An Interview with Jason Hartman
As part of my series about the “How to Navigate and Succeed in the Modern World of Finance”, I had the pleasure of interviewing Mike Sekits, Co-Founder and Managing Director at Btech Consortium / Strandview Capital.
Mike has been an investor and investment banker in financial services for 33 years. Prior to co-founding Strandview in 2016, Mike co-founded and managed three special opportunities funds aggregating over $250 million for Jacobs Asset Management (“JAM”), where he developed and executed investment strategies in sectors such as mortgage, financial technology, and management of distressed loans. While at JAM, Mike served as a highly proactive and strategic board member for nine companies which, at their peak, generated over $400 million in aggregate revenues employed approximately 4,500 people and managed over $3 billion in assets. Previously, Mike worked in the financial institution’s groups at Bear Stearns, PaineWebber and Dean Witter, and for private equity firm TSG Consumer Partners.
Mike serves on the Boards of LRES (a national appraisal and e-Valuation company), Insellerate , Coverance Insurance, and The Closing Exchange.
Mike received his Bachelor of Arts in economics and accounting from Claremont McKenna College with the Phi Beta Kappa distinction, and he has served on the Board of Directors for Goodwill Industries International ($5 billion in revenues, 3,000 locations and 125,000 employees) since 2014 through 2021. He currently serves on the Evergreen Goodwill Board in Seattle.
Thank you so much for your time! I know that you are a very busy person. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
After graduating from college, my first few jobs were in investment banking. I was advising large banks and specialty finance companies on the West Coast. From there, I gravitated toward working with consumer financial products and financial technologies.
In the mid 90’s I was intrigued by the Internet’s potential to impact consumer finance. It was then, in 1999, that I left banking to begin investing in and advising early stage fintech companies. One of those first opportunities was Silvergate Capital.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?
My first job out of college was in Dean Witter’s Los Angeles investment banking group. I, along with the rest of the young financial analysts, were expected to wear a suit and tie even though we never left our cubicle desks. We showed up at 7am and often did not leave until 11pm. In our second week on the job, we were all asked to come into the office on a Saturday morning.
I had never gone in to work on a Saturday at any of my summer office jobs, but no big deal I was excited about my position as a young banker. I suited up, figured I could wear a slimmer, eclectic tie as it was Saturday and headed out the door of my apartment.
My roommate who was a few years older and had been working as a commercial banker asked, “Where the heck are you going in a suit on a Saturday morning?”
I answered, “I’m headed to work, and I never see the light of day let alone a client, so why would Saturday be any different?”
My roommate, Rob, gave me a concerned look and shook his head as I hopped into my car. Well, as he expected I was teased mercilessly the whole day. All day long, nonstop, my attire and I were the running joke. Every other Saturday for the next three months I was sarcastically reminded that I don’t need to wear a suit. It’s a silly thing but memorable.
Lesson learned was listen to your mentors. I should have taken the cue from my roommate.
Are you working on any exciting new projects now? How do you think that will help people?
At Btech Consortium, we’re evaluating up-and-coming payment platforms that utilize blockchain technologies. Any time you can move money more quickly, efficiently and confidently, it’s of great importance to banks and their customers. That said, while blockchain has powerful applications, it’s important to understand the constraints it faces in a highly regulated environment like financial payments.
Thank you for that. Let’s now shift to the central focus of our discussion. Extensive research suggests that “purpose driven businesses” are more successful in many areas. When your company started what was its WHY, its purpose?
My partners and I believe in community and enabling those that need assistance. Through serving on the board of Goodwill, both nationally and at the local level, I appreciate how important it is to help those less fortunate so they can maximize their potential, often through the power of work. Goodwill’s mission, for instance, is “to enhance the dignity and quality of life of individuals and families by strengthening communities, eliminating barriers to opportunity, and helping people in need reach their full potential through learning and the power of work.”
Strandview formed The Btech Consortium, alongside Elizabeth Park, to empower community banks to compete against larger, money center banks. It’s important for all of us to have strong local communities, and healthy community banks are a critical component necessary to achieve that. Community banks serve local businesses in a manner that the larger banks often do not or will not. Our Btech Consortium enables community banks to better use technology and provide a higher level of service to their clients.
Do you have a “number one principle” that guides you through the ups and downs of running a business?
Be persistently professional. Things won’t always go well — markets and opportunities change. We all make mistakes along the way. But, if you conduct yourself professionally, honestly and do so in a respectfully persistent manner, things should eventually work out well for you and those around you.
If a fellow business leader would ask you for advice about whether to bootstrap or to look for VC capital, how would you help them weigh the pros and cons of that decision?
I am usually more impressed by teams that bootstrap their businesses. With companies that choose to look for VC capital, the focus often shifts from creating a great business to raising series after series of financing, which is unfortunate and ultimately detracts from the company’s original vision and drive.
Instead, companies should focus on staying lean, proving out their product(s) and clearly understand their competitive advantage in the market. They shouldn’t conflate raising capital with being a successful business operator. And raising too much capital is dilutive and can create the wrong incentives for the company and its team members.
What measure do you use to determine the value of a company? What advice would you give to other leaders about how to get an optimal evaluation of their business?
Cash flow. Most businesses are valued on their ability to generate future cash flows. In certain excessive markets, that basic metric is overlooked, but eventually markets correct themselves and it’s all about future cash flow. As an early-stage investor, it often requires forecasting farther ahead than may be preferred, but CEO’s must build the case for profitability at some point in the process.
What would you advise to a founder who initially went through years of successive growth, but has now reached a standstill. From your experience do you have any general advice about how to boost growth and “restart their engines”?
We’ve had success helping our portfolio companies upgrade their sales leader and/or seek distribution partners. Forming a distribution relationship with a successful company that already markets to your target customer base and is looking for additional revenues and deeper engagement is an excellent way to rapidly grow.
What are the most common finance mistakes you have seen other businesses make? What should one keep in mind to avoid that?
Spending too much time concerned about multiple capital raises and valuations. It’s distracting and takes management’s focus away from building the business.
Ok, here is the main question of our discussion. Based on your experience and success, what are the five most important things one should know in order to succeed in the modern finance industry? Please share a story or an example for each.
- 24/7/365 payment capability. Increasingly it’s important to move money quickly, efficiently and accurately. The ability to offer payment specialization is an excellent way for banks to gather deposits and provide their customers with a competitive advantage. Examples include CASS, Triumph, Silvergate Bank and Signature which have all developed digital ledgers to allow businesses to facilitate real time payments among their customers and gather low-cost deposits. Zelle is the equivalent leader on the consumer side of the banking industry.
- CRM solutions for commercial banking officers to better serve clients with a holistic view of every relationship. Banks are leveraging platforms like Salesforce, Microsoft Dynamics and other third-party CRM solutions to aggregate information about their customers and push it outward to their banking officers to create more effective communication. We think those solutions will continue to be more robust and effective over time, with more banks adopting these types of solutions to remain competitive. Very few, if any, banks get this right but we expect to see lots of improvement over the next few years.
- Adopt Low Code/No Code technology tools. This consists of plug-and-play technology programs that are developed, assembled and integrated by business analysts, rather than deep coders. These are easier to consistently modify long-term compared to highly customized coding embedded deep into program language. Few if any banks are using these types of tech development tools but interestingly, smaller banks are in a better position to use this type of tech meaningfully.
- Lean into Artificial Intelligence (AI)/Machine Learning (ML)/Robotic Product Automation (RPA). These technologies help to recommend customer interactions and product offerings by extracting data from various forms and other types of communications while also automating routine tasks. For example, automated call center technologies used by larger financial institutions are using this type of technology to route customers to the appropriate team member(s) fore efficiently. We anticipate mid-sized and smaller banks will begin using similar, more advanced AI/ML/RPA features over time.
- Adopt technology for seamless communication with customers (“meet the customer”). This technology helps banks seamlessly move from text, to email, to phone, to branch to out-of-office interactions through robust CRM integrated with communication tools. Using the same above automated call center example, this type of technology is already in use by larger financial institutions, and we expect to see mid-sized and smaller banks to begin using these more advanced features as well.
Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?
It’s a marathon not a sprint — stay professionally persistent and don’t cut corners. One needs to put in the work to uncover opportunities — conducting proper due diligence, negotiating proper terms matter, consistently looking to add value to portfolio companies (including adding key executives and developing distribution) and remaining on the lookout for potential liquidity opportunities.
Don’t forget that it’s okay to take a breath, walk around the block and stay active outside of work. “Downtime” is excellent for out-of-the-box thinking.
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
Technology that facilities mentoring so that the smartest, most successful people in their fields could provide career advice to millions of people at the same time, using AI and integrated communication tools to deliver custom advice visually and audibly in both brief summary and deep-dive content. As an example, the AI/ML tool could analyze all of your business texts, emails and calls, as well as your performance on Zoom calls, and then provide you with customized feedback from Mark Cuban, Jamie Dimon and Patrick Lencioni all in a format that one could readily digest.
How can our readers further follow your work online?
Those interested in learning more about the Btech Consortium can visit https://www.btechfund.com/.
This was very inspiring. Thank you so much for joining us!
About The Interviewer: Jason Hartman is the Founder and CEO of Empowered Investor. Jason has been involved in several thousand real estate transactions and has owned income properties in 11 states and 17 cities. Empowered Investor helps people achieve The American Dream of financial freedom by purchasing income property in prudent markets nationwide. Jason’s Complete Solution for Real Estate Investors™ is a comprehensive system providing real estate investors with education, research, resources and technology to deal with all areas of their income property investment needs. Through Jason’s podcasts, educational events, referrals, mentoring and software to track your investments, investors can easily locate, finance and purchase properties in these exceptional markets with confidence and peace of mind.
Starting with very little, Jason, while still in college at the age of 19, embarked on a career in real estate. While brokering properties for clients, he was investing in his own portfolio along the way. Through creativity, persistence and hard work, he earned a number of prestigious industry awards and became a young multi-millionaire. Jason purchased a California real estate brokerage firm that was later acquired by Coldwell Banker. He combined his dedication and business talents to become a successful entrepreneur, public speaker, author, and media personality. Over the years he developed his Complete Solution for Real Estate Investors™ where his innovative firm educates and assists investors in acquiring prudent investments nationwide for their portfolio. Jason’s sought after educational events, speaking engagements, and his popular “Creating Wealth Podcast” inspire and empower hundreds of thousands of people in 189 countries worldwide.
While running his successful real estate and media businesses, Jason also believes that giving back to the community plays an important role in building strong personal relationships. He established The Jason Hartman Foundation in 2005 to provide financial literacy education to young adults providing the all-important real world skills not taught in school which are the key to the financial stability and success of future generations. We’re in a global monetary crisis caused by decades of misguided policies and the cycle of financial dependence has to be broken, literacy and self-reliance are a good start. Visit JasonHartman.com for free materials and resources.