The Workstream team has the privilege of working with an amazing group of businessmen and investors - one of them being the ever-innovative Wenz Xing. He's currently an investor at Bullpen Capital, where he focuses on companies in the puberty stage in between seed and series A. They call that stage ‘post-seed.’ In this Q&A, Wenz imparts some of his hard-earned insights on leveraging technology and what makes automation work.
Desirene (D): What led you to your current role as an investor at Bullpen Capital?
Wenz (W): How did I get here? Well, I have always found myself gravitating towards people who are working on new things. The first founder I worked for when I was 19 had me knocking door-to-door at restaurants to pitch them on raising money from their customers. It was a crazy idea – crowdsourcing loans from the community.
From that point on I always wanted to be surrounded by people who solve problems in creative ways. Even though I’m on the other side now as an investor, I still view myself as working for founders, not the other way around.
D: Are there any trends that excite you?
W: I’m writing during the COVID-19 crisis where we are seeing record levels of unemployment claims being filed globally, at magnitudes greater than the sum of prior recessions combined. My mom’s a casino dealer and got laid off, whereas knowledge workers such as myself are able to work from home.
Knowledge workers also tend to be able to move cities, switch companies, and get access to credit at cheaper rates. As a result what we have today is a system where hourly employees tend to be ’trapped’ in whatever they currently are doing. Too expensive to move, too expensive to switch jobs.
I believe we are at a point where technology can now be used to solve fundamental problems such as labor friction. For instance, the same company that handles my mom’s payroll or onboarding may be able to offer her a loan for when she wants to move cities or switch industries. Most hourly workers don’t have the cash cushion to afford these sorts of switching costs. But this is a huge barrier because social mobility is directly linked to being able to switch jobs or move to new places.
There is now enough data being collected to do underwriting in quite sophisticated ways, outside of the traditional FICO score. A vertically oriented software company who sits in the middle of all this data may be able to correlate a worker’s attendance rate or job performance to a score of trust, or capability to pay back a loan. This means opportunities for credit and subsequently wealth creation. Creative ways to reduce labor friction can result in increased social mobility, thus lifting the bottom up.
D: What tools / services do you use to improve productivity?
W: The Five Minute Journal provides structure to my mornings/evenings. It really helps me to put a frame on how I should be spending my time and what to reflect on.
D: With regard to your investment in startups in the hourly work space, what made you decide to invest in this area?
W: I’m a big believer that technology and humans have a symbiotic relationship – processes such as automation actually work better and make economic sense when humans are involved in the loop.
Ocrolus is the first company I invested in at my firm, they take unstructured financial documents such as bank statements and turn them into easily ingestible data sets. One non-intuitive insight that they had was that by placing hourly workers in the automation loop to double-check some of the characters being digitized, the company could get to 99% accuracy much faster and with a lower cost structure than a brute-force AI approach, which requires a magnitude greater amount of training data.
It was a win-win, both on the product front and on the business model.
D: Do you have any books you recommend to people in your industry?
W: Technology Revolutions and Financial Capital by Carlota Perez. It’s a compelling 10,000-foot view of what role investors play in society with respect to the progress and dissemination of technology.
D: What quote / mantra inspires you?
W: “Give me a lever long enough and a fulcrum on which to place it, and I shall move the world.” -Archimedes
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Desirene is a marketer and content-writer of Workstream. She has been with the Workstream team for over a year and is based in Singapore.