Banking on Digital Growth
Banking on Digital Growth

Episode · 9 months ago

156) #ExponentialInsights: Ignore the Gig Economy at Your Peril

ABOUT THIS EPISODE

The traditional bank has ignored the gig economy at its own peril.

When you walk into a branch as a soloprenuer, you have two options for an account: Commercial, or Consumer.

Today’s economy defies the binary — and financial brands should, too.

That insight comes from the ineffable Raj Bhaskar, Co-founder & CEO at Hurdlr, who joins the show to discuss how the gig economy is shaping the future of finance.

Join us as we discuss:

- Why banks need to stop neglecting the gig economy

- Why banks aren’t sufficiently scared by brands like Square or Stripe

- Why COVID should serve as a wake-up call for traditional financial brands

You can find this interview and many more by subscribing to Banking on Digital Growth on Apple Podcasts, on Spotify, or here.

Listening on a desktop & can’t see the links? Just search for Banking on Digital Growth in your favorite podcast player.

...banks don't fear square stripe and Shopify enough because they see that income flowing into their bank accounts, that's gonna change one day, it's not going to flow into their bank accounts, it'll stay on those platforms, you're listening to banking on digital growth with James robert lay a podcast that empowers financial brand marketing, sales and leadership teams to maximize their digital growth potential by generating 10 times more loans and deposits. Today's episode is part of the exponential insight series where James robert ley interviews the industry's top marketing sales and fintech leaders, sharing practical wisdom to exponentially elevate you and your team. Let's get into the show greetings and hello, I am James robert, ley and welcome to the 158th episode of the Banking on digital growth podcast and today's episode is part of the exponential insight series and I'm excited to welcome roger bobb Oscar to the show, raj is the co founder and Ceo at hurdler, a smart mobile app for independent workers, freelancers and Solo preneurs to seamlessly manage their business finances in seconds, not days, not ours, not even minutes. Seconds! In fact, Hurdler is a top 10 grossing financial app on Apple and google with more than eight billion in finances tracked and more than 300 million in taxes saved. And I'm excited about this conversation because it continues to echo the importance focused around creating value for small business, even smaller than that, we'll call them the solo preneurs are working in the gig economy, working in the freelancer economy, working in the creator economy because it's in this sector. We will continue to see explosive growth that has been fueled and really accelerated by the covid...

...pandemic. So with that welcome to the show, Roget is so good to have you on today. Thanks for having James around. A real pleasure to be on before we dive into what financial brands and fin techs can do to create value for the solo preneurs or the creator economy, the freelancer economy. However you want to slice that, I want to hear what is good for you, what's going well personally, professionally, it's always your pick to get started awesome. Yeah, I mean personally, personally and professionally, for me are are very well mixed, you know, those are those are my two big buckets in life, everything is going well, we're we're healthy, we have a great thanksgiving, we had our both sides of our family spend the night and so I think we did like six meals together all in the same household, multigenerational, that was pretty cool, because it's been a couple of years since we did that, And then, you know, professionally, uh there's there's a lot, I think we're going to talk about the growth of folks, you know, ordinary people launching businesses from their homes, you know, that got massive and it just grew even more through the pandemic that happened in 2006, with the recessions and so any time these things are there people really people have the need for multiple income streams. Right? It's not necessarily out of, because I want, I'm just dying to start a business because they need the extra money. That's where most of it starts. Yeah, I agree with you. And it creates a level of of some security because I have those multiple income streams and that then translates into a level of increased confidence because when one income stream, you know, maybe it putters out, it dries up. Well then I got a couple of other things to fall back on. I mean, that in essence is what the gig economy is essentially all about, Right? Yeah, definitely. And, and it's a lot of it, you know, the past was glorified. Uh and even today they talk about flexibility, but if you, if you look at the real need for flexibility, it's for the ability to earn income in, in hours that you have...

...available. Right. And so a lot of the folks in gig economy are still working full time jobs and they need the flexibility to go on the clock at night so they can make money whenever they're free. Right? And, and that's one of the things, let's start here. What would have been the big trends that you have seen unfold over the last 18, 24 months when it comes to the gig economy, The freelancer economy, perhaps even the creator economy signal fire reported that the creator economy now has over 50 million independent content creators curators and community builders, including social media influencers, bloggers and videographers and yahoo an article from y'all who noted that the creator economy accounts for a market totaling more than $104 billion and is increasing daily globally. So what are you seeing through some of the research and trends the on your side here? Yeah. So I think number one is the number of new business formations um that occurred during the pandemic was almost double from the prior year. That's pretty significant. That's at a time when publicly, like in the news, you hear about businesses shutting down particularly restaurants and local shops. So I think, I think that's the key thing. And then I think the second thing is uh folks, what I'm seeing is people learning, I don't know if they know that it's leverage, but they're basically leveraging their time. And I think uh you know, remote, remote really allowed that to happen. And I think everyone benefits from that. So I don't think that's harming like, let's say, the company they work for. I think, I think folks are much more productive now. Absolutely. And and, and so therefore we have new income streams, new revenue streams as individuals, beyond just the quote unquote company. Thinking about creating value for a solo preneurs, someone working in the gay economy, the freelance economy, the creator economy, where might there currently be gaps in a traditional...

...financial brand, say a bank or credit union to serve and create value for these people here? Yeah, I think the way I look at it is that, you know, traditional banks are structured as consumer retail or business commercial and sometimes business. Yeah. And sometimes they talk about in business, commercial, small business, but most of those small business customers that banks want, you know, they want a minimum of a million million plus in revenue, that's kind of the bare minimum. So when you look at that those numbers and then consumer retail, there's this huge gap. And if I'm a Shopify store seller, selling goods out of my home, you know, where do I go? Do I go to commercial? Do I go to consumer and really, really, I just need a little more horsepower from the consumer operation because I'm not that million dollar, $5 million seller that fits commercial. And and also if you're a shopping fire digital seller, you don't really want to hang out inside of a branch, correct? And I think it's interesting to to see what like you mentioned Shopify what they're doing, they're now offering quote unquote financial services, even lending products to someone working in this solo preneurs gig economy created economy, freelance economy, what's a commonly held belief that others in the industry, maybe it's an incumbent bank, Credit union leader. They think about this freelancer solo preneurs creator economy that you might just passionately disagree with, where where might they be able to transform some of their thinking here, I think I see a lot of them not necessarily believing that Shopify square and stripe, are there competitors? A lot of them still see them as complementary perhaps subconsciously. And why is that just doesn't make sense? Why is that, why do you think that is? I think they just view them as a as revenue generation...

...platforms Right, right. Don't necessarily see that they're building out the rest of the staff and a lot of that has kind of been done quote unquote behind the scenes, it's almost like the ancient wisdom from Sun Xue know the enemy and know thyself, you need not fear the result of 100 battles and so it's like we we we we kind of know what's going on on this other side of the coin, this other side of the equation, but until it has become almost full public square, right square. And to see how they've continued to to grow in this space, it was something that didn't happen overnight. But then when you're kind of heads down, focused on serving a particular market segment and the world continues to evolve and transform around you, that's when you're like, oh I wasn't exactly 100% aware of this, thinking about your own journey here of of growth of creating value for those working in the gig, the freelance the creator economy, how has your model changed over time with the work that you're doing? Yeah, that's a good question, you know, we started off almost a decade ago, um as an api first company and and these platforms didn't really, they weren't evolved enough to leverage our features. And so we were forced to build a retail app. We ended up doing very well for 56 years. Even today, it's an excellent proven app, excellent reviews. But then over the last few years, we finally started getting organic lead for other platforms, Fin techs, even some banks, top five banks to use our features through our A. P. I as their own embedded in their offerings because they see this gap. And so we're seeing like now hurdler has the ability to power some of these folks with our proven features and really uh really grow the impact that we wanted to have. Originally, I really appreciate this thinking and it's one that I'm hopeful more and more continued to explore, because it looks at the idea of collaboration over competition, that we can co create value together almost like a best of breed. I'm I'm curious...

...to get your take on this. If you could go back in your own mind, like it's a 10 years of of focusing on creating value for gig freelance and and and creator economy workers. What's one thing that you would do differently, knowing what, you know, now, you know, one side of me says that maybe I should have, but I didn't know this at the time of course, but first dive into retail rather than it being something that I discovered that we overshot the moon. Um, so that were there quicker and uh yeah, that that's one side, the other flip side that I ponder is should, you know, should we have just continued doing api when there were no takers at the time, if you look at the evolution a lot of times when trends start, it really takes 10 years for them to really hit. Yes, they do, yes, that's that's just a common thing. I mean web services back in the day, they used to talk about it in 2000 and they started getting really used in 2010 and so I'm seeing that here because there have been a few rounds of gig economy when Uber and, and Lyft started my company put out a blog post at the top 100 on demand companies, you know almost eight years ago and at that time there was on demand for every single thing. Now there's five or six top platforms, right? It's consolidated well and and think about that for a minute because it's almost like a platform economy as well because you, you've got like the Ubers and the lifts of the world, but then you layer on top of that food delivery right? And grocery delivery and how it's almost you continuously are stacking other levels of service on top of this initial foundation here. Running a business is hard, it's even harder when you are a solo entrepreneur. I can think back to my early days being, you know, 1920 years old, getting this off of the ground 20 years ago, it was a different time period, thinking about what you've learned here. What are some of the big pain points that you are hearing from those working in the gig,...

...the freelance, the creator economies today? Yeah, well first is knowing where they stand with their finances, most, most folks, independent folks, everything is commingled. It's all over the place. Yeah. And that's part of that gap, like banks don't fear square stripe and Shopify enough because they see that income flowing into their bank accounts, that's going to change one day, it's not going to flow into their bank accounts, it'll stay on those platforms. But basically connecting all these dots simply for these folks who are co mingling and that's a big pain point. They don't, they don't actually know how much money they're making, they might see the income coming in, but as you know, income is not profit. Exactly. Exactly. And and I think that's where, you know, you look at solving people's big problems when you put their pain at the center of your thinking of you're doing to create what I call prescriptions or cure solutions a path forward beyond the present moment to help others grow. In fact, there's a lot of in my own mind, ancient stoic wisdom that can guide some of this thinking cynical once said, you know, he that does good to others, does good for himself. And and to me that's where a lot of the opportunity is when it comes to thinking about creating value for gigs, for freelance, for creator economies. What are some of the opportunities from your perspective for financial brands and maybe even fin techs to create value for people working in these different economies here? Yeah, I think it's uh so there needs to be more offerings that target these folks first, they shouldn't have to make a tough, it shouldn't be a tough decision to figure out where within a bank, I'm supposed to go if I'm a solo preneurs or micro business owner. So that, that's the first thing that should be simple. And then if you dive down deeper into that, it's a, those pain points, it starts with mapping all of their income, but then, you know, getting paid and then the number two, a lot of the platforms are...

...taking care of that very nicely, helping them earn revenue. But then the number two pain point is then tracking their expenses and then third is taxes and all of this is before they hire their first employee, Oh, taxes, you're you're giving me a little bit of PTSD here once again going back 20 years because right, I was I was a college student, you know, I was a sophomore in college and had some early success and Well I thought you could make all the money and then you could spend all the money. I didn't know anything about this tax stuff and I'll never forget. And it was because I didn't I just didn't know what I didn't know early on probably the 1st 234 years of the business kind of doing it on my own before I got some knowledge and wisdom and worked with an expert around this. I had like a six figure tax bill and it was it was a bit stressful to try to crawl out of that. And it wasn't intentional, it was just I didn't know what I didn't know. I think this is an important subject to really provide some education around back to your point because if you think about a traditional financial brand, there have been historically either commercial focused or retail focused. This is kind of the what I would call the messy middle. But When we look at other research, 50% of the US workforce is projected to be part of this gig, freelance creator economy by 2027. And so for the dear listener to provide a little bit of education, how might the needs of someone working in this new type of economy be different than that of say the traditional quote unquote small business owner. Where's the gap historically here. Yeah. I think the number of the first thing to understand...

...is most of these folks, but most of the folks didn't even know they're on the hook for taxes and so they're they're starting off tracking all of this stuff in their personal accounts that's flowing their consumer retail accounts. And so how do you un commingle all of that help them do that. My company specializes in that. We we have a lot of data around that, but that's the first thing is not mixing all this stuff together and so really just helping them see that and that's really the starting point. I think this this would have saved me so much heartache and time digital growth is a journey from good to great. But sometimes this journey can feel confusing, frustrating and overwhelming the good news is you don't have to take this journey alone because now you can join a community of growth minded marketing and sales leaders from financial brands and fin techs who are all learning, collaborating and growing together, visit digital growth dot com slash insider to learn more about how you can join the digital growth insider community to maximize your future digital growth potential. Now, back to the show, I'm telling you if if we could go back, I ask you the question like what would you do different? This is something that I would do different starting this up and fortunately, you know, it's been 20 years and it's been a lot of fun and I got a lot of great people now supporting this this journey and really this bigger purpose of getting a billion people beyond financial stress towards a bigger, better, brighter future. And, and so collaboratively thinking here, what are the collaborative opportunities between say some of the work that you're doing? Maybe it's a Fintech, maybe it's a financial brand of bank or credit, where might those opportunities sit through your perspective? So I think so if it's a fintech, other platform targeting creator economy, even traditional banks, they have their primary offering might be account, could be formation, forming a business,...

...could be something around capital. And so they have their number one hook to acquire their customers and what we're seeing is organically we're getting these platforms are reaching out to our company say, hey our customers are actually requesting these features that you provide in your A p I let's add this into into their platforms under their brand. It's seamless. It's their stuff to help retain their customers because they're bringing them through. Now after you acquire the customer, how do you hold onto them for the rest of life? Just like a traditional bank? Yeah, I have my bank account, my personal bank account from like when I was a teenager and it's gone through three or four acquisitions and it's still there because that's where all my money goes into. So how do you just more value there. So I don't need to leave and find something else. That's a great point, it's continued value creation, It's going in. And and I would even say some of the conversations that I've recently had like doing a listening tour of sorts, listening, just asking questions would be another good place to start. I want to look ahead towards the future here for a moment. Like I said, you know, 2027 It's projected that 50% of the US workforce is going to be a part of this independent contractor, freelancer, Solo Preneurs, creator creator economy, what are you most hopeful about in this new type of a model when when you when you look ahead towards the future? Yeah. You know, it's interesting that so a lot of those stats were put out, you know, a handful of years ago and I would say that that did not predict a pandemic and what we're seeing in the pandemic, I think that it's accelerating getting folks to that point, but probably there's a case to be made that it will exceed that. Because those studies didn't take into account the pandemic and the pandemic people are moving all about and their own video and they can really leverage their time. And I see a lot of professionals doing arbitrage like working and then, you know, they moved out of major cities into the midwest...

...but they're still, you know, getting compensated at the major city rates. Um which is I think that's good and I think over time it balances out. So I think it's uh I think it's that everybody, there's no reason why everyone should not have independent income. If you think of a normal, just a normal consumer, a lot of folks aspire to own a rental property right there, not necessarily considered part of the creator economy, but that's independent income. Absolutely, that's an additional income stream. So everyone should have independent income, even if its investment related, it's needed. We know that X percentage of the country doesn't have any investments so that this is what brings everybody up and when you do that, I think this stuff needs to be part of our education, you know, latest high school, they teach us things in high school that we don't necessarily use right now. I think finance, they need to do more financial education in high school, so people are better off because you're going to have folks more folks doing vocational things, not necessarily Being able to commit to the four year investment of traditional college or university. There's so many successful people now online that are passing on that because it creates so much burden. So I think this really lifts everyone up, You know, I can't help but think going back to episode 1 35 with scott Donnell who is the founder of gravy stack, really talking about this idea of building this end to the curriculum, not just financial education or financial literacy, but I'd even take it a step further and add entrepreneur entrepreneurialism into this type of thinking because For me, I remember being in an executive coaching program, strategic coach Dan Sullivan, he's been a guest on here a couple of times, he's been coaching entrepreneurs for 40 years. And one of the very first things that I did after my first session was go to my kid's school and...

...volunteer as what is known as a watchdog dads of great students. And then I got in, I started talking to the counselor, they had a career day and they would always have for example, you know, someone from the fire department, the police department come, they'd have a teacher, they'd have someone from the bank come, they, but they never had an entrepreneur there. And so I was able to go in and and and did this for a good three or four years before the pandemic and I'm looking forward to getting back and do it again, because I would ask the kids like, do you know jay z, do you know like Lebron James and everyone's like, yeah, but then I'm like, what about like Elon musk? You know, do you you know, all these other entrepreneurs and they're like, no, and so I'm like you have a much better chance of quote unquote, making it big through an entrepreneurial path than say going to play in the N. B. A. Or you know, but now creator economy, you can build your own audience too and that's a whole different type of a perspective. So because this is such a broad market, you talked talked Shopify, we've we've talked influencer where might there be opportunities to focus on niches? Because if you kind of take a broad path, I'm a big believer, if you can focus and carve out a specific niche, you build expertise around a specific niche, you empower a specific niche. Where might there be some subset moments of the gig freelancer, creator economies financial brands can be thinking about here. Yeah, I mean there's so many and that's what, you know, that's part of our you know why our strategy is transitioning back to api first because it's fragmented, it's so fragmented and there isn't it's not a winner takes all. It's uh it's like you talk about the collaborative approach that's it's really, it's not like one winner is going to capture the entire country. We have, we have to partner together to help folks. Uh you know, they talk about and being meet...

...them, meet the customer where they're at. So there's there's some pretty interesting like uh you know, nerve nerve dot pro doing uh banking, niche banking for musicians. Yeah, I mean really awesome stuff that that that uh that those guys are doing, that's one that comes to mind. Um there's uh one of our clients is bonzai, they focus on photographers um and other creative professionals and there's a, there's a bunch of, you know, there are some new, you know, new fin techs that are focused on, you know, the freelancer segment, but everyone still, if you if you if they allow you to dive deeper, they're focused on certain niches. So you, even though you have shopped the Shopify is of the world, you actually have some of these other platforms who are targeting Shopify sellers or the stripe e commerce entrepreneurs. But I think musicians, photographers are pretty good niches. I think, I think what you if you're if you're a bank or Fintech, um I think first you want to figure out what income level you're really looking to support because I think you're all your economics of your business kind of are gonna, you're gonna go less around that. And so I think like when you're talking about gig economy gig economy folks, typically people are referring to Uber drivers and the like and that income level or income earned from those platforms is a lower level than creative professionals. So I think it also it depends on, you know, the product offering you're looking at, you know, one of the things I also was thinking about as you're going through is Studio Bank out of Nashville, there are niche bank for the creative economy where brick and mortar combines seamlessly with a great digital experience. So I'm I'm I'm so fascinated with a lot of the opportunities here on the flip side of the equation. I'm listening to this, I'm a financial brand leader, may be I'm in Fintech, what are some of the roadblocks the challenges that could hold me back from moving forward and...

...creating value for people in the gig, freelance creator economy. I think, I think the number one thing is uh not really understanding their needs, you know, most of the folks in the gig economy, the traditional gig economy, the Uber drivers of the world, they need the additional income. I think that's the first thing to recognize versus you know, a long, you know, years ago they put out that story about the six figure Uber driver in the Wall Street Journal and that's not the norm. People go to Uber to make additional money because they need the money. I've only once met someone uh you know when writing um that was doing it specifically to save up for an additional vacation that was pretty rare and that was a husband and wife team. Yeah, and I think you mentioned Uber, I'm thinking about life too, because I know lift for examples, building financial services into their offering, they have rewards, getting cash back on gas on dining, getting paid faster, integrating into other areas of life. So that's just something else to consider and think about here, I want to get real practical as we start to wrap up because there's so much opportunity to create, to capture, to collaborate around it can feel a little bit overwhelming and I'm a big believer that all growth, all transformation begins with a very small, simple step forward, something practical. What would be the next best step for someone who is listening to move forward with courage, to move forward with confidence, to create value for those working as a solo preneurs in the gig, freelancer creator economy, what would that be? Yeah, I think it's very simple, I think it's uh if you if you agree, it's hard not to agree with the growth. I mean all the numbers are there, then you just have...

...to create a simple offering to help these folks see there what I'll call their business finances and quotes within their consumer retail accounts. Very simple. So just pulling out those numbers and and and displaying it for them, so they don't have to go through every single transaction on their own. That's a great, you know, and it's about simplification, it's also about providing clarity as well and through that clarity, it's going to help to build their confidence. I think another opportunity to is you're sharing that is there's a community aspect and element that could be baked into this to almost play the role of a facilitator, bringing together a niche, whatever it might be a subset, and then facilitating other types of content events that that really empower them to to do more around whatever it is that that they're doing here. What are your thoughts on that? Yeah, absolutely. I think uh I think that's important and that can include education as well. I think that's especially for local, like local institutions. Uh that's a that's a main draw. Yes. Yes. When you look at the collaboration opportunities, what's the best way for someone to reach out, say hello to you, continue the conversation, maybe even collaborate with you because it's been a great conversation with you today. Rush, appreciate it. James robert, let's say the best way to reach me is as to email me, it's just our age. A hurdler dot com or H U R D L R dot com. Happy to help out in any way that we can. And I'm pretty good about if if if we can't, I'll try to point point, point them in the right direction or make an intro to some other partners that that would be good fits for them. This opportunity is huge. The impact can be even bigger, right? So, um it's going to require a lot of, a lot of companies to work together to really help everybody. It definitely will. And I appreciate that because it's about, it's just about, we're all working a rising tide, lifts...

...all boats in the bay and and I appreciate the knowledge the inside the passion that you've shared here today raj. Thank you so much for joining me on another episode of banking on digital growth and thanks for having a real pleasure until next time and as always be well, do good and make your bed. Thank you for listening to another episode of Banking on digital growth with James robert, ley to get even more practical and proven insights along with coaching and guidance, visit digital growth dot com slash insider to join a community of growth minded marketing and sales leaders from financial brands and fin techs until next time. Be well and do good. Mhm, mm hmm.

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