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.