The End of the Road for AVAIL

December 24, 2013

If I had to confess my biggest weakness it would be this: I am often unable to tell when I am being foolish.

Ask just about anyone I work with closely and each will confirm frantic phone calls from me desperately looking for perspective. I often need to ground my ideas in the understanding of at least one other person – otherwise new ideas I believe to be smart, might actually be quite foolish. Best not to bet the farm on foolishness.

Awareness of my weakness started early this year when I began a long, unsuccessful wrestling match with the mortgage industry in an effort to save a software application we created for our clients called AVAIL. Without getting into details, a business entity critical to our business threatened to destroy us (literally) if we did not stop offering that solution. What this entity didn’t realize is that AVAIL created new jobs for clients and significantly more business for all of us. And AVAIL helped many thousands of people buy homes.

After many hours of conversations and writing responses to cease and desist letters, I gave up. And several weeks ago I sent a personal e-mail to all clients announcing that we are officially pulling the plug on AVAIL December 31, 2013.

Yet, what happened during the experience caused me to SEE something I had not noticed before. I recognized that Cogent Road was not in control of our own destiny. Even though I created a solution that simply repackaged existing systems into something far more valuable, another company had the power to overrule me in my own business. AVAIL actually revealed a huge and potentially fatal flaw in our business model.

Then I received an e-mail that changed my life.  Todd Worthington, our Director of Client Services walked into my office and said something I will never forget. He told me one of the credit bureaus sent him a short, terse e-mail requiring us to immediately shut off credit to one of our largest clients, an FDIC insured deposit bank. We had received no prior communication about this client. Yet, the e-mail told us to shut them down. Now.

I immediately got involved and with Todd’s help, got everyone back on the same page. But I was very badly shaken by the experience – not just for Cogent Road, but the fact that the bank (our client!) would have been significantly damaged as well.  I realized that Cogent Road needed a new business model if I ever hoped to exist in a future without another “email of death” springing up in my inbox. I spent the next months holed up in my office working on it. I looked at the problems in the mortgage industry – and realized many of my struggles were also experienced by others in the mortgage supply chain to some degree. I let my mind wander, free from the limitations of our current resources, and thought of ways in which our software could bring cohesion and integrity to our industry.

I tackled the industry from the perspective that Cogent Road would design the software platform used by the entire industry. I followed the flow of data and business logic through every source, from the sale of the physical property to the sale of the property’s income stream. As I created the software in my mind, I simply watched as the business model formed around it: a coordinated solution of existing players taking on new digitally-based roles. It involved a new software strategy and an improved business model for mortgage banking, one designed to create prosperity rather than foreclosures.

In the end I created a short powerpoint – and a twenty-two page “screenplay”.

And to my horror, on October 21st, 2013 when I presented it to the senior partners of our corporate law firm – they laughed. Literally.

Cogent Road’s new business model is designed for a digital economy. Therefore, if one’s understanding is grounded in analog business methods, my ideas seem foolish. And, as evidenced by my many frantic phone calls, even I often wonder.

Yet, in the digital economy it is the software that creates the business model. And though it is not yet what it will become, the software exists.

Roohmz Enterprise: A Knowledge Management Exchange

December 13, 2013

As we get closer to launching Roohmz Enterprise (in Beta) I have wrestled to define its category. Initially I called it a loan production system only to feel confined by such a tight definition. I drifted toward Process Management System, but that felt stodgy and stale. For a moment I tried Business Management System, but I laughed at the acronym. In past blogs I described Roohmz as an operating system – and it is. But even this concept is too restrictive since operating systems control hardware.

So what is Roohmz anyway?

To better understand Roohmz we’ll have to look at it from the perspective of a software engineer. In software development we use repeating sets of instructions called “objects” which can be called and then influenced by “attributes” appended to them. In this way software code can reference an object and then use any number of attributes to influence what the object does. This makes software code lighter (less lines) and stronger. Further, flexibility is greatly enhanced because objects can be combined in growing numbers of ways to produce new solutions – without recoding from the ground up each time. This concept is called Object Oriented Programming.

We built Roohmz around the Object Oriented model in that we created a super-easy, non-technical language mortgage executives could use to “teach” Roohmz how to enforce their desired business processes. Once taught, Roohmz then uses artificial intelligence to assemble every loan according to the business process it now understands. In order to build a “teachable” system, we started by creating a library of objects users could arrange visually on the screen. Each object performs tasks such as running an audit, performing a calculation, ordering a product, moving a loan file to the next person in line, delivering disclosures, receiving documents from consumers and everything else needed to ensure fully compliant mortgage loans are assembled quickly and consistently and as near automatically as possible. This object model also means that Roohmz can learn and enforce different business processes for each loan type if desired.

Because we use an object model, Roohmz continually grows more powerful each time we add new “functionality” objects into the software. As we learn from our clients, we will discover new ways to combine existing objects into brand new capabilities. It is therefore a very customizable, yet scalable solution that provides increasing value to every client that uses it.

More than just software, Roohmz Enterprise is also a private and secure internet-based exchange network. This means a lender’s business process can now include securely sharing data and financial information between any third party also in the Roohmz network (e.g., other lenders, investors, partners, vendors, consumers). It is the ability to incorporate third-parties directly into business specific management processes that makes Roohmz so powerful. Securely sharing and exchanging information in this way also brings much needed data integrity to an industry currently drowning in redundant data and systems.

So we see that Roohmz is a teachable system that enforces the ideas of executives – and also provides a secure exchange which can both receive, deliver and act upon information from third parties within the network.

Going forwared Roohmz is best described as a Knowledge Management Exchange, or KME.

The Foolishness of Prejudice

November 14, 2013

I am very hands off at Cogent Road. Sometimes (and I do realize this), it drives our team crazy. Honestly, I often struggle as I stumble along and try to learn how to lead in what others may view a very unusual manner. Yet, I press on because I am driven by an intense desire to remove prejudice from our company. Instead, I hope to create a culture in which all people see themselves without pre-conceived personal limits. As one learns to see the capacity of his own potential, he also learns to see and appreciate the wisdom of others. This is seeing others without prejudice; it is creating a culture competent and comfortable inventing software solutions for previously unsolved problems. And ultimately I hope it will make us a better software company.

The software industry as a whole is changing rapidly, though not in a good way. Software development is no longer driven by market need, but rather by venture capitalists who use financial superpowers to transform simple, easy to make software projects into billion dollar companies, regardless of the efficacy of the software itself. Consequently, if consumers find the software interesting so do the VC. And because billion dollar valuations speak “wisdom”, the technical and business press listen. And the VC software message of today is that really good, really valuable software companies sell ads.

In fact, the foolishness of this prejudice is at such an extreme that I might argue if the software industry doesn’t change it may damage our nation’s competitiveness. To illustrate we need look no further than yesterday’s announcement that Snapchat turned down a $3 BILLION ALL CASH offer from Facebook. What? Snapchat is a 30 person, two year old company that lets adolescents send photos to each other – and then automatically deletes them once they are sent. Its a simple cell phone application written by 24 year old Evan Spiegel in a just few weeks. It costs $0.00, has no revenue model, and serves no business purpose. Yet, in the prejudice of our industry, it was worth $3B. In cash. Even more shockingly the VC behind Snapchat said $3B wasn’t even enough. How can this be?

Why would a software company spend $3B for software that it could build itself in just a few months? This tells me that Facebook must not be a software company at all, but rather a media company. It views Snapchat as rival media property stealing attention from its Facebook audience. Because these companies sell advertising, they need ratings. Cloud based software companies have evolved into media companies which create applications to attract and retain an audience. This means that the top software companies in the United States are now spending billions to create and acquire software that distracts people for as long as possible.


It took five years to complete Roohmz Enterprise – and we did it without any outside investment. Cogent Road also has no debt. It was built slowly and deliberately by a team that understood how to build a cloud-based network to transmit complex financial data arrays through a predefined network of employees and business partners. Its functionality continually captures and analyzes loan data while the loan application moves from originator to final investor and beyond, using complex business rules to ensure loan files remain compliant. It is a new kind of data-centric networking system that will transform the way business is done, making it easier, safer and more profitable.

I hope, as we prepare for launching this complex application into the mortgage industry, that Roohmz will shine some light on the foolishness of software prejudice.

Update on Cogent Road’s Roohmz Enterprise Development

September 25, 2013

We had hoped to roll out Roohmz Enterprise last April – its now the end of September and we are still working on it. Because we receive a lot of inquiries about when Roohmz will be ready, I thought I’d post an update for all to see.

First, I believe Roohmz will roll out before Christmas this year. The reality however is that Roohmz Enterprise is extremely complicated and functions very much like an operating system for mortgage production. And, as a result, if we discover some new as yet unexplored area we must venture into, further delays may occur. Sometimes you don’t see what needs to be done until you bump into an obstacle. If it helps, we all feel good about getting things tied down this year.

Roohmz is remarkably different from any other software in our industry. During development we must think through the human work of mortgage production in the smallest detail, then automate the work where possible via the software. This means that Roohmz does actual work on every loan that moves through the pipeline – and facilitates the process for borrowers, lenders and investors.

To give you an idea of the complexity of Roohmz Enterprise consider that the team working on it is the same that created Funding Suite, Cogent Road’s flagship software product. Funding Suite is the leading software platform for ordering and managing mortgage credit reports. It incorporates innovative technology such as our Intelligent Credit Report and individual accounting at the branch and user level. It is supported by a backend system, completely hidden from our users, that routes, tracks and manages all credit service orders placed through the system. Funding Suite is the only system to use digital imaging so that credit authorizations and other documentation can be instantly matched to each order  – giving Funding Suite users some of the fastest service order completion rates available.

Our team designed, built and rolled out the first version of Funding Suite in only 18 months. This was back in 2007.

Since then our team built the industry’s only Automated Valuation (computer generated appraisal) platform that used client defined business rules to ensure the correct automated valuations were ordered based on a wide assortment of loan criteria. It was also the first software to merge four different automated valuations into a single, comprehensive report. Unfortunately, the industry downturn in 2008 put the kibosh on acceptance of automated appraisals (for now).

This same team also created our Transaction Assurance Policy (TAP) software engine that, in partnership with AIG, used an insurance policy to guarantee a home’s value at the price the buyer was willing to pay for the home. It was (is) an amazing product that allowed mortgage lenders to get an INSTANT assessment of whether a home’s sales price qualified for the policy – entirely eliminating the need for an appraisal. We had a pilot set up with Bank of America – just at the time AIG got hit with the mortgage crises in 2008.

When we realized our Automated Appraisal engine and TAP were dead in the water – we turned our attention to the industry as a whole. We noticed that the meltdown occurred because the investor lacked transparency into the individual loans that made up its securitized investment vehicles. We also noticed that consumers themselves had no way to see how their loan was coming along – or if the lender needed anything from them. Further, there was no way for consumers to deliver confidential information to the lender (income and bank statements, tax returns, W2s, etc.), without sending them via e-mail. And we noticed that mortgage production was still being done manually – even though these lenders considered themselves paperless.

We knew if we could build a loan production system with intelligence founded in both the loan data AND the credit data (remember, Cogent Road cut our teeth on the Funding Suite credit platform), we could provide new efficiencies for borrowers, lenders and investors that have never existed before.

Fast forward four years later and we are just about to wrap up Roohmz Mortgage Enterprise. It has challenged us to create technologies never before conceived – and to perform business tasks that no software application in any industry can do. It is the creation of an engineering and design team that has worked together since 2005 – almost unheard of in the technology business. We know how to communicate with each other. We know how to solve problems together.

And we have created  an idea that will prove well worth the wait.

Software is an Idea’s Reality

September 4, 2013

I had a deep conversation this morning with a Cogent Road employee I respect greatly. We talked about real issues – and the challenges of taking on an entrenched industry from our currently smallish Cogent Road enterprise. Some days our expectations are so high, its easy to suddenly feel suffocated by their enormity.

I write these blogs to give anyone interested in our software an understanding of Cogent Road’s character. To me, before investing in enterprise software, one should know the mindset that created the idea behind the software your employees will use everyday. Always remember that software is an IDEA written in ones and zeros. It is always the IDEA behind the software that adds value to your business – not the software itself. The software serves only to deliver the promises inherent in an idea.

Cogent Road’s ideas grow out of our belief in people. We examine current business processes – and then design new ways of working that will enhance our client’s contribution to its employees, partners and customers. It is not helpful to simply automate existing manual processes with software. Instead, Cogent Road designs software around ideas that help our clients do work in better ways - allowing us to provide clients with new levels of service previously impossible without our software.

As we talked this morning, we discussed the unusual reality in which each Cogent Road leader works in areas that are unknown and unfamiliar. While this may sound nonsensical, I believe its the core of what makes our software (and our company) so powerful. When our leaders grow comfortable working in areas of newness – their ideas reflect it. When good people are free to think and create, our software more easily captures the transcendent nature of new and powerful ways to do things.

But most importantly, when our leaders work continually in the undefined ways of growth, they begin to realize how important the support of others can be. Mistakes are often made. Questions circle incessantly around one’s head – and we learn to ask for help. In this environment we recognize, at our very center, the importance of working together as a professional team. And it is my opinion, that it is this “people-focused” mindset that allows Cogent Road to capture ideas in software code that will help every client support its own network of people. Our software helps clients work differently, yet more easily, while helping them create unprecedented levels of loyalty with their own customers.

It is very difficult to create software that enables clients to do new and better things. But the task is made easier because Cogent Road’s leaders are growing more comfortable working in areas of newness themselves.

Rachel’s Husband

August 22, 2013

Cogent Road is a software manufacturer. Consequently, we have a windshield view from which to observe the many ways enterprise software is transforming business work. Yet, as technology creeps deeper into the crevices of everyone’s life, we also see something many do not. Something I believe will radically reconstruct executive and employee organization. Today I will introduce this issue – and how Cogent Road has responded.

If you follow baseball (which I don’t), you know that baseball teams are run by managers. These managers study player statistics, recruit talent to fill in weaknesses and run teams by the numbers. Baseball is a slow moving game governed by the law of averages – and in my experience is only exciting when games or players greatly exceed these averages. Since baseball is a numbers game in which individual player performances are strung together, managers are needed.

When one watches a fast moving game such as football or basketball, it is easy to spot a coach along the sidelines. The coach designs plays and teaches his players how to execute them. He is concerned with the harmony of player interaction – and how different players support the others for the benefit of the team. When the play starts, each player focuses on how his role supports the others on the team. Players practice together – and execute together.

We see that the managers focus on the statistics of individual players within slower moving games. We also see that when the action is fast – the situation requires a coach who can create, teach and run complex plays that incorporate multiple people in different roles.

From my perspective as a software executive I noticed that while technology has dramatically increased the speed and complexity of business - these businesses are still run by managers. While business processes may have changed due to technology, the management mindset has not. In my opinion, to compete successfully going forward, businesses will need to create a “coach” position. And this is exactly what I have done at Cogent Road.

I wasn’t sure how to do this at first. As the president and CEO my title made the coaching idea a bit difficult in the same way that playing quarterback while also coaching would be difficult. I needed to create an entirely different position – with a title that had no preconceived reflection. So after much pondering, I opened our Monday morning executive meeting a few weeks ago by announcing that Alan, my business partner, would become president and CEO.

I explained that I needed a different title in order to help our company navigate a faster, more connected business landscape. Internally I needed to be free to create new and unique kinds of jobs – while defining specific roles for each. Instead of managing by the numbers, I need to focus on corporate offense and defense – and design plays in which employees function together to improve performance. Cogent Road needed me to be a “coach” so that I could train our company to compete at a much higher (and significantly faster) rate. I explained that our business was akin to a complex professional sports team competing in the business arena – and managing by the numbers would no longer be effective.

And because I created this new “coaching” position, I also enjoyed the opportunity to create its title. Since the title of “coach” was super-boring, and being just a bit self-indulgent I selected a title that really means something to me.

At Cogent Road my new title is “Rachel’s Husband”.

Growing Your Business From the Inside

August 1, 2013

As Cogent Road grows and our management style becomes more defined, I see more clearly how different we are as a company. Most striking is the way we manage our business from the inside-out, rather than the more accepted outside-in approach. Today I will introduce this difference.

Traditional management focuses on the external. This means products and services begin with focus groups – creating solutions generated by external ideas. These businesses then go outside to “hunt” customers and bring them into the business. Management focuses on external employee behaviors, spending significant resources to mold and shape them. Marketing departments look outside, studying other companies in order to benchmark messaging, pricing and distribution.

I have discovered that when management focuses on gathering from the outside, it ends up with a business that “takes”. This “taking mentality” expresses itself in a variety of ways. Consider that price wars result because management concedes value and desires to “take” market share by lowering its price. Management perception designs various strategies that take as much as possible from both employees and customers. And worse, companies pile up and sit on hoards of cash, ultimately revealing the company’s “taking” nature.

Perhaps there is nothing wrong with hoards of cash sitting around. Yet, I would suggest that pushing that cash OUT of the business would bring a much greater benefit TO the business. But this can only be done if management works using an inside-out approach.

At Cogent Road we are constantly learning to sharpen our focus on the internal. This is akin to saying we focus on the “roots” of the business, then shape our operational efficiencies as the business grows. If the roots are good, wouldn’t the business (no matter how it shapes up) also be good? Sounds logical. But how does one define an “internal” perspective, let alone manage from it?

Admittedly, much of this is new to us. For now I can tell you that we are focusing on creating an environment of trust in our employees, customers and vendors. We are learning to create value by encouraging employees to be creative and learn from mistakes. We use the lessons gleaned from these mistakes to create brand new technologies and solutions we believe will add value to our clients. We invest in our employees, who in turn invest themselves in helping our clients. And our clients return the value back to us by staying with us a long, long time. We do not run ads telling people how great we are. We do not “hunt” for clients with salespeople. Instead, we focus on giving as much as we can to the clients we have – and new clients find their way to us. And, over time, as our solutions provide greater and greater value, more clients will come to us.

And out of these roots, Cogent Road grows at the perfect rate.


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