Rohan's "Overnight" Success

November 23, 2015

Find your life’s purpose and then throw yourself at it with all of the energy you can muster. And success will come calling overnight.

For Rohan, the “Overnight” part was about 7 years.

We learn something from every one of our customers. Our takeaway from Rohan? Learn to enjoy the journey of growth. When all of the early euphoria and excitement goes away, the ability to see each experience - whether its failure or success - as a step toward growth, is what will keep you going.

A key career decision

Rohan Mathew founded the IntersectFund, a microfinance institution in 2009. Check out his TedX talk below. He talks about Jorge, a poor immigrant and a minimum wage worker struggling to make ends meet. And how the IntersectFund helps Jorge generate additional income by giving a micro-loan to setup a hot-dog cart business. They also teach Jorge some basic business skills along the way.

[Click image below to see Rohan’s 9min TedX talk]

He separately told me when I met him later that a key career choice he had to make was to let go of a lucrative Wall Street investment bank opportunity, to allow him to focus full-time on helping people like Jorge build better lives for themselves.

Today, more than 7 years later, the IntersectFund does more than $5 million in micro-loans annually. They’ve helped Jorge, Michelle, Kim, Rita and hundreds of others set up decent lives for themselves and their families.

There’s more than meets the eye

So, how do you get started setting up a micro-credit non-profit institution from scratch? Well, you’d need to set up the loan processing system which in turn would include all of the following:

• The Origination System: This is the loan application process. Includes collecting the Loan Requestor’s details and why and how much of a loan they need, the risk of non-repayment and how the risk can be mitigated, their guarantors and what collateral they have

• The Servicing System: This is the loan processing stage - which includes Risk Evaluation and Mitigation, Disbursement and Collections

[Click on the following diagram for more detail]

Once you’ve figured out all of the above, you’d also have all those other things too:

• Hiring and training the best people you can find

• Keep growing your customer base

• Raise funds from foundations by submitting applications and winning grants from them

• Managing your cash flows effectively so you can keep the lights on

• Keeping everyone on the team motivated by constantly helping everyone clearly see the vision

• Making sure you’re not being a bottleneck for the team, are running great meetings and keeping yourself fresh.

• Using software technology and automation to increase efficiency in operations.

And the hundreds of other things that every entrepreneur would need to do.

Not for the faint of heart. And certainly not stuff you can get done overnight.

Software for higher efficiency

Each of the items in the above list deserves a post of its own. For the rest of this post, we’ll focus on that last item in the above list: Software.

There’s not much you can do without software these days. The better you can figure this part out, the faster your growth is going to be.

Rohan’s choice of software tools for his key tasks:

• Zoho Creator [think, Google Forms on steroids] for accepting loan applications.

• MS Excel for the financial models and risk analysis.

• MS Word for creating loan agreements.

• RightSignature for electronic signing of the agreements.

These tools are great when used standalone. But to use them together, there’s still the manual task of copy/pasting data between these tools.

• The Loan application info from Zoho Forms into Excel.

• The approved loan amount, required collateral and the repayment terms from Excel into Word.

• The loan agreement from Word into RightSignature for the final signing.

Not to mention the rework involved when things would go wrong, which was also a common scenario.

It was clear that more automation was needed. Here’s the 2 standard options most people evaluate at this point:

• Plan A: Buy an off-the-shelf solution

• Plan B: Hire a team to build a complete solution from scratch

“Do something well or not at all” - Rohan

That’s probably the mantra that Rohan repeats more than anything else. Just because you’re a non-profit doesn’t mean you’ve got to compromise on quality. Visit the offices of the IntersectFund in New Jersey and you’ll realize that he follows through on that principle.

• It’s a beautiful and highly functional office. Just the kind of setup you’d expect from a venture funded startup in Silicon Valley.

• They have the best hardware money can buy - top of the line Apple laptops, Retina solution 27” monitors, iPads for all their staff.

• They have an absolutely no-compromises principle for hiring talent - they’ve proven that it is possible to attract great talent even if you can’t pay big bucks. You just need a really big vision and be totally committed to it.

With those kind of standard already in place, it’s not surprising that when it came to choosing a software platform for their loan processing system, Rohan was looking for something world-class there as well.

Unfortunately none of the off-the-shelf solutions even nearly met his expectations.

He switched to plan B - to hire a team to build the solution. In his search to find such a team, he looked at both hiring his own team and also at outsourcing. Once again, most of the people he met just didn’t match his expectations in terms of quality. Occassionaly he found a few people who leveled up to his standards, but they were too expensive to fit into his operational budget.

The hacking phase

It was a good 9 months or so before Rohan discovered that neither plan A nor plan B was going to work well for him.

You’d think that their growth was stalled during this time - and that their future was going to be bleak, with everyone in the company copy/pasting data and doing a lot of inefficient manual work.

But if you took a look at the growth curve of the IntersectFund during this period, you’d have noticed a graph going up and to the right, with more loans applications being received and getting processed faster.

Were they hiring more humans for getting all that manual work done? Nope.

Rohan realized that almost anyone can code these days. It just takes a bit of practice.

During the day he was the CEO at Intersect, running the company.

In the nights, he would transform himself into a hacker - piecing together the integrations between Zoho, Excel and Word - using Zoho Scripts, Excel Macros and VB Script.

It was now possible to get an application filled up in Zoho and generate the draft agreement for signing in RightSignature is less than half the time it would take earlier.

That was the “software system” that the IntersectFund relied on, to grow from the initial set loans to more than $3 million in annual disbursements.

The lesson here? Innovative hacking can take you a long distance :).

The hack helps, but the hacker becomes a bottleneck

Eventually, the hacks put together by Rohan started showing signs of age when he became the bottleneck for the whole system. The solution, while it worked quite well, was mostly a tool that only Rohan could use.

• It wasn’t online and hence not accessible by anyone at anytime

• It didn’t have an easy to use interface that would allow anyone on the team (not just experts) to use the system

• The business rules that were coded into the tools were understood to a large extent only by Rohan. This made it necessary for other members on his team to always reach out to him for clarifications.

The growth in the number of loans was slowly starting to stall. It was now time for a system that would get Rohan out of the way and help speed up growth significantly.

With the kind of growth they’d already achieved with the hacked-together solution, it was clear that investing in an end-to-end online loan processing system would have the kind of RoI that would be easy to demonstrate, to the board and the rest of the team.

A fortuitous association

Around the same time, Multunus was helping Lend for America (LFA) launch an online campaign for them. LFA is a non-profit that helps, encourages and guides students at universities to set up their own micro-credit institutions out of their dorm rooms.

LFA also happens to be wholly owned by the Intersect Fund.

One thing led to another and soon, we were speaking with Rohan about building the next generation online loan processing system - together. Our team worked remotely out of Bangalore, with Rohan providing guidance from New Jersey.

Fast forward another 12 months. Here’s the progress since then:

• We’ve launched two key parts of the Servicing system:

• Closer: The workflow for converting an tentative approval for a loan application to a signed agreement with the borrower

• Servicer: The system that actually disburses the funds and sets up the automatic repayment schedule as well.

• Rohan is no longer the bottleneck - the application is online and usable not just by everyone at Intersect, but also by their customers.

• While Rohan continues to hack on the code (along with our programmers), he now has more time to focus on growing his business.

• The rest of the staff at IntersectFund now has a 24/7 dashboard they can use to communicate much better among themselves. They also have a lot more visibility into how the company is doing overall.

• Last, but not the least, the growth in the number of loans has been almost dramatic. The projected disbursement for this year is upwards of $5 million.

“Overnight” Success

When we hear stories of success in the media, all we end up seeing are graphs like the one above. And we’re led to believe that success happens almost overnight.

Of course, the journey is usually much longer, arduous and fraught with unexpected ups and downs all along the way.

What keeps the best entrepreneurs and teams moving forward during those times is a of a better future. To make the world a better place. For people like Michelle, Kim and Rita.

It’s been 7 years since Rohan started IntersectFund. And by the looks of how they’re doing today, they’re not stopping any time soon. They’re a team that clearly sees everyday as a learning experience. They’ve learned how to enjoy their journey.