Community Bank Comeback

Over the past 5 years my company's focus has been on helping banks clean up their balance sheets. Our interest is not on the 200 or so major money center banks, many of which I can see from my office window. We focus on the 6,800 other banks in the US, the local community banks that seem to have been forgotten over the past few years, the ones that were not helped by TARP, Warren Buffet or sovereign debt funds around the world. My company invests in the community banks that help businesses get started and keep people employed in small towns all over the US.  

"In America, small business is a big deal."  - Bob Beauprez

Post 2009, community banks had some big problems to deal with, and they put their heads down and worked on them. Unlike New York City, many of the towns in which these banks operate did not turn around as quickly. In some cases it's a little bit of a catch-22. Before a small town in Kansas can rebound, the local bank that finances new businesses needs to be ready to lend again.

Interestingly enough, as much as NYC seems to be completely turned around - some people even say it is in a bubble once again - when I talk to bankers across the country I do not see the same optimism. I see lights starting to shine but no significant growth yet.  

"Never doubt that a small group of thoughtful, committed citizens can change the world.  Indeed, it is the only thing that ever has."  - Margaret Mead

Below is a link to a great article about the value of community banks in the US economy. Please read it. Until smaller cities and towns across the US start to revitalize their local banks, we will probably continue to see hot activity on the coasts and little in between. Paying attention to the in-between is necessary to achieve a vibrant US economy.  

http://www.huffingtonpost.com/mary-buffett/the-future-of-regional-an_b_3861799.html

Please share your stories about how a community bank helped you start your business.

Disruptive Business

"The arrogance of success is to think that what you did yesterday will be sufficient for tomorrow." - William Pollard

I met an awesome business consultant last week, Whitney Johnson.  She spoke about creating "disruptive movements" into our business models.  

So often in business we get too comfortable in our successes. When we are at the top of the profitability curve, we think we will stay there.  But Whitney so eloquently and simply illustrated that the best of companies never stop innovating, even when their businesses are most profitable. In the absence of innovation, a downfall is imminent.  Business, just like life, is a series of ups and downs.  If we don't change while getting close to the top, we will come down - quickly. 

Take a look at Whitney's excellent piece on using constraints to your competitive/disruptive advantage. I also liked this article from last week about Related Co's newest mega project in NYC - Hudson Yards. This is one of the greatest examples I have seen of using constraints to your advantage.   

"Innovation distinguishes between a leader and a follower."  - Steve Jobs

When I started my business, money was the biggest constraint. I found ways to turn that into an advantage, and 10 years of phenomenal growth ensued.  When easy money came into the picture in 2007/08, without focusing on innovation it led to substantial problems in our model and subsequent losses.  We innovated our way out the problems in 2010 and continue to follow an innovate first model.  

What's your next move?