Aris Allegos worked in London and Hong Kong in banking before returning to Australia in 2012, where he saw a glaring gap in the local market – a lack of available unsecured lending for small business. So, along with co-founders Andrew Watt and Piers Moller, he created Moula a fintech that offers small business loans without the rigmarole and time delays often experienced with banking loans. SMEs link their business data to Moula through an online application form; the in-house platform analyses the business and its borrowing capability, and Moula can then make funds between $5000 and $250,000 available within 24 hours. In short, it gives SMEs access to funding in order to grow in a much quicker timeframe than traditional loans. The Moula catchcry is “backing good business” and their smart startup has helped change the lending landscape in Australia. Allegos shares his thoughts on business growth strategies, leadership and the surprising silver linings from COVID-19.
Start with First Principles
We didn’t set out to be a fintech. When we started, the word ‘fintech’ didn’t exist. It was more to do with the fact that there was such a gap in the market: there was an opportunity to fund small businesses using non-traditional means or without traditional overlay. My upbringing was typical, second-generation Greek, whereby my mum and dad, aunties and uncles, and grandparents all ran small businesses. Fundamentally, that’s all I ever knew. When I came home to Australia in 2012, an observation I made was that businesses could not access funding in the absence of providing security or in the absence of having established banking relationships, and that was the mission we set out to solve. Every loan we write, every business we help, takes me back to the position my parents and grandparents were in. We are helping people who were in the same boat my family was in and giving them an opportunity to grow their businesses.
Start With a Product Geared to Your Market
Our platform [algorithm] isn’t licensed from a third party in the US or the UK; it’s all bespoke and even more importantly, all the information is Australian. At the outset, we made a decision to build our platform in-house. It’s specific to the domestic market, and for us, that makes it a more robust business.
A Unified Leadership is Key
Between Andrew, Piers and myself, we have been doing this for nine years and there is implicit trust between all of us and that, ultimately, has been the key to our growth and longevity. An important point: between the three of us we have never had an argument. You hear of businesses where there are divisions between the founding team members; things fracture, which spells the doom of the business. We haven’t had any of that and by virtue of all being on the same page, it’s enabled us to navigate the ups and downs.
Setbacks Are Inevitable; Optimism Is Essential
Any entrepreneur would be lying if they didn’t admit to experiencing numerous setbacks; it’s the nature of the beast. I think the biggest challenge for us, in the early days, was understanding the forecast growth. Like every entrepreneur, the expectation is one of extreme entrepreneurism. We had expectations that acquiring customers would be a lot easier and that didn’t necessarily play out as we would have liked. Unsecured small business lending didn’t exist. What we needed to do was develop a category which meant developing a brand. It took a lot longer than we anticipated, but we have gone from no-one even knowing about the category to the government advocating it as an important instrument in the current environment.
We Are Only as Good as the Sum of Our Parts
For us, the parts are the people. We’ve built a team over the course of six or seven years; these are people with topnotch credentials who have bought into the vision, who understand what our mission and purpose is, and who share that. That team element has been critical to our growth and it’s been amazing to see everyone strive towards the objective, notwithstanding the challenging times.
Hiring is More Art Than Science
The process we go through is not an arduous one. We don’t go through 27 interviews and psychometric tests. We’re looking for relevant experience but it’s really fundamental that people coming into the business appreciate that this is about responsible lending, in an ethical and transparent manner. They appreciate that this is a high-growth, dynamic environment where change is the norm, not the exception. It’s really about getting into the psychology of the person you are bringing into the team, which you don’t extract through tests or a simple list of questions; it’s more about rapport.
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Distribution Needs a Multi-Pronged Approach
For us, distribution is no different than a lot of businesses. It just so happens we’re distributing loans but it’s still about brand and online presence, particularly because we are a digital business. It’s a balance of investing in the platform and selling the product. Our strategy is threefold. We invest heavily in our digital presence, a direct channel that is very robust. We have intermediaries, finance brokers, that we work with. Then the third arm is our strategic relationships, of which Officeworks is one. So those three give us our distribution capability and they all complement each other.
COVID Has Silver Linings
It’s really spoken to the will of the human spirit, not to sound too clichéd. The commitment and the effort some of the people within our business have put in over the last [few] months has been phenomenal; they have gone beyond the call of duty to ensure we are in the right position going forward.
From our customers’ perspective, I have been amazed and heartened by their responsiveness and proactiveness. It’s so easy when a crisis happens to throw your hands in the air and not respond, not engage with your lender and wait for it to blow over but we have seen the opposite.
SEE ALSO: How One Small Business Grew During COVID-19 Lockdown
Leadership Isn’t a One-Size-Fits-All Approach
I spend a lot of time empowering my leads to manage according to their standards. It’s all common sense but these are people who have had much more formal leadership training than I have, so I’m empowering them to run their various departments according to how they see fit. For any entrepreneur, you need to have confidence in your own style and hope it’s the right style, and if not, hope you have hired people who will tell you accordingly. It’s safe to say that sometimes it’s hard to hear feedback from your team around doing things incorrectly but you’ve got to be open to it and as Andrew, my co-founder, says, I’m much more open to feedback, so clearly that’s working.
Take What You Need From Business Advice
I was once told to not become over-emotional about the decisions I needed to make. I actually took that advice but turned it on its head. I think you do need to apply some emotion in what you do, particularly when people are involved and you need to manage a team. Your emotions and your sensibility is critical; it’s a balance between the pragmatism of what you are trying to achieve and the emotional aspect of what we do, day in and day out.
