Speaker 1:
From the library of the New York Stock Exchange at the corner of Wall and Broad Streets in New York City, you're inside the ICE House, our podcast from Intercontinental Exchange on markets, leadership and vision and global business, the dream drivers that have made the NYSE an indispensable institution of global growth for over 225 years. Each week, we feature stories of those who hatch plans, create jobs, and harness the engine of capitalism right here, right now at the NYSE and at ICE's exchanges and clearinghouses around the world. Now, welcome Inside the ICE House. Here's your host, Josh King of Intercontinental Exchange.
Josh King:
The change from the nine-to-five workday to the world of nighttime and weekend music gigs is a familiar site. Whether performing in a local bar to a crowd of thousands, the intersection of the two worlds is highlighted by innovative ideas, creative thinking and a certain kind of, well, structured chaos. Many top Wall Street executives are known to embrace their musical passions once they step away from the boardroom.
James Dolan, the CEO of Madison Square Garden Entertainment, that's NYSE ticker symbol MSGE, and Madison Square Garden Sports, that's ticker symbol MSGS, leads the band JD & The Straight Shot, balancing his time between performances and the bustling atmosphere of Nixon Rangers games. Dolan as the executive chairman and CEO of Sphere Entertainment, another spinoff of MSG, that's ticker symbol SPHR, also enjoys welcoming bands now these days, like U2 to Las Vegas' new 875,000 square foot Sphere to play in front of more than 18,000 fans. Likewise until last year when he wasn't overseeing Goldman Sachs, that's ticker symbol GS, its CEO, David Solomon, could be found thrilling crowds as DJ D-sol showcasing his techno sounds at nightclubs and festivals in New York, Chicago, Miami, and The Bahamas.
While transitions from business to music can be common, it's less frequent to see musicians pivot into entrepreneurship, specifically the FinTech space. Artists such as Jay-Z, Jermaine Dupri, Craig Coleman, and many others have notably excelled in creating and managing businesses, including record labels and entertainment companies, but the adventure into FinTech, more of a rarity.
Our guest today, Amos Winbush III, not only made the leap from music to entrepreneurship back in 2007, but he's founded five companies since including his latest FinTech venture Bckers. I met Amos a couple of weeks ago welcoming the staff and board members from the National Museum of African-American History and Culture as we mark Black History Month and found Amos's story fascinating. Drawing from Amos' personal insights and over 15 years of experience as an entrepreneur, he's established Bckers with a mission to support small and medium-sized businesses, the shops and stores that form the backbone of the US economy. After all, according to the US SBA, SMBs contribute 44% to the US economic activity, create 64% of new jobs in the country. They employ nearly half of the American workforce. Created 17.3 million new jobs from 1995 to 2021 or 63% of all new jobs during that period.
In a minute, Amos and I are going to delve into his career, both as a musician and explore how his experiences in the industry cultivated his entrepreneurial drive. We'll elaborate on how Bckers is tailored to benefit SMBs, highlight their role in facilitating access to capital that may otherwise be challenging to get. Our conversation with Amos Winbush III, CEO of Bckers is coming up right after this.
Speaker 3:
Connecting to opportunity is just part of the hustle.
Speaker 4:
Opportunity is using data to create a competitive advantage.
Speaker 5:
It's raising capital to help companies change the world.
Speaker 6:
It's making complicated financial concepts seem simple.
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Opportunity is making the dream of home ownership a reality.
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Writing new rules and redefining the game.
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And driving the world forward to a greener energy future.
Speaker 10:
Opportunity is setting a goal.
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And charting a course to get there.
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Sometimes the only thing standing between you and opportunity is someone who can make the connection.
Speaker 13:
At ICE we connect people to opportunity.
Josh King:
Welcome back. Remember to subscribe to Inside the ICE House, wherever you listen to your podcasts, and please rate and review us on Apple Podcasts so other folks know where to find us. Our guest today, Amos Winbush III is the co-founder and CEO of Bckers, a FinTech company that helps small and medium-sized businesses establish credit worthiness and gain access to institutional capital. A serial entrepreneur whose journey began in 2007, Amos has excelled in creating companies across various spaces, with Bckers being his fifth venture. He's previously served on the board of directors of the United States Congressional Foundation and the New York Urban League, and is currently on the board of Pursuit Learning, a multi-billion dollar fund investing in SMBs across the Tri-State Area.
Amos, thanks so much for joining us Inside the ICE House. Welcome back to the New York Stock Exchange.
Amos Winbush III:
Thanks for having me, Josh.
Josh King:
You were last here, I don't know, maybe eight weeks ago or so for the opening bell at the National Museum of African-American History and Culture. Your memories of that experience and those that were there with you that day?
Amos Winbush III:
Come on. It was amazing. It was really, really good. Not only to just be there, but to learn that it was the first Smithsonian Museum to ring the bell was pretty great.
Josh King:
What's your involvement with the museum?
Amos Winbush III:
My godfather was one of the first funders for the Smithsonian Museum and we've stayed pretty close to it. The co-chair of my board, his sister's an exec there. It's deep in our family, I guess you could say.
Josh King:
Can I ask who your godfather is?
Amos Winbush III:
Byron Lewis.
Josh King:
Was he there that day?
Amos Winbush III:
Byron was not there. Byron is 92. He founded UniWorld and later sold it to WPP. Every major black movie that you can possibly think of from Shaft, to campaigns for McDonald's and Quaker Oats, it was UniWorld who worked on those campaigns.
Josh King:
We lost Richard Roundtree a couple of months ago. How were you connected to Byron and what influence did he have as a godfather on you?
Amos Winbush III:
Byron's awesome. Every chance that I get, I sit at his feet and just listen to stories that, to us are in pop culture, but for him it's just his life from him talking about Harry Belafonte and Aretha Franklin and Prince and all of the greats that you could possibly think of. Those were his friends. We were connected maybe 15, 16 years ago. I had gotten a 40 Under 40 award and I was wearing pink pants to get my award and he was in the audience. He walked over to me at the very end and he was like, "You're a special kind of guy." That was how our relationship started. What I didn't realize is that our wives were also friends. I had no idea. We went to Sarah Beth's for a brunch and both of our wives started talking to each other first and we're looking like what is going on? They've known us before kids, been with us ever since.
Josh King:
I gave Amos a little quick overview of Bckers in the introduction, but for our listeners, because we're going to be delving so much into both, that company, your story and also the journey of SMBs, just frame it up for someone tuning into our podcast, what's Bckers.
Amos Winbush III:
Bckers is a tri-sided platform. We sit inside of three ecosystems, seamlessly; the banks, the SMBs, and the SMB customers, to provide visibility into the creditworthiness and risk of a small and medium business. The problem that the SMB ecosystem has is that most companies succeed or fail with having access to 20 to $50,000 in capital, but banks aren't lending that amount because it's really risky. Typically, with no standardized underwriting process, they look at five years tax returns and two years to three years of revenue. If most companies are in the red, they're not getting a loan. Four out of five SMBs are declined every year, and that leaves about 11.5 million businesses in the arms of predatory lenders, high credit card debt or not having capital at all, which means they'll go out of business.
Josh King:
I mean, is a loan of 20,000 to $50,000 worth it to a bank to do five years of tax return analysis?
Amos Winbush III:
It's not. It's not. That's a major issue, that it takes the same amount of time to do a $20,000 loan as it does a $2 million loan. If you're a bank, where do you put your resources, understanding that you don't have the infrastructure internally to nurture small and medium businesses at a larger clip to bring a return? Our job is to do that for them and bring vetted deal flow that they're able to invest in right now.
Josh King:
I want to read a little bit from the mission statement of Bckers. Bckers enables banks and lenders the ability to reevaluate their SMB nos creating a pathway to yes, for previously denied loans. Why are there difficulties in approving these types of loans, requiring resources like yours to help access capital for these businesses?
Amos Winbush III:
Well, most banks can't, or are ill-equipped, to understand the risk of small and medium businesses. They look at the binary numbers. They don't look at the enthusiasm of the community around that business. Where Bckers saw in opportunity is within the $15 trillion disposable income that sits in the pockets of average everyday people. We said there's an opportunity to activate that capital into growth capital to fuel these businesses. That then brings visibility into the credit worthiness and the risk of those businesses, where now the banks don't have to do any work. They look at the data. How many businesses are raising capital in these communities? How many people are investing in these businesses and what's their return rate? Have they defaulted? Ultimately, Bckers being able to sit in three ecosystems, our technology can tell if a business needs to raise capital within six months, before the business even knows, even to the point of how much capital they'll need to raise. It's bringing visibility into perspective SMBs, as well as SMBs who are already within the lending portfolios of banks.
Josh King:
Let's go into your way back machine. When was the first time you needed to ask some party for capital for something that you wanted to do that you couldn't find in your own bank account or in your back pocket?
Amos Winbush III:
We do it now. I think, initially, you put your own money in, it shows that you're a believer in what you're doing, and then you go and raise capital. I understand very, very intimately what it feels like to have a bunch of nos. I understand what it feels like to have a centralized system that says, "If we don't believe in what you are doing, you are unable to do what you want to do."
Josh King:
Tell me a story. Young Winbush needs some money.
Amos Winbush III:
Young Winbush, as of three months ago, needs a million and a half dollars. You go through the process of raising capital ... It doesn't matter that I've had two exits and this is my fifth company, you're always asking someone for something.
Josh King:
Tell me about the first time though.
Amos Winbush III:
The first time was 2007. I was a newlywed. We were living in Lower Manhattan in Battery Park. I was a singer-songwriter. I was in the recording studio. My mobile phone crashed and just out of sheer frustration, I went home, went to bed, had a dream about creating a platform that would wirelessly [inaudible 00:13:18].
Josh King:
This is everyone's nightmare by the way. You've got your life on this device and suddenly it gives up some X on the screen, or whatever your screen was showing.
Amos Winbush III:
Completely black. There was nothing that could be done. Yeah. Just through the process of just figuring out what the business would be, I went out to raise capital and it was impossible. Number one, this was 2007. There was no startup community in New York City. We literally built that from the ground up. It was going into bars that we had converted into pitch groups and just a bunch of nos. My wife and I, I love her, we ate ramen noodles and chopped up wieners. It was a struggle, man. I understand exactly what it feels like to raise capital and get a bunch of nos. By the grace of God, the company ...
Josh King:
What was your first yes for that?
Amos Winbush III:
I hired a CFO. My CFO brought in his relationships and we were able to raise 1.4 million. This was 2008, 2009, which was really difficult in the market because everything was crashing, but we were the only company, or the only black company, that was able to raise over a million dollars in 2009.
Josh King:
As you were sprouting ideas for your current idea, Bckers alongside your co-founder, Mehmet Balak, beyond what you've just told me, personal motivations and past experiences that drove the desire to support this segment of the economy?
Amos Winbush III:
Yeah. For me, personally, my grandfather was a small business owner. He had several trucks. This is my dad's dad. From a very early age, I understood what that looked like, to run a business.
Josh King:
Out of where?
Amos Winbush III:
In Louisiana. I also understood the sacrifice, because He was traveling all the time. For Mehmet, his dad was a carpenter and a mechanic so he understood the struggle of what it felt like to both see a parent struggle to raise capital and have a sustainable business that allowed you to eat and have a roof over your head. We also understand that launching a business is not a singular thing. Most families put capital in together. It's a joint thing. If your business fails, it's more than you that's just failing, it's your entire family that could go bankrupt.
Josh King:
Your grandfather scraped together to get truck number one. How did that work?
Amos Winbush III:
Truck number one, then he got truck number two and then truck number three.
Josh King:
Hauling what kind of stuff from where to where?
Amos Winbush III:
I don't know that. We didn't really talk about it. I think that's another thing that's really important for us, when we talk about small businesses, it's communicating. We didn't talk about it. I didn't learn what my grandfather did until I think I was in my teens.
Josh King:
What was the process for you and Mehmet deciding on this sort of funny spelling of the pronunciation Bckers? B-C-K-E-R-S.
Amos Winbush III:
The fact that you just asked me that question is the reason why we did it. Just to see B-A-C-K-E-R-S was a little weird. I went back and forth with taking the A and the E out and just having it maybe B-C-K-R-S. There's no rhyme or reason for it, just number one, it was too long, I guess you could say. Even without the A, you still know that it's Bckers and that's why we did it.
Josh King:
I introduced you at the beginning of the show as Amos Winbush III. I think we have ticked off Amos, I. Amos, Winbush II, your dad, he grew up in Louisiana, deep musical heritage. Before we dive really deeply into entrepreneurship, your journey started in the entertainment industry. Tell me about how that began.
Amos Winbush III:
Yeah. Yeah. Everything started with music for me. I remember my dad, very early on, touring and me standing on the side of the stage and watching artists like Mavis Staples and just really amazing blues singers and gospel singers just rip it up.
Josh King:
What kind of musician was dad?
Amos Winbush III:
Dad's a lead guitar player, but also he plays multiple instruments. I knew that it was something that I wanted to do only because he would invite me into those spaces with him and I would sing for his friends and I would see their response. I'm like, "Oh, I guess I'm good at this. I want to keep doing it." He never pushed me. He nurtured it. He never said, "Do you want to do this? If you want to do this, it has to be this sacrifice." It was none of that. It was, I'm going to be there if you do it or if you don't do it. I think my earliest memory of performing was probably seven, eight. My mom then nurtured us on the gospel side. We sung in church choir every Sunday, so I understood what that sacrifice was. It prepared me for speaking in front of crowds and being able to hold my own and also keep a captive audience for people. It's storytelling at its most purest form. Yeah.
Josh King:
Amos, on episode 398 of our show, which we did earlier this year, Grammy winning DJ Paul Blair, also known as DJ White Shadow was joining us. He talked about his creative process, developing new sounds for some of Lady Gaga's hits to Superbowl ads. You've got a single 'Babylon of the Orient' made its way onto the opening ceremonies of the 2008 Summer Olympics. For something like Babylon of the Orient, take us through your creative process.
Amos Winbush III:
(singing)
That's a really great question. I had moved to New York City at, I think it was, 19, 20, and got an entertainment attorney, Andy [inaudible 00:20:26], at Greenberg Traurig through the process of just creating. He said, "You should meet David Liang." At the time David Liang was the former roommate for John Legend and he was working on this fusion album of Chinese beats and Hip Hop. We met and he's like, "Let's work together."
The funny story about Babylon of the Orient, we recorded that in his shower, in his bathroom. Here I am singing in the bathroom and I'm like, "I don't want to do this. I don't want to do this." Little did I know, was that that song would be pre-downloaded on SanDisk MP3 player and sold millions of copies around the world and allowed me to save up money to start my first company. That's literally where the money came from, that song.
Josh King:
How long from the moment in the shower until your bank account starts filling up. I'm just curious about how the music business works in a situation like that.
Amos Winbush III:
Typically, it's about a year to two years, sometimes even longer than that. If I'm not mistaken we recorded it in 2006. I didn't start seeing revenue until 2007, 2008-ish.
Josh King:
It starts funding your first company, I think CyberSynchs, right?
Amos Winbush III:
Yep.
Josh King:
A universal synchronization firm that specialized in the development of disruptive mobile technology. That was your first venture into entrepreneurship, quite the break from Babylon and the Orient, and what we just heard. When we were touching on this story earlier, you were getting the money, but what did you actually have to do to create CyberSynchs?
Amos Winbush III:
I reached out to my business attorney, sorry, my business manager at the time, and was like, how do I start a tech company? He's like, "You have to find software engineers." I'm like, "What's a software engineer? I don't know what that is. Where do I find them?" It took some time and I had to do some research, and this was late 2007, early 2008. I put an ad on Craigslist, and this was before Craigslist started charging for their ads. I started interviewing people at the local Starbucks down the street from my house. That was honestly how it started from; asking the question, finding the answer, moving into action and building.
Josh King:
Are the engineers mostly in the Battery Park, New York Metro Area, or are you getting them from Czech Republic?
Amos Winbush III:
They were in Brooklyn. I was interviewing people, they would come to the Broad Street Starbucks around the corner from my house, and I would sit there all day just talking to people over and over and over until someone was like, "Oh, we can do this. We can do this." Because most of the time it was, "We can't do this. No one's ever this before." No one ever knew what wirelessly synchronizing content was at that time. You had a USB cord, you stuck it in your tower on your computer, your desktop, and it downloaded that information. We were thinking outside of the box, and I wanted to do something that was bigger than what we're currently seeing.
Josh King:
At what point, emotionally, psychologically, does this make the transition from ... I mean, you're a successful musician at this point. That seems to be your career track. You've got this side hustle because you're frustrated. At what point does those paths cross and that becomes the passion and the music becomes something you enjoy on Sunday afternoon?
Amos Winbush III:
When it cannot leave your spirit. When you wake up thinking about it, you go to bed thinking about it, you dream about it. To the point where I had to put a pad and pen on my nightstand, because I would wake up in the middle of the night with ideas. It was really difficult. It was super scary. It was very challenging. I knew I had to do it.
Josh King:
How did it exit?
Amos Winbush III:
We licensed it out to a major telecom on the continent of Africa, which is still there now.
Josh King:
In a 2013 interview that you did on SiriusXM, you mentioned entering the tech industry with little knowledge of starting a company in the space, and you just talked about hiring software engineers, finding them in Brooklyn, but what did you have to do to sort of actually get the knowledge to be a leader of a business?
Amos Winbush III:
It's a really great question. I think anyone wanting to start a business should automatically understand that it's not something that you naturally have. The first business that I created, it was leading by fear, which created a really, really tough and toxic environment, not only for me, but my people that work with me and even inside of my family. Because when you don't have experience in something, you don't have the right people around you, everyone else is trying to figure it out, you go to the natural inclination, which is, "I'm scared. I'm afraid. I'm going to hold this from you until I feel comfortable releasing it to you." That was my life. It was really, really difficult.
I think what shifted, for me, was the prime minister of Nevis and Saint Kitts invited me out for my 30th birthday celebration and also to tour the island, talking about entrepreneurship. I was walking on the beach and the first thing that I could think of was, "I'm no longer going to be 30 Under 30 anymore." I had just received the Inc Magazine's 30 Under 30 a few years before. Who am I at this point? It was really diving into me as a person and releasing those badges of identity that many of us walk around with to just find out what I needed and what I wanted and what I wanted my legacy to be, in order for me to become, I think, a half-decent leader.
Josh King:
If you think about that process of you with your producer in the bathtub, creating Babylon of the Orient and however it begins with notes on a page, some experimentation on your own instrument to mix, to finalization, to the form of distribution that created a revenue stream. The parallels of starting a business, coming up with an idea on a napkin and hiring those engineers, learning some fundamentals of leadership and management. There's some parallels there in terms of completing a finished picture of what a business is. As an artist at your core, what do you think of the sort of sculpting process of a business that's ultimately ready to go to market?
Amos Winbush III:
That's a really great question. I think, much like in music, you recognize that you come with an idea. That idea is only solidified by the people around you who also have ideas. I almost akin it to a thumbprint. As a founder, you put your thumbprint there and then you get your team to place their thumbprint on top of that. It creates this amazing, unique, specific thing that everyone is responsible for nurturing.
I think when you look at creating music, it's much the same. You have a songwriter, you have a sound engineer, you have a vocal producer, you have a mixer. You have all of these different entities working together to create this one thing that is supposed to do one thing, which is move the listener, emotionally. Finding some part of who they are in what you've created. I think at the most natural part of creating a business, if you do it the right way and for the right reasons, is having your users and the people who interact with that business find themselves in what you've created. That's the success. That's the success that entrepreneurs seek. Anything outside of that is selfish and ego-driven.
Josh King:
From that moment in 2008 founding CyberSynchs, to leading Bckers today, how has your journey as an entrepreneur evolved from that first idea to idea number 2, 3, 4 before we get to five?
Amos Winbush III:
First one was very selfish. It was; I had a problem, I knew other people had the problem, I'm going to solve it. That's okay. I think being an entrepreneur, you go through different stages in life. You go through seasons. There's seasonality in everything. The second was much like the first where there was a problem, I wanted to fix it.
Josh King:
What was that problem?
Amos Winbush III:
It was a company called Group Exit. I hate group text messages with a passion. I wanted to create something that would automatically remove people from your group message without them knowing it. If they said your name, it would automatically fill back up so you can catch back up what people were saying. Really great idea. It caught on like wildfires, but Apple at the time released a new software development kit that removed us having access to text messages. That business went away instantly.
I think it was much the same for the next business, which was all about finding people in your near community that wanted to do like-minded activities. I'm a big tennis player and I also run, and it was really difficult to find people who played at my level and also who would run at the speed that I would run. I created this app called Woez that was hyper local to find people in your area. Six months later, Facebook created meetup groups, or something to that effect.
I had always felt that I was ahead. Then something happened in the market that overtook. Right around, I would say, Woez is when I connected with Scott Case, Steve Case at Startup America Partnership under the Obama administration. It was all about community and I had never experienced that before. Traveling around the country, creating startup ecosystems, supporting the individuals who were doing it, bringing in resources, and that switched for me. Startup America Partnership switched for me. Scott Case switched for me. Steve Case switched for me.
Everything from then on was about the greater good, not only for communities but the larger community. I created a company called 8, which is all about telling the entrepreneurial story. I partnered with Forbes and we created something special called Forbes8, and we traveled around the world creating TV shows and providing capital to small businesses. Exited that business to Forbes in 2021 and started Bckers. Bckers really started out of necessity though. We were in a pandemic and there were thousands of businesses shutting down. More close to home, one of the favorite wine shops that we love, it's a neighborhood wine shop called La Petite Cave, and we were walking on our Friday walks during the pandemic and ...
Josh King:
Is this Battery park or where [inaudible 00:33:00].
Amos Winbush III:
This is in FiDi, in the financial district. The owner, Lawrence, had a sign on the door saying he needed $20,000 and it wasn't a gift, it was a loan and he was going to pay them back. Simultaneously, looking at that and then going home and seeing Robert Smith on CNBC saying that the banking system is broken and we need to do something different, Bckers came out of that.
Josh King:
With over 33 million small and medium businesses nationwide, ranging from the local grocery stores that you might know from Louisiana to that wine store in the financial district, not all are going to need Bckers as a resource. How do you and your team narrow down this potentially vast TAM to a core group audience that you're targeting with the platform?
Amos Winbush III:
Yeah. I guess you can take it back to some stats. There are 33 million businesses in this country. 230,000 of those businesses have revenue over $5 million. The lion's share below that, which is over 90%, are bringing in less than a million dollars a year. When we look at businesses who ultimately are our target audience, our TAM, it is well into 16 million businesses who annually are looking for capital, 14 to 16 million. 2.8 million of them receive capital from banks, to the tune of almost $2 trillion being deployed, but the other 11.5 plus million aren't getting capital. If we do what we're doing properly, with amazing partners across the industry sector, then we don't have to touch every business to make a difference. What we do have to do is to ensure that we are visible to those businesses and allow them to make the decision that if they need capital, there's infrastructure to support them getting that capital.
Josh King:
Bckers looks to increase funding success rate in this area from, as you said, maybe one in five people who need to get money to maybe two in five. The increase from one to two in five may not seem incremental, at a micro level, but at 11.5 million potential customers, you can begin to scope the opportunity. What broader impact would the success of the goal have on the business landscape if two in five can now get money instead of one in five?
Amos Winbush III:
It would bring 3 million businesses into the banking ecosystem that are currently not in the space. It would add an additional $9 trillion to our GDP. SMBs currently now report over $12 trillion or covers over $12 trillion in our GDP, which is half of our gross domestic product. When you think of providing infrastructure and an ecosystem to undergird these businesses, it shifts not only the business, the family, but the community. Bckers having the ability to activate that customer, that's walking into your business every single day, from a transactional relationship to a transformational relationship is the difference between you having longevity and you being here and gone tomorrow.
Josh King:
Let's talk a little bit about how this knitting works, how the technology at Bckers works. Your three primary stakeholders are; banks and lenders, small and medium-sized businesses and consumers. How does the platform unite all three?
Amos Winbush III:
We live inside of the banks back-end. It's more than just having access to transactional data within the business itself. It's about having insights on cash flow, so what's coming in, what's going out. That's one. The second way is that internal small business, it's bringing insights to the raw data that banks and other lenders just don't have access to. What's your average transaction amount within your sales? We could say, within our technology, if you raise that by 10%, it would open up X amount of loans availability for you, and it would bring X amount of dollars to your bottom line. It's having that customer who walks into your business every single day for a haircut, or a bagel, or coffee, or a pizza to now feel even more grounded in the relationship that you have with them as a small business, to them being a participant in the success of your business and also inviting other people into your space.
Bckers, ties all of that in with one back-end system. APIs go out or thin clients go out on the mobile for customers and SMBs, and we bring it all into this amazing insights portal that gives us valuable data and interaction with people.
Josh King:
The virtuous circle of Bckers. After the break, Amos Winbush III and I are going to continue to discuss the problems that Bckers is working to try to solve and how local and federal legislation is impacting their mission. All that and more coming up right after this.
Speaker 16:
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Josh King:
Welcome back. If you're enjoying our conversation, and want to hear more from guests like Amos Winbush, CEO of Bckers, remember, please subscribe to the Inside the ICE House Podcast wherever you listen. Give us a five star rating if you would, and review us on Apple Podcast.
Before the break, Amos and I were discussing his Louisiana roots, his musical background, and then his entrepreneurial pursuits and how his current company Bckers is working to help small and medium-sized businesses. Amos, let's shift the conversation to artificial intelligence and its impact on each stakeholder. As we were talking. I was imagining, yeah, this is so made for AI because the underwriter can't possibly think about doing all this work, but if he has some AI minions and robots to sift through the opportunities, perhaps there's an opportunity for Citibank, JP Morgan, Bank of America to be in on this. How does AI assist engaging the need for capital, determining the optimal timing for additional funding?
Amos Winbush III:
Number one, having just the sheer ability to crunch raw data and bring insights to that is just so valuable. Up until this point, it hasn't been possible. Then taking quantitative and qualitative data points to make this full, full picture of both, what's happening internally inside of your business, what's happening on the community level around your business and what's happening with comparable businesses that could be 5, 10, 15 miles away. It allows us, as a business, to say, your credit worthiness is 780 based on these, their credit worthiness rating is 800 based on those. It brings them back with a really nice bow that says, "This is what you could do to change that, and these are your potential partners."
Josh King:
In what ways does Bckers use AI within the platform to enhance consumer usage? Are there features or functionalities that help to create a more personalized and effective user experience that benefits those who patronize these small and medium-sized businesses, like your wine store in FiDi?
Amos Winbush III:
I think discoverability is really important around that. It's taking, not only your habits, but predictable habits and turning them into what we think you would like to fund, both within your community and across the greater landscape of small and medium businesses. We don't lean heavily on the consumer side, because we want them to be able to make their own decisions without us driving those outcomes.
Josh King:
Shifting the aperture to public policy a little bit, taking a somewhat broader view of the topics that we're talking about, President Biden released his 2025 proposed budget in March. It included $971 million for the SBA, which is a 25% increase from his administration's first budget back in 2021. Increase, Amos, of over 240 million in the course of his term. How crucial is this support to small and medium-sized businesses?
Amos Winbush III:
So crucial. I think passing this budget, number one, we're still operating under a continuing resolution. I think we need to get a budget approved. Second, I think it does something that the SBA hasn't done up until this point where they're lending directly to small businesses within their 7(a) Program. It allows the business owner to go directly to that small and medium business agency and get those loans directly. I think that's the 20 to $50,000 that we're talking about where banks don't have that ability to do it. We also understand that the SBA underwrites 85% of the loans that banks give out, so they have a big responsibility to ensure that capital is being released and it's being released responsibly and within the right communities.
Josh King:
About a year ago, Amos, President Biden discussed the reliance on small businesses to the overall health of the economy, I want to listen a little bit to what the president had to say in a speech celebrating National Small Business Week.
President Biden:
Small businesses are the engine of our economy, the glue. They really are the glue, the heart and soul of communities. Most citizens don't know it is that you small business owners, you account for 40%, let me say it again, 40% of the gross domestic product of America, small businesses. Not mega corporations, small businesses. You employ nearly half of all private sector workers. I don't think people know that. I don't think they understand the consequence, the economic consequence. You're involved in and you're innovative across every single solitary industry.
Josh King:
Talk about the two data points that President Biden brought up. First of all, 40% of America's, GDP employing half of all private sector workers. This kind of plays like government, military. How would you characterize, Amos, the current state of small businesses in America and the importance that this group receives the kind of support and funding that it needs, the increased budgetary allocations that the president is trying to put through in this budget.
Amos Winbush III:
SMBs are struggling. That struggle often isn't seen because we go about the business of getting it done. I think, also, SMBs are really hesitant to share that they need help. Destigmatizing that is really important in allowing small and medium businesses to raise capital with dignity is key. When you look at access to capital, it has to be a decentralized approach because the problem is just so big. There are not enough players to issue out cash, to deploy cash. I think when you look at small and medium businesses, as a whole, and even if you take what President Biden said and you drill it down to the numbers, half of the US workers represents 62 million people. 62 million people. When you think about those 62 million people that are employed by the SMBs it then humanizes the need for an ecosystem to support them.
Josh King:
On behalf of the 62 million people, the support for small businesses in the budget included this new 7(a) direct lending program. It designs to address gaps in access to really small dollar lending, also potentially expand the SBA's direct lending capabilities. How could these expanded capabilities impact SMBs in their efforts to access capital, whether small dollar or even much larger loans?
Amos Winbush III:
It does a couple of things. It creates a new pathway that wasn't currently available. Just take it a step back. If you look at what happened during the pandemic, the government created a multi-trillion dollar financial vehicle, not to prop up hospitals or big businesses, it was to prop up small and medium businesses, because they knew that if SMBs did not get the capital they needed, it would crash our economy. If you take that and look at a 35,000-foot view from that, the question would be why? When are we going to start taking this seriously? We're sitting on a ticking time bomb, if you think about it, where small and medium businesses across towns in this country, if they don't receive the support, the financial support and resources that they so desperately need, it will crash small towns across this country. I think if we look at it that way, then we'll have more of a drive to create solutions and different avenues that look and feel different from what is currently in the marketplace.
Josh King:
A survey that was taken last year on small business credit reported that startups of color, Amos, are significantly less likely than white-owned startups to receive funding through lenders, despite being more likely to apply for financing from a lender. Do you think that the proposed budget in 2025 does enough to address the difficulties in accessing capital for underserved groups?
Amos Winbush III:
I don't. It's not just this budget. I think it's the way that the financial industry operates and moves. I will say that companies are trying to do more. The reason why this is so important to me is I'd worked closely with JPMorgan Chase, Advancing Black Pathways, with the then CEO, Thasunda Duckett, and Jamie Dimon and Sekou Kaalund, and recognize that this is a major bank with over $30 billion that they're deploying to the African-American community. The problem was that you just couldn't find them. It's like, "Well, that's not a problem."
Josh King:
You couldn't find what?
Amos Winbush III:
They couldn't find the businesses.
Josh King:
The businesses.
Amos Winbush III:
Yeah. Yeah. The black and brown businesses to invest in. Well, if that's the issue, create a solution that finds and resources those businesses early on where you can then just invest in them. We need more of that. We need more of individuals wanting to take a step back to say, I'm going to look on the community level, create platform or an initiative that removes me out of the way, I'm no longer the bottleneck and allows technology to be that decentralizing force that allows individuals to get the capital and the resources that they need.
Josh King:
I mean, if JPMorgan can't figure it out, you wonder who might be able to figure it out. You've mentioned Jamie Dimon. We had Peter Scher, the vice chairman of JPMorgan on maybe a couple of years ago, maybe coming right out of the pandemic. Peter's responsible for taking Chase into communities like Detroit and growing out the branch network in places that had begun to erode. I mean, what kind of access and communication have you had with the major banks and what they're doing to increase access?
Amos Winbush III:
Yeah. I want to take it a step back. I don't think that they can't figure it out, it's not their business model. For us to assume that their model is to resource and equip small and medium businesses, at a larger rate, is false. They have the resources, they just don't have the infrastructure, internally. Does that make them bad? No, it doesn't make them bad. It just makes them good at what they do. It's our job as innovators to create a runway that is debris free for them to invest in those small and medium businesses at a larger rate. We have really great conversations with big banks, regional banks, community banks. I sit on the board of Pursuit Lending. It's all about creating access to capital for small and medium businesses across the Tri-State Area. Could we do that more? Yeah, we could. Could large banks create initiatives that allow small and medium businesses to have easier access when preparing for loans, going through the underwriting process? Yeah, we could.
Josh King:
From banks to government, talking about the Tri-State Area, Amos, the New York State Senate Bill, A4255, the New York Small Business Rent Stabilization Act is currently in committee. Why is rent stabilization so crucial for the wellbeing and sustainability of small and medium-sized businesses?
Amos Winbush III:
It is by far the most expensive line item in their P&L. If you are looking at rent prices that are raising sometimes 20, 50, 60, 70%, it is a non-sustainable runway that we're putting in front of these businesses. They can't make enough money to support that. I think having a panel that convenes, that set some parameters on what landlords could do, how much they can raise their rent, would cap some of these businesses from shutting their doors.
Josh King:
I mean, you've lived in this neighborhood, Lower Manhattan, for so long. You go up as far as 14th Street and you see these amazing neighborhoods, but a lot of empty storefronts. What's the balance between a landlord presiding over a space that has no economic value because there's not a soul in it, to lowering rent and making that space available to an SMB?
Amos Winbush III:
If I understand your question, what's the value in having that space being empty or filled?
Josh King:
Yeah.
Amos Winbush III:
There's no value in having it being empty. I think the value, if there is value, it sits on the side of the owner of the building where ... I really can't even see that as being a value, because they're having carry costs that they're putting out of their pocket every single day or every single month. I can tell you where the value is for putting bodies in that building.
Josh King:
Let's flip that coin then.
Amos Winbush III:
Putting bodies in that building, not only would ensure that small and medium businesses keep their door open, it'll ensure that communities can function properly. If you have the ability to walk down the street to a cleaner that you've built a relationship with for the last five years, or however long, or a barber or whatever it may be, it shifts the feel and the nature of what community is. That's all we want. We want to be heard, seen and valued. If we take that into perspective when we're setting rents where maybe you don't get a 75% markup, maybe you get a 20% markup, I think that's okay.
Josh King:
As we begin to wrap up, considering the discussion we've had, raising the funding success rate for SMBs, would be achieving this sort of two-in-five target the sole measure of success for Bckers or are there other criteria that you guys are looking at?
Amos Winbush III:
The measure of success for Bckers has nothing to do with the end result around two-in-five. I think it's if we have the ability to shift the landscape from how it operates now to what it can be or could be. If, myself, along with the team, if we're still valuing the work that we're doing, if we have the ability to share that mission and purpose with the world, then I think that's what ultimately will drive the success of Bckers, not the two-in-five. If we have the space where we can share that with people, then there are very few people who will say, "No, I don't want to participate in that." They'll dive in. If you are literally going into a Walgreens and you're spending a dollar to $2 on a Red Nose campaign, you could do that within a small business in your community as well.
Josh King:
You are up and running. You've got some runway behind you, you've got a lot of runway ahead. What do the next 12 months look like for you?
Amos Winbush III:
It's a really great question. We are partnering with amazing people. We are looking at private equity deal. We are partnering with an amazing bank. We've partnered with a firm called Hootsuite. We are really excited about where we are going. I would say within the next 12 to 15 months would look a lot like having small and medium businesses recognize that there is support out there and there's an ecosystem out there that's about bringing visibility into their innovation and finally being able to quantify the people that walk through their doors for their value. Yeah. That's what I think the next 12 to 15 months would be.
Josh King:
Well, it may not come in that timeframe, Amos, but we hosted you for the National Museum of African-American History and Culture up on that podium to ring the bell. Whatever time down the road, we'd love to have Bckers up on that screen and have you ringing the bell for that.
Amos Winbush III:
That's the goal.
Josh King:
Thanks so much for joining us Inside the ICE House.
Amos Winbush III:
Thanks for having me, Josh.
Josh King:
That's our conversation for this week. Our guest was Amos Winbush III, CEO of Bckers.
If you like what you heard, please rate us on Apple Podcasts so other folks know where to find us. If you've got a comment or question you'd like one of our experts to tackle on a future show, or hear from someone like Amos Winbush, please leave us a review. Email us at [email protected] or tweet at us @icehousepodcast. Our show is produced by Lance Glynn with production assistance, editing and engineering from Ken Abel. Pete Ash is the director of programming and production at ICE. I'm Josh King, your host, signing off from the library of the New York Stock Exchange. Thanks, for listening. We'll talk to you next week.
Speaker 1:
Information contained in this podcast was obtained, in part, from publicly available sources and not independently verified. Neither ICE nor its affiliates make any representations or warranties, express or implied as to the accuracy or completeness of the information, and do not sponsor, approve or endorse any of the content herein, all of which is presented solely for informational and educational purposes. Nothing herein constitutes an offer to sell, a solicitation of an offer to buy any security, or a recommendation of any security or trading practice. Some portions of the preceding conversation may have edited for the purpose of length or clarity.
