We Can’t Just Do The Things We’re Already Good At
On the one hand, I want us to do more of what we’re good at. And on the other hand, I don’t want all our eggs in one basket. A wise friend often asks me the question: “What could bring your business to its knees?”
By Ami Kassar
In my previous life, before I started MultiFunding, I was employed as the chief innovation officer of the largest issuer of credit cards to small businesses in the United States. My mandate was clear and challenging: to develop new products or services that might have nothing to do with our core business.
In a big company, innovation is often stymied by bureaucracy and budget. From the budget perspective, the company typically has a clear formula for making money, and it’s easy to get locked into that formula. It can be challenging to get the bureaucracy to agree to put resources into new initiatives that may or may not pay off. So, when I started MultiFunding 14 and a half years ago, we started with a clean slate, and it felt liberating. We were young, naive, hungry, and willing to try to help anyone who would listen to our pitch. We also had nothing to lose and nothing to protect. With this spirit, grit, and ingenuity, we built our expertise in helping business owners obtain SBA lending.
But almost 15 years later, I feel as though my life has come full circle. Over the past two years, I realized that I needed to start thinking about innovation. Multifunding has been successful. We’ve developed a formula that works for us, but it’s time to start building on our core business. This need stares me in the face every morning when I wake up and look at our performance indicators. One indicator is the volume of our SBA lending. Our goal is to increase it by 30 percent this calendar year. Right next to this box on my dashboard is another indicator: the percentage of our revenue derived from SBA lending. Today, that percentage is more than 95 percent. Our goal is to reduce it to 25 percent. Clearly, we have a long way to go.
So, on the one hand, I want us to do more of what we’re good at. And on the other hand, I don’t want all our eggs in one basket. A wise friend often asks me the question: “What could bring your business to its knees?” This is not a fun topic to think about but it’s important. For us the answer is clear: We rely heavily on one government program. And if there ever were a shift in SBA priorities, funding, or rules, we could wake up one morning and find ourselves in big trouble.
So, we have been working for some time to find additional products or services to sell that don’t rely on the SBA. In looking for a close cousin to our current core products, we’ve concluded it would make sense to start offering our community full banking services and lines of credit. Soon, assuming there are no last-minute SNAFUs, we will be able to offer these services nationwide with a new banking partner. Just to be clear, once we are live, no one will come to MutiFunding to do their banking. But we will be able to help them set up a strong banking relationship with a line of credit to support their business. It’s taken a long time to find a bank that offers this, and we are excited to be on the one-yard line.
On the one hand, I am excited about all of the possibilities created by our launch. Eventually, this new business line could become more significant than our current business. At the same time, we are scared. I worry about our brand, reputation, and integrity. Will we be as good at these new products and services as we are at SBA lending? Will we risk upsetting customers or hurting our reputation? How will our other banking partners react to our offering these services? Ultimately, do we know what we are doing?
With whatever we do, we want to hold ourselves to the same standards we uphold in our SBA business. But the reality is that this will be hard to do given how much we have to learn. In my old life, when I was trying to innovate, my biggest battle was with the bureaucracy and politics of a long-standing corporation. Today my battle is with myself and my baby that I have spent almost 15 years building. But if I want to move forward, I have to be willing to take some chances and press on. We have to embrace our entrepreneurial spirit again.
This time around, we do have something to lose. So it’s tempting to be cautious. But I worry that any attempts at perfection are the enemy of progress. If we ever want to diversify our offerings, we have to put some of these fears behind us. We can be candid with our customers in the early days about our lack of experience in these areas, and we will adopt a philosophy of crawl, walk, run. In all likelihood, we won’t get our new products and services exactly right in the first round. We will have to learn how to market and sell and tweak them as we go. The offerings will probably change over time as we learn and adapt.
Our challenge will be to let our new initiatives build steam, to stay flexible, and to grow while maintaining the vigor and rigor of our core business. It can’t be one or the other—it has to be both. This is my leadership challenge for the foreseeable future.
Ami Kassar is CEO of MultiFunding.
