Hao Liu of Boro
An exclusive Tech Tribune Q&A with Hao Liu, the co-founder, president, and CEO of Boro, which was honored in our:
Tell us the origin story of Boro – what problem were you trying to solve and why?
The idea for Boro began when I was an international student at Wabash College. The campus isn’t very walkable, and it’s in a remote location, so I wanted a car that would let me travel beyond the tiny town I was living in.
The problem was that I had very little saved, and since I didn’t have much of a credit history, I couldn’t get approved for a loan. I ended up getting stuck with a clunky old car worth $500 dollars that ended up costing me even more in the long run.
I soon realized this wasn’t just a problem for international students. Tens of thousands of American college students experience these issues too. There’s a huge gap in access to credit for college students. The traditional borrowing system isn’t designed for them. When credit card companies created their approval criteria decades ago, the world was different. You didn’t have this huge class of people who were no longer dependent on their parents, who didn’t have the borrowing history these companies required to be eligible for a loan.
Boro’s first purpose is to address that gap by providing low-interest loans that prevent students from getting trapped in debt cycles, like they can with credit cards that only require them to make minimum payments.
But the other, equally important purpose of Boro is helping students to understand their finances in the first place. There might be an even larger gap in the financial education of students than there is even in the financing options available to them. We provide financial education through blog posts and quizzes throughout a borrower’s repayment process to set them up on the most financially independent path possible. Our goal is to help guide them towards a better future.
What was the biggest hurdle you encountered in your journey?
The biggest hurdle for us is that we get mistakenly compared sometimes to companies that are essentially doing the opposite of what we’re trying to do. Specifically, I’m referring to payday lenders and student credit cards.
These companies have some good practices that are similar to ours, like having a lower barrier to entry for students who need loans. But they often do so because they can take advantage of these students’ lack of financial education, meaning they end up dinging these students for late fees and high interest rates. They can make all their money off of a one-time customer.
At Boro, we actually need financially healthy borrowers, because we want them to be in a place where they’re able to come back and use us again and again. That’s why empowering their financial health is so important to us. Yes, it’s a personal passion, but it’s also good for our business.
Still, because of the surface similarities we have with these other companies, it can be a challenge for people to understand our value proposition and how it’s different.
What does the future hold for Boro?
The development on the horizon that I’m most excited about is the launch of our personal finance education feature. We’re building a way to gamify financial education. By downloading our app, students will soon be able to go through the equivalent of a financial education course by logging in for a few minutes a day and consuming bite-sized chunks of content and quizzes.
Our biggest goal is for students to be empowered to manage their financial lives with confidence, and our financial education is a big part of that by making personal finance fun and accessible.
What are your thoughts on the local tech startup scene in Chicago?
When we were first getting set up, we thought about New York City or the Bay Area, of course.
But Chicago became an attractive option for a few reasons. For one, there is a huge amount of fintech talent here, which comes from the city’s past as a major trading center. Nearly all of our employees are local hires.
Another reason that’s obvious is that Chicago is much less expensive than either of those two cities. Jack Dorsey had a point when he mentioned his teams would become more distributed and less concentrated in the Valley. It’s just unsustainable.
The third reason is that the tech community is very supportive of each other here, and the leadership at various levels is committed to making the city even more attractive as a tech hub.
What’s your best advice for aspiring entrepreneurs?
My advice would be to not get distracted by what everyone tells you to do, just because it’s what everyone thinks is what should be done.
A lot of people tell me what I should put onto our platform and explain to me why I need this or that thing because all of our competitors have it, or because it’s what the customers are saying they want. Of course, I want to pay attention to the competition, and I very much value the feedback of our customers, but I want to build a product that will truly serve them, and get at the root of what they need instead of the solution they are familiar with.
In our case, one sticking point has been a loan calculator. A lot of people tell me, “Oh, you need a loan calculator”. But our customers don’t need a loan calculator – they need better transparency. A loan calculator won’t actually help them make better decisions, but a lender that is transparent, straightforward, and communicative will.