Maik Taro Wehmeyer, Co-Founder & CEO @ Taktile

0:00All right, welcome back. We are here at Bits and Kretzels. We are here with Maik, the co-founder and CEO of Tactile. Thank you so much for joining us. Well, thanks for having me, guys. Can you give us a bit of an introduction into who you are and what you're building? Yeah, well, I'm Maik, co-founder CEO of Tactile. We are the vertical solution in AI for banking. So we help banks, insurance companies to build better credit decision models, better fraud models. and we are based actually in Berlin so European grounds but we expanded to the US I'm in New York now but I'm back in Munich now for the Bits and Presses conference so glad to be here amazing so yeah it's great to have you what pulled you over to New York sorry to say again so why did you end up moving well we for the founding story is we did white combinator in San Francisco however it was COVID so they kicked us out of the country and we started to build the product teams in London and in Berlin and in Romania which by now is actually more feature than a buck because we get for the same amount of dollar a much lower percentile of talent of building the product but our main market is the US which is why I then decided two years ago to move back to New York and build the office in New York.

1:11And is that because of the companies that you work with are they primarily East Coast? Yeah I think it's probably twofold if you sell into financial services the US is just the biggest market in the world we We have 8 ,000 banks in the US and if you want to be close selling it to US banks, you need a sales team in the US. And if you want to have a sales team in the US, the CEO also needs to be there, which is why it was mandatory in the first place to move over. But I think it was the right decision. So, yeah, that's why I'm there. And how are you finding it, living in New York now? The good thing is I took my wife.

1:45So that's kind of made it all a bit more...

1:47Maik Taro Wehmeyer:She likes it too. She likes it too. Thank you. The pleasure. The pleasure. I think it's a very different market in terms of how you actually do business. I mean, we were just having a very, very big deal with a huge bank in Denver, actually. And I was flying over to meet the CEO. And it was a 30-minute meeting. It actually went fine. And then three weeks ago, we had the US Open in New York. And I asked the CEO, hey, don't you want to come by? I have a spare ticket for the semi-final man, which I didn't have. But he said, yeah, I'm coming over. So I had to buy the ticket. That was stressful. But he did come over.

2:22We watched the game and I did ask him in the end. So where do we stand in terms of the deal? And then he looked at me and said, you will win the deal because I know you and I trust you. And I knew this man for 30 minutes from a quick visit in Denver. And I had like one year's open. Like just a different way on how you do business, how you build trust among people, which is, you know, I like that type of enterprise sales motion. So I think it's more my market. but I think there's a couple big differences between the two markets here.

2:51Maik Taro Wehmeyer:Because it's very relationship driven. It's incredibly relationship driven and very trust driven, especially for our product, which we're ripping out the heart of a bank or an insurance company, we put it on tactile. It's a big trust decision that you're making, so you have to feel comfortable with a smaller company like us to go with them. And the best proof point of show trust is the founder and CEO actually like being there and saying hi. Yeah maybe you were just talking about the product. Can you explain to our audience what does decisioning, risk decisioning, credit decisioning actually mean and how do you augment that now with modern technology?

3:26Yeah so like in the end we are trying to own every mission critical decision within a bank or with an insurance company. Let it be if you apply at a credit card at N26 there first needs to be a fraud check a KYC check, then you need to do a credit check, and then every time you swipe the credit card there needs to be an AML or fraud check. Along the customer journey within the bank there are a lot of risk decisions, and we own them. And you can make much better decisions nowadays with AI. The models have learned a lot of things that humans don't know about, and kind of like augmenting in many cases the human intelligence with machine intelligence leads to better decisions which for a bank leads to less fraud which makes money, less credit, more money, higher automation rates, less people, more money.

4:11So there are a lot of business values or divers that you actually can get by introducing Tactile.

4:19Maik Taro Wehmeyer:And what does that mean for the consumer of credit products and so on? So who's maybe not getting a credit line now who was before and vice versa? Well, I think the better user journey is actually very good because they just get accepted faster. So like if you're a small business owner and you apply for a loan at Barclays, it might take you two months, three months to get accepted by the time your business might be bankrupt or your competitors are ahead. So I think like just being a lot faster is what every consumer and a consumer can be an S &B likes a lot. I mean, of course, we're trying to hold out fraudulent actors of the system.

4:54So if you're a fraudulent consumer, you probably don't like us that much. But if you're not, I think it's normally a good thing for us to be around.

5:01Maik Taro Wehmeyer:Yeah, it's super interesting. And maybe shifting a bit to the AI role here, what does it mean to implement AI in that system? And what are you sort of also seeing in financial services more broadly in terms of AI adoption? I mean, it's not super easy because we're operating in a regulated industry. And AI in many cases is just probabilistic. It's not deterministic, meaning whatever input comes out, it's not 100 % clear what output you're getting, which the regulator doesn't necessarily like. Because especially like insurance is like almost like social services in some countries. Same for like banking, meaning like the regulator wants to make sure decisions are being fair, are being honest, are being transparent.

5:43So like mixing AI models with human intelligence and deterministic rulesets is what we do on the platform. And that normally gives a lot of comfort to the regulator of like slowly introducing AI across the path until it's like being understood a bit better. And how is it going from sort of like zero to one? You're building very cool technology, but in a regulated space. What was that journey like to kind of getting the first customers to proving that you had a product that works? It took very long. It took us three years after founding the company towards signing the first customer. Wow. Because you cannot come with a half-baked product.

6:19Yeah, yeah. There are so many bells and whistles that you have to build that it actually, three years, which is now nowadays we see world they want to like see revenue coming in after like six months like 12 months it's just not possible for the type of industry and like product we're operating in so it's rough but once you have something uh it's pretty sticky you know so we've never lost a customer which is pretty pretty pretty incredible and during those three years were there times where you were thinking god is this is this gonna hit are we gonna make it Many times. Many times, but it's Oktoberfest week, so let's keep up the mood here.

6:58Amazing. You just got to persevere. No, it was tough. I mean, I think being resilient as a founder is probably the most important thing. So out of the first hundred pitches towards banks, what do you think how many said yes? One. One. Wow. That's pretty frustrating. Yeah. Really frustrating. You're not used to like getting an O. If you ask your friends out for a B, everyone says yes. Like getting an O in life is like nothing you are like normally familiar with and I think it was really rough. Now it's a lot more saying yes, so it's okay. But I do remember those times, they were pretty rough. And how was it going through YC?

7:34European founder, NYC, building in a regulated space? We were the first remote batch back in the day, so we had a bit different experience. but the way that they take care of us now over time is just insane. We were just invited all AI founders, small group, into Napa Valley a couple of months ago and they keep investing into you. They kept investing into every round that we've been going through. Plus even from a content perspective, they teach you post-series A badge. They say, now it's the AI badge and they keep bringing incredible ecosystem around for us to keep developing. So I think it's not only the first-time badge, as some people think.

8:12if you're successful and of course they have a normal distribution across the portfolio companies but if you're on the good on the good front they keep investing into you but that's actually good what's like the best piece of advice you've gotten from YC the best piece of advice has probably been it sounds so obvious and easy but it's just you know build a product that your customers love and like I didn't fully get that in here and I was like of course I'm getting a product that my customers love but Michael Seibel was our group partner he was like talking talking talking about it with me and said like just spend every minute that you have with customers and every minute means every minute it's not like a day per week it's like four and a half days per week don't don't close partnerships don't talk to investors the whole time like it's all like small gratifying things that by the end of the day doesn't really really help in order to get to product market fit and it's very very hard to measure product market fit but I think I know we've understood what it what it takes it's also what michael told me product market fit is kind of like asking like what's product market fit do i have product market fit and then he was like i mean do you know what it feels like to push a boulder up the hill that's like yeah it's pretty tough it's like then you don't have product if you're chasing a boulder down the hill then you have product market fit you just don't know how to hire the people you don't know how to serve the customers you don't know like how to take the investor calls that's pmf so it's like it's a good rule of thumb pushing the ball up there or you're chasing the boulder down the hill what are you doing right now.

9:40I'm chasing. I got to get out of here. That's amazing.

9:47Maik Taro Wehmeyer:Maybe one last question. What do you think is the most underrated opportunity for founders in AI right now? It's actually interesting. You asked me about the YC experience and I was just saying that they kept inviting us for these AI batches. A couple of months ago, we had these AI batches in Napa Valley. Very small group of people. Sam Altman was there, who used to be the president at Y Combinator, now we founded Oat May I, everyone knows them. He did a fireside chat and was giving his dinner talk around how incredibly powerful LMS will be. They will be able to do everything that humans can do and even more.

10:20Then afterwards, we sat at night by the fireplace, by the fire camp, a small round of people and him, and one of the other founders, he was a bit tipsy, he was like, hey Sam, he was really depressed, kind of like asking, why are we actually still building companies? You told us today that Oat May I is going to conquer the world and going to take over everything. And he said, no, no, no, you misunderstood. I said the LLMs will be really powerful in taking over every human task. But what we cannot do is build enterprise-grade applications. And the biggest opportunity for you as founders, and back to your question, is actually building enterprise applications around AI.

10:53Because here's the legacy system of Barclays or HSBC or Goldman and here's Sam's LLM. But until this LLM gets in there, it's very complicated. legacy databases, there's politics, there's procurement, there's so many things. And he said the biggest opportunity for all of you is actually building those vertical AI solutions and that is actually where the big money is. B2B, that's where we all should be going and that's what founders should be thinking about very heavily. Yeah, I guess that's where that moat can still exist. If you build that gap there, you still have a huge moat. High barriers of entry, which you can solve by, you know, LLMs.

11:28It's just an API. It's not an application.

11:30Maik Taro Wehmeyer:Do you partner with OpenAI on those sorts of things? Or with LLM companies? We are, we are. I think they're... Anthropik is a bit more aggressive in terms of B2B. We just had them in our office last week in New York. So I think, yeah, OpenAI is still very focused on the consumer space. They're just trying to hire 500 forward deployed engineers in order to build that. But they're like very, I would say for the moment, they're still a bit behind. And I think Anthropik is doing a really, really good job at the moment of understanding this enterprise opportunity and hiring industry heavyweights in order to get there, plus partnering with the big B2B SaaS companies out there.

12:10Maik Taro Wehmeyer:So the tech class of the world. Amazing. Thank you so much. Well, thanks for having me, guys. Love it. Thank you. This was fun.