Dealstruck is a budding financial technology company that provides loans to other small businesses to help them get started—and grow. Founded in 2013, the San Diego-based startup has evolved into a 50-person company that’s secured more than $60 million in loans for more than 600 small businesses. As a startup and small business itself, Dealstruck knows the journey of fledgling entrepreneurs looking to get started, which is why the founders have made it their mission to equip other small businesses with a suite of loan products that will position them for success.
Recently, the company’s co-founders CEO Ethan Senturia and CTO Russell McLoughlin came to Salesforce’s San Francisco offices to talk about how they got started, what they don’t like about Wall Street, and what they do like about CRM. They also divulged their organization’s superpower!
At first glance, neither appears to be the archetype of their executive roles. Dressed in a bright green v-neck T-shirt, Senturia’s presence doesn’t necessarily scream “CEO”-- until he starts talking business. Then he gets loud. But like a good CEO, he knows when to defer to the more soft-spoken McLoughlin. In between talking about tech, the clean-cut “computer nerd” explained just how the keeping-it-real culture is one of Dealstruck’s secrets to success.
That, and massive amounts of oatmeal consumed at the office.
Salesforce: So long have you two worked together?
Ethan: On Monday (June 29), it will be three years to the day since we started the company. We met through a startup leadership group in San Diego; I had some ideas about how to avoid going back to Wall Street and he had unemployment -- it was a match made in heaven!
I didn’t want to go back to Wall Street, but I wanted to do something in financial services, because that’s the only thing I have some level of competency in.
SF: But you’re a finance guy. Why wouldn’t you want to be on Wall Street?
Ethan: The culture. Also, when you work on Wall Street you just look at a business and think it’s good or bad and then decide to push money in that direction and then they do all the hard work. I want to do the hard work. I don’t just want to make decisions. But you know, most entrepreneurs are control freaks, so no better way to have control than to start your own business.
SF: Sounds scary to me.
Ethan: It’s terrifying and it never stops being scary. It’s emotionally terrifying because you’re like, “Oh my God, I went to school and I paid all this money and thought I had a career in finance, and now I’m just sitting on a curb with no job and no income and not even a good idea.”
Russell: Yeah, all your friends went to the big tech companies like Google or Facebook -- the safe play …
Ethan: Or Salesforce!
SF: So explain to me what it is your business does.
Ethan: We lend money to growing small businesses who cannot get financing at their bank and whose next best options are predatory. So we look at a market and say: There is prime, really good healthy customers; there’s subprime, younger startups or money-losing companies going the wrong direction; and then there’s companies in the middle -- mid-prime, which is what we think and what we do. So if you were buying a car, we’re not the Ferrari, we’re not the Pinto, we’re the Toyota Camry of small businesses.
SF: Tell me about your experience using Salesforce.
Russell: We’ve been using Salesforce, but not from the very beginning. We thought we could do it ourselves at the beginning -- you know in handling a loan management system and CRM. All of that we thought we could do a workflow for processing them using web applications. We got a long way on that, but eventually, as we brought on more people doing selling and underwriting, I came to realize every person needs a view into the data -- they need reporting, they need dashboards, and the ability to go in and change things. If we really did it alone, we’d have to go in and build it all ourselves.
With Salesforce, we were able to start with the core CRM functionality, then we bought a loan management system from the AppExchange. I have a computer science background, so we customized it a lot -- we built Apex and the glue that tied the system together and integrated it with our web applications that sit outside Salesforce. So from a customer perspective, they don’t even know we use Salesforce, but from an operational perspective, everyone in the company lives in Salesforce.
SF: But a lot of small companies are reluctant to use Salesforce -- they say it’s too complex, too expensive, and made for big companies. Did you have those same thoughts?
Ethan: We were resistant at first. We thought it would diminish the enterprise value of what we were going to build -- that if we were built on top of Force.com, our technology wouldn’t be seen as our own and it wouldn’t be seen as a key piece of the business we were trying to build. We thought if we build it ourselves, it would be our code and everything ours. That was the initial reluctance, which turned out to be untrue.
Russell: It was also important to maintain the user experience. We wanted to have the rich web applications and use the latest technologies, and, initially, it wasn’t clear that Salesforce had all these APIs. But you really can use Salesforce and still have all these cool features on the front end.
SF: So then what was the catalyst? When did you finally make the jump to Salesforce?
Ethan: One of our early angel investors who is now chairman of our board had been in commercial finance for 25 years, and he is one of those really smart, experienced entrepreneurs who got a lot of gray hair having done it. He said, “You know you guys need to be on Salesforce. Don’t try to build all this yourself, because I’ve tried to build all this myself the last 25 years and I end up with six different systems -- one for CRM, one for loan management, one for reporting, etc. I’d have to glue them all together, and it’s a big mess -- data gets lost, the audit trails aren’t clean, and there’s no IP or value in what I built because no other lender could figure out how to use this thing if they were to buy it.”
Then we adopted it, and we just signed a three-year contract yesterday.
SF: What changes, if any, has your business experienced using Salesforce?
Ethan: Neither of us has a sales background, and in our business sales is the most important piece of the company. Sales success that has happened wouldn’t have if we had tried to build it ourselves. We wouldn’t have lead flows, or lead scoring, or call flows, or the ability for multiple people in the organization to look at a single record.
We never sold anything before we had Salesforce, and I’m pretty certain we wouldn’t have been able to sell anything.
SF: Now that you’ve used it for two years, what advice do you have for other small businesses considering CRM?
Ethan: Our whole contract is less than what we would pay one engineer for one year, and with that we get Partner Communities, the CRM, we use Pardot. We are consumers of Force across marketing, sales; we use apps from the AppExchange to manage sales and call flows — and we’re still paying for all that functionality less than what we’d be paying one engineer.
And if we built it ourselves, we would still be building it.
But the biggest thing for me is I don’t have to ask anyone to help me see things. I don’t have to go to a developer and say “can you run this report? Or can you tweak things this way?” I'm an independent person who can monitor the company and its performance across the entire organization -- credit, sales, tech, marketing, finance, accounting -- in one place, and I don’t need anyone’s help to do it. It’s huge.
SF: What are two clear signs that a business needs a CRM?
Ethan: If you’re unable to keep up with lead flow or customer demand. If you find yourself being slow to respond to people, or you’re getting lots of inbound follow-up like ‘Hey, I’ve been waiting to hear back from you,’ then you probably need a CRM.
When you are not keeping up with your customer volume, it’s probably time for a CRM.
Second: If you have real trouble measuring the value of your sales funnel. So, in our business, we start with a lead and we end with a loan, and through that process a lot of things have to happen: they have to send documents, we have to look at those documents, an underwriter has to approve it, an offer has to be accepted, a contract has to be sent and signed. Then ultimately, they get their money. But what’s hard is you have all these stages of this funnel and you wonder what’s it worth, because I have to figure out how likely it is that the resources we expend today to build the funnel will generate return down the road. How many salespeople do we need? Do we have enough underwriters to keep pace? Am I spending too much money doing all this crap?
So if you find yourself unable to forecast or understand the value of what your ultimate output is before the output is generated, because you have to make decisions that impact it along the way, then you probably need a CRM.
SF: What is your company’s secret superpower?
Ethan: I feel like our superpower is being a shapeshifter. We generally are able to make lots of changes and very quickly backtrack on things we said we’d do without a lot of ceremony or pushback (internally). People are understanding that all this is being made up as we go and we don’t have 10 years of historical data to say things should be done this way. So when we change, we change on a dime, and we generally are able to get buy-in from people who might disagree. So it allows us to beat our competition in responding to the market.
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