We had an interesting chat with Mr. “Nathan DauSchmidt”, COO of the Madison – US based start-up “Bankmybiz”
Below is the interview we conducted with him:
1. What is it exactly that you do and what your start-up is all about?
Bankmybiz.com is a matching network of business owners and lenders. We save business owners time and help get them the financing they need by informing them about which funding products they qualify for and then connecting the business owners directly with local and national lenders.
2. When has your startup been founded? And what stage is your startup currently at?
September 2013 is when the product tentatively launched. There were some initial sign ups, and so the platform was built out a little more. We had our full launch in December 2013 and have been growing ever since.
3. What is your startup’s business model and how does it work?
As a matchmaking service for business owners and lenders, we charge lenders for providing quality matches with business owners seeking financing. Business owners never pay a dime.
4. How did your team meet? And who in your team does what?
We all met at a coworking space called 100state in Madison, WI. First Michael Adam (CEO) and Adam Braus (CTO) got the company up and running from an idea to a prototype and then deals starting happening because of our site!
5. What, exactly, makes you different from existing options, what will make your product and/or service stand out in the marketplace? In other words what’s unique about you and what’s new about what you make?
Our competitors are typically large banks or non-FDIC banks which actually underwrite the financing that business owners are looking for. Bankmybiz subscribes to the philosophy that lending is relationship based, which is why we allow business owners and lenders to interact and find relationships that suit them the best.
6. What is your growth like? And what milestones has your startup achieved so far?
Bankmybiz is constantly growing its user base, but we are still primarily centered in the Midwest. One of our biggest milestones to date has been that we’ve created over $6,000,000 in new lending relationships and have a pipeline of $40,000,000 waiting to be funded.
7. Who are your competitors? And what is your start-up’s competitive advantage over them?
Kabbage, Lendio, and a few others. They tap into private equity money which totals in the hundreds of millions–our community bankers, and alternative finance lenders have access to hundreds of billions in capital. Also, while our competitors have to do their own due diligence, Bankmybiz lets the lenders perform their owns due diligence–something they do everyday.
8. What obstacles did you face and how did you overcome them?
An obstacle that we had was ratio of lenders to business owners. Obviously a lender can service more than one business owner–so we need a lot more business owners than lenders. At first we spent about 50% of our time and resources going after each group, but found that we should ultimately spend the vast majority of our time going after business owners.
9. What are the key things about your field that outsiders don’t understand?
That banks, particularly community banks, want to loan to money–if you present yourself well. A lot of business owners are intimidated by being rejected by a bank. They may not realize the reason the bank said “no” is because they maybe already made several similar loans and need to diversify. Chances are if you take your proposal to another lender they’ll be interested. That’s why the Bankmybiz Q&A platform is intended to do.
10. Why are you going to succeed?
Because community bankers need new tools to connect with business owners. Business owners sometimes need some help finding financing to suit their needs. Bankmybiz addresses both of these problems.
11. If your startup succeeds, what additional areas might you be able to expand into?
Commercial insurance and other business services like consulting on loans. Also, data on deal size and industries could be used as leading indicators of the economy. Really the data side of the business is the most exciting from a growth potential.
12. Why did you choose this idea and concept to build your start-up based on?
Our CEO Michael Adam was a lender for over 10 years. He was frustrated by being unable to easily find new businesses which were looking for a loan in his area. LinkedIn was of no use, so there needed to be something new.
13. What have you learned so far from launching your idea?
That there are a lot of successful business owners that are oblivious to a lot of financial terms–and there are a lot of lenders that don’t understand this.
14. Six months from now, what’s going to be your biggest problem?
Testing new revenue streams–do we try promoted posts? Do we offer a consulting service? Should we just leave it alone and try to grow? Any one of these strategies, or a combination, could work–but knowing which one can be harder.
15. What’s the benefit for the customer/user?
Faster access to financing with more information on products for business owners plus the ability to shop around in your area. For lenders, Bankmybiz is a dedicated funnel of people looking for business financing that we match to your preferences.
16. How did customers / users find out about you?
Word of mouth is by far our best friend. Otherwise we have found that twitter has been very good to us. One thing in particular that we’ve learned is that minority owned and women owned businesses really tend to spread good experiences on Bankymbiz to their friends.
17. Who are your current customers / users? Who are your target customers / users?
The current customers vary across industries, but we see an over representation of small software firms on the business owner side. They tend to want a more tech savvy solution to their search for financial products, and also generally aren’t too knowledgeable when it comes to navigating a bank. Bankmybiz helps them bridge that gap and they tend to tell their friends.
18. Where do new customers / users come from and what makes new customers/users try you?
New users tend to come from word of mouth and the media. We’ve been fortunate to get some good write ups in local papers which formed the nucleus of our network. From there it’s been about adding relevant content to conversations about getting business owners financing wherever we can get a word in. We’d like to think our passion for creating opportunities spills over and encourages people to take 5mins and sign up.
19. What do your customers / users say about your product and/or service?
Our customers like to use our Q&A platform to interact with one another. It’s a great feature to get questions answered that maybe you’d be intimidated to walk into a bank and ask.
20. How are you going to scale?
We think that we will continue to scale as long as there is interest! Since Bankmybiz doesn’t need to deal with specifics of the loans themselves, our platform can branch out to be international quickly.
21. What’s the biggest missing feature? The one thing customers/users keep asking for?
That would have to be a consulting type service to help them really shop around for the best deal. Often times we have customers who want to hire us to take them through the whole loan application process. Once we scale some more I’m sure we will offer this service.
22. Are you going to internationalize? And if yes how are you planning to expand your start-up’s operations accordingly?
Yes we are thinking about it. Since we are in the midst of working on a Spanish version for underserved Latino communities in the U.S., a next step could be to expand into Latin America.
23. How big do you think you can get? Why? And how you are planning to achieve your goals?
Bankmybiz can continue to grow whenever a new business owner enters the marketplace. Since business owners can keep coming back to Bankmybiz.com to shop around for the best loan deals, that’ll mean we can keep adding users.
24. Are you looking to hire a new workforce? And if yes, what job vacancies do you currently offer and where can potential applicants contact you at?
We are currently looking for content writers. They are some of the most overlooked talent in the startup sphere. Getting a marginal improvement in click through rates from catchy, informative writing can make or break a company like Bankmybiz.
25. Are you looking for partnership opportunities or funding from Venture Capitals (VC) or other funding sources? Or your business is self-sustainable? And if the first option applies where can potential partners / investors contact you at?
Bankmybiz is always interested in partnering with business owner advocacy groups and lenders’ associations. We are also in the midst of our Series A round which we hope to be closing somewhat soon.
26. What advice do you have for fresh entrepreneurs?
Save up much more money than you think. It is highly unlikely that you will be able to support yourself with a young company without the influx of outside cash. Even if you can secure that outside cash, you’ll get a better deal if you think it might be feasible to go it alone and boot strap.
27. Finally, do you have any other comments that you would like to add?
If you are a business owner, lender, or just interested in the concept, please take 5 mins to fill out your profile at Bankmybiz.com. Ask some questions about finance, read about business loan products, and remember that Business owners never get blind solicitations!