As part of my series about the “5 Things You Need To Know To Create a Successful Service Business”, I had the pleasure of interviewing Eytan Bensoussan, Co-founder and CEO of NorthOne. Eytan deeply believes that the success of the small business sector is one of the most important causes of our time. It has the potential to reduce income inequality, empower immigrants, and provide disproportionate leadership opportunities for female and minority businesspeople. Creating a banking service that is as modern as these companies is why Eytan started NorthOne. Prior to NorthOne, Eytan was a Sr. Engagement Manager for McKinsey & Company. He served many clients in the Financial Services industry, usually on the topic of digital customer experience and financial inclusion. Prior to that, he earned his JD/MBA from McGill University and was called to the New York Bar in 2010.
Thank you so much for joining us Eytan! 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?
I grew up in a family of small business owners. Each one of them was gifted in their craft but forced into finance as their businesses grew. Having to moonlight as a bookkeeper, payroll coordinator, or financial planner was something that none of them was trained for, but ultimately needed to do in order to survive. What I didn’t realize then, was that this experience was actually quite common for small business owners across America. I just never knew it growing up.
Years later, I spent about five years at McKinsey & Company. Much of my time was spent working with financial institutions and helping them plan for the next five to 10 years. Part of that work had me discover this massive wave of innovation that was spreading across the financial system. I learned that recent changes in regulation, technology, and post-recession consumer behavior had opened the doors to new ways to experience financial services.
I couldn’t shake the idea that perhaps, buried in all these trends, were the ingredients for a better business banking experience. Specifically, one that could help small businesses, like the ones I grew up with, spend less time on financial administration, and more time on doing what they loved.
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?
In the early stages of NorthOne, I started listening to podcasts and articles on the startup ecosystem. While listening I heard something that sparked a lot of curiosity as a founder, so I emailed one of the hosts to learn more. After reaching out I soon realized that I was corresponding with one the most important venture capitalists in the game. The biggest takeaway here is that anyone will answer an email if it’s a great one. Take time to think strategically about who you’re communicating with those within your industry. The simplest of outreach can change the game.
We’d like to learn more about your unique business model. What advantage does NorthOne offer over other digital banking systems, such as Orange?
NorthOne is a fully digital challenger bank built for American small businesses, freelancers, and startups. Our product is beautiful and simple. It’s a fully-mobile bank account that also connects to tools SMBs use via our NorthOne Open Banking. With NorthOne’s API — we automate bookkeeping and financial admin, which can save businesses as much as 50% on financial admin costs. We had more than 100,000 businesses across America request access to a NorthOne account prior to our public launch.
NorthOne’s mission is fundamentally different from that of a bank. We want to put the back office of small businesses on autopilot. The burden of banking and financial administration among the largest contributors to small business back-office busywork and assumption is that business bank accounts are mostly commoditized. It’s an incredibly humbling place to start. That’s why the bank account is central to our mission, which is to eliminate all financial back-office work for SMBs by starting with a different approach.
Given the ability of hackers to hack into even large corporations with their depth of security it would seem that a smaller digital bank will be more vulnerable. How do you address this question for your clients?
NorthOne has an advantage on digital security, because we have not been grandfathered into decades of tech and expansive (and oftentimes dated) integrations built by legacy banks. Because we get to start from scratch we’ve deployed something we call “security by design”. The very architecture of our technology layer is designed to solve important cybersecurity goals we have. Banks can’t say that same. They’ve had to build their cyber defense piecemeal, and it shows.
Traditional banks also offer mobile and online banking. Where do you see your edge?
We’re not beholden to the business model of most banks. Traditional banks have turned their models into digitally-infused accounts, paying little attention to the needs of many consumers. NorthOne started with consumers first, we continue to personally interview businesses across the U.S. To date NorthOne has interviewed over 400 businesses to better understand what needs they need met by their bank first, rather than the other way around. We didn’t just build a website and app for our bank, we built for our consumers.
Thank you for that. Let’s now pivot to the main focus of our interview. Extensive research suggests that “purpose driven business” are more successful in many areas. When you started your company what was your vision, your purpose?
A precondition of dedicating a decade or more of my life to something was that it had to be filled with a deep sense of purpose. I am deeply connected to my family and the struggles they faced as small business owners themselves. This is my deepest purpose with NorthOne! I understand the struggles of playing bookkeeper, while managing the day-to-day of a business. My vision was to solve the problems that hinder financial success for so many passionate small businesses owners.
What do you do to articulate or demonstrate your company’s values to your employees and to your customers?
At NorthOne we live the values of NorthOne every single day. As one of the leading role models at NorthOne I take these values very seriously. We don’t subscribe to a single value that we don’t instill directly into our own lives.
Do you have a “number one principle” that guides you through the ups and downs of running a business?
I work with some of the greatest in the industry. When we’re hiring candidates, we make sure that they are passionate about the mission and are top-rate. We make certain that our NorthOne employees are the absolute best at their craft.
Can you tell us a story about the hard times that you faced when you first started your journey? Did you ever consider giving up? Where did you get the drive to continue even though things were so hard?
As a business owner myself, there were two major, challenging moments that we faced as a company. When we first started NorthOne, there were quite a few people (including investors) that told me that we could never go up against the big banks. When dozens of people told me that it wouldn’t work, after investing the better half of a decade working on the concept, it only fueled my motivational fire to keep going. Because of that, I had a deeper desire to go on. It was just one to two years too early for the investors we were meeting with.
Another difficult time in the early days of NorthOne happened when we were beginning to run out of money. I was paying all of the expenses on credit cards. I had no salary. I had a child on the way. It was an extremely stressful situation. Of course, it all came together, the story does have a happy ending. We landed great investors. But we never forget that feeling of looking into the bank account and wondering how we were going to make payroll.
So, how are things going today? How did your values lead to your eventual success?
NorthOne is my life calling. Every single day it fulfills me in every single dimension of my life, even spiritually sometimes! There is an emotional stake for me with the businesses that are NorthOne users, because I grew up directly surrounded by my family’s small businesses. We encounter challenges every day, and I’m so proud of the people that I get to work with who provide incredible solutions, day in and day out.
Based on your experience and success, what are the five most important things a founder or CEO should know in order to create a very successful service-based business? Please share a story or an example for each.
- You’ve got to recruit the best of the best candidates that you can at your stage.
- You and your employees must have a deeper drive for what you have created.
- Be nimble. Learn from your mistakes, especially those you make most often. Figure out how to pivot and re-adjust; reinvent yourself when you can.
- Show humility. Be humble in what you create and show your customers that you are as passionate as they are.
- Show hunger for what you do. Never stop reading and learning about your passion. Nike is a great example of a company with an insane hunger to be the absolute best. Show your competition every time that you’re the best and an innovator in the space.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
Without a doubt my wife, whom has supported me throughout everything. There is no other person who has given me so much support. She has supported me professionally and continuously encouraged me to perform at my best in every situation. Not only is she brilliant, she also knows how to solve the thorniest of problems effortlessly and has given me everything.
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. :-)
I don’t mean to sound redundant here, but this is a movement here that I’m in. This idea that small business is the single most important factor when it comes to reducing income inequality. One of our key focuses is creating access to U.S. financial practices that empower small businesses, especially those created by immigrants and minorities, who don’t always have easy access to standard financial practices. We see the reverberations of small business affect every aspect of the economy. People can build their own destiny and are not reliant on something they can’t control. That is the cause of our generation, bringing that level of empowerment to people on a personal level. Whether they are small business owners, freelancers, whatever it is. There is no greater level of economy that you can access by owning your own business. The greatest movement of our generation that NorthOne gets to be a part of, is fixing the imbalance among small businesses. We’re using the very machine of capitalism to better the lives of those who live in society surrounded by capitalism.
How can our readers follow you on social media?
Find me on Twitter! @eytanbensoussan