[JayBallentine]

Kabbage is going to really disrupt this industry even though they'll probably never turn a profit from their MCA programs. Think of the Amazon.com and Netflix business model. Unprofitable companies that changed the game with super low costs and superior technologies that created monopolies and crushed the competition. They have long term views and don't mind running in the red for many years until they dominate their respective industries. With many millions of dollars in their venture capital war chests, the sky is the limit. Kabbage will become the Netflix of MCA. Approval and funding within minutes? Check. Super low rates? Check.

Absolute game changer.

You nailed it MCN. It's the long term view. Technology companies don't start hoping to make a "few bucks." Everyone wants a billion dollar exit. They all know, billion dollar exits do not come fast. So, they focus on two things; product and the "hockey stick." They don't want to see incremental growth year over year, that's bad, it's more "what do we have to do to get to the fastest rate of growth possible, so that we can exit in 7 years."

Did you see what Travis Kalanick of Uber just did in a few short years? He took on governments, shipped, got sanctioned, kept going, 4.5 years later - $1BN in revenue. He has been quoted as saying; "I want to make money every single time any human gets in a cab." That's what you're up against, that type of ruthless aggression. They don't want to leave crumbs on the table, they want you working in their mailroom.


These folks have VC's to answer to, and a lot of them sit on their boards. A lot of these board members know exactly how to get to "hockey stick" growth.

True story: Ten minutes ago I got off the phone with the Zazma guys. THESE GUYS ARE CHARGING 3% TO THE MERCHANT AND 3% TO THE SUPPLIER FOR THEIR MONEY.

Quote; "we're only concerned with scaling customer acquisition at this point." That was a gentlemanly way of saying; "we're going for the jugglar. We don't want to participate in, rather, we want to own purchase order financing." How do you compete against guys who raise money to pay themselves six figure salaries, with huge warchests to wear you down?

Here's the kicker. They are focused on scaling and getting to that hockey stick by activating a viral co-efficient. In other words, when they get a supplier, that supplier is simply going to send in more deals. They're giving him the easiest sell in the world, so that motivates him to go get more deals. Then, they reach out to the CUSTOMER and say; "tell your OTHER suppliers about us too."

So here's how it works, suppliers bring in customers, and customers bring in suppliers who bring in customers, who bring in suppliers... see where I am going here?

That doesn't exist in MCA, but it can. ISO's hate chasing pieces of paper, so if you eliminate the paper, they'll chase more deals instead. Not only that, they'll bring in others, friends, family, schoolmates, etc to chase with them.

These pieces of paper simply must go if this industry has a shot in hell.