In this episode of "Accrued, a Fintech Confidential series presented by LoanPro, Tedd Huff and co-host Colton Pond sit down with Mike Dushane, the Chief Product Officer at Octane, to learn how getting loans for fun and recreational activities is becoming easier and more user-friendly. 

Mike has a rich background in the automotive and power sports industries. He shares how his passion and career have merged at Octane, leading to groundbreaking work in recreational financing. He explains Octane's mission: to streamline the loan process for customers looking to purchase RVs, motorcycles, and other recreational vehicles, making these dreams more attainable than ever before.

Throughout the episode, the trio looks at the nuts and bolts of what makes Octane different. Mike highlights the company's close collaborations with dealers and manufacturers, ensuring that customers not only find the perfect vehicle but also secure financing in a smooth, hassle-free manner. This partnership model not only benefits customers but also strengthens the ecosystem around recreational vehicles, fostering a community of enthusiasts supported by accessible financing options.

Mike shares his insights into how Octane's customer-centric approach sheds light on the importance of understanding and empathy in finance. By prioritizing the needs and experiences of their customers, Octane is able to offer personalized loan options that resonate with individuals' unique circumstances. This approach is not just about making sales; it's about building lasting relationships and supporting customers' lifestyles and passions.

Looking to the future, the episode explores Octane's vision for continuing to innovate and improve the financing process. With a focus on leveraging technology and data, Mike discusses how Octane is constantly seeking new ways to enhance the customer experience, making it even easier for people to finance their recreational dreams. 

You will come away from this episode with a deeper understanding of how fintech is transforming the landscape of recreational financing. Through engaging stories and insightful discussions, Tedd, Colton, and Mike illuminate the exciting possibilities that lie ahead in making finance more accessible and aligned with the passions that drive us.

Watch on YouTube.

Key Highlights

• Mike's Automotive Background and Passion for Power Sports: Before joining Octane, Mike had extensive experience in the automotive industry and a personal passion for cars and power sports, which he brings to his role.
• The Importance of Team Success: Mike attributes Octane's success not to individual efforts but to the team's collective hard work and innovation.
• Octane's Approach to Lending: Octane initially focused on serving customers in the prime and near-prime segments, looking beyond traditional metrics to responsibly extend credit to those often overlooked by big banks.
• Customized Loan Offers: Utilizing alternative data and proprietary models, Octane can provide more personalized loan offers, often outperforming competitors by offering better terms or servicing customers they might decline.
• Technology Integration with Dealers and OEMs: Octane integrates its technology with dealer and OEM platforms, streamlining the loan application and approval process to enhance the customer experience and facilitate instant loan decisions.
• Data-Driven Collections Strategy: Octane employs a strategic approach to loan servicing and collections. It uses data to inform when and how to engage customers most effectively, aiming to enhance customer experience even in collections.
• Empathy in Collections: Beyond technology, Octane applies empathy in its collections approach, understanding customer situations to encourage repayment in a way that respects the customer's circumstances.
• Expansion into RV Lending: Recognizing the crossover interests of their customer base, Octane expanded into RV lending, adapting their lending approach to suit the different dynamics and needs of RV buyers.
• Compliance and Fair Lending Practices: Octane prioritizes compliance and fairness, using data and models vetted for bias to ensure equitable lending practices.
• Vision for the Future of Lending: Octane is focused on further personalizing the lending experience, leveraging data and technology to meet customers' individual needs more precisely and improve their purchasing journey.

Takeaways

1. Customer-Centric Financing: Octane focuses on creating a seamless, frictionless financing experience for customers looking to purchase recreational vehicles, including RVs and power sports vehicles. They use technology to simplify the loan process, making dreams more accessible for their customers.
2. Partnerships Enhance Customer Experience: Through partnerships with dealers and OEMs (Original Equipment Manufacturers), Octane can offer more personalized and immediate loan options, enhancing the customer's overall buying experience.
3. Empathy and Data-Driven Decisions: Mike Dushane emphasizes the importance of empathy in product development and decision-making at Octane. The company uses a combination of empathy and data to make better lending decisions and serve its customers more effectively.
4. Future of Finance in Recreational Lending: Octane is exploring ways to personalize further and customize lending experiences, aiming to make financing as tailored and relevant to the individual customer as possible. This approach suggests a future where lending is transactional and closely aligned with the customer's preferences and needs.
5. Innovative Use of Technology in Lending: Octane leverages its proprietary technology platform to manage the end-to-end buying and lending process, which includes everything from application to loan servicing. This streamlines the process and opens up opportunities for innovation in loan servicing and management.

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Website: https://octane.co/ 

LinkedIn: https://www.linkedin.com/company/octane-lending 

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Time Stamps:

01:25 Octane's Big Move

02:25 Mike's Impact

04:47 Mike's Love for Cars

08:52 Tech Makes Loans Easy

10:30 Partners Make It Better

13:49 What Makes Octane Special

16:24 Choosing Who Gets Loans

20:50 Keeping Loans Healthy

23:42 Low Default Secrets

24:05 Tech in Loan Service

24:37 Tech Talks to Customers

25:06 Lending with Heart

26:19 Caring in Collections

27:06 Data for Better Loans

30:02 RV Loans Join the Mix

33:59 Personal Touch in Lending

34:56 Fair and Right Lending

36:04 Future of Financing

This is a Production of Diamond D3, Media

ABOUT:

Mike Dushane: Mike Dushane is the Chief Product Officer at Octane, overseeing the product and editorial teams and responsible for product direction, strategy, and implementation. He joined Octane in August 2018 and has introduced innovative new products that have significantly contributed to its growth. Mike lives in Brooklyn, NY, and is an avid traveler, photographer, swimmer, car nut, and gadget tinkerer.

Octane: Octane® is revolutionizing recreational purchases by delivering a seamless, end-to-end digital buying experience. We connect people with their passions by combining cutting-edge technology and innovative risk strategies to make lifestyle purchases–like powersports vehicles, RVs, and outdoor power equipment–fast, easy, and accessible. Octane adds value throughout the customer journey: inspiring enthusiasts with the Octane Media™ editorial brands, including Cycle World® and UTV Driver®, instantly prequalifying consumers for financing online, routing customers to dealerships for an easy closing, and supporting customers throughout their loan with superior loan servicing. Founded in 2014, we have more than 30 OEM and 4,000 dealer partners, and a team of over 500 in remote and hybrid roles.

Tedd Huff: Tedd Huff is the Co-Founder of Voalyre and the President and founder of Diamond D3, a professional services consulting firm focused on global payments and marketing. He is also a video podcast host and producer of Fintech Confidential.

Over the past 24 years, he has contributed to FinTech startups as an Advisory Board Member, Co-Founder, and Chief Experience Officer, providing strategic and tactical direction for Global Payments OpenEdge, Heartland Payments, Nuvei, and TSYS, among others, focusing on growth while delivering innovation, process improvements and user experience-driven value to simplify the complexity of payments.

Colton Pond: Colton Pond is a seasoned marketing executive with a strong fintech and financial services background. In his latest role, Colton is the CMO for LoanPro's API-first lending platform, aiming to meet the increasing market demands. His track record includes a significant tenure at Truv, where he led the marketing team to achieve a 300% growth in year-over-year revenue. Colton has also held key marketing and sales positions at MX, Lucid, and HealthEquity, demonstrating his ability to drive success and innovation within the fintech sector.

Diamond D3, Media: A media creation, management, and production company delivering engaging content globally

We see is that dealers and OEMs,

they want to control the experience because they want to make it more

personalized and reduce friction.

We're really excited about building products that do that

because they also help us.

To make better loans, have better experience for our

borrowers,

Tedd Huff - Fintech Confidential: Welcome to Fintech Confidential, bringing

you the people, tech, and companies that change how you pay and get paid.

welcome to Accrued, the Fintech Confidential Series presented by LoanPro.

In this series, we're deconstructing the complexities of lending and exploring

compliance, optimization, modernization, and personalization through insightful

conversations with the industry's best.

I'm Tedd Huff with my co host Colton Pond, and we're here to guide you

through the intricate lending world.

Whether you're deep into Lendtec or just intrigued on how the

technology is reshaping lending, you're in the right place.

Now let's dive into another episode of Accrued.

Hey Colton, welcome back, man.

After a short hiatus, we're so happy to have you

back.

It's good to be back in a new location as well.

I'm in the studio this time, so we should have better audio.

Um, but it is good to be back.

Thanks so much, Tedd.

No worries.

So let's go ahead and kick off this episode.

Octane is quite the powerhouse and they're transforming

how we finance all the fun,

Making those dream purchasess of power sports vehicles, RVs;

And so much more.

But as we start talked about in the very beginning of before we hit record,

not sub Marines, but some Marine stuff.

And it's not just a possibility, but

octane is really created a seamless.

Experience to make those dreams become a reality.

Their end to end digital buying experience is truly setting a new

standard and recreational financing.

And it's not just about the tech Octane's business model is a perfect blend

of business of business to consumer

partnering with recreational vehicle giants like Polaris, partnerships

that ensure that dreamers and doers alike get to experience the

thrill of ownership without any of the traditional financial hurdles.

Mike, you've been in the driver's seat of product direction, strategy

implementation since joining Octane in August of 2018, and it seems that You

have a knack for launching innovative products that push the envelope and

it is significantly contributed to Octane's growth and your journey.

So I want to welcome you to the show and, um, well, welcome.

Thank you.

Thank you.

Good to be

Mike, it's good to have you, my friend.

Uh, we know each other well for the audience and viewers.

I found out that Mike at Octane and Octane is a customer of LoanPro.

And we met at a dinner in New York city and realized that we live a

few blocks away from each other

and decided, you know what, uh, we're going to become workout

buddies and go, go work out.

So my one workout a month is with Mike.

I need to do it more often.

I need to get in better shape.

Mike always pushes me.

But in addition to that, uh, Mike is an avid.

Um, traveler, swimmer, all things, uh, fun, but on the business side, one of

the most brilliant product leaders that I've had the opportunity to engage with.

So if you wouldn't mind, Mike, uh, give the audience a view into your

career path, how you got to Octane.

And what I would personally love is before this, we talked about

guiding principles that guide you illustrate one of those guiding

prinicples that is really impactful.

Absolutely.

Well, thank you for the kind words, Colton.

First, let me say that our success at Octane is not due to me, but due

to an amazing team of people here.

Um, I believe, you know, jumping right to guiding principles.

One of those is that your success in business is all

about the people in the team.

And I don't just mean the leadership.

I mean, every single person in the company where real ideas, um, turn

into execution and come to fruition.

I am a longtime car nut.

So throughout my career, I've been in various product management jobs for

a quarter century now, um, starting while I was at University of Michigan.

Um, throughout my career, I'd say there's one simple thing

that's tied it all together.

That was empathy, um, understanding what people actually want and going

out of my way to give it to them first.

And then thinking about how do you make it a business?

How do you actually monetize it?

How do you, um, you know, connect the dots so that the thing can scale.

So my passion is cars.

It has been since I was a little kid.

I attribute that to being born in Los Angeles where everybody's into cars.

kind of have be to live in LA.

So when I first started my career, I was involved with a couple of startups

that had nothing to do with cars.

They were fun.

I learned a lot, but at the same time, I was freelancing and writing

about cars for various outlets just because it was a fun hobby.

Doesn't pay Never did.

Certainly doesn't now,

and eventually I joined those two things together.

First, I joined, uh, uh, Prime Media, which was a media company that owned

Automobile magazine, and, uh, I led the web product and editorial function

there, which, uh, to be honest, at first was just me, um, and then, uh, moved on

after a couple of years to car and driver magazine, which was and is the biggest

circulation car magazine in the world, um, has the largest, uh, automotive media web

presence in the world, led digital efforts there for the better part of a decade.

And was able to kind of bring my passion for cars and what I knew car

enthusiasts wanted to digital platforms.

After that, uh, did some corporate stuff at Hearst for a few years,

uh, relaunched the Cosmo website.

Uh, put together a business plan for Hurst Automotive.

Um, but then I, I followed one of my mentors, a guy named Chip Perry.

Went to TruCar, where I worked on automotive marketplaces.

But both Chip and I left.

Uh, after a few years and I found, I think the right place for me, which is

octane and octane is exciting because.

We're not doing cars right now,

but we are doing power sports and power sports are actually an even more

fun kind vehicle because cars have gotten so fast that you can't really

drive them on public roads to their limits or anything close to them.

But power sports, you can use off road, you can bomb around.

There are more raw experience and a lot of big car nuts are really

starting to turn to power sports.

for a lot of car nuts, Power Sports is the new hot sports car.

And that's because they're raw, and they're fun, and you can use

them anywhere, um, and really push them to their limits.

And that's a ton of fun.

So, moving to Octane for me was really a natural progression.

Mike, it's funny as you, as you talk about this, all I can think

of is all the UTVs that are around my neighborhood here in Arizona, man, I've

got, there are some that have got like.

30 inch wheels and tires on it.

Some have got these huge stereo systems you can hear from a mile away.

And I'm not even exaggerating when I say

Oh, I know.

Uh, but it's just crazy to see how a lot of these guys that

used to tinker on their car, tinker with their cars and do all this

customization of made that switch over.

To those vehicles.

It's just, it's, it's awesome to see that there's that enthusiasm

that continues to go through.

But one of the things that you pointed out, and I really, like, I really like you

to break down for us how you're leveraging technology to make the loan process

for these as friction free as possible.

Especially for those who are really looking to finance

their recreational dreams.

Octane developed its own platform, and that doesn't sound

super sexy, but what it allows us to do is manage the whole buying

and lending process end to end and make it simple and automated.

Before Octane, the process of financing PowerSports and the

majority, the vast majority of new PowerSports purchases are financed.

And the process sort of looked like fill out a paper app, your dealer

faxes it somewhere, come back in a few days once everything is, you

know, done and you have a decision.

Um, and it was, it was quite opaque and, and a lot of deals got lost or people,

got frustrated because of that long lag.

And so we turned it on its head and we said, well, why not allow people to, um,

either do a digital credit app through a dealer or with our prequel product,

do it right on their phone or their computer, uh, at home or in the dealer.

Take that process through from applying to getting a loan.

In minutes and not days.

So it really is, you know, by automating every single piece of it

from the, uh, document processing to even the credit decisioning,

all of it is instant, and it allows us to turn people's passions into

purchases in minutes and not days.

Oh, I'd love that.

Passions to like passions to purchases.

I love that.

I love that statement.

I'm going to put that one in the old mental bank.

Yeah.

Uh, Mike, dive in deeper there.

So this segment that we're doing on, we're doing three episodes

with consumer lenders, folks that, that lend to, to consumers.

Octane being squarely in there.

One of, one of the unique aspects that I love as a marketing person

is your, your Go-to-market approach.

In a B2B2C way in partnering with retailers and OEMs and others.

So give us context on what role that plays in enhancing the customer experience.

You shared a little bit on what they were used to.

But

how does that play a fundamental role?

Because I can't just go to Octane's website and get a loan.

yeah.

So Octane is a point of sale lender.

It means that every loan that we do is actually originated

by one of our dealer partners.

And what we've done is we've created a suite of technology tools that

joins together our OEM partners.

So OEM partners help us provide low promotional rates.

with our dealer partners who actually engage the customers and, you know, sell

them the units and finalize the financing.

We've created these digital tools that sit on the OEM websites and they sit

on the dealer websites so that instead of customers just kind of applying

into some random form or CRM, they're actually applying and filling, um,

submitting their information directly to.

Our loan origination system and instantly getting qualified for loans.

So that means that somebody who goes on an OEM website or a dealer website from

their home and then walks into a dealer, they're already qualified and ready to go.

The dealer in many cases can just click contract and the customer then

signs it on their phone and that's it.

So it's having the partnerships with the dealers and the OEMs

and they're using our technology.

That allows us to, to, um, make those loans pretty instantaneous.

and I'm sure that that drives increased trust, right?

If we think about financial services and lending and especially consumer

lending, previously, there's been a lot of distrust you going directly to folks like

Polaris and the customer engaging with Polaris with Octane behind the scenes.

I'm sure it drives greater trust, which drives greater conversion rates

and all the things that they want.

No, that's all true.

And it, it, um, it does.

We, you know, we have trusting relationships with our dealer

and OEM partners and you know, that, that trust is mutual.

And yes, there is the conferred trust that comes from associating with them,

but we also have a very transparent experience where you understand right

away if you're, um, pre qualified to buy.

our prequalification is unlike pretty much any prequalification out there

in that when you get prequalified with us, the rates and terms that are

generated are the real rates and terms.

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as you, as you talk about all these different ways that you've, you've

reduced the friction, you've made it easy for them to understand where they

stand, can you give us a sneak peek maybe behind the curtain a little bit and help

us understand like, What technologies you guys are using to, to make this

such a revolutionary way to apply for these, these, these, uh, financing.

Yeah, absolutely.

Our stack, our core stack is proprietary.

Um, and also, but, but our proprietary stack really just

covers the things that we are going to do better than anyone else.

So the way that we decision loans, the way that we process loans, those are

things where our proprietary stack.

is necessary and where we've built that up over the past decade,

I hear proprietary, and that means Tedd, I'm not really going

to tell you, but I'm going to give you a little bit of information.

secret sauce!

Come on, it's a secret sauce!

yeah, I mean, we're, we're not, I mean, and

honestly, it's not the technology,

it's the team of people building it and it's how we have broken

down the walls between risk and technology and our organization, yeah.

So that we can build things quickly and we can build things that both satisfy

our risk and compliance appetite and are delightful to our customers and our

dealers, partners, and our OEM partners.

that is the secret sauce.

Honestly, the hardest thing we've done as a company is figuring out how you take,

a technology forward organization,

which is also a very mature financial institution.

So how do you join that rigorous culture, financial culture with a

technology culture so that you can build products that, um, produce great.

Um, financial returns, but bring customers in the door because they

are a great product experience.

it's really that cultural thing that is our secret sauce.

It's not any one piece of technology.

The cultural thing allows us to build the great platform.

So I love that, Mike, and jumping in a little bit more,

tying back to the guiding principle you brought up of empathy, and having

empathy for, for people in the end customer and building around that.

I feel like, man, if product leak leaders could capture that principle

and that guiding principle, we have way better product leaders to understand

customers and what they're going through.

would love your thoughts on how you look at that market and, and how you

drive, like, uh, determining is this a qualified, uh, borrower or not?

well, I think, um, In a nutshell, first it

comes down to the culture.

The product and engineering teams partner very closely with the RISC team

to figure out the most innovative ways.

To assess risk, and I'll say that we slight distinction.

We don't really do much subprime for us.

Subprime is a little bit of a different sector.

We do primarily prime lending, um, but we also do near prime.

And that was where we initially entered the market is, you know, think of it

as people with a FICO score in the six hundreds, low seven hundreds,

um, and how do you, you know, they typically get left behind by big banks.

So how did we.

Figure out how to responsibly lend to those people.

Well, it's about data and it's about modeling.

Um, so we don't do manual processes.

There's no review, like the dealer calls and says, Oh,

this is a really good customer.

Trust us.

No, it's all about data and modeling.

And so we bring in as many data sources as we can.

And they help us decide everything from what kind of credit offer, if any, do

we want to make, to what is the fraud risk that we see with this person, to,

um, what is this person's income and do we need to validate this person's

income to make the right decision..

So we've always been pretty conservative, but by using great

data and sophisticated models, we're able to expand our lending box

So it sounds like every one of the loans that you're doing

is It's very custom to each one of the individuals and delivering

that out to your partners that are

on the dealer front and actually selling them.

It sounds like it gives them a little bit of a, and maybe not a

little bit, probably quite a bit

of a home field advantage when, when competing against the others out there.

How does pulling some of this alternative data in and

comparing it to the other stuff,

Help us understand how that works in the real world compared to the way

you guys thought it would be going when you first started doing it.

Yeah, well, in the real world, first, I'll nerd out a little

bit and tell you technology wise, most lenders have a FICO buy box.

They pull the FICO score.

And if you're between A and B, you get this rate and B and C, you get that rate.

It's purely based on FICO.

We have a proprietary model that is based on, um, a lot of

our own homegrown attributes

Sorry, you said proprietary again, and it took everything.

I couldn't not laugh.

So continue my apologies, Mike.

we have our own model that, uh, that, that produces

a score that's different to the FICO score, but more predictive

in our market than the FICO score.

And that includes data from the credit bureaus, but it also includes other data.

So what does that mean in the real world?

It means that when a dealer gets an offer from us, often times Well, A,

it's quicker because it's instantaneous.

But B, we oftentimes have a better offer, um, or an offer where

competitors have none because we're able to see these other data

attributes about people and understand,

that not all, but, but some of them are going to be a very good Uh, credit risk

that that we would take where others might say no, or others might give them

a poorer offer based solely on FICO.

So it gives us more insight into who the customer is so that

we can make better decisions.

For the record, we also pull FICO and, you know, that is absolutely

one of the factors we use.

What I love about that, Mike, at a prior job.

We did some cashflow underwriting stuff.

And we would talk about this all the time where FICO is, is an indicator,

but does not need to be the only indicator of should I lend money or not?

Because there are people with high FICO scores.

You think about if I had a job at Metta and I make 400, 000 a year.

And I get laid off tomorrow and I have a 780 FICO, I could go get a loan.

I could go get a personal loan and I would be just fine.

But I may not be the best person to loan to.

I just lost my job where there's people with like a 650 or 630.

Credit score, really good income, really good at their

attributes that you can depict.

And those are great people to lend to.

I'd love to tie this then together with thinking about portfolio

performance and default rates.

Um, I know Octane has an amazing portfolio and very perform portfolio.

Y'all do a lot of good things.

Help us understand.

That philosophy there, how you think about tying those two

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Well, first I want to give a shout out to our amazing risk team.

We wouldn't be the company we are without them.

And that's true on,

their modeling, um, in, in terms of how we extend offers to how we

actually service our loan book and we, we partner with loan pro, uh, to, uh,

loan pro runs our servicing platform.

what we love about loan pro is that because it's a API driven, we

can connect it directly into our proprietary platform and make it

part of our overall stack seamlessly.

And what that means is that as we develop.

models for how we,

approach servicing loans or for collections.

When we want to bring in additional vendors who help us automate some of

those things, we can easily connect them to both loan pro and our own systems.

It's about.

Dotting the I's and crossing the T's and making sure that you do things

well, making sure that you do things compliantly, and then being smart about

who your contact, which customers you're contacting, when you're contacting them.

What kind of messaging are we using when we're contacting them

to give them the best experience?

Because if they get the best experience, they are going to be

better at repaying their loans.

And that's a big part of Why we see such great loan performance.

Mike, I'm super curious because you've talked about like

all these different things that you think about and how you approach the

experience from the consumer side.

What strategies has Octane implemented to really keep these default rates down?

Because you've mentioned it, Colton's mentioned it, and I'm assuming that

when they do default that you guys are having a much higher success rate.

With collections.

What are the strategies that you can share that aren't proprietary

help us understand how and why.

Part of it is having great people who know what they're doing.

We didn't just assume like so many tech startups do that.

Hey, because we're a tech startup, we're smarter than everyone else.

We actually brought in a lot of people who have significant

experience in loan servicing to help us spool up that function.

And they've done that very well.

But then what we did is we said, all right, we're going to start with kind

of the normal way that you do things.

And then we said, help us understand your process, help us

understand how to make that better.

And where we've used technology is saying.

Hey, instead of some supervisor having to pour over things and

figure out who's going to call whom,

where it's just as likely as not someone just spaced out on paying a bill.

We can do that without annoying people.

We're actually looking now at reducing frequency of contact because, um,

incremental contacts may not actually drive better performance, and it

makes the customers happy if they just get the context that they want.

Indeed,

and, uh, and we've seen great results with that.

Love that.

And it goes to a theme that we've talked about on this podcast series on

transforming lending from a transactional relation or transaction to a relationship

and how to do that efficiently.

And a lot of people have previously done lending.

I give you money, you give me money back.

You don't give me money back.

I heard your credit score and I repo my asset, uh, relative like.

Consumers want to pay their loans, right?

And one of the coolest things I've seen with Octane,

Mike, hopefully you don't mind me sharing, but Octane does a really good job when you

look at portfolio performance on when a customer gets a borrower gets 30, 35, 40.

50 days past two, how do you get them back?

So many lenders out there.

Oh, you're 30 days past two.

Okay.

You owe me double as much.

And I'm going to hit fees, fees, fees.

And then you remember me triple as much.

And then all of a sudden the consumer sitting back and being like, I'm never

going to be able to dig out of this hole.

You know what?

Forget about it.

Uh, I can just totally default on this, this loan.

It's no big deal to me.

Um, but in reality, the lender wants the money.

The consumer wants a better financial relationship and Octane has done

a really good job of how to help customers that are About to go, uh,

uh, default, come back and get right.

Um, so we'd love your thoughts there, Mike, of how you approach

that and how you approach it from having empathy and a customer

centric view, as you, you mentioned.

You know, when we say the word empathy, sometimes we think

that it's just a one on one thing.

But the reality is that we can train our models and our systems based

on what consumers actually want and what they do so that we're exhibiting

empathy through our platform.

And that's a big part of it is saying, all right, given everything

we know about this customer

what is the thing that's most likely going to engage them to actually want to pay?

And so

that is part and parcel with what is going to engage the consumer the best, what's

going to give them the best experience so that they actually want to pay us back.

And so using, um, we, we use loan pro as our core platform, and then we put

our own collections models on top of that, using all kinds of different data.

And then

layering those pieces on so that we're making the right decisions about who

to call, how to call them, when to call them, how frequently, uh, what

messaging to use, um, that's how we drive really great performance.

So it is systematized empathy.

How are you using these strategies really to shape

the future

of lending at Octane?

How is it helping you when you're thinking about strategies to extend

maybe into other areas of lending?

How, how are you thinking that from a strategic perspective?

it really comes back to our culture.

Joining technology with high performance lending products.

And so as we're working with dealers and as we're working with

manufacturers, that's usually how we enter or always how we enter markets.

We are not a direct to consumer lender.

And so it's really about going to them and saying, yeah, we

know you have lending, but

think about how lending can be a driver of your business if you put it

at the forefront of your experience,

we actually go through an exercise internally called hopes and fears,

where we say, what are the customers hopes and what are their fears and

how do we address those things in a meaningful way so that they get more

excited and reduce their anxiety.

So, for example, by taking a prequalification product and putting it

right on a manufacturer's site in a very non confrontational way where a customer

can use it in their own home, they can get more excited about a purchase and

alleviate any anxiety, especially if they don't have perfect credit about

whether or not they could qualify.

And from an OEM's perspective, we can also take their promotional

rates that they have and bring that right into the experience.

From a dealer's perspective, we can take the inventory that they have and

apply offers directly to that inventory.

So that it isn't this abstract concept of, Oh, I sort of like this vehicle, and I

guess I need to go in and get it financed.

It's very real.

It's very actionable for people.

Um, so we continue to expand our end to end process to cover ever more pieces

of it so that OEMs and dealers see us not just as a lending partner, but as

a way to increase their customer base.

So on that expansion note, uh, I love that because it ties into

embedded finance and embedded lending.

And a lot of what octane is doing is around embedded lending, which I believe.

Uh, the future of finance has a large aspect of embedded lending with brands

who have customers and how to reach those customers through financial products.

we love the, the power sports market, right?

Cause it's fun and exciting.

Right.

Uh, and Tedd here's, here's that all the time in his backyard.

Um, but I know recent somewhat recently octane made the pivot and shift or, or

addition to go into the RV lending space.

So help us understand that leap.

From a customer perspective, there's crossover, right?

If you're somebody who does power sports, you may also like to go camping.

You may also like to, to use an rv.

Um, it is a really different market though.

Uh, RV loans are much longer.

The average weighted life of our power sports loans is just over two years.

Um, in rv it's, it's many years.

Um, and the initial loan terms are, are.

Twice to three times as long as well.

Um, they're, they're bigger, more expensive purchases.

Um, and the dealers operate a little bit differently where,

um, there is a higher degree of consolidation in the dealer market.

So there are a few big players and that's interesting because they're willing to

invest a lot in building great digital experiences with great embedded lending.

And so that's where we've been able to capitalize is that.

Um, most lenders, when you talk to them about embedded lending, when you

talk to them about building an end to end experience in partnership with,

um, whether it's a large dealer group or a large OEM, it's very difficult

for them to conceptualize anything other than, I don't know, can you

embed a fax machine into your website?

And that's where we've been able to really change the market is by

saying, yeah, we can we can embed the whole process end to end.

Um, give the customer everything they need, give the merchant everything

they need, give transparency and visibility through the process

and monitor KPIs in real time.

You mentioned something that I guess I just natively

thought about is that crossover between the RV and the power sports.

they're so similar, like you were mentioning.

Um, actually I can't think of anybody that's a friend of mine that has an

RV that doesn't have power sports.

So when I think through that, but although they're the same person,

How does the lending approach to RVs differ from what you've done in the power

sports space, even though they're similar?

The payment's larger, it's it's falls at a different place in the

customer's payment waterfall in terms of what bills they're paying and when.

what I've had my eyes opened up into in this conversation has been,

um, There is so much data and there's so much data to look at that actually is

indicative and predictive of a performance portfolio, which is what any lender wants

is to drive portfolio performance and that customization and personalization.

I feel like it's key.

How do you personalize and how do you customize what y'all are doing?

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on the servicing side again, it's about getting ever more

personalized so that no two customers are having the same experience

and we're actually delivering a customized one on one experience

to every single borrower when it comes to how we engage with them.

From your perspective, how would you overcome that

feeling of uncertainty?

We've got to prove that it's better to our dealer partners.

That's all it is.

We have very close relationships with a lot of dealers.

They trust us and we trust them and they have been great at

helping us pilot new products

if we do it well, they're going to see a better product,

better rates, better products.

Um, higher approval rates or, you know, getting more butts in seats.

And if that's the case, then they're going to like it and

they're going to want more of it.

Our goal is to offer the best possible, um, overall deal structure to every

customer where it's more personalized.

All the data sources we use are highly vetted to make sure that they are not

having a disparate impact on people.

So instead of trying to make it this very subjective thing where biases can come

into play, we're using models that we know are unbiased with data sources that we

know are unbiased and truly looking at,

capacity and propensity to repay.

it's about making sure that we're not, um, enabling any kind of,

unfair lending and automating it and using objective data sources

we're not using like large language a I, you know, a lot of

companies say they're using it.

I haven't seen any way to actually use some large language model to

make a credit decision in a way that is, um, unbiased and fair.

So our eyes are open.

We'll use a I for other things, like how do we communicate with customers better?

That kind of thing.

Well, I'm super glad Mike, that you're the one that

brought up the buzzword AI.

I didn't do it this time.

I think that's the first time in this entire series that's happened.

We always like to end the episode by saying, let's pull out the crystal ball.

Let's look ahead to the future and understand from your and

Octane's perspective, what are the.

the trends that you're seeing in financing, where are they headed?

and especially where do you believe that Octane is, is going to be able

to lead the charge in those changes?

One trend we see is that dealers and OEMs, they want to control

the experience and they want to control the experience because they want to make

it more personalized and reduce friction.

We're really excited about building products that do that

because they also help us.

To make better loans, have better experience for our customers, our our

borrowers, um, and ultimately see lower credit losses and better loan performance.

The other big trend that I see right now is a rapid acceleration of the amount of

data and kinds of data that are available to make decisions, which will help us.

Further expand beyond what we already have, even, um, the pool of customers

who can get great financing and to do so in a way that is not only fair

and compliant, but that has great, um, credit performance as well.

Another big trend is that I'd say data rules the world and,

um, and, and leveraging that data quickly is one of our superpowers.

You mentioned something data rules world.

I have a shirt that says the data doesn't lie.

And then I also have a shirt from Mike that says compliance is cool.

So I can authorize that they are very focused on compliance.

I should have worn it today.

I'll wear it next time we work out for sure.

Um, but what I loved about this conversation is.

The focus on technology, the focus on innovation, but the end message

of how to drive personalization and lending and finance to eventually

the segment of one, right?

And, um, there's a big vision and passion project of mine of how to do,

uh, drive greater personalization and,

in what we do within finances on, on your end, uh, Mike, any

concluding remarks in relation to.

The role that you're using technology and innovation to truly meet

customer's needs where they're at.

A job is fun when I'm learning and when I'm making a difference

for people and I'm having fun in this job,

having been here now for 5.

5 years because we continue to learn, we continue to build new things and all those

things make our customers lives better.

Um, so I don't know, maybe that sounds a little bit, um, uh, like,

like, yeah, it sounds a little cliche, but it really is true.

It takes a great team of people to do that.

You've got to empower your people and you have to be radically

empathetic to your customers.

And as long as you do that, you'll keep making products better and you'll

keep gobbling up market share and having a great profitable business.

Mike, you know, this episode has been a lot of fun.

Like Colton mentioned, uh, it's really nice to sit down with you again.

I got an opportunity to sit down with you in January and And learned a little

bit about your perspective, but this is completely expanded my understanding

of, of how you approach everything.

So I, I really appreciate you being, being on the show today,

No, it was a lot of fun.

It was good.

I still can't live up to, you know,

Cliché

dying and coming back to life and you know, everything else, but.

Mike, Mike texted me last night and said, I can't live up to Brett

Beard all the, the man is a legend.

Like he is a legendary for sure.

And then the other exciting part is we're actually recording this

episode on Pi day, March 14th.

I'm actually, I just got a ping for my team.

Cause I'm 15 minutes late and I'm supposed to go get a pie in the face for my team.

So hopefully Mike, you got me out of like being late and getting a pie in the face,

but I'll let you know how that goes.

You'll have to tell me about the

pie in the face when we see each other Saturday.

but just kind of recapping the things that we've talked

about and Colton, you did a really good job of it just a moment ago,

but what I take away from it is.

Treating everybody as an individual through the data that is available, that

is compliant, uh, to, to really give them the best opportunity at not only acquiring

that dream recreational vehicle, but Also doing it in a way that doesn't make

them feel like less if they're having to move forward throughout their life.

And, and I think

that's really interesting.

And I love the level of empathy that you guys have brought

into the whole experience.

Well, thanks for having me today.

It's been a lot of fun.

All right, so that is a wrap for this episode of

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