The following interview is a conversation we had with Laura Kornhauser, Co-Founder and CEO at Stratyfy, on our podcast Category Visionaries. You can view the full episode here: $10 Million Raised to Power the Future of Financial Inclusion

Laura Kornhauser
Thanks so much for having me, Brett. Thrilled to be here. 

Brett
Not a problem, and I’m super excited for this conversation. Let’s go ahead and kick off with just a quick summary of who you are and a bit more about your background. 

Laura Kornhauser
Absolutely. So a little bit about myself prior to starting Stratyfy. Now, six and a half years ago, I spent over a decade at JP Morgan Chase in both lending and risk roles. Prior to that, my undergrad degree is in engineering, so I bring that mindset or that viewpoint to what we do at Stratyfy. Though, as I often joke, I write zero code for us because we have very talented folks that take care of that and do an amazing job in doing that for us. But for me, I had a number of different experiences during my time at JP Morgan, aided by my family background, which both of my parents are entrepreneurs. So I grew up with a front row seat and what it’s like to build, run and grow a business over time. 

Laura Kornhauser
And despite all of that front seat, I still made this decision to go at it myself, Brett, and along with my amazing Co-Founder Dmitry and start Stratyfy now. It’s many moons ago and have been so thrilled, in particular by some recent big wins that we’ve had over the past calendar year, that I’m excited to tell you all a bit more about. 

Brett
Nice. Well, we’ll dive into that shortly here. One other question we like to ask, and the goal here is really just to better understand what makes you tick as a Founder. What book has had the greatest impact on you as an entrepreneur, as a leader, and as a Founder? 

Laura Kornhauser
Yeah, so there are so many to mention, but a few that come to mind that I think are particularly relevant to what we do at Stratyfy. So one is for me to kill a Mockingbird. And that was so influential on me in part because of when I first read it, which was at a pretty young age, you know, very early in my high school days. And while I can’t claim that in that first reading, I grasp everything that wonderful book has to offer as far as lessons and insights, but it really opened my eyes to a lot of, I’ll say, the persistent and prevalent racism that has existed in our country for so long and really exposed me to that in a very powerful way at such a young age. And since then, I’ve read that book many more times. 

Laura Kornhauser
And every time I do, I feel I get something new and interesting out of it. So that’s one. And then the other one that leads into a very big and important thing about me and a big thing that makes me tick is, oh, the places you will go and oh, the places you’ll go has become particularly relevant to my life lately, as I am the mom of two young sons. So we read that frequently, and we read that often. But I think it has a ton of lessons also to teach entrepreneurs about the twists and turns of the entrepreneurial journey and the importance of perseverance and the importance of working through those twists and turns along the way. And love that. That’s now a book that I read frequently to my two sons. 

Brett
Nice. I haven’t read the second book yet. I have read the first one, but it’s probably been like 20 years, so probably should go back now at some point and reread it again. 

Laura Kornhauser
Honestly, I wish I had the time to do more reading. I’ll just say in general, but I read it probably once every five to ten years since, you know, that early time. I read it first my freshman year in high school. And every time you get something new out of it, Brett, so strongly recommend. 

Brett
Nice. I love that. Well, let’s switch gears now. Let’s dive a bit deeper into the company and everything that you’re doing there. How we’d like to begin this part of the interview is really focusing on the problem. So what problem does Stratyfy solve? 

Laura Kornhauser
Yeah. So Stratyfy helps financial institutions better understand the true risk of potential customers and make more informed decisions about those potential customers. So that’s the problem at a high level that we’re addressing it, and we’re doing so with a technology that leverages the capabilities and power of machine learning, but does so in a very different and new way, which then helps solve a second, more technology focused problem, which is a lot of promise and hopes have been placed around the impact that machine learning can have in financial services. But many of those hopes and dreams have not yet been realized. And our differentiators, particularly our transparency differentiators of our core technology, really help us unlock that value and solve that problem as well. 

Laura Kornhauser
But first and foremost, it starts with, how do we help financial institutions better understand their customers, in particular, the true risk of those customers, and make more informed decisions about them. 

Brett
Take us back to 2017, early days of the company. What was it about this problem that made you say, yep, that’s it. I’m going to go dedicate the next 610, 1520 years of my life to working on solving this problem? 

Laura Kornhauser
Yes. So a few things that led to that leap or led to that decision, and some, if you will, more macro and some more micro or personal. The more macro is that I really wanted to have more of my day to day as well as, you know, longer term trajectory focused on work that has impact and work that has impact not just on the people that already have many opportunities, but also people that often do not have as many of those opportunities because of some structural inequities and bias embedded into our financial system. So that was something I was very, or always have been very passionate about. 

Laura Kornhauser
And you know, as I was in my mid thirties, not to age myself, but mid thirties, making the decision about transitioning to the entrepreneurial Germany and thinking about my career for the next 1020 years, I really wanted to do something that had the ability to have a greater impact. So that’s the one or the more macro. The micro, for me, was actually an experience that I had. Being rejected for a credit card that I applied for, a credit card that was heavily marketed to me as well. And digging into learning why I was rejected, and I’ll say the not great reasons, I’ll just put it that way, that I was rejected, that really exposed me or opened my eyes to the folks that are inaccurately measured by more traditional ways of risk evaluation and risk based decisioning, particularly in lending products. 

Laura Kornhauser
And for me, that credit card was not going to have a major impact on my life, thankfully. But for many other folks that received these rejection notices or turned down by one or multiple financial institutions, it has a deep impact on their opportunity set and their path going forward. And that personal experience really opened my eyes to how prevalent that was, not just when we started the company, but still today. And that leads to not just bad outcomes for the financial institution that’s turning away ultimately good customers, or for our economy, which then misses out on growth and opportunities, but also for those individuals and their communities. And I really wanted to help tackle that hard issue. 

Brett
It goes back to those early days. What was it like trying to convince customers to really just give you that first chance and to give you a shot? 

Laura Kornhauser
Yeah. So this is not a space. You know, the credit and risk case is not a place where it is easy to get early adopters. I’ll put it that way. You know, folks that manage risk work their careers often are on the risk averse side. Right. So it was not easy. Right. It was not easy. But what I think really unlocked those initial opportunities for us was one, we had something new to offer from a technology standpoint and that was interesting for folks to learn about. So that unlocked a lot of conversations. But that’s not ultimately what got us those first opportunities. It was the fact that were able to deliver that technology in a way that was usable especially for our early customers, in a way that really drove value. 

Laura Kornhauser
So, you know, it was all about how do we build a product and an offering around that technology that makes that technology usable, that landed especially those early customers. And hey, every customer that we’ve landed ever since. And then the last thing I’ll mention is persistence and perseverance. We worked through a lot of those early challenges where everybody wants to be your fifth customer or your 10th customer, but nobody wants to be your first customer. And the way we work through those was just persistence and perseverance and creativity as it related to, you know, getting in front of people, getting back in front of them, having someone else who we know is a trusted contact of that person mention us again. And, you know, it wasn’t the first, 2nd or the third time that led to those especially, you know, first few customers. 

Laura Kornhauser
It was probably the fifth through 10th. So perseverance is extraordinarily important throughout the entrepreneurial journey, but definitely getting your first few customers, especially when you’re in the financial services space. 

Brett
Yeah, I can imagine. And what’s the growth like today? Any metrics or numbers that you can share? 

Laura Kornhauser
Yeah, so this past year I can focus on in particular. So this past year has been a tremendous year of growth for us as a company and as an organization. We have significantly increased our customer account. So when I say significantly increase, we’re now working with, you know, four times as many. So 400% increase in number of customers that we’re working with today as were working with a year ago. So massive increase on the customer side, which of course has also translated it to a nice increase on the revenue side as well. And then the other growth metric I’m extraordinarily proud about is the growth in our team. And over the course of the last year, our team has almost doubled as well. 

Laura Kornhauser
And the quality of the folks that we both add on the team one year ago and have attracted to the team over the past year is absolutely exceptional. Exceptional from a skills standpoint, but also just exceptional people as well, which is so important, especially as you’re building a company like we’re building, that is mission focused and mission oriented, and you’re doing so remotely, it doesn’t work without those components. So I’m extraordinarily proud of the team that we have in place right now and the team that we built. 

Brett
What does the team see? Obviously, there’s a lot of tech companies. There’s a lot of options that are out there. What do they see to say? Yep, this is an opportunity that I want to dedicate my life to, or part of my career, too. 

Laura Kornhauser
Yeah. A few things that they see, that is how we’re able to attract that talent. One is alignment with our mission. So our mission is to enable greater financial inclusion while helping FIS better manage and mitigate risk. We see that as two sides to the same coin. We can’t do the first, that is move the needle on financial inclusion. If we don’t do the second, managing and mitigation of risk, and ultimately show that financial inclusion is not just the right thing to do, it’s also the smart business move. It’s also good for your bottom line. So everyone that has joined our team is aligned with that mission and cares about that mission. And each individual on our team has a different, I would say, reason behind or different personal experience behind that care that they have for our mission. 

Laura Kornhauser
But that has been a huge attractor of talent for us. The other thing that I believe has also helped us attract the top tier talent that we have on the team today is that we are solving hard problems, and we’re doing so with very innovative technology. So we’re solving hard, longstanding, challenging problems with innovative technology and solutions around that technology. And that is tremendously motivating for the team as well, is being able to be part of helping us write that story. We do our best to give everybody on the team a lot of agency, a lot of ownership, a lot of ability, if you will, to define their path within the organization. And that would be the third thing that I would highlight. 

Laura Kornhauser
But that third thing often doesn’t work or doesn’t work well if we don’t bring that a plus talent in to be able to do that and be able to help lead all of us together. 

Brett
Taking a look at the different solutions you have, I see credit risk assessment, fraud detection and unbiased. Are those three different products? 

Laura Kornhauser
Those are three different products, all which leverage the same core technology. 

Brett
Brett, which one did you begin with and how did you know it was time to launch another product and then another product? Or did you have three right out the gate? 

Laura Kornhauser
We did not have three right out the gate. We started with credit risk assessment and decisioning. That’s where we started. That’s where we earned our first customers. That’s still where we have the majority of our customers. But one of the things that we, when we built that initial product offering for credit risk assessment, one thing that we always enabled our users to do was to measure or evaluate potential harmful or unwanted bias as a KPI of models or decisioning strategies that they were building using our software. So we always saw fairness as a key performance indicator that should be evaluated right alongside expected financial performance or other fit data science metrics. When looking at making a choice between model or decision strategy a and b, that were way ahead of the curve. 

Laura Kornhauser
And again, it speaks directly to the mission that we started the company with now that led to such positive feedback and interest about that capability. In particular, that were hearing from both customers and prospects that we pulled those capabilities out and launched a separate offering, which is what we call unbiased, which allows lenders to proactively test on a much more frequent, much more robust, and much more efficient way, proactively test for unfair bias, such that they can uncover that unfair bias as soon or as quickly as possible. You know, no one intends to have an unfair bias in how they’re making loan decisions or other decisions in a loan lifecycle. But oftentimes it can be hard to root those out or to find them, especially because they often emerge over time, as opposed to emerging on, you know, day zero or day one. 

Laura Kornhauser
So what that product allows them to do is find those, and then, if those biased risks emerge or exist, allows the customer to understand exactly what is driving those bias risks so that they can move to what we call our step three of undo. So how do I ensure that these biases aren’t in my decisions going forward and aren’t being propagated forward into the future? That offering now can be leveraged no matter how or where a customer has built a model or decisioning strategy and sits on top to do that proactive testing and monitoring and subsequent steps should a risk emerge. So that’s how we developed or decided to develop that product offering. We also see it as working quite nicely with our credit risk solution. Fraud for us was something again that we got pulled into via customers and partners. 

Laura Kornhauser
Our core technology is a ton of value to offer in fraud detection because can leverage the best of data through machine learning, but in a way that’s very understandable for the user, much more understandable, transparent, controllable than other machine learning approaches, which allows that user to impart their own wisdom or subject matter expertise into a model. And we find in fraud. This is particularly powerful because oftentimes fraud experts can spot emerging trends or emerging threats faster than you have enough data for a machine to find it on its own. So that’s what brought us into fraud detection, and the way we’ve been able to, as an early stage company support these three use cases is because they are ultimately all powered by that same core engine and that same core technology that we have at Stratyfy. 

Brett
Are the buyers the same? Is it selling to the same types of decision makers? 

Laura Kornhauser
Oftentimes the buyers at an organization are different, actually, though they are highly related, but they operate in different groups within the organization. Though what we found is that we can really land and expand with financial institutions by having this product suite such that the initial product that we get brought in on and demonstrate success on is then used, or that proof point is used to expand into other use cases or other product offerings. 

Brett
This show is brought to you by Front Lines Media podcast production studio that helps B2B founders launch, manage and grow their own podcast. Now, if you’re a Founder, you may be thinking, I don’t have time to host a podcast. I’ve got a company to build. Well, that’s exactly what we built our service to do. You show up and host, and we handle literally everything else. To set up a call to discuss launching your own podcast, visit frontlines.io podcast. Now back today’s episode. What about your market category? Or maybe market categories? How do you think about category? 

Laura Kornhauser
Yeah, so we get put in the predictive analytics and decision optimization category. We are also a prescriptive analytics company, which is not talked about nearly as much, but it’s the, you know, how do I not just learn from data and predict the future, but how can I take action to have an impact as well on that future or change that future? So we can also play in the prescriptive space as well, but we get grouped in predictive analytics and decision optimization. 

Brett
What role does analyst relations play in the general go to market. Are you actively working with like Gartner and Forrester and helping them to shape and define these categories, or what does that look like? 

Laura Kornhauser
So we are not actively working with them, though we’ve been referenced in a number of different reports on emerging trends in our space by those analysts. You know, we have made the choice, though, not to, you know, invest further in that from a capital standpoint at this particular time. You know, given the traction that we’re finding, I would say, if you will. 

Brett
Organically now to talk a little bit about funding. As I mentioned there in the intro, you’ve raised 10 million to date. What have you learned about fundraising throughout this journey? 

Laura Kornhauser
Oh, a lot. I’ve learned a lot on the fundraising side, Brett, and my biggest piece of fundraising advice for founders is if in that initial 30 minutes meeting, you don’t feel the excitement from the investor and you aren’t equally excited about them. So that excitement needs to go both ways. Deprioritize. I think that I had, early on in our fundraising journey, I had a number of different discussions where I thought, okay, you know, they want to have another call. That’s a good sign. I’m going to convince them in this next call. I’m going to tell them more in this next call, and it’s going to show them the value that we have and the proof points that we have and why this is such a great investment for them. 

Laura Kornhauser
And I found that everybody that ultimately became our investor in reflecting upon that afterwards, you know, I left that 1st 30 minutes meeting super excited about them, and they left that 1st 30 meetings super excited about us. And without that, I feel that you can, especially being in our space, which is a space that everybody is interested in learning more about and talking more about, because there’s going to. We’re still in the early innings of machine learning, delivering its value in financial services. You can waste a lot of time and energy as a Founder with folks that are genuinely interested in your company, genuinely interested in your space, but won’t. 

Brett
Ever invest based on everything that you’ve learned so far. What would be the number one piece of advice you’d give to a Founder if they were just starting a company that’s selling to a similar group of buyers? 

Laura Kornhauser
Leverage that early time in your company’s journey to have as many conversations as you possibly can without any sort of sales angle. I think there is a push that I know I felt from the day one of the company to go into conversations with a solution to the problem. We had thought a lot about, of course, the problem that we are solving and we had a ton of experience about it. But the most impactful conversations I had, especially in those early days, were the conversations that I walked in without any sort of pitch or sales agenda and just with an agenda to listen. The good old, you know, you have two ears and one mouth, use them in that portion. That type of advice, I think is tremendously valuable for an early stage Founder. 

Laura Kornhauser
And I also found that when I positioned calls as wanting guidance and advice, as opposed to a more pitch or salesy positioning, the quality of the feedback I got was so much more valuable. The quality was so much higher. So I think that being really selfish, for lack of a better term, with those early meetings, from a feedback standpoint, selfish about feedback is important, tremendously important and absolutely critical. Other thing I will mention is that something that has really touched me, or really something I’m extraordinarily, again proud of throughout my entrepreneurial journey, is the number of folks that have gone out of their way, in some cases quite literally, to help us and to help me and to help Stratyfy. You just need to tell them how. 

Laura Kornhauser
And that’s, I think another thing that founders can sometimes not realize, and I perhaps didn’t realize in our early days, is that, you know, there will be people that come out of the woodwork that very genuinely both care about, you know, your success and the success of your business and truly want to help give them the roadmap of how to help. They don’t know necessarily the right way to help. And the more you leave it open ended, the harder it is for them to help. Be very specific in your asks and you will be amazed at who comes out to help you along the way. 

Brett
Final question for you. Let’s zoom out. Three to five years into the future. What’s the big picture vision here? 

Laura Kornhauser
So our goal is to first expand access to fairly priced credit and then move on to other financial products and help expand access to those by again helping financial institution understand the real risk of individuals and the businesses. So if I step back and I look three to five years out, we will have made a significant impact on access within credit. There’s an initiative that we announced over the summer where we’re the technology partner for underwriting for racial justice, where we’ll be working with, under beneficial State Foundation’s leadership, working with 20 lenders to help them find ways to expand access to their loan products. 

Laura Kornhauser
This is one massive step towards that future vision that I believe will be a blueprint for our industry on how, you know, collaboration can happen across different lenders and the great results that can be achieved when you take a chance, an informed chance, I should say, on folks that are left out of our financial system, often due to no fault whatsoever of their own. So that’s one huge thing. And then we’re going to leverage that success to expand into additional use cases and ultimately additional industries. We’ve already successfully piloted our technology in both healthcare and the insurance space. This is another space where the decisions really matter. They really matter on people’s lives. So it’s absolutely essential that folks using machine learning technology to help inform those decisions really, truly understand how that machine learning technology is working. 

Laura Kornhauser
And that how it’s working is not just from a technology standpoint, but like how the specific model you build using machine learning. How does that model work? What insights is it drawing from data? And how can I, as an expert in that field, which is another place, you know, financial services, healthcare, another place where there’s vast expertise, if you will, outside of the data, how do we allow that expertise to come in and be an essential part of that model or decisioning strategy as well? 

Laura Kornhauser
So we will expand into other use cases and ultimately other industries, again with a unique form of machine learning that leaves the human in the loop, or really the human in the driver’s seat, takes as much value as possible or as much insight from data as possible, but then also recognizes that data alone is not going to give us all the answers. It gives us part of the answers. But there’s another piece that’s necessary to get to the, if you will, the full equation or the full output that we want to have going forward. So that’s where we’re headed. That’s what I’m super excited about and motivates not just me, but the rest of our team to keep on driving forward. 

Brett
Amazing. Well, I love the vision and I really have loved this conversation. We are up on time, so we’re going to have to wrap here before we do, if there’s any founders that are listening in, that want to follow along with your journey, where should they go? 

Laura Kornhauser
Thank you for that question. So, first and foremost, you can follow both myself and Stratyfy on LinkedIn. I also encourage any founders listening to this. Please reach out to me directly, send me a message, let me know you listen to this and that you want to connect. And I would love to connect with you personally as well, to the extent that I can be helpful in your entrepreneurial journey in any way, shape or form. I’m also here to do that as well. I can’t stress enough the importance of a strong Founder network for any entrepreneur. Those are the folks that I turn to on my great days and on my worst days and the ones that truly support me through this journey. 

Laura Kornhauser
And nobody understands what you’re going through like someone else that is either going through it now or has been through it as well. So if I can be a resource like that for anybody listening in, I’m happy to do it. Please reach out to me directly. 

Brett
Amazing, Laura, thanks so much for taking the time. 

Laura Kornhauser
Thanks so much for having me, Brett. 

Brett
No problem. Keep in touch. This episode of Category Visionaries is brought to you by Front Lines Media, Silicon Valley’s leading podcast production studio. If you’re a B2B Founder looking for help launching and growing your own podcast, visit frontlines.io podcast and for the latest episode, search for Category Visionaries on your podcast platform of choice. Thanks for listening, and we’ll catch you on the next.