the buyer and of course seamless if you're doing multiple tasks and everything else on AI you know there's a lot of different people that talk about the good bad and ugly of AI I know the Tesla the tesla ceo elon musk uh uh is concerned about ai some people are in the world but it sounds like your guys's ai is

mostly the kind of ai that's making it very easy for uh people interact and integrate with your software as well it's probably not gonna take over the world anytime soon and kill all the humans. Exactly. No, we're, I think that AI is a different story. It's probably a long way out if it's even possible. But what I would say is that, you know, there's so much talk of Robocop and Terminator and all of that. That's one thing, but why don't we actually just turn our attention to using the AI

for our advantage instead of worrying about things that might be out there and may or may not be out there. So that's what we do. We say, let's make X-Men out of everyone. Give them special powers, superpowers. You say, like, let's make X-Men out of everyone, right? Yeah.

Give them special powers, superpowers. So that's what we're in the business of, you know, giving you superpowers. That's pretty darn awesome. So you joined Accelerator's Techstars and FinTech Innovation Lab. And how are these accelerators working for you? Yeah, so these Accelerator programs are some of the best in the world. Techstars, along with Y Combinator, are the very best accelerator programs. What we benefited from is really springing up a whole network of relationships and contacts. In London, we did Techstars in London with Barclays.

So we got a really great introduction to Barclays Bank, and we still have a fantastic relationship with them right now, as well as others like Thomson Reuters, now Refinitiv. They landed up investing in us, made two investments into Forward Lane. And really, it's the strength of the Techstars network that's been fantastic. That's awesome. That's awesome. And you can see it through founders all over the world.

And you guys raised $6.3 million. Which funding round are you guys in right now? We're actually in our series seed round of funding, which is quite decent size for a seed size round. We'll probably be looking to raise our A round in about a year's time and start looking at that in about six months time. But we're good capitalwise for at least the next 18 to 24 months. Cool. But, yeah, we count Refinitiv, which is owned by Blackstone, as one of our investors.

And we have a fantastic set of private investors from many of the top financial institutions here in New York, ultra-Honored Worth and Honored Worth investors. So we're very pleased with our investors. And then you guys got a lot of interesting partnerships. You've got partnerships with Morningstar, Salesforce, IBM Cloud, and Pershing. Yeah, absolutely. So, you know, we see channel partnerships as a good way to bring this technology to the most number of people in the fastest possible way.

So what we do is, you know, in the case of Thomson Reuters or Refinitiv, we're partnering with them and their Electron platform to deliver our APIs to their sets of clients. We work with Morningstar and their content and the top tier one firms that we are engaged with to help bring the Morningstar insight, the Morningstar views as a kind of neutral touch points when they're selling to their clients. So Morningstar benefits, the client benefits, and we all benefit together by having this

unique extra insight that Morningstar provides. When it comes to Salesforce, the ability to flick a switch and just get these new superpowers alongside your CRM system is one of the exciting new developments that will be coming out in January. And that will basically bring the four lane technology to a much wider group of users as part of our distribution strategy. And then finally, IBM have been a longtime partner. We're part of their global entrepreneur program. They're fantastic partners. And we love what

they're doing in the fintech space. And we're also working to bring our APIs to the IBM Financial Services Cloud so that IBM consultants can use it in their projects. That's got to be awesome. That's a huge company and probably a lot of business. Them on top of Salesforce. You know, the more you can know about your client, the more you can know about who they are, what they bought in the past, what they're interested in buying in the future, the more everything you can have to know about them. I know my friend Robert Scoble has talked about wanting a future where like a hotel

he might be going to searches his signals on social and identifies that he likes a certain type of whiskey. And when he arrives in the hotel room, there's a whiskey glass of, you know, whatever his favorite type of whiskey is there for him. You know, all sorts of different advances that they can do using AI and stuff with what you guys are doing to just help, help connect better with the customer,

help serve the customer better, make the customer happy, make the process as seamless as, as possible. I mean, there's, there's something like when you're a salesperson and you can immediately quickly catch rapport with the client,

talk to them about what's important to them. Every great salesman that I've ever known just has a real talent for that. Being able to have AI data that's being given to you as to some of the background on it where you can easily start dipping into it um the uh uh it's pretty darn awesome so yeah uh you guys are working with tom thompson reuters wealth management as well yeah so uh yeah just to just to your pride points uh you know what we see in in large organizations is that uh they have to go through lots of different applications to try and knit together like a broader picture on a client. And according to Morgan Stanley Wealth Management, this takes about 30 minutes per client. if you can use data in the background to aggregate this information and to

help pull this together into a 360 degree view of your customer. So that the exact question that you're talking about is how can I have a better conversation with my clients show that I, I understand him or her more deeply and, and also ask the right questions, right? So, so that it's not creepy or anything like that.

It's just building trust, building connections. So this is really what we focus on is those insights, you know, pulling together all of that data out of every all of that data picture, what might be relevant for this client and why? And then what can you do about it? So I think that this is really the cutting edge of AI, which is what actions can you take with those insights? So it's quite an empowering aspect. So I guess... For the securities companies that you guys are serving and probably banks you might be working with in the future,

I mean, these are relationships with a whole lot of money usually involved, I'm sure uh and those people in fact no customer likes to be fumbled uh by a salesperson they don't like to be manhandled mishandled or you know I mean I I've had sometimes a conversation with sales people I'm like you know you need to get off the phone and get somebody who knows what the hell they're doing on the phone with me because I I you're I'm done with you. And that can destabilize a lot of relationships, lose a lot of relationships. And so this is probably imperative in making sure that you've got the data on a client and you can talk to them and gain rapport and keep that relationship maintained.

Yeah, exactly. Meet their needs and come up with a solution that's like talking to what they're really interested in versus what you think they're interested in. Yeah. I mean, I've had salespeople that have advised me. They're like, you should do this. And I'm like, you're an idiot. Exactly. And you don't know.

You don't have a clue who I am. I'm like, who are you? You don't know me. So, yeah, there's that. I mean, so that's cool. You guys already test this out and you guys have got it functioning and working with clients and helping integrate the whole systems. So some people are afraid robots and AI are going to take over the jobs. Is there a point that you guys could get so powerful you'd just replace all the stockbrokers?

You know, it's a good question. I think that, you know, so much of what a human does is context. And, you know, like what's happening today, you know, How are you feeling today? When I'm on the phone with you, what are you thinking? What's going on? And many of these things live outside of the data system. So I think that you can get quite far with AI and what it can do. You can certainly dramatically

improve the economics of the business uh by spending much less time looking for information like think of a world pre-google you know how long did it take to do a school project to look up what like a meerkat is or uh or something in an encyclopedia britannica right you'd have to wait until you get home or go to library or try and find those books. Now you can get it in a flash. And I think the same thing is going to be happening in the institutional space.

So I don't think AI is going to replace humans anytime soon. It's just going to change the relationship, I think, probably in a positive way create more trust create more value uh but the human the context is always the relationship element is always going to be there in my opinion and i think you're right we're always going to value that human interaction people buy based on emotion uh for the most part and i mean i mean when i whenever i call up my utility companies and i gotta deal with that robotic uh whatever it is you know menu system i just want to choke it half

the time so if i were to do that and buy stocks i probably wouldn't be happy exactly um so yeah i mean i don't think humans are going to be especially when it comes to sales because sales is a very fluid thing and I don't I mean machines would certainly have to get really really good at being able to handle the fluidity of the sales process I would think and people buy

in sense from confidence and when someone advises something or says you should buy something you know especially when it comes to investing your money in it like stock um and there's an element of trust uh that you put another human being that i think would be kind of lost in an ai so yeah it'll be interesting to see where the future goes with all these different interactions um we've certainly spent a lot of time staring at our phones. Maybe we are ready to

give ourselves up to the computer AI gods and just pray to our robotic gods in the future or overlords, if you will. Maybe that's where we're going. I don't know. We'll see. We're going to get there one way or another, whether we

like it or not, I suppose. You guys have done some really cool things in tapping this niche in the market. I don't think I've ever heard of any of this sort of stuff going on. What else do we need to know about what you guys are doing? Yeah, so I think that this field of AI insights and what to do with them, actual insights, is really on the cutting edge. I think that so much of time spans around like Alexa and these kind of simple things, but I think it's very exciting that we're starting to move into this world where you're going to be presented with information. You don't have to do the searching, right?

It's presenting information to you. And as that feedback is being gathered, it's optimizing and improving. And the next step really is kind of giving you a playbook of interactions. So if you think of transactions linked to sales behaviors or user activity, interests, once you've made that linkage, you can start to do some analysis and you can say, well, on average, what kinds of actions led to sale? What things should I talk about when i'm trying to sell emerging markets fund uh what you should i uh when i'm speaking to millennial in wealth management what in general has been interesting to millennials this week in chicago right um and um

and really be a lot more topical a lot more in points, a lot more empowered to actually be effective. And I think that this is the bottom line is nobody ever woke up in the empower you and help you take actions that will lead to results. And so I'm very excited to see where the field goes. Our unique expertise is in financial services. We spent three years building custom natural language processing focused on the unique problems of financial markets. Things like bull markets, bear markets, the Fed versus Apple, the fruits versus the company. More sophisticated things like what is the difference between an ETF and a mutual fund when you find that name. BlackRock Emerging Markets ETF. How are you going to pick that up? So that's what we do very, very well. And as a result, we were able to read the

information in a much deeper way than other companies. And so we believe we can do a very good job of pinpointing those insights for you so that you don't have to spend all that time going through all that data. It's a real expensive process, like I said, for these banks and stock companies. They've got a lot of asset management they may be doing on behalf of a client and a lot of investing that way. You certainly don't want to fumble the client mishandle them and and have them get upset and take their money elsewhere um and enter enter um and screw up your relationships yeah yeah so do you guys you guys see yourselves expanding beyond the realm of you know stocks and financial instruments

into maybe some other things like i don't say hotel management or interaction with clients for hotel customer basis things or are you going to stick with the straight and narrow there you know right now there um there's so many domains within financial services you know there's funds, fund distribution. There's commercial banks that are making loans to medium-sized businesses. And there's SME banking with

millions of small and medium-sized businesses across the U.S. which need better information, better insights, better relationships. There's investment banks, which need to go deeper into the public companies so that they can compete with their competitors. These are just some of the areas, wealth managers, private banks,

just a small handful of the domains that we have unique expertise. And as you can imagine, that is a really, really big market. So for now, we're happy with being a vertical specific solution that, you know, solves the problem in a very targeted way, but really understanding the domain that we're in and our customer. At the end of the day, we want the investor, the customer, to be happy, to have a trusted, personalized experience, a kind of white glove experience. So that's what we're in the business of, is bringing this white glove experience to everyone.

Perhaps in the future, as we expand afterwards, we'll look at going beyond that. But for now, we're staying focused. And then what are your guys' plans for 2019? We're almost at the end of the year. It's going to be pretty interesting. 2019, I think, is going to be our best year yet. We have integrations with Salesforce coming out.

We've just hired a new team. We're up to 25 people now. And we have a very big pipeline of actually 80 firms in place. So we're looking to expand that and also bring our offering to different price points, smaller companies and bigger companies. So I think that there's a lot on our plate. Our product, our Pathfinder series is coming out. Our website is coming out.

The new Salesforce integrations are coming out. So from our side, it's all coming together. The team, the product, the markets, and timing is great. So very much looking forward to an exciting 2019. And you guys have built a pretty good culture there in your guys' office. I mean, that's been one of the things you've looked at, at building a strong, good, solid company. Yeah, culture is extremely important to us.

You know, I think that's one of the reasons why I came to America is because I actually do believe in the American dream. A lot of Americans kind of think I'm being trite or skeptical, but I'm not skeptical. It's well and truly alive. I believe in the diversity that I see around me every day and also the meritocracy that's so great about America. And so what we've done is we've tried to create a microcosm of that and bring as much diversity, neutrality into who we are hiring and really just focus on who people are personality-wise,

what they can deliver from their career, their experience, and really try and build an idealistic culture. We have a four-lane social contract, which is built on something called the Rainforest Social Contract, which is all of the values of the old Silicon Valley, I should say, that led to collaboration, paying it forward, giving a time to other people, leading and following, and really just being a good person to other people in the company

so that they can work in a good environment and feel appreciated and also not like chastised for failing. So we really look to promote that values and culture are very, very important at Ford and as is diversity. Exactly. I'm excited to hear that because so many entrepreneurs don't get that you need to have culture when you first build your company, culture, environment, what you're putting in there is a very big and important thing. One of the things we used to have around my office was the only dumb question is the unasked question. And that was to encourage people to ask questions, to learn, and get to know what they needed

to do for their material as well. Absolutely. And as a final thoughts, you know, we're very much focused on our customer. It's part of our values. You know, we're focused on innovation. We want to be unique and original. And, of course, a global leader,

just as every other startup wants to be a global leader. But I think that through this combination of value sets, being true to our word, having integrity, focusing on the customer, and then, of course, creating unique and original technology to solve problems. I think we can really get somewhere with that. Sounds good. Well, Nathan, it sounds like some exciting stuff you guys are doing, especially from my background of working in stocks and understanding that whole trade, being able to have that interaction. Give us your plugs one more time so we can look you guys up on the interwebs. Sure. So the Podfinder series is coming out soon. It's a Netflix-style series on AI, digital innovation, and the New York fintech ecosystem. It will be live on our

websites, www.forwardlane.com slash media tomorrow. And so you can go out there if you want to learn more about Forwardlane. There's a couple of videos if you want to learn about our culture. We have some culture videos talking about what it's like to work at Forwardlane. And if you're in the AI space, NLP, or even sales to financial services, we are hiring. So please do get in touch with us.

And of course, any executives, innovation, corporate strategy people and financial services, feel free to get in touch with us at Forwardlane. We have great technology with proven results and we'd love to share more about it. Cool.

That sounds awesome. I was going to just ask if you guys are hiring, because I know a lot of my audience, a lot of my friends and people, they work in this sort of industry, and yeah, some of them are looking for jobs. Absolutely. So yeah, we'll be happy to have some good chats. Sounds good. Well, Nathan, thanks for coming on board.

We appreciate you spending some time with us and sharing it. Be sure to check out his website, guys. Be sure to go to YouTube.com for just Chris Voss. Hit that bell notification button. Tell your friends, neighbors, relatives to subscribe to the show. We are on iTunes. They can go to Google Play. They can go to iHeartRadio.

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