Michael Halloran: As a fellow Brown alum who’s gone from a corporate role to a startup, it’s great to connect and tell the story of your fintech company based in D.C.

Odysseas Papadimitriou: Thanks a lot for the opportunity. It certainly has been a wild ride from Greece to Brown to Capital One and, now, WalletHub in Washington. And the team is working on some really exciting projects! WalletHub is the first and only service offering free credit scores and reports that are updated on a daily basis. And we’re building the brain of a financial advisor, to help the people who need financial advice the most but can afford it least.

MH: I was intrigued by your positioning as an AI-based financial advisor that will keep your wallet full instead of empty. I think it’s interesting that many people don’t realize that a financial advisor – whether a real person or an algorithm – doesn’t have to provide investment advice, but could be just offering “advice”.

OP: Unfortunately, the biggest problem for most Americans is just making ends meet. For example, Americans currently owe more than $1 trillion to credit card companies for the first time ever.

So what most people really need is some basic financial advice, from credit card recommendations to advice on getting your credit score in shape before a loan application. And they need it to be free. While such a service might not make financial sense for a traditional advisor to offer, WalletHub can.

Simply put, WalletHub is building individual brains focused on specific categories – credit cards and credit score improvement, for example – that can provide users with personalized advice on the optimal action to take, based on their credit history and stated financial goals as well as simulations with historical data.

MH: Interesting. Your neighbor here in the D.C. area, Michael Kitces, explains better than anyone, I think, the differences between different types of advisors and what is necessary to be registered as a financial advisor, but many people still get confused between investment advice and financial advice, which WalletHub offers.

OP: If that were the biggest misconception people had about money management, whether every day or long-term, we’d be in great shape.

MH: Obviously the major players are Credit Karma and Credit Sesame in this space. How would you contrast what you offer to each of these?

OP: WalletHub is the only service with free credit scores and reports that are updated daily. So we take the centerpiece of these other services and do it even better. And that’s just a small part of what makes WalletHub so interesting. One other big differentiator is that WalletHub puts the consumer first, while these other services are more like billboards for their sponsors.

MH: Recently, NerdWallet stumbled and had to lay off more than 10% of their staff in late 2017 as a result of failing to make their numbers. They had raised $60M in venture capital financing a couple of years ago. Do you think VC funding can contribute to seeking to expand too quickly compared with more of a ‘lean startup’ like yours?

OP: Definitely. VC firms place a lot of bets and rely on a small number of them providing massive returns to pay for the rest. They also have to consistently beat the market to justify charging customers high fees in the face of competition from low-cost index funds. So they’re looking for a big payoff very quickly, and they push companies to their limits to try to achieve that, whether or not it’s really the right thing for the company.

I chose not to take VC money in WalletHub’s early stages because I have a long-term vision for the company and did not want to give up control and see that compromised. And I was fortunate that I didn’t need to take the money, as angel funding and a profitable model have been enough thus far.

But that’s not to say taking VC money is always a bad idea. It can help businesses that are experiencing growth that cannot be funded with more conservative means.

MH: I agree. Venture-backed firms get a lot of funding and support building traffic but can struggle with what to do once that they’ve got a lot of traffic. WalletHub clearly has a well-oiled machine churning out content to drive the customer acquisition efforts for your service. Do you plan to keep providing surveys rating states and cities, or was that more a means to an end of getting to a certain level of traffic?

OP: WalletHub produces a wide variety of content, from serious research reports on the credit card market and consumer debt to fun infographics that educate people about the financial side of popular culture. Our reports ranking cities and states are somewhere in between. But I think they’re successful because they’re useful.

A lot of people would like to take a more analytical approach when deciding where to live, for example, taking into account home prices, job opportunities, cost of living, schools, crime etc. But that’s hard work, and the juice may not seem like it’s worth the squeeze if you have to do it yourself. You might, however, take a look if WalletHub does it…  And sure, the topics aren’t always that high minded, but the logic is the same.

MH: Is the use of the term Artificial Intelligence in your company’s description more about distinguishing what WalletHub is looking to do with data and not being simply a media company, or do you intend to be an doing more in AI with your platform? 

OP: We’re not just throwing the term AI around, but I do think our use of the technology does differentiate us from competitors, many of which are bloated companies stuck in their old ways. WalletHub uses Python, in addition to MySQL and Golang.

 

MH: Thanks for spending some time talking about WalletHub. I see that you’re looking to hire both financial writers and engineers, so best of luck as you continue to grow.

OP: My pleasure. We’re always on the lookout for talented individuals who want to change the world one dollar at a time!