Heart behind the Hype

Category: Small Business Borrowing Published: Saturday, 20 December 2014 Written by Admin


Oh, wait - wrong buzzwords. It's now cloud computing, pivoting, big data, 3D printing and FinTech.

Tech and entrepreneurship have gained popularity among Wharton MBAs with 13.7% of the 2014 class accepting full time positions in tech, up from 5.6% in 2010. It is the top 3 industry choice among MBAs after financial services and consulting.

Some are skeptical about this exodus of students into the industry. Is this yet another empty business school hype, a new herd mentality?

In heart behind the hype, we ask CEOs who live and breathe the industries and innovation we consider 'hot' to understand what gets them excited about their fields and how to succeed in them.

Description: Kabbage provides cash advances to small businesses and more recently personal loans through online channels to collect data and underwrite risk. They appear on Forbes America's most promising Companies list at #37

Area: Financial technology / start-ups


Rob Frohwein, co-founder and CEO of Kabbage               

Years position held: Rob: 6 years

Years in tech: 15 years

Education: JD, Villanova University and BA, Economics from Dickinson College in Carlisle, PA

Kathryn Petralia, co-founder and CEO of Kabbage

Years position held: Kathryn: 6 years

Years in tech: 20 years

Education: BA English Literature, Furman University


1. How is Kabbage revolutionizing lending and creating impact?

Kabbage has not only provided tens of thousands of small and medium businesses with access to capital, but has reduced the time and friction previously associated with small business borrowing.  Kabbage maintains an NPS in the 60s versus less than 20 for most banks; customers number one reason for preferring Kabbage is the speed and ease of the application process, and the permanent access to capital that only a credit line can provide.  Permanent working capital has previously only been available to very large, established businesses due to the inherent risk associated with it, and the extensive management and diligence required by lenders to provide it.  Kabbages unique access to a variety of data sources, to which Kabbage stays permanently connected, gives an ongoing measure of risk and business performance, mitigating the risk of a line of credit.  This data-driven approach has created a technology standard that has now been imitated by most of the incumbent alternative lenders.

2. Chance or choice: what led you to your current role in the industry?

For Rob: I would call it a bit of both.  Although I was not involved in the financial services industry to any material extent, I came up with the idea for Kabbage.  Ideas have always been central to my personality having kept a business idea book since the age of 9; I have alway started businesses.  Most failed and a few have enjoyed moderate success but Kabbage is my biggest idea in terms of how large the company has become.  So chance plays a part, but Ive always chosen to pursue my ideas.

For Kathryn:  Its very difficult to chart a course for a career as an entrepreneur.  I was fortunate that when I was 8, in the late 70s, my parents gave me a computer.  Although Ive never been drawn to writing code, I am an avid consumer of technology and have always believed in its transformative abilities.  From a couple of dotcoms in the 90s, to 7 years at a specialty finance company in the last decade, to another fin tech startup to Kabbage I have always been drawn to innovative concepts.  The burden of regulation has caused financial services companies to adopt technology more slowly, which has created an unbelievable opportunity in the industry.  Atlanta is a hub for financial services companies, particularly in payments, big data and security, which makes it easier for companies like Kabbage to grow.

3. You just graduated today and plan to work in start-ups / FinTech. What would you do?

I would do two things, not necessarily in a specific order.  I would spend a couple of years at a traditional finance company to gain a broad understanding of the space and the opportunity (and to reinforce my love of startups!).  I would also look for internships and entry-level positions at startups/small companies that are gaining traction and have the potential to become very large businesses.  Its not possible to learn this type of business in school; the best education comes from working in the industry.  When you join a startup, put yourself in a position where you will be forced to understand every aspect of how the company works (technology, marketing, user experience, etc.).  Product, for example, is a great place to start.  And avoid seeking a strategy role!  Real startups should not designate a strategy role early in the companys life.

Description: Udemy is the world's largest marketplace for teaching and learning; it is also a leading provider of Massive Open Online Courses (MOOC). Udemy has served over 4 million students from over 190 countries and overs 20,000 course alternatives.

Area: Educational Technology

Dennis Yang, CEO of Udemy

 Years position held: 2 years

Years in tech: More than 15 years

Education: MBA from the Stanford Graduate School of Business; BS from Northwestern University

 1.       How is Udemy revolutionizing online learning and creating impact?

Udemy is creating an impact by bringing knowledge via 20,000 online courses on everything from Java to Excel to photography to our more than 4 million students. We're asking, "How do we take the number of people who have access to skills and increase that access exponentially?" While other companies focus on the K12 or traditional higher education space, Udemy is committed to helping adults gain the necessary skills to advance their careers, change jobs or pursue passions. We're empowering individuals and companies to survive and thrive in a global economy where 65% of grade-school kids will have jobs that don't exist today.

2.       Chance or choice: what led you to your current role in the industry?

Both chance and choice. As a lifelong learner, I have a great passion for constant learning and improvement, and am deeply interested in technology's potential to impact practical skills-based education around the world. I was first introduced to Udemy in 2012, and I immediately jumped on the opportunity to lead the company in fulfilling its mission to help anyone learn anything online. The real impact we're having on the lives of students and instructors is incredibly powerful and rewarding.

3.       You just graduated today and plan to make an impact in the tech education industry. What would you do?

There are so many challenges in today's world in need of thoughtful solutions that it can be hard to know where to get started. What are you passionate about? Do you have a great idea for solving a big problem? For example, we at Udemy saw unmet demand for skill-based learning content globally. To meet this need, we're tapping into the knowledge of experts around the world to help students and companies everywhere build applicable skills. The first step is to identify a deficiency in an industry (there are plenty), and stay rooted in your mission to fill that void.

My next answer is to consider joining us on the Udemy team. We're hiring in many roles across marketing, business development and operations. We're proud to help people get the information they need to improve their lives in measurable ways more skills, better jobs and more satisfaction in being able to realize their dreams for themselves.

We project that in the next three years, one in six people will be taking Udemy courses globally. If you're not ready to join our company, consider teaching on Udemy. The marketplace model we developed means we can quickly help individuals transform expertise into practical courses. Teaching a course is also a great way to demonstrate mastery of a topic for current and prospective employers and clients

Description: A Wharton homegrown, CommonBond started its first fund lending to 40 Wharton MBA students in 2012. In two short years, it has raised $100 million in funds and expanded student lending to graduates from law, medical and engineering programs across the US

Area: Financial technology / start-ups

David Klein, CEO and co-founder of Common Bond 

Years position held: 3 years

Years in tech: 3

Education: Brandeis University with a BA in Politics, Economics, and International Business and attended the Wharton School at the University of Pennsylvania.

1. How is CommonBond revolutionizing the lending and creating impact?

When I started the MBA program at Wharton in 2011, I was shocked at the high cost of my student loans. It didnt make sense to me that I would be charged the same flat rate as every other student, and I found the process of getting a loan to be unnecessarily painful. I connected with two Wharton classmates - Michael Taormina and Jessup Shean - and we realized that if we found a way to provide loans for ultra-credit worthy borrowers, then we could charge better rates and offer better service. We estimated that ultra-credit worthy borrowers represented a $60 billion market segment. And so we started CommonBond, with a vision of lowering the cost of higher education with a better student loan experience.

We are also the first financial services company to bring the one-for-one model to finance and education. For every loan fully funded on our platform, we pay for the education of a child in need for a full year through our partnership with Pencils of Promise. A big source of inspiration for our social mission is Warby Parker. When I first started pre-term at Wharton in 2011, I heard Neil Blumenthal speak and I was able to talk to him directly, about how he's been able to make the social mission work in a for-profit business. His answer still influences the way we think about it today - in short, it's not about dollars and sense so much as it is about who you are.

2. Chance or choice: what led you to your current role in the industry?

Both. I made the choice to go to business school with the express purpose of starting a company. But it was pure chance that CommonBond was going to be the idea that turned into a company. It was because I had to get loans myself to pay for school. And in that process, I stumbled upon a pretty broken student loan industry that wasn't giving borrowers a fair shakes.

3. You just graduated today and plan to work in start-ups / FinTech. What would you do?

I'd go start a company. I have that bug, and used Wharton as the time and space to uncover that clarity about myself - entrepreneurship is my "calling."

But if I, instead, wanted to join a company, like many people at Wharton, I'd probably want to work at CommonBond. Seriously. It's small enough for one person to have a major impact on growth; It's a company that shares my deep-rooted belief that business can and should be a positive force for change; And it's a company that's really helping people - saving its average borrower about $10,000 - and treating its borrowers like human beings.

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