Interview With MotoRefi's CEO

Kevin Bennett is the CEO behind MotoRefi, and he's also gathered an impressive list of start-up experiences throughout the years. In this week's episode of Industry Focus: Financials, host Jason Moser interviews Kevin about his company, start-up culture, and more. Learn how MotoRefi works, and how it manages to nab rates that save its customers so much dough; the importance of mission-driven company culture, and how MotoRefi stays true to its; what the grandma test is, and how it can keep a business more honest; some of the most important lessons Kevin's learned in the start-up world; advice for anyone interested in starting their own business; and more. Plus, Jason closes out with some guidance for these increasingly tense times in the market.

To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. A full transcript follows the video.

This video was recorded on Aug. 12, 2019.

Jason Moser: Welcome to Industry Focus, the podcast that dives into a different sector of the stock market each day. It's Monday, August 12th. I'm your host, Jason Moser. On today's show, we're going to talk a little bit more about the recent market turmoil as it pertains to geopolitical risk and how investors may want to think about that kind of stuff. But we begin this week with another installment of Between Two Fools.

To call Kevin Bennett an entrepreneur would be putting it lightly. He's been a part of the success of start-ups, including Homezen and Opower, among others. Today, Kevin is the CEO of MotoRefi, a company focused on helping consumers save money by refinancing their car loans. I recently had the good fortune to chat with Kevin about MotoRefi's market opportunity, the importance of culture in today's workforce, and more about his extensive experience in the start-up world. To learn more about MotoRefi, check them out at motorefi.com, or check them out on Twitter @gomotorefi.

__

Moser: OK, Kevin, tell us a little bit about MotoRefi. Most people probably don't realize they can refinance their car. You and I were talking about that industry data. A lot of people out there with some delinquent car loans right now. MotoRefi is, I think, a really interesting business from a number of angles, but tell our listeners what you do and the problems you're trying to solve.

Kevin Bennett: It's great to be on the podcast. We're a big fan of Motley Fool and the work you're doing to help consumers with their finances. Our goal at MotoRefi is similar. Our mission is to help people improve their relationships with their cars. As we know, most people have cars and need to get to and from work, socialize, get to countless other events, it's an integral part of their lives. Unfortunately, most people don't have the best financial relationship with their car. You alluded to this around refinancing. For example, most people are actually paying more for their car loans than they should be, and only 47% of people even know that they can refinance their car and save money. That's different from when people buy a home, for example. When they buy a home, they'll often shop their financing, make sure they're getting their best rates, and they will often refinance their home to make sure that those rates are the lowest in the market. That's not true with people and their cars. Most people actually don't shop or compete their auto financing when they purchase their cars, and then they aren't even aware that they can refinance it and get a better rate. At MotoRefi, we partner with trusted lenders like credit unions and community banks. They have low rates, we help pair our customers with the best rates for their auto financing so they can save the most money possible.

Moser: That's a really interesting point. Having gone through the process of buying a home a few times, and having gone through the process of buying a car, and I remember with my car I bought, it was an Explorer, and Ford had this 0% financing deal for people who qualified. Of course, I'm going through this process thinking, "Alright, I should be qualified because I know my credit record, I know my credit score, and I know that I'm employed. There shouldn't be any issues in getting that 0%." But you're right, I don't think people shop around for an auto loan rate at all. Homes appreciate typically in value. Cars, we know you drive it off the lot and it automatically depreciates in value. What are the challenges that come with not only trying to educate the consumer on what you can do for them, but then, on the back end of that, the work that you all do in order to get that loan refinanced at the lowest rate possible, considering those challenges that were talking about?

Bennett: On our end, there's a lot of technical work, analytics, data science that goes into helping our customers and making sure we can qualify them for the best loans possible. From a consumer perspective, this all manifests itself in a really great experience. A consumer would go to motorefi.com, they could check the rates they qualify for in seconds without entering their Social Security number, without having a hard pull that dings their credit. If they like the rates they see, in just a minute or two, they can get a firm offer of credit from a lender. We underwrite directly on our platform. It's automated and easy for the consumer. And then, in that same week, they can actually close their financing in most cases. We make it easy for them to go through the whole process online. We even take care of the trip to the DMV so they don't have to do that.

Moser: That's a value add right there, [laughs] that alone.

Bennett: People aren't asking themselves when the next opportunity to go to the DMV is. People are busy, and we try and help them with that as well.

Moser: Wow, that is good! Service is a great differentiator. You should never underestimate the power of excellent customer service. Now, what you do at MotoRefi, it sounds like it would be an ancillary business at any other big bank, it's like one other thing that may be a big bank would do. Whereas it's precisely what you do and what you focus on. What's your competition in this industry?

Bennett: It's a great point you made and I want to underscore that. Traditionally in the finance markets, there are lenders that are all things to all people. What we're seeing is the evolution -- and we partner with lenders, so this is a collaborative process. We will specialize in a specific vertical -- in our case, it's auto refinance -- and provide the best possible experience to our customers that way, and help and partner with lenders in that specific vertical. In terms of optimization and being very focused on what we do, we certainly are doing just that, and it allows us to provide a world-class experience to our customers and to our lenders.

Moser: You mentioned collaborate. We're obviously very big on collaboration here at The Motley Fool. We're also very big on culture. Our listeners care about it, we care about it. We talk about company culture all the time because it really does feel like it is a big differentiator over longer periods of time. Companies that have special cultures, you create a workplace where people want to be, a workplace that people want to be a part of, and a company that they want to be a part of. The longer you can keep people there, you obviously bring down the cost of trying to bring new people in. I've read a lot about MotoRefi's culture. I read a lot of good things about your company and the culture you've developed there. What makes your company culture so special?

Bennett: Jason, I appreciate that. I want to actually return the compliment, which is, what you all do at Motley Fool is really incredible and inspiring. I'm, one, obviously pleased to be speaking with you on the podcast; but two, when we were putting together our portfolio of investors, one of the reasons we chose Motley Fool Ventures is exactly because of the valuing of culture and the emphasis of culture, not as a nice thing to do, which it is, but as a way to build competitive advantage. You mentioned competition earlier. We really think it's key. I've been inspired, we've been inspired by the work that you all do. We are doing our best to create a great company culture, as well. 

When it comes to what makes our culture special, I think it's easier when you're a mission-driven organization. You don't have the same ambiguity or question around what are you doing or why are you doing it. Everybody just knows.

Moser: You kind of have a North Star?

Bennett: Exactly, and it helps focus. It is that acid test around, what should we do? You go right back to that North Star of, is this the best thing for our stakeholders? Is it great for our customers? Is it going to help our lenders? Does it really add value to the ecosystem? It really is a big, big focus. Recently, I get asked about this on Quora, around mission and culture. And my advice was that, the best thing you can do is put your mission at the core of your business. Not as an ancillary thing of, "Oh, we'll give something away for free on the side." But make sure that your core North Star is completely aligned with your mission. I see culture as a very analogous and core part of that. 

We try very hard to put our stakeholders first. It sounds simple, but it's really core to what we do. For example, what does this mean for our customers? It means we live by the grandma test. That's a test established by another one of our investors, QED Investors, and Nigel Morris, who co-founded QED and actually co-founded Capital One. And early on, we were speaking, he said, "Never sell anything to a customer that you wouldn't sell to your own grandma."

Moser: [laughs] I like that!

Bennett: It's a simple test. Everyone knows what it means. They get it instantly. We repeat it constantly. It's a rule we live by. So, when we talk about constantly putting customers first and making it central to what we do, that is a key example. 

Moser: A lot of work upfront there in developing that mission. It really sets it up for success, doesn't it?

Bennett: Oh, absolutely! It absolutely does. As you alluded to, it helps with recruiting, because great people want to do great work, and they want to work on mission-driven businesses that are doing good things for the world. And when you can be clear-eyed about that, and not just put it on a piece of paper, but live by it every day, people get that, they appreciate it, and want to be part of it. We're certainly as good as the people we work with. I'm incredibly fortunate to work with an amazing group of people. A lot of that has to do with our culture. They're not just talented, but they're great people. We also hire according to culture. There are no brilliant jerks here, or people who are brilliant but don't care about the mission. We don't really do that. I think people get that here when they come in and speak with us. It's worked well so far.

Moser: The grandma test, that reminds me of Warren Buffett's, he's got a similar axiom, I guess you could call it. It's basically, don't do anything you wouldn't want to see on the front page of the paper the next day. Just gives you an idea of how you should behave. I think that's a good one, the grandma test. I'm going to have to spread that around here. I'm sure our listeners will appreciate that one. 

Let's pivot away from MotoRefi specifically for a minute. I want to talk about you as an entrepreneur, because this, if I'm not mistaken, is the fifth start-up that you've worked on in your career. Is that right?

Bennett: I think that's about right. 

Moser: That's impressive, to say the least. I feel like we could do a whole show on your start-up experience. Honestly, if you're willing to come back, we probably will do a whole show on your start-up experience, because I know our listeners would love to hear about that. But tell me, is this your dream job, being a part of start-ups? Or is this getting you to a higher ground, some different longer-term goal?

Bennett: I'm absolutely passionate about start-ups, as you might imagine. This is what I love. I love the freedom. I love the creativity. I love the collaboration. I love solving hard problems with smart, motivated people. It's the best. And the community is incredible and generous community. I've benefited so much from friends and mentors in the start-up community. It is a group of people who truly want to make a difference in the world. It's been fun and a privilege to be part of the community that's working to make that happen.

Moser: Tell me about a time that made you question what you were doing. At one point, I'd have to imagine you have a number of examples here, what happened, something that happened that made you think, "Oh, my god, I can't be doing this anymore, I have to go get a nine to five and just settle down"?

Bennett: I often describe start-ups as an act of faith. There's a moment in one of the Indiana Jones movies, where he's crossing a canyon or something like that, and as an act of faith, he steps out, and a brick appears. Then he takes another step and the brick appears. 

Moser: Yeah, I remember that.

Bennett: That is start-ups in a nutshell. You're solving hard problems. You're doing things others haven't done, or at least haven't done in the way that you're trying to do them. And they're difficult. It is, by definition, cutting a new path into the world in some ways. And it's challenging. There are days where you're on top of the world, and there are days where it just didn't work. Whatever it was you were trying to do just didn't work. And I think part of the fun is building in that experience, that muscle memory, that allows you to keep going. And I think everyone understands that in their lives. Everyone has challenges. Everyone has things that are hard. And sometimes, you just get up the next day, dust off, and go back at it. We all have those challenges in life. I don't think they're unique to start-ups, but I think I'm privileged to be in a community that, first of all, accepts that and understands that; and secondly, embraces it. That's what innovation is all about, is trying things. And whatever it is, you learn. If it works, you learn it works. If it doesn't work, you learn it didn't work, and you try something else. That is the process of start-ups and trying to do what we do. It's a lot of fun.

Moser: Going on the learning from your mistakes thing for a second there -- I would imagine this line of work keeps you very humble. If not, you probably aren't in it for all that terribly long. We were saying five start-ups here. Are all five of those continuing on? Are they businesses that still exist in one form or another? If not, were their failures there that made you think, "Oh, I'd better be doing something different, I need to change this"?

Bennett: It's a great question. Actually, the point on mistakes and failures is, one of the things that I think I got a little better at over time was trying to catch those mistakes early. I think you're alluding to this, too. There's a saying in start-ups -- fail fast and fail cheap. If you're off on the wrong track, catch it early so you can adjust or pivot or do whatever you need to do. Constantly be reflective, be evaluating what you're doing, be testing it. Is it working? Is it not working? It's that tinkering that is at the heart of start-ups. You absolutely need to be reflective and stay humble and know that you're not always going to be right. I was reminded the other day of a decision in an earlier start-up where I fell in love with a certain type of design for the software and the product. Absolutely loved it! Working with some incredibly talented people. I fell absolutely in love with it. There was one problem -- our users hated it. Absolutely hated it. It just reminds you to test and test and test because sometimes you can be right, and sometimes you can be wrong.

In terms of the start-ups, to get to that question, I believe they are all living on in one form or another, although I will say two things. One, these are all start-ups I've been a part of. They're not all start-ups I've founded. I want to be clear and transparent on that. Some of them, I've joined existing teams; some of them I did start. And there were various degrees of success. Some got more traction than others. I was at Opower through the IPO, which was a great success story in the D.C. area and across the U.S. in terms of cleantech and behavioral science. But I've learned from all of them, and I've really enjoyed the experiences, and it gives you pattern recognition. Seeing that many different reps, having that many different reps at start-ups, is helpful. You learn. You take something away from each one. Not just in the relationships and the domain learning, but also in the experience and learning the things that have been successful and the things that were less successful, or you'd do differently next time.

Moser: That's a good point you make there about you loving the software design and customers hating it. I think that translates into the investing world as, maybe there's a service or a product out there that I really love, but that doesn't necessarily mean that everyone else really does, and it doesn't necessarily mean that it's a good investment idea because of that. Always worth remembering, it's a big world out there, and you've got to get feedback before you can make that kind of a big picture decision. 

I'm sure we have some listeners out there that are considering getting into start-ups or would like to know more about it if they have this idea. What's one piece of advice you would give to someone who is interested in getting into the start-up gig? Someone who's inspired by your conversation here, what's one piece of advice you'd say to someone getting started?

Bennett: I've heard this was used by another company somewhere down the road, but, just do it. 

Moser: [laughs] Yes.

Bennett: Jump in, find a way to add value. There are so many people I've spoken with along the way who have been interested, and they want to do it, and they're excited, and they have the twinkle in their eye, and something holds them back. It just feels different, it feels risky, whatever. But I rarely, if ever, have seen or heard from anyone who has made the leap and regretted it. Sometimes the biggest risk you take is not taking the risk. That would be my advice. Most people are in a place where, take the risk, take the jump. If you don't like it, you can always go back to what you were doing before, and probably having learned some valuable lessons you can take to your previous industry or job or whatever it would be. But that different experience, whether you're in it for the long term or not, can often create a ton of value, whether it's in a more traditional corporate sector, the nonprofit sector, or whatever the case may be. I've only seen people satisfied that they've done it. That's not to say that everyone stays in it. Some people do it for a year or two and say, "Not for me," or they end up going in a different direction. But the experience itself is always valuable, and probably more valuable than the experience they would have had, had they spent that time doing whatever they were doing previously.

Moser: Yep. You never know if you don't try. Speaking of that, I know what you've got going on in the near-term here with MotoRefi, but given your entrepreneurial nature, what's next for Kevin Bennett?

Bennett: This is it. I couldn't be happier where I am now, building MotoRefi with this team.

Moser: And a big sigh of relief from the entire MotoRefi team. [laughs] He's not going anywhere, folks.

Bennett: It's such an incredible opportunity to help people. We are helping people every day. It goes back to the North Star and the mission, which is, we are helping our customers. I'd be remiss if I didn't say, we save them an average of $100 a month. It's real money that makes a difference in real people's lives. We're also helping great lenders. We work with great lenders, a lot of credit unions, community banks, and we're helping them as well. On both sides of the equation, we're thrilled with what we can do, and we just want to help as many great lenders and as many consumers as we can. I'm incredibly fortunate to be on this journey with some amazing people on the team. We're growing and we're expanding. We just moved into a new headquarters in Arlington. Really excited about the opportunity before us and what we can do, and the culture we're building. All of it. Couldn't be more excited. I am ready, and will be continuing to spend all my time pouring into this endeavor, because I think it's worthwhile and a lot of fun.

Moser: Well, he's the CEO of MotoRefi. Kevin Bennett, thanks for taking the time to speak with us this week!

Bennett: Jason, thanks for having me! Really appreciate it!

__

Moser: Before we wrap things up this week, I wanted to take a couple of minutes to talk in regard to all of the drama that's been going on here in the markets recently. Part of this is, no doubt, inspired from Chris Hill's awesome episode of MarketFoolery from last Tuesday, and part of it is also inspired from a conversation I had over with my friends Kristen Scholer and Tim Stenovec this morning about all the escalating tensions between the U.S. and China. Goldman Sachs lowering their U.S. economic forecasts for the final quarter. Protests in Hong Kong. Political rhetoric. It seems like this perfect storm of a lot of things going on that it's resulting in some volatility in the market, and questions. It seems like more and more we're hearing that R-word, the recession, just on the horizon there. 

Listen, let's be clear, we haven't had a recession since the Great Recession. We're probably overdue for a recession. And you know what? We're going to have a recession. When it happens, I don't know. I really don't care. That's the way you have to approach these things as investors. 

But really, I just wanted to touch on a few things that I talked about today with Kristen and Tim, because they're bigger picture concepts that help me keep focused in times like these when you get a little volatility and uncertainty, and you don't quite know what to do. A few things that I think matter. One, business-focused investing. We talk about it a lot here at The Motley Fool. Sometimes, maybe, it's not quite as simple as it might sound. But ultimately, the idea is that if we invest in good businesses, then over time, we're going to do well. You can't control the ebbs and flows of the market. You can't control the political rhetoric. You can't control the geopolitical risk that plays out in today's society. When you invest in good businesses, those good businesses tend to transcend all of that stuff over time. Invest in good businesses. 

No. 2 is, expect the unexpected. One of those things that you'll learn in life as you grow up, and it becomes a little bit more apparent the older that you get, you need to expect the unexpected. When you think something can't happen, think again. That will keep a level of humility and keep an open mindedness about you as an investor that will serve you well over time. 

Again, going back to this idea that there is a lot of stuff going on out there, most of this stuff is totally out of our control as individual investors. There's not anything that you can do about it, or I can do about it. You can't tell our leaders or leaders of other countries what to say, necessarily. We can speak with our political voice, of course, but there are a lot of things that go on out there that are simply out of our control. You have to embrace that and understand it. I think taking that longer view helps. 

Again, that goes into this next point, always take the long view. Taking the long view gives you an opportunity as an investor to let this other stuff play out. Once you recognize that there's stuff that's going on that we can't control, stuff's going to happen that you didn't think was going to happen, taking that long view makes a lot of sense. It takes a lot of this day to day craziness, sometimes what it feels like, craziness, it takes a lot of that stuff out of play for you. 

And above all, when you run into times like these, a lot of people will sit there and say, "Well, yep, that's it. I told you so. There's no way I'm going to invest because it's too risky. There's too much of this stuff going on out there that I can't feel comfortable putting my money into the market when I don't know what's going to happen day to day." That completely misses the point. As you know and as we know, and as we're trying to tell the entire world, we want to teach the entire world of this concept, the bigger risk is not investing at all. Investing is not too risky. The bigger risk is not investing at all. You will not achieve your financial freedom, you will not achieve your financial independence, if you don't invest. Now, whether that's investing in your company's retirement plan, and contributing to a 401(k), or whether that is a retirement plan and investing in individual stocks, whatever that may be, you need to be doing something with your money with that long-term plan in mind. If you're not doing that, you simply won't be able to achieve your financial freedom without some tailwinds that you may not have anything to do with -- whether you hit the lottery, or someone leaves you a lot of money in their will. I don't want to be going to bed at night planning my retirement around those two things. Remember, above all else, the bigger risk is not investing at all. 

As always, people on the program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. An affiliate of The Motley Fool LLC manages a vehicle that holds an interest in MotoRefi. Today's show was produced by Austin Morgan. For Kevin Bennett, I'm Jason Moser. Thanks for listening! And we'll see you next week!