With the role of specialized technology cemented in the private lending industry, new platforms are giving private lenders more tools than ever before to conduct business. No one knows the importance of emerging, lender-based technologies better than Josh Youngblood, the co-founder and CEO of Kumo Technology and Alfred Tech.
Despite his company’s success, Youngblood’s background is not entirely conventional for a technology CEO – after receiving a degree in industrial engineering from USC, he held a position at NBCUniversal where he led mission-critical operations driving $1 billion in distribution revenue.
Youngblood’s most recent venture, Kumo Technology, was founded in 2012 and began as a custom software development firm – while in its infancy, he said the new venture worked with private lenders in the Los Angeles area, a pattern that continues to this day.
“We built a very strong niche in that particular space because, in order to build software, we really became embedded in [private lenders’] operations and became acquainted with a couple of large lenders in the L.A. area,” he said.
While working with these lenders, Youngblood said he acted as ‘a consulting CTO and trusted advisor;’ not only to help build tech-related infrastructure but also streamline departments within their operations.
One lender Youngblood said Kumo has worked with since the company’s inception has seen its portfolio grow from $300 million in annual funded loans to $1.2 billion while also reducing headcount – to Youngblood, the expansion of technology has been instrumental in the streamlining process.
“I think at the core of what we do, we listen to users,” he said. “We knew going into this venture that in order to have good design, software, and usability, we have to be close to the people who are clicking the buttons and doing the work every day; we’ve taken that feedback to heart while we design and modify our software. As a development company, we own the technology we are creating, so about four years ago we decided to take to market a strong, scalable platform for lenders. That mindset has become the Alfred platform we’re selling today.”
When thinking of the name Alfred, images of a loyal, observant, and responsive (not to mention impeccably dressed) butler from a certain comic book franchise come to mind – Youngblood said this is by design, as the Alfred platform he helped develop serves as the lender’s butler, an end-to-end technology platform for the private lending business.
According to Alfred’s branding material, “Alfred came to prominence through King Alfred the Great of Wessex, in the 9th century. Alfred was as much scholar as warrior, an early renaissance man for whom the notion of ‘counsel’ was a perfect fit. The name persisted through centuries, and ‘Alfred’ found itself beside famous surnames like Tennyson, Nobel, and Hitchcock. And then, yes, Alfred was a butler – perhaps a Superhero’s most famous one. And certainly, that anticipatory service is one aspect of what we do. But ‘Alfred’ has taken on a cultural significance all its own, an identity that most everyone understands, even if they can’t express it.”
At the core of Alfred are three deceivingly simple goals: building relationships, closing deals faster, and growing business at a consistent rate. Youngblood said he knows all too well the complexities of the private lending sphere, including the headaches associated with the underwriting, loan document generation, and investor distribution processes. Despite these potential pitfalls faced by blossoming and seasoned professionals alike, Youngblood said at the end of the day, a company will not miss out on potential deals with Alfred in its toolkit.
The platform’s tailored approach to loan and investor management situates the platform in a unique position, Youngblood said, but its functionality is ever-changing. As lenders old and new begin to use technology on a more consistent basis, apprehension about what those platforms offer can be common. Although that may be the case, Youngblood said Alfred’s mindset towards user qualms is unique as well.
“I think you have to take any apprehension in stride, but then listen and adjust. We have four pillars to our company and the fourth pillar in that series is partnership – that stems from a humble approach that we take with every customer,” Josh said. “That is exactly what we have done from the beginning, and we will continue to do, because when someone thinks an aspect of Alfred would be better a different way it’s the people who are clicking the buttons and doing the work every day who are using [our platform] to make their jobs easier.”
This user-first mentality extends outside the confines of company partnerships, however. Youngblood said many existing platforms are designed as one “monolithic” piece of software which discounts the ways in which different functions can work with each other (and even with different programs entirely.) Instead, Alfred focused on building functions piece by piece that integrate in a seamless fashion. This concept, also known as API (application programming interface) is an often overlooked – yet incredibly important – function in lending-related software.
“In our early days we recognized the power of a true API, so we spent extra effort and investment in developing a robust API at the core of our system,” he said. “We built everything around that – there is competition within the space, but a question we often ask ourselves is ‘are they building platforms that can integrate and deliver true business automation?’ We took this approach from the beginning because with the way cloud computing is moving, the API served as the foundation of the platform. Now, we’re in a position to easily add integrations to expand what it offers.”
In addition to internal integration with new features, Youngblood also said an API has upstream and downstream external applications.
“Alfred has the ability to integrate with anything from CRMs to QuickBooks to other systems that push or pull data,” he said. “I think that’s going to be a huge competitive advantage in the future. As we onboard more customers and people request different types of integrations, automation – both data and data entry – will be driving more of that functionality.”
A prevalent desire amongst lenders is for automation in borrower flow “as much as possible.” Dealing with loan applications can often be a cumbersome process, and Youngblood said one of Alfred’s goals is to make that process structured, intuitive, and automated. This, he added, will not only save potential headaches during the initial intake, but will also assist in collecting bank statements, personal financial statements, and the other components of the loan process.
These features will be tentatively released in March 2020. Youngblood said Alfred is looking forward to implementing these attributes with new and existing clients alike.
“As we add new features, we always find it important to keep in mind that there is a mix of technology expertise amongst our customer base. Some professionals know what an API is, but a lot of people don’t,” he said. They may have heard about it, but they don’t necessarily know the power of it. What we’re coming up with is samples and demos for many integrations so that customers can see how APIs work. One of the best things we can do is focus on our use of technical language, which can be daunting sometimes.”
When tasked with designing an engaging, yet simple to use interface, Youngblood said his engineering education has played a large role in a user-first mentality.
“At its core, my engineering degree talked about human interaction with technology. That core made a large impression on me, especially the ergonomic design of technology,” he said. “That gave me a lot of tools, I think, in the beginning, to set up my mind in the right way – at the end of the day, though, I’ve always been technically inclined and interested in helping people in their jobs.”
Similar to how factory equipment was once designed from the top down – that is, without the factory employees in mind – Youngblood said early software platforms were designed in a similar light. In the absence of APIs and other integration tools, he added that a lack of user input has left gaps in lender-related technology.
When designing Alfred, Youngblood implemented what he calls a ‘Fisher-Price mindset.’ Although much of the platform’s internal functionality is incredibly complex, a deceivingly simple user interface leads to more straightforward usability, he added.
“When it comes down to living up to and delivering on the promises we’ve made, it means that we have to stay close to our customers and maintain the trusted advisor role,” he said. “We’ve done so well up until now, and we will continue to scale the company and grow the platform making sure that our people are supporting our customers. The team we have has an in-depth knowledge of how this industry works and how lenders work; they spend time learning the specific nuances of our customers.”
Alfred was officially launched in August 2019, but has already worked with lenders such as the Lone Oak Fund, Archway Fund, and Freedom Private Money. Moving forward, Youngblood said he hopes to expand the platform’s portfolio while also cementing its branding. Taking Alfred’s (the Batman character) loyal and ever-present characteristics to heart, Josh said he is even looking to incorporate clips from the Dark Knight movies into promotional material.
“Part of our story is that we hired a branding firm to specifically work on our company name, website, and other attributes. We went through exercises to form the company culture and how we wanted to embody the tonality of the brand,” he said. “They did an excellent job, and I can’t reiterate enough the importance of good branding and design.”
This branding, he said, does not only help with a cohesive physical appearance but moving forward will easily inform prospective clients about Alfred’s competitive advantages.
“As I’ve said, I value the relationships with people and companies I have managed to build with Kumo and Alfred. We know our services best and we want to share that knowledge with others,” he said.
Even though Youngblood said it is a cliché to extol the virtues of a well-rounded, passionate team, it is true nonetheless. Alfred’s four pillars, trust, innovation, service, and partnership, are not simply words on a website to blindly procure new business – he said they are qualities that team members bring to the office every day.
“Our customers need someone who really listens, someone who cares and takes the time,” Youngblood said. “We have found that people are very willing to talk about what they do, how they do it, and what aspects of a product or service they don’t like.” When all is said and done, Youngblood stated that Alfred sets its clients free to handle the aspects of private lending that a computer can never do. After all, isn’t that what automation is supposed to accomplish? For more information on the Alfred platform, visit alfred.tech
