7 ms·

Either Klarna is really good at pulling strings to get media coverage, or mainstream media does not fact checking themselves. About a year ago, the company was

Either Klarna is really good at pulling strings to get media coverage, or mainstream media does not fact checking themselves. About a year ago, the company was everywhere in the media when its CEO announced that it created an AI bot that is doing the equivalent of 700 fulltime customer service folks. I did what seemingly no other publication reporting on it did: signed up for Klarna, bought one item and used this bot. I was... not impressed? Klarna's "AI bot" felt like the "L1 support flow" that every other company already has in-place: without AI! Think like when you have a problem with your UberEats order and 80% of cases are resolved without a human interaction (e.g. when an item is missing for your item.) I walked through the bot's capabilities [1] and my conclusion was that pretty much every other company did this before (automating the obvious support cases.) The real question should have been: why did Klarna not do it before? And when it did, why did it build a wonky AI bot, instead of more intuitive workflows than other companies did? My sense is that Klarna really wants to be seen as an "AI-first tech company" when it goes public, and not a "buy now pay later loan company" because AI companies have higher valuations even with the same revenue. But at its core, Klarna is a finance or ecommerce-related company: an not much to do with AI (even if it uses AI tools to make its business more efficient - regardless of whether it could use non-AI tools to get the same thing done) [1] https://blog.pragmaticengineer.com/klarnas-ai-chatbot/ https://blog.pragmaticengineer.com/klarnas-ai-chatbot/

vrosas 1y ago
To be fair, admitting their amateur foray into chatbots was an abject failure and rolling it back really does put them at the forefront of the AI movement.
iforgetti 1y ago
Glen Okun of NYU business school has written about BNPL loan portfolio weakness. The AI marketing is just an attempt to reframe the value narrative of the company before IPO. They would rather be seen as an AI company than an unsecured lender of last resort. The narrative on Klarna’s core business is not good in any case, either an extractive lender benefiting from people buying what they may not afford and charging exorbitant interest or a lender of last resort who has not properly underwritten the risk in their portfolio. Neither is preferential to them compared to a value narrative framing them as an AI company. Likely the market is too skeptical in this environment to take the bait however.
- blibble 1y ago
  > a lender of last resort who has not properly underwritten the risk in their portfolio. I thought they more or less instantly offloaded the risk as asset backed securities to clueless people who didn't know the actual risk profile what they were buying sound familiar?
- spaceman_2020 1y ago
  I can't believe it takes b-school professors to figure out that people financing their DoorDash might not be the best people to lend money to.
  - rchaud 1y ago
    This is the primary positioning tactic used across the startup industry . Uber isn't a taxi app, it's actually the "future front end for millions to access autonomous transport". Doordash isn't a delivery app, it's an "on-demand logistics" platform. Similarly, Klarna isn't a shady payday loan company, it's an "AI-first consumer finance play".
    - Avicebron 1y ago
      > "AI-first consumer finance play" In a more civilized time, saying this was your plan would get you chucked feet-first into a wood chipper.
      - runlaszlorun 1y ago
        oh I think we're heading back that way slowly...
      - dcsan 1y ago
        The addition of "feet first" made this much more evocative!
    - spaceman_2020 1y ago
      Heard a new term yesterday: “private credit”. Lenders that give unsecured loans to businesses at high interest rates We just used to call them loan sharks
Avicebron 1y ago
The problem with "AI-first" companies is that they really are just shells for people who want to be "AI-First" engineers, and not "guy who solved my problem affordably and was nice" engineers. The average person doesn't care how you ended up fixing the weird charge on their account, it's how fast and how proficiently did you fix it
cosmicgadget 1y ago
I liked your comment but don't think the shot at media was necessary. A company replacing workers is news enough and the fact checking need only be to validate that information. The "as good as 700 workers" I assume was presented as a claim, not a fact. Evaluating the effectiveness of the AI bot is another matter and firmly in the investigative journalism sphere. Coincidentally that is an awesome application of a blog.
- AznHisoka 1y ago
  Sorry, but its attitudes like yours that make it easy for media to keep spouting out ridiculous claims/lies, and get away with it. Shots are absolutely necessary when its warranted. Full. Stop.
  - cosmicgadget 1y ago
    Am I allowed to respond once you've used "full. stop."?
darth_avocado 1y ago
I think this is in the broader context of Klarna CEO claiming he had stopped hiring for almost a year because of AI. It was a big talking point for a lot of CEOs and LinkedIn influencers. Big enough that incompetent management across the industry was following Klarna’s steps and reducing staffing (Not because AI, but because they could short staff teams with AI as an excuse). That is why when there is a clear evidence that Klarna was completely wrong, it needs to be talked about. Previous discussion: https://news.ycombinator.com/item?id=42432494 https://news.ycombinator.com/item?id=42432494
pjc50 1y ago
> mainstream media does not fact checking themselves. Mainstream media will print a press release for you if you send it to them. It is very important to understand how limited the fact checking really is. If a mainstream paper prints a statement of the form "X said Y", you can be sure that: - they are pretty good at checking that person X did actually say Y - they make no effort whatsoever to fact check the underlying statement Y. There isn't really the money or interest in actually investigating the claims of every little press release. > really wants to be seen as an "AI-first tech company" when it goes public, and not a "buy now pay later loan company" because AI companies have higher valuations even with the same revenue Yes. This is because multibillion dollar investments are made by people who are easily distracted by the jangling keys of AI.

vrosas 1y ago

To be fair, admitting their amateur foray into chatbots was an abject failure and rolling it back really does put them at the forefront of the AI movement.

iforgetti 1y ago

Glen Okun of NYU business school has written about BNPL loan portfolio weakness. The AI marketing is just an attempt to reframe the value narrative of the company before IPO. They would rather be seen as an AI company than an unsecured lender of last resort. The narrative on Klarna’s core business is not good in any case, either an extractive lender benefiting from people buying what they may not afford and charging exorbitant interest or a lender of last resort who has not properly underwritten the risk in their portfolio. Neither is preferential to them compared to a value narrative framing them as an AI company. Likely the market is too skeptical in this environment to take the bait however.

blibble 1y ago
> a lender of last resort who has not properly underwritten the risk in their portfolio. I thought they more or less instantly offloaded the risk as asset backed securities to clueless people who didn't know the actual risk profile what they were buying sound familiar?
spaceman_2020 1y ago
I can't believe it takes b-school professors to figure out that people financing their DoorDash might not be the best people to lend money to.
- rchaud 1y ago
  This is the primary positioning tactic used across the startup industry . Uber isn't a taxi app, it's actually the "future front end for millions to access autonomous transport". Doordash isn't a delivery app, it's an "on-demand logistics" platform. Similarly, Klarna isn't a shady payday loan company, it's an "AI-first consumer finance play".
  - Avicebron 1y ago
    > "AI-first consumer finance play" In a more civilized time, saying this was your plan would get you chucked feet-first into a wood chipper.
    - runlaszlorun 1y ago
      oh I think we're heading back that way slowly...
    - dcsan 1y ago
      The addition of "feet first" made this much more evocative!
  - spaceman_2020 1y ago
    Heard a new term yesterday: “private credit”. Lenders that give unsecured loans to businesses at high interest rates We just used to call them loan sharks

Avicebron 1y ago

The problem with "AI-first" companies is that they really are just shells for people who want to be "AI-First" engineers, and not "guy who solved my problem affordably and was nice" engineers. The average person doesn't care how you ended up fixing the weird charge on their account, it's how fast and how proficiently did you fix it

cosmicgadget 1y ago

I liked your comment but don't think the shot at media was necessary. A company replacing workers is news enough and the fact checking need only be to validate that information. The "as good as 700 workers" I assume was presented as a claim, not a fact. Evaluating the effectiveness of the AI bot is another matter and firmly in the investigative journalism sphere. Coincidentally that is an awesome application of a blog.

AznHisoka 1y ago
Sorry, but its attitudes like yours that make it easy for media to keep spouting out ridiculous claims/lies, and get away with it. Shots are absolutely necessary when its warranted. Full. Stop.
- cosmicgadget 1y ago
  Am I allowed to respond once you've used "full. stop."?

darth_avocado 1y ago

I think this is in the broader context of Klarna CEO claiming he had stopped hiring for almost a year because of AI. It was a big talking point for a lot of CEOs and LinkedIn influencers. Big enough that incompetent management across the industry was following Klarna’s steps and reducing staffing (Not because AI, but because they could short staff teams with AI as an excuse). That is why when there is a clear evidence that Klarna was completely wrong, it needs to be talked about. Previous discussion: https://news.ycombinator.com/item?id=42432494 https://news.ycombinator.com/item?id=42432494

pjc50 1y ago

> mainstream media does not fact checking themselves. Mainstream media will print a press release for you if you send it to them. It is very important to understand how limited the fact checking really is. If a mainstream paper prints a statement of the form "X said Y", you can be sure that: - they are pretty good at checking that person X did actually say Y - they make no effort whatsoever to fact check the underlying statement Y. There isn't really the money or interest in actually investigating the claims of every little press release. > really wants to be seen as an "AI-first tech company" when it goes public, and not a "buy now pay later loan company" because AI companies have higher valuations even with the same revenue Yes. This is because multibillion dollar investments are made by people who are easily distracted by the jangling keys of AI.