Levers for growth
March 14, 2022
As we grow out from our identity as a Series A company, there is an ideological shift from just finding product market fit to understanding how to develop and adjust the growth levers of our business to reach scale. A few of these levers that we must be focused on and need to have answers for below:
Onboarding Underwriters: Although there are underwriters ready to join the platform today, it is difficult to know at this point what challenges may arise as underwriters begin to integrate us into their internal workflows. Seeing proof of several underwriters not only joining the platform, but also expanding their use of the platform over time will be a critical part of building a sustainable network because (a) different underwriters will attract different profiles of borrowers and investors, and (b) it will allow us to become less services and human capital oriented and transition to more of an infrastructure business.
Defaults: As we onboard more underwriters, defaults and workouts will be a natural course of doing business. To live up to our infrastructure aspirations, we must separate out what is our responsibility as a technology solution and the underwriter's and borrower's responsibilities as the ones directly involved in the transaction. Anzen is still in its early days as well, so understanding how defaults and workout situations are taken care of would be a key item to understand the maturity of the marketplace and its viability as a technology platform.
Technology: The [ ] acquisition is an important part of our long term road map. It is a platform that can drive value once it is integrated into our existing workflows and it can also be used as a wedge to give potential customers a taste of what using the Percent platform could be like (i.e. paid pilots). Technology M&A is always challenging and often takes longer to integrate than we would like it to. What we will have to show in the near term is its ability to operate as a standalone product that can generate revenue and help us penetrate new asset classes before developing the longer term integration roadmap.
Borrower Growth: In order for us to be a company that reaches scale, the platform will need to attract (a) sticky and (b) large borrowers. We need to live up to our thesis that we can stay with these borrowers throughout their entire debt capital markets life, starting with small <$5M deals and continuing to grow them until they reach the institutional markets. The volume of borrowers and their loyalty and retention on the platform will be a good measure of success as investors are likely to follow to any source of good risk adjusted returns.
Unit Economics Maturation: As we continue to mature and the revenue mix continues to shift towards more recurring revenues, we want to make sure that the unit economics stabilize at a healthy level. At its steady state, we have a complex business with three different types of customers and making sure that the unit economics not only make sense for us, but also for each constituent in the ecosystem will be a key part of the business' sustainability.
Let's go get it this week 💪
