Welcome to the SMB Tech Innovators podcast, powered by Gusto, where we explore the intersection of financial services and vertical SaaS strategy and discuss how software combats the rising complexity of running a business. In this episode, Lilac Bar David, Co-Founder and CEO of Lili, unveils how AI is simplifying and revolutionizing financial management for small business owners. Lilac discusses the impact of technology and finance innovation in technology and finance, integrations in banking and accounting, and the power of AI in streamlining financial operations for increased efficiency and accessibility through Lili’s unique approach.
Podcast highlights:
- The high consumer expectations in banking services.
- Lili’s mission — to simplify small business financial management.
- Addressing the unique challenges of small business owners.
- Overcoming financial management hurdles in small businesses.
- The synergy of banking and accounting in Lili.
- AI’s role in automating financial management.
- The strategy behind building vs. buying technology for Lili.
- Lili’s plans, including accounting and tax focus.
- Designing Lili for inclusivity, particularly for female entrepreneurs.
- Advice for fintech founders on navigating regulatory challenges.
Listen to A deep dive into fintech evolution with Lilac Bar David and connect with Lilac on LinkedIn.
A deep dive into fintech evolution with Lilac Bar David
Lilac Bar David is a pioneer in the dynamic world of financial technology, working to solve the unique challenges that small business owners face. With a career spanning more than two decades in banking and payments, Lilac has consistently shown her dedication to innovation in technology and finance. From her early involvement in Pepper, one of Israel’s groundbreaking challenger banks, to her current position as Co-founder and CEO of Lili, Lilac has always been at the forefront of merging technology and finance.
Lili: Empowering Small Business Owners
Lili is a financial platform co-founded by Lilac and designed explicitly for business owners. The platform combines banking, accounting, and tax management tools to simplify the financial aspects of running a business. With Lili, entrepreneurs can focus on building and growing their ventures while the platform manages their financial needs. The platform seamlessly integrates banking and accounting, providing clarity to business owners and consolidating all financial tools into one user-friendly space.
The main challenge is that hiring an accountant monthly or weekly is too expensive for many small businesses. As a result, they are left with many questions and have to figure things out on their own. Our goal is to use AI and a variety of different services to provide all the features and answers people need to grow their businesses, manage their cash flow, handle taxes, and more. AI can provide solutions to a wide range of business questions, which is one of the main areas we will focus on in 2024.
Solopreneurs: A Significant Segment
Solopreneurs, a substantial segment of Lili’s customer base, have gained increased attention. Estimates suggest a significant volume of business, approximately $1.3 trillion, is driven by solopreneurs globally, and Lili recognizes their unique needs. Lilac emphasizes the challenges these individuals face, often acting as their businesses’ sole operators, marketers, and financial managers. Saving for taxes is a prominent pain point, and Lili’s innovative approach leverages AI and automation to address these challenges.
Lili Smart: Unified Financial Management
Lili Smart was introduced earlier this year as an innovative tool that exemplifies Lili’s commitment to simplifying financial management for small business owners. This tool leverages AI and embedded FinTech to automate processes, ensuring that transactions are categorized in real time. Lili Smart streamlines the entire transaction flow, eliminating the need for manual categorization and providing a hassle-free experience for users. Lili Smart offers:
- Integrated banking, accounting, and tax features
- Simplified bank reconciliation
- Automated transaction categorization
- Enhanced Invoicing for faster payment and improved payment tracking for users
- Comprehensive Financial Reports
- Consolidated banking, invoicing, payments, and taxes
- And more…
Embedding Accounting and Banking: A Seamless Experience
Lili’s main philosophy is to merge accounting and banking, which makes it a popular choice among small business owners. This approach simplifies the entire transaction process by eliminating the artificial distinction created by traditional software tools. Lili leverages AI to automatically categorize transactions, offering its users a hassle-free, real-time experience. By combining accounting, banking, and transaction categorization, the entire process is streamlined, making it easier for small businesses to manage their finances.
Build vs. Buy: Strategic Decision-Making
Lili follows a strategic decision-making process when it comes to building functionalities. This process involves weighing the options of whether to build or buy. Lilac emphasizes the importance of owning technology to ensure affordability and accessibility. The platform aims to add value to specific use cases and enhance user experience. Various factors, including the need for customization, innovation in user experience, and cost considerations, influence the decision of whether to build or buy.
Future Vision: Evolving to Address New Challenges
In the future, Lilac has plans for Lili to expand and help small business owners with more of their needs. They are looking to partner with experts in credit offerings, business insurance, and payroll to provide users with a more comprehensive platform experience. Their ultimate goal is to seamlessly integrate accounting, taxes, and other financial features into one holistic platform.
The trends shaping user demands, with a particular focus on the increasing complexity of managing businesses, are as follows: As companies expand their operations across both online and offline channels and serve both local and international markets, there is a growing need for platforms that can provide an all-in-one solution. Entrepreneurs are looking for tools and services that can automate processes and optimize their time.
Focus on Female Business Owners
Lilac underscores the significance of serving female business owners, who constitute a significant portion of Lili’s user base. The platform’s design, features, and simplicity aim to resonate with both male and female small business owners. In addressing female business owners, Lilac recognizes the historical bias in the design and branding of traditional financial services. Lili’s approach ensures inclusivity, making the product comfortable, relatable, and user-friendly for all entrepreneurs.
Founder’s Advice: Navigating Regulatory Complexities
As an experienced founder, Lilac recognizes the current ease of developing technology products but emphasizes the increasing difficulty in building a strong brand. Regulatory complexities, particularly in the aftermath of recent events in the financial industry, require a comprehensive knowledge of compliance and risk management. Lilac advises founders to engage directly with these issues, understand the framework, and participate actively in compliance decisions. While specialists are crucial, Lilac underscores the importance of founder involvement in navigating the distinct challenges of the startup ecosystem.
Lilac Bar David’s journey and insights offer a comprehensive view of the intricate relationship between finance and technology. Through platforms like Lili and initiatives like Gusto Embedded, the financial services industry is undergoing a paradigm shift. Innovative solutions driven by AI and technology pave the way for a more accessible, efficient, and empowered financial future as SMBs grapple with modern business challenges. Her vision exemplifies the transformative potential at the intersection of finance and technology. It is a place where businesses, regardless of size, can thrive in an increasingly competitive landscape.
And Lili’s commitment to simplicity, automation, and user-centric design positions it as a trailblazer in empowering entrepreneurs on their business journey. The platform’s commitment to simplifying small business finance through technology and empathy positions it as a beacon for entrepreneurs navigating the intricacies of financial management. As Lili continues to evolve, it stands as a testament to the transformative power of technology in reshaping the landscape of small business finance.
Listen to A deep dive into fintech evolution with Lilac Bar David and connect with Lilac Bar David on LinkedIn.
