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Aiming to Disrupt Consumer Credit: Al Goldstein, CEO of AvantCredit (Part 5)

Al Goldstein: We just focused on the things that are most critical to the business. In our case, it was building out the regulatory infrastructure from day one, and building data reporting and analytics infrastructure. There was demand because there are a lot of customers looking for lending products. As we’ve grown our business, we continue to refine. We continue to make sure that we operate within our various constraints including capital constraints. As an example on the regulatory side alone, we have 20 full-time people who are focused on regulatory compliance. That’s just massive for a business that is less than two years old.

Sramana Mitra: Between starting the service to when you got your first institutional lending partner, what was the time window? >>>

Thought Leaders in E-Commerce: Rick Wilson, President of Miva Merchant (Part 7)

Sramana Mitra: E-commerce has been a category where a lot of people have bootstrapped businesses to some scale. You talked about your sweet spot being this half a million to million range. A large portion of that is probably bootstrapped businesses right?

Rick Wilson: Absolutely, I would say the vast majority.

Sramana Mitra: What are you hearing from this community? Are these people trying to scale? What is the thought process in your community? >>>

Building a Subscription E-Commerce Business from Switzerland: Samy Liechti, CEO of Blacksocks (Part 5)

Sramana Mitra: Interesting. In 2005, you said you had the biggest growth year. What kind of numbers did you do?

Samy Liechti: We had 75% growth. The reason was very simple. We had won an award for customer experience in the US. I remember we had a whole bunch of PR coverage all over the place. We did not have enough people, socks, and time. This brought us to the next level. I think 70% growth in one year is a lot. We had to adopt processes, systems, and so on. That was the biggest growth ever. Usually, we have 20% a year. >>>

Aiming to Disrupt Consumer Credit: Al Goldstein, CEO of AvantCredit (Part 4)

Sramana Mitra: When you went to market, what about the institutional partner side? Did you go to market with a set of institutional partners pre-negotiated?

Al Goldstein: No, we didn’t. In these marketplaces, you have to match both sides. To get started, we lent only our own capital. We raised equity capital. We have raised over $100 million of equity capital today. We took the risk ourselves and lent our capital plus a combination of debt capital on top of that until we built up on our portfolio to show the performance of the loans over time – to show that our models were, in fact, very predictive. As we got more and more performance, the institutions became more and more interested.

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Thought Leaders in E-Commerce: Rick Wilson, President of Miva Merchant (Part 6)

Rick Wilson: The trend we see there is that they want to go direct. They want to build a community around their product. I think Kickstarter has really brought that down even from the million dollar plus range to the zero dollar plus range where you can do a product video, get a personality out there, and build a community. Once you build a community, you have enough momentum to go figure out the logistics. If you’re selling a single SKU, outsourcing fulfillment is easy. If you’re selling jewelry and you have 5,000 SKUs, it gets a little more challenging. Even all of those problems are now solvable by one to five person teams, which was impossible a decade ago.

Sramana Mitra: I would say e-commerce is probably the domain that is seeing the maximum impact of ultra-light startups. Would you agree with that? >>>

Building a Subscription E-Commerce Business from Switzerland: Samy Liechti, CEO of Blacksocks (Part 4)

Sramana Mitra: Were all these customers in Switzerland?

Samy Liechti: We have different currencies and languages here. We were not prepared for payments outside Switzerland. We only had Swiss Francs. All of a sudden, we had our first German customers. Then we started the same for Germany. Little by little, we introduced other currencies and then other payment methods like credit cards. I remember, in the early stage, a Japanese customer wanted to order and we weren’t able to process the credit card. One of his cousins was on a holiday in the Swiss Alps. He still had some cash left, so he sent it in an envelope and we sent him the socks to Japan. >>>

Aiming to Disrupt Consumer Credit: Al Goldstein, CEO of AvantCredit (Part 3)

Sramana Mitra: Is your offering for any kind of credit or is this for a specific kind of credit?

Al Goldstein: We provide two products today in two markets where we operate in the US and the UK. Our first product is an installment loan product. This type of loan ranges from $1,000 to $20,000 for a period of one to four years. This is a fully amortizing monthly pay product. So customers will borrow, on average, $5,000 and pay it back in monthly equal installments to zero over the term of the loan. These loans have no origination fees or late payment penalties.

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Thought Leaders in E-Commerce: Rick Wilson, President of Miva Merchant (Part 5)

Sramana Mitra: If you were to tell us what you’re seeing in your customer base, what are some of the big trends that you’re seeing right now?

Rick Wilson: There are some broad industry trends that are fairly ubiquitous. Most online stores today are becoming multi-channel. They’re going to be selling through their own store, marketplaces, or may very well be selling in the offline world. Roughly a third of our customers have a brick-and-mortar presence. I think the sense of either a pure play e-tailer or not is gone. People understand that e-commerce is a technology that enables streamlining of your business. >>>