Not every startup or small business has credit information widely available. Seattle-based SimpleVerity wants to fix that.
The Seattle company, founded in 2012, compiles credit reports for 5.5 million small businesses around the country. Many of the big credit companies do not have credit data on those smaller ventures, and that’s the void SimpleVerity is filling.
Mike Carreno and Randall Lucas co-founded SimpleVerity and are still the only two employees. Carreno was previously the VP of Engineering at Yapta and Lucas was at Voyager Capital. The two met in 2007 when Yapta took an investment from Voyager.
“We stayed in touch over product whiteboard sessions and microbrews, since we liked brainstorming about software and lots of big-data geekery,” Lucas said. “By 2012, we were both looking for a new project, and met for coffee to compare notes — which ultimately turned into a pitch deck and a prototype for SimpleVerity.”
We caught up with SimpleVerity for the latest edition of Startup Spotlight.
Explain what you do so our parents can understand it (in a Tweet-sized statement): SimpleVerity is the credit data source for over 5.5 million small businesses who are overlooked by the major credit bureaus.
Inspiration hit us when … Inspiration hit us when we were examining the data needs of angels and VCs who invest in startups. As a result of our research, we realized that the traditional business credit market — where vendors will commonly extend credit terms to their recurring customers — is 20 to 50 times as big as the equity financing market, and still has huge inefficiencies and room to grow.
VC, Angel or Bootstrap (And Why): We’re looking for the right money at the right time. When we were prototyping, it was laptops at Stumptown Coffee and a credit card. Now we’ve got a great syndicate of angels helping us not only with money, but with strategy and contacts. When and if the time is right, we’ll welcome venture folks to our team.
Our ‘secret sauce’ is: Our “secret sauce” is getting deep into business processes that are stuck on paper and FAX. We’ve developed a workflow engine that utilizes proprietary algorithms and a distributed workforce to take a modern approach to obtaining quantitative, third-party verification of a borrower’s credit history.
The smartest move we’ve made so far: The smartest move we’ve made so far has been going to Seattle’s SoDo district and talking to the various manufacturing and industrial distribution businesses and understanding their credit processes and pain points. They’ve provided us with valuable insight that was essential to the development of SimpleVerity – and they continue to serve as key product advisors as we continue to iterate on our product and make improvements.
The biggest mistake we’ve made so far: The biggest mistake we’ve made so far has been trying to talk to customers in a language they don’t understand. Specifically, credit people have their own language and culture, which is very different from what you’d hear in “startup-land.” So, like mercantile adventurers since time immemorial, we had to learn to build rapport at first by smiling and showing off shiny objects, while scrambling to learn how to talk the real language of our customers.
Would you rather have Gates, Jobs, Zuckerberg or Bezos in your corner: We’d get along best with Jeff Bezos. He took a complex and dirty business —cardboard boxes and foam peanuts, for heaven’s sake — and transformed it with data insights, and with relentless, detail-oriented automation.
Our world domination strategy starts when: Our world domination strategy starts when we get asked a second time for the same piece of credit information. Because of how our market works, we end up creating brand-new data, which is costly. But the second time someone wants that information, we’re the only ones in the world who can instantly fulfill that need.
Rivals should fear us because: Rivals should fear us because we’ve literally got the dream team for this particular niche. Mike spent the last several years wresting valuable insights and alerts from over a billion rows of airline pricing data. I spent the last several years laser-focused on using technology to make financing decisions for small and growing businesses. Our advisory board includes the chief risk officer of one of the country’s largest financial institutions, the executive who used to run the country’s foremost business credit bureau, and the professor who actually wrote the book on credit reports.
We are truly unique because: SimpleVerity is truly unique because we’re the only business focused exclusively on surfacing the credit data on over 5.5 million small businesses that are ignored by the major credit bureaus.
The biggest hurdle we’ve overcome is: The biggest hurdle we’ve overcome is learning how to demonstrate our very non-software, non-techie market space’s potential to a market of software-focused investors and other teammates. Software companies rarely need what service we’re providing, but almost every company that owns a forklift needs what we do.
What’s the one piece of advice you’d give to other entrepreneurs just starting out: One piece of advice we’d give to entrepreneurs just starting out is that there are tons of startups scratching the itches that startup/tech people have, but there’s relatively few focused on scratching itches out there in the massively larger “forklift economy.” Move a trillion-dollar market by a percent or two and you will be richly rewarded.
