Steve Burke – Being a Disruptor can be Remarkable

Article reprinted from Thrive Global
Original publication date: January 24, 2021.
Author: Jason Hartman, Author | Speaker | Financial Guru | Podcast Rockstar

As a part of our series about business leaders who are shaking things up in their industry, I had the pleasure of interviewing Steve Burke.

“Being a disruptor can be remarkable. But you have to be willing and able to evolve. Two perfect examples of an inability to pivot are Blockbuster and Blackberry. Both would have been viewed as disruptors in their early years. But both of those companies did not re-invent themselves. When Netflix and the iPhone hit the market, they were quickly left behind.” – Steve Burke, CEO, Agora Data

As the CEO, co-founder, and partner of Agora Data, Inc, Steve Burke’s career started in the retail auto business in the early 1980s. Burke has been a pioneer in the world of auto financing as the cofounder of multiple companies and a longtime executive within several regional and larger publicly traded banks that purchased more than $20 billion of auto loans on the secondary market. Steve is a co-founder of the NAF (National Automotive Finance) Association and recently completed his executive education at MIT in Artificial Intelligence.

Thank you so much for doing this with us! Before we dig in, our readers would like to get to know you a bit more. Can you tell us a bit about your “backstory”? What led you to this particular career path?

During my time in the car industry, I’ve personally experienced the limitations put on auto dealers because they can’t access affordable and abundant capital. Historically, smaller dealers faced insurmountable challenges to grow their business. After owning my own dealership, I shifted my career path to the financial side of the industry. In my experience working with larger financial institutions, I learned why car dealers had limited access and I began to think of ways to solve this problem. Through founding Agora Data, I want to change that dynamic now and for future auto dealers. Used car dealers are the epitome of American entrepreneurship. At Agora Data, we want to make a true impact and help these small business owners grow their companies.

Can you tell our readers what it is about the work you’re doing that’s disruptive?

Agora Data recently made history in the auto industry by closing on the first-ever crowdsourced auto securitization on Dec. 29, 2020. This breakthrough accomplishment allows car dealers and smaller finance companies to have direct access to capital markets with more favorable financing terms. This type of transaction has never been accomplished before due to the complexity of different originators and lack of technology. We overcame all of these obstacles and we are energized that this achievement will reshape the future for dealers, finance companies, capital markets and consumers.

As an example of the impact, smaller auto dealers will traditionally pay low to mid-teens or higher on interest when they borrow money. They typically have lots of financial covenants and may even pledge their real estate. With crowdsourcing, we can take a large number of originators and put them into our program. This aggregation can take their interest rates into the mid-single digits, free them of nearly all of their financial covenants and give them the flexibility to double or triple their portfolio in the span of 12 months. Before Agora Data, there was no efficient way for these entrepreneurs to access capital and grow their businesses.

The part that I’m really excited about is that we give dealers the ability to pass along savings to consumers.

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?

I had shirts made for our employees to wear at an industry conference. Unfortunately, I had the name of our company displayed on the shirts as AROGA, which is AGORA spelled backward. It was an opportunity to laugh at myself. I now rely on my amazing team to proofread everything.

We all need a little help along the journey. Who have been some of your mentors? Can you share a story about how they made an impact?

Muhammad Ali. I had the opportunity to meet and get to know Ali later on in life. He was not only the greatest boxer of all-time, but he was also an inspiration to thousands, if not millions of people. I was incredibly fortunate to view him as a mentor. Ali believed in himself, his causes and he strived for excellence 24/7. Throughout his career, he was consistent and true to himself. Although he had trouble speaking due to advanced Parkinson’s Disease, we communicated without trouble. His eyes and movements made this possible. Ali had a plan for everything. He did not wing it.

In today’s parlance, being disruptive is usually a positive adjective. But is disrupting always good? When do we say the converse, that a system or structure has ‘withstood the test of time’? Can you articulate to our readers when disrupting an industry is positive, and when disrupting an industry is ‘not so positive’? Can you share some examples of what you mean?

Disrupting an industry is good when it provides benefits to the majority of the stakeholders in the industry being disrupted. Agora Data is an excellent example as our entire community will benefit from Agora’s disruptive features:

1. Auto dealers will benefit from access to elegant financing. The dealer can lower their expenses, make more money, grow their business, have less restrictive financial covenants, build goodwill and create a two, five and 10-year plan for retirement.
2. Consumers will benefit due to the auto dealers having lower costs. Much of those savings can be passed along to the consumer. Consumers will have lower payments and a lower Loan to Value (LTV), giving them the potential for equity in the vehicle early on and ultimately lower defaults. If defaults are eliminated, the consumer will improve their credit scores and qualify for other loans such as a mortgage.
3. Capital Markets will benefit from this disruption as a new channel of assets will become available.

Being a disruptor can be remarkable. But you have to be willing and able to evolve. Two perfect examples of an inability to pivot are Blockbuster and Blackberry. Both would have been viewed as disruptors in their early years. But both of those companies did not re-invent themselves. When Netflix and the iPhone hit the market, they were quickly left behind.

Can you share 3 of the best words of advice you’ve gotten along your journey? Please give a story or example for each.

1. Invent: Think differently rather than recycling features that others have done. For example, all of the software providers in auto finance offer variations of the same reports, analytics and functions. We aim to create new offerings that can take our industry into the future.
2. Plan: When inventing, do it with a plan. At Agora Data, we will gather in our conference room or on Zoom to collect ideas in a way where we maximize participation. We narrow down the best ideas, obtain buy-in from the group and plan each step in the process to achieve our goals.
3. Capital: Whatever amount of capital you think you need, double it. At Agora Data, we are always stressing our budgets to ensure we have sufficient capital to support our products and features while providing excellent service to our customers.

We are sure you aren’t done. How are you going to shake things up next?

Our goal has always been about the “community” of sellers and buyers as a whole. We are already in development to release more features for the auto dealers to make more money, while allowing consumers to save money at the same time. The goal itself seems counterintuitive. But we feel we have the model, planning, and technology to make this a reality for all stakeholders to benefit.

Do you have a book, podcast, or talk that’s had a deep impact on your thinking? Can you share a story with us? Can you explain why it was so resonant with you?

Good to Great by Jim Collins. The passage about having the ability to tell time versus building a clock has always resonated throughout my career. My goal in business is for my team to excel, have fun doing so and make a positive impact that outlasts me.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

“Don’t judge a book by its cover.” When I first started in the car business, a customer walked into my dealership looking out of place. Based on his appearance, he didn’t look like he could afford a car. None of my sales staff wanted to wait on him and honestly neither did I. As the owner of the dealership, I stepped up and did my job. After spending a few minutes with him, I quickly realized his intellect. I ended up selling him a car and learned that he was one of the wealthiest people in the U.S. at the time. It was a lesson for me, as well as my staff.

You are a person of great influence. If you could inspire 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. 🙂

Financial Education. Too many people make grave financial mistakes early on in life and many times never recover from them. I would like to develop software that enables people, young or old, to make better financial decisions and realize the impact of bad decisions before mistakes are made.

How can our readers follow you online?

You can connect with Steve on LinkedIn and follow Agora Data on Twitter, LinkedIn or via their website at AgoraData.com.