Opinions expressed by BIZ Experiences contributors are their own.
His mission is to make the whole time-consuming, intimidating,distasteful process of applying for a mortgage a relic of the past.Traditionalists may scoff at 35-year-old Daniel Geduldig'shomebased business in tiny Dillsburg, Pennsylvania; his rapid-firequips; his offbeat advertising; and his practice of completingmortgage applications by phone in the evening, rather than meetingwith clients in person during the business day. But he's theone laughing all the way to the bank.
In just five years, using unconventional methods, Geduldig,owner of Dan the Mortgage Man Inc., has turned a $5,000 investmentinto a $17 million business, named one of the fastest-growingcompanies in central Pennsylvania by virtue of its skyrocketingsales. "Half the people who see my ads roll their eyes andwouldn't have anything to do with me," Geduldig says."But my clients would vote for me for president."
Despite his slightly loopy image, which is carefully cultivated,Dan the Mortgage Man knows exactly what he's doing. His wackymarketing techniques--like newspaper ads featuring his face on abottle of mouthwash accompanied by the slogan "Kills theincompetence that causes bad service"--attract younger clientswho might otherwise feel uncomfortable doing the whole uptightmortgage thing.
It's this kind of unconventional thinking that has youngentrepreneurs in the traditionally staid financial servicesindustry developing a growing and loyal following, catering to theclients more established financial advisors don't want to bebothered with: Gen Xers like themselves.
Pamela Rohland (prohla@aol.com) would love to know moreabout earning money and less about spending it.
Next-Generation Investing
True, twentysomethings and early-thirtysomethings don't haveas much money to invest and spend on financial services as theirparents' generation. But someday they will, and if you'rethere to serve your fellow Xers now, you're bound to reaprewards down the road.
"Forty million people were born between 1965 and1976," says Don Silver, author of The Generation X MoneyBook: Achieving Security and Independence (Adams-HallPublishing). "During their lifetime, they'll go throughseven to 10 jobs and have up to five different careers. Traditionalmoney and retirement planning techniques won't work for thembecause they'll be encountering dramatically new definitions ofjobs, work and career, not to mention retirement plans. So, servingGeneration Xers is a logical move. Right now, BIZ Experiencess lookingto make money from them might face an uphill battle, but time is ontheir side."
Although Generation X's financial prowess hasn't yetpeaked, it's nothing to sneeze at. In 1997, U.S. News &World Report reported that 60 percent of Xers are activelysaving for retirement, and that Xers account for one-fifth of allU.S. investors.
Why are Xers concerning themselves now about a retirement thatcould be 40 or more years away? "They have less security thanthe baby boomers did," Silver says. "More than anyprevious generation, they need to know how to protect theirfinancial future and be aware in advance of the financial impact ofany life-changing decision, such as moving to a new job or gettingmarried."
Although marketing financial services to your peers may give youan edge, it's not the only way to go. Xers who are busybuilding careers and families don't have as much money toinvest as those who are already established. Some BIZ Experiencesshope to make up the difference by building a large volume ofclients; others serve clients from a variety of age groups.
Brent Houston, 29-year-old managing director of Mr. Stock, anonline investment brokerage in San Francisco, says his companyappeals to younger people with technical savvy and a desire to calltheir own investment shots, as well as older investors with deeperpockets. "Most brokers go after asset managers with $150,000or more to invest," he says. "There aren't a lot ofGeneration Xers who have that kind of money, and they're beingleft behind. We try to give our customers the tools they need andlet them make their own decisions. Our business allows people witha minimum of $2,000 to go online and buy Microsoft shares for $100each."
The 6-year-old company earned $4 million in 1998; Houstonexpects Mr. Stock to have 100 brokers employed by mid-2000.
Other financial services BIZ Experiencess don't targetindividuals at all. Jeanne Esti's company, Strategic Solutions,taps into the desire of businesses, associations and otherorganizations to establish their own credit cards, with a portionof the proceeds from sales going to a specific cause. Outfittingherself with a laptop computer, a phone and a printer/copier forless than $5,000, Esti, 30, started her company in September 1998.From her Alexandria, Virginia, home, she worked the phones,gathered leads from former contacts and read credit card industrypublications. Although she believes it's too early to tell whather future sales will be, her client list, which includes TheNature Conservancy and National Geographic, gives her asense of optimism about her business's future.
"I teach my clients how to put deals together," Estisays. "There are a lot of intricacies to doing this, butthere's such a wealth of rewards if it's doneproperly." While many companies that want to establish acredit card already have legal teams in place to do that, Esti saysshe can go beyond legalistic details and put the project togetherfrom start to finish.
One of the toughest parts of her business is persuading banksthey have something to gain from the deal--namely, theorganization's mailing list and access to all its members."When potential clients ask why they need me," Esti says,"I tell them it's because I have the expertise, and theyneed someone impartial to tell them what will work and whatwon't."
Thinking Out Of The Box
Like most BIZ Experiencess in this industry, Esti worked in arelated field before going solo. After earning a degree incommunications and marketing, she worked at MasterCard and AmericanExpress before starting Strategic Solutions. Houston worked on thetrading floor of the Pacific Stock Exchange before he and hisformer partner, Peter Eberle, struck a deal with their formeremployer, option-market maker Group One in San Francisco, to put upthe start-up capital--equipment and office space included.
Geduldig, a former psychology major, worked for two years in themortgage industry before launching his own business. He wanted togo out on his own because he was tired of his bosses saying no tohis outside-the-box ideas. "It was an excellent time to startthe business because of the low interest rates," he says."I was in the right place at the right time."
The keys to Geduldig's success are low overhead (workingfrom home with only one employee), developing strong relationshipswith dozens of lenders nationwide and charging above-average rates."People are willing to pay me significantly more for theconvenience of not having to take time off work to go to a mortgagecompany and fill out forms," he explains. "They can giveme their information at home in the evening while they'rewearing their bathrobes."
Houston, too, knew his business would have to be different tosucceed. He opted for a playful name and logo to market his staffas renegade brokers. Mr. Stock's trademarked cartoon emblem--astockbroker holding stock certificates in one hand and a wad ofcash in the other--may be goofy, but the company itself is seriousabout its approach. Providing excellent customer service is one waystart-ups can compete with the big boys. Mr. Stock guarantees anyphone call will be answered by a live broker within three rings andthat a broker will respond to any customer's e-mail within 24hours.
The open-collar young BIZ Experiencess finding success in thisonce-stuffy, shirt-and-tie business are distinguishing themselvesby breaking with industry traditions. In the process, they'reupholding a larger business tradition: making money by givingcustomers what they want, the way they want it. Taking the time tolearn what customers need is an investment that pays off foreveryone involved.
Smart Move
Cash In
- The Generation X Money Book: Achieving Security andIndependence by Don Silver (Adams-Hall Publishing, $15,800-888-4452).
- Gen X Press (http://www.genxpress.com): ThisTowson, Maryland, company provides a newsletter and consultingservices to help businesses better market their services to GenXers. For more information, call (410) 464-2020.
- The National Association of Personal Financial Advisors(http://www.napfa.org) helpspeople get into the financial services business and offersextensive information. Call (847) 537-7722 or(888) 333-6659 for details.
- The Whiz.com (http://www.thewhiz.com): This onlinecommunity provides Generation Xers with personal financialinformation.
Contact Sources
Dan The Mortgage Man Inc.,dgeduldig@aol.com, http://www.dtmm.com
Mr. Stock,info@mrstock.com, http://www.mrstock.com
