Marla Blow earned her MBA from
Stanford GSB in 1999.
“The importance of
but our incentives are aligned with our
customers’ incentives. We apply behavioral
economics principles to frame when, what,
and how to message our customers. We try to
create messages that drive the behavior that’s
most important to us — making payments
on time, ideally in excess of the minimum
payment, and urging people not to max out
the card every month. We try to keep the
messages positive, in a way that’s measured
and spaced out, getting them the information
they need at the moments that matter.
For example? “Thank you for your payment,
you are on your way to credit success!” That’s
the kind of thing chatbots enable us to do.
It works better than, “Hey, your payment was
due three days ago.” You congratulate them
and celebrate their wins on things that are
consistent with managing their credit well.
That turns out to be incredibly powerful.
Any other ways you offset the higher risk?
We start with a small amount of credit. The
mainstream average credit line is $3,000 to
$5,000. We offer a $500 credit line. That’s
enough to get someone through the end of the
month, order some pizza for their family, and
fill up their gas tank. We can’t take large risks.
For our customers who use the card well, we
grow with them and grow the credit line
to $750, then to $1,000. We eventually hope to
graduate those people into better products.
We’re introducing a new card that has more
of those features, but right now we’re a single-product company.
What do you wish you’d known back
at Stanford GSB that you know now?
The importance of persistence. That has
been the difference maker for me. That
willingness to have 200 conversations just to
get the capital to start the business, to spend
a year and a half listening to the naysayers,
knowing that it’s going to be hard and that
you’re going to have to push against a lot of
resistance. I believe in what we are doing
here at FS Card, and I would have talked to
another 200 people if that was what it took
to build the business. Δ