Think Differently: Is Debt the Greatest Innovation of all Time?

We’ve talked at
length about how consumers are in the driver’s seat. What is Kredit
doing to help consumers resolve their debt? Dave Hanrahan, co-founder and CEO
of Kredit, discusses the following with Erin Kerr:

• How debt shaped the
  society with live in today
• Why digital
  accessibility is a need, not a nice to have
• What role consumer
  empowerment will play in the future of the ARM industry

Transcription
below:

[Erin]: Hi everyone. And
thanks for joining us for another installment of think differently. Think
differently is a feature of the insideARM innovation Council, where the most
innovative minds in the ARM industry converge. I’m here today with Dave
Hanrahan, co-founder and CEO of Kredit. Great to be here with you, Dave, how
are you?

[Dave]: Doing well.

[Erin]: I am doing well.
Glad to hear you’re also doing well. Before we talk about Kredit since maybe
some of our audience doesn’t know you well yet, why don’t you tell us a little
bit about yourself?

[Dave]: Sure. So first
off, thanks so much for having me. It’s always great to talk to another
technology enthusiast as well. You know, the three things that you need to know
about me are: I’m engaged, I have two golden retrievers, and I recently made
the transition from New York to Miami for the near future. So between those
three things, that’s, that’s taken up all of my limited, free time outside of
Kredit, but super excited to be down here and lots on the horizon on the
personal front.

[article_ad]

[Erin]: Yeah. Great.
Well, congratulations on your engagement and the move and golden retrievers are
the best dog to have. They are great. We had a golden retriever for a very long
time and she was just so chill and relaxed, so that’s great to hear. Thanks for
sharing all of that. So let’s talk about some individual thought questions from
your kind of personal philosophy. What do you think is the greatest innovation
in history?

[Dave]:  Sure. So outside
of the, the wheel and rockets and really cool things like that, the greatest
innovation in my mind is actually the introduction of debt as a mental
framework. A lot of people think in terms of kind of monetary theory, you know,
that, you know, dollars and gold coins kind of came first as a medium of
exchange. And that, you know, those really evolved as a function of people
sitting around and not wanting to trade, you know, chickens for corn. And, you
know, they came up with this happy medium in the middle that was, you know, a
currency as we know it today. Um, but in reality, IOU’s drastically predated
actual money and they really serve as the bedrock for the free markets today
and capitalism as a whole. So in my mind that’s really one of the greatest
innovations that’s ever come to be.

[Erin]: Wow. That’s an
interesting answer and not one that I’ve heard before, and not something I’ve
thought of. So that’s, that’s super interesting and obviously super pertinent
to the conversation that we’re going to have today and your business and my
business. So that’s great. Another personal question for you. What’s the
bravest decision you’ve ever made?

[Dave]: Yeah, so brave is
very subjective. I would say that one of the decisions that’s required the most
conviction personally, is the decision to go and start Kredit. It’s no small,
you know, mental decision to be  willing to, you know, take your career
and put it on hold to try to go build something that you think an industry
needs or consumers need and that they’re ready to adopt. So for us, you know,
we have a lot of conviction in what we’re building and we think it’s worth that
effort and time, but it is very, you know, risky personally. But you know, it’s
something that we think is worth that risk.

[Erin]: Yeah. And I would
say that’s objectively a brave decision. So I absolutely think that, you know,
that’s a, it’s an objectively brave decision to sort of pause what you’re doing
and start something new, no matter what that is. And that’s a great segue into our
business line of questioning. Why don’t you tell us a little bit about Kredit
and talk me through the thought process that led you to creating Kredit?

[Dave]: Sure. So, at its
core, Kredit’s platform is a messaging and payments hub for the ARM industry,
different organizations, whether they’re debt buyers, collections agencies, law
firms, creditors can all invite their consumer bases to Kredit, to interact and
set up different repayment plans. We eat all the costs of the payments
processing, and we give the platform away, really in an effort to help
consumers get out of debt faster and try to help different firms in the ARM
industry make that digital leap as quickly as possible.

[Erin]: That’s really
interesting. It’s definitely a novel concept at least from my experience. So
that’s great. So, a little bit more about your organization. Does your
organization like to experiment and if so, I mean, I’m assuming so since it’s a
pretty new concept, how?

[Dave]: Yeah, so we view
our role as enabling compounding creativity. So we want to make things like
communication and payments, so seamless and such a no-brainer that operators in
the ARM industry can focus on being creative in other aspects of their
business. So how are you available to consumers? What different payment options
can you provide them? What different types of payment plans can you entertain
so that, you know, the people who are really, really good at operating
businesses can focus on doing just that. And they don’t need to worry about,
Hey, is our software going to be something that the consumer was really
delighted by and enjoyed interacting with.

[Erin]: Great. I’m
assuming I know the answer to this next question too, given the fact that what
you do is different, but have you ever looked to a completely different field
to inspire innovation at your company? And what do you have an example of that
if you’ve had

[Dave]:  Totally. So
there’s, there’s a lot of different examples, you know, on the messaging front,
we look at slack and other platforms like that, that are consumer focused on
the payments front, you know, Venmo, PayPal, you know, a bunch of different
brands have innovated there. One of the areas that we think is the most
interesting is the IT services space. As you think through IT services, there’s
many, many different companies that will handle everything from database
management to security and things like that. And all those different systems
take their own specialties and combine them with other vendors to really
develop an integrated hub. And that’s really the vision we have for Kredit. You
know, we think that we can come in and provide some assistance on the digital
interface that consumers interact through. We don’t want to go rebuild the
entire collections ecosystem. There’s lots of existing vendors who have done a
great job. So, figuring out the right way to build that ecosystem of integrated
solutions to meet everyone’s needs is something that we really try to bring
into our own business that other people have done in other industries.

[Erin]: Yeah. And you
mentioned, there’s a lot of great, sort of software that exists now within the
industry. And so kind of dovetailing off of that, what kind of future do you
envision in the ARM industry and what role does Kredit play in that future?

[Dave]: Yeah, in our
minds, the future is digital. There will always be phone support and things
like that. But, with reg F you know, there’s a lot of limitations placed on
traditional outreach methods compared to what’s been possible in the past. And
if people are able to make the digital jump, not only it’s going to be higher
ROI, but consumers have shown that they really, really prefer those methods. So
we view our role as helping as many firms as possible, make that digital leap
without having to incur major costs to get there. And once everyone’s on the
other side, you know, the world’s your oyster and there’s so many creative
things you can do to interact with consumers and drive success for your
clients. But re we really want to help people make that simple but complicated,
you know, leap to get there first.

[Erin]: Yeah, definitely.
So speaking of customers preferring a digital experience, do you see any risks
or limitations and following a process of innovation that’s sort of centered around
listening to customers and consumers?

[Dave]:  So I wouldn’t say
there’s issues with it. Anytime you ask a question and you get an answer
there’s associated work there, but if you’re willing to put in the work to
answer any questions that consumers bring up, or the feedback that they give,
or that your customers give, it’s only going to benefit. So it, it takes work
and it takes resources, but in our minds, if you go in and you fix those
problems that are raised, or you’re answer those questions, it’s really going
to create a lot of competitive moats for you, given that, you know, your
systems and your processes will be really, really efficient. So frankly,
that’s, you know, some of the things that we’re trying to help with is we can
go talk to consumers. We can centralize best practices. We can help a lot of
different organizations think through problems that other organizations have
had to think through, and centralize those learnings. But the exercise of
talking to your customers and talking to consumers is irreplaceable in terms of
figuring out what the best next steps are on the digital front.

[Erin]: Absolutely.

[Dave]:  And we’re
definitely seeing a lot of conversations around that. At the Innovation
Council, we saw it, and at strategy and tech earlier this year, and that’s
really where the discussion is happening in the industry right now. So what
current industry challenges do you think will require the most innovative
solutions? Yeah. So when we think through, you know, how we’ve structured our
platform, it’s really about empowering consumers to be able to take control on
their own and drive conversations forward. If you don’t have someone to talk to
about an account, there’s not much you can do there. You have to have the
consumer to engage with. So I think the biggest challenge and also the biggest
opportunity is finding creative ways to engage consumers on their terms and put
them back in control so that, you know, they’re not just going to come and
resolve the account that has been replaced with one organization. They’re going
to come and use that as a catalyst to start, you know, getting their financial
life on track and being able to make a full recovery so that all organizations
who they might have accounts with are going to get those resolved and there’ll
be in a much better position going forward. So that presents a lot of work, but
also a lot of opportunity to help consumers.

[Erin]: Yeah, absolutely.
And like I said, that’s a huge part of the discussion, ongoing discussions in
the industry right now. So it’s great that you guys are on the forefront of
that, and I’m interested to see how you guys grow in the next, you know, year,
two years, five years, 10 years. That’s awesome. So again, thank you Dave so
much for joining me today. Do you have any final thoughts, any closing words
you’d like to leave with the audience?

[Dave]: No. I mean, if
you’re looking for help with your digital strategy, uh, you know, obviously you
can, you can reach out to me, uh, and, and we would love to talk to you. Uh,
but I would say don’t be scared of the digital push embrace it and, you know,
drive it forward. Uh, it’s going to benefit any organization that can make the
jump over the divide. And, you know, if you can’t, then it’s going to be
really, really difficult to succeed. Long-term

[Erin]: Yeah, definitely.
And I, a hundred percent agree with that. So again, thank you so much, Dave,
this has been another episode of Thinking Differently. This is a feature of the
insideARM Innovation Council, Dave, and Kredit are member of the Innovation Council.
And that’s where industry leaders converge. Thanks so much, Dave.

[Dave]: Great. You too.
Thanks. Bye.

iA Innovation Council is a collaborative working group of product, tech, strategy, and operations thought leaders at the forefront of analytics, communications, payments, and compliance technology. Group members meet in person (and lately, virtually) several times each year to engage in substantive dialogue and whiteboard sessions with the creative thinkers behind the latest innovations for the industry, the regulators who audit and establish guardrails for new technology, and educators, entrepreneurs and innovators from outside the industry who inspire different thinking. 

2021 members include: