PALM DESERT, Calif.–Hard lessons learned in life. Why one person makes more than 100 phone calls (no emails!) every day. What the ROI on conference attendance should be. What CUs are missing in an area where 25 out of 25 large banks have invested.
All of that and more came out during a panel discussion here with three leaders in emerging technologies and markets. All three—Brock Pierce of the Bitcoin Foundation and Blockchain Capital, Ron Suber of Prosper, and Ken Rutkowski of Business Rockstars, had previously spoken to the California/Nevada leagues’ REACH Conference prior to the panel. The discussion was moderated by Tansley Stearns, chief research officer at the Filene Research Institute.
Below is the Q&A:
Stearns: How do you manage change?
Suber: We had a restart in January of 2013. This year we have hired 375 people. Establishing mission, vision and value and having everyone understand what their role is and how we make money is important. For us, it’s about getting the right people on, the wrong people off.
Pierce: I have spent my whole career trying to identify trends early, and then I try to be that person who goes an inch wide and a mile deep.
Rutkowski: I believe everything we do should have 10x ROI. So whatever you spent here, if you spent $5,000 total, you should have $50,000 in value walking out of this meeting. If you have a group of five people or more you should be using Slack, it’s one of the best tools out there. Two, I have mentioned that you must be an epicenter of opportunity, but it’s something you have to do. A group of 60 or 80 of us used to have breakfast every morning and we brainstormed on where is everything is headed.
Stearns: One challenge for our industry is that we have been talking for years about attracting younger members and being relevant to Millennials. How would you address that issue?
Pierce: (Earlier) Ken showed you how Facebook is becoming a new tool, and the even younger generation is using Snapchat. They’re not even on Facebook. One thing I would be looking at is what are the demographics of my users, what is their behavior?
Rutkowski: A good example is Tom’s shoes, which uses the one-for-one model. It’s a cause-driven business. People buy them, even though they’re not the best shoes. There is another company in Minnesota, Woodchuck, where when you buy one of their products they plant a tree. It’s a cause. Every Millennial is attracted to a cause. You as credit unions must give back. If you don’t have a cause younger people won’t work with you.
Suber: Two important words: conversion and engagement. You get people to your door, to your website, can you convert them into something where you actually make money? What is your conversion ratio? It’s really a key performance indicator. Secondarily, what is the engagement? It doesn’t matter how old they are. If that person borrowed from you, what is the level of engagement? Or do you just mail them a monthly statement and take money from their account for 36 months. If that is your level of engagement, you are going to lose them. That’s why we bought BillGuard, the number-one app in the App Store.
Stearns: What is your favorite new innovation and what lessons can we take from it?
Suber: For me, it’s the cloud. I literally have two devices, an iPhone and iPad. I don’t have a computer. Any time I type something into one device it’s already there in the other. That ability to be free of paper is the future. The world is going to be paperless.
Pierce: If I weren’t doing what I’m doing today I’d probably be focused on this area of crowdfunding. You can test in the market and if you don’t raise enough money, it doesn’t come to market. You can even now crowdfund equity and to some agree that will disintermediate guys like me. The ways that capital is being accessed and capital can flow on P2P platforms excites me a great deal. The way I make money now is investing in things where almost no one agrees with me. The unicorns reside in the areas where you believe a lot of money will be made.
Rutkowski: I’m creating a series of conferences in Waterloo, Canada, which is the start-up capital in the world. (Research in Motion) has sparked so many companies. The first one is around music; not sure if people have realized that artists today are the entrepreneur. The second is transportation. The third is Life Science. The idea of our younger generation, anyone who is under 20, will have a choice if they want to live or die. By the time they are 70 or 80 years old they will have a choice to decide if they want to continue to live on.
Stearns: I want to ask you about failure. What are some of your failures and what did you learn?
Pierce: When I was 17 I raised $88 million to reinvent the media industry in what is essentially YouTube today. People were using camcorders at that time in 1997. And media people told me not in a million years will people watch content on computers. So I learned everything about timing. We raised $88 million and we spent $96 million. So I learned about market timing; I was one of the early adopters of Bitcoin. Due to my learnings from that earlier failure, I knew Bitcoin looked interesting but I didn’t now if the future was now, or 25 years from now. I kept monitoring the sector until I saw critical mass and momentum.
Suber: My first midlife crisis was in my mid-30s, with two kids in middle school and a big job in California and I told my wife I wanted to become an entrepreneur and move to Chicago. We moved in July. It started snowing October. We grew the company so fast we blew it up and it went to zero. The following winter, I’m sitting there, cold, we lost a lot of money, and I have no job. The failure for me was you have to have the right partners. You have to have the right culture and capital and urgency, and when the window for change presents itself you have to shoot the window.
Rutkowski: I moved to LA and met a lot of $30,000 millionaires. You find out they were posers after they siphoned everything from you. It took time to learn who they were and graduate to a new level of friends. I insist that I be the dumbest one in the room; I try to hang out with the smartest people. I ask people to do a ‘friend check;’ do you want to be like them the rest of your life? How will you graduate from them?
Stearns: Do you really call more than a hundred people a day?
Rutkowski: I hate email. I call 100-200 people a day. I have 9,649 unread text messages. Do not send me a text or email. I work on a call list every night. A call can be Happy Birthday. It’s a connection point. I make it a routine. I bike to my office every day and I do a lot of my conference calls on my bike. I think it’s so important to hear a voice. Email removes all emotion.
Stearns: What is the one thing for an individual CU or collaboratively as an industry that is the biggest opportunity?
Pierce: To me, there is no doubt in my mind there is an opportunity for CUs in blockchain. It’s going to take big banks four or five years to integrate these technologies. I assume you are more nimble and you can go from pilot to rollout in shorter time. It’s a huge opportunity to increase your margins and reduce your costs and it can become a growth opportunity for you. These companies are not going to call you, but they want to hear form you.
Suber: Everyone here now knows what online marketplaces are. All the big banks have invested, and we have met with them. You don’t have to use us; pick another marketplace. Engage now before these other big banks figure this out. This is the opportunity and the challenge: can we do this together? Can Prosper or someone else work with credit unions? Are you going to do nothing and then years from now realize you had a chance to take a swing, and you missed it?
Pierce: These disruptive technologies don’t come along very often in your lifetime in the area where you have expertise. I think the timing is right now in blockchain. Twenty-five of the top 25 banks are doing it? What other signs do you need? They have made their bets, but that doesn’t mean you can’t run faster.
Stearns: What is the one thing people should walk out of here with?
Pierce. Curiosity. We live in this ADD world. If anything has captured you in what you’ve heard today, get curious, get outside your comfort zone. It’s fun to try new things.
Suber: For me, I don’t get out of bed every morning until I have clarity on this one word: intention. Do you know every morning what your intention is just for today? Not for tomorrow or next quarter. What do you want to do as a credit union executive today, as a spouse today? What is your intention? And all day long people will try to change it. At the end of the day you ask yourself how did you do.