This week, we hear from Alex Blumberg from Gimlet Media and the Startup Podcast in our new Bcast Bytes segment. Peter and Jonathan talked to Levi King from Creditera about why your business credit matters, and we share a few of our favorite subscription services.

Only have time for a Bcast Byte? Here’s our first one with Sabrina Parsons and Alex Blumberg (13 minutes):

Listen to Episode 5:

Show notes:

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Audio transcript:

Peter: This week sounds fun to me. We’ve got a new segment coming out. We’re going to launch a new segment here on the Bcast called “Bcast Bytes?” “Bcast mini?” “Mini Bcast?” “Microcast?”

Jonathan: Yeah, and we thought we’d use this time, usually, when we talk about a Bplan’s article to introduce this new segment and feature, you should be able to start hearing it outside of our regular full episodes. It should be just about 10 minutes long, get you on your way with some tips and advice, but our very first segment this time around is our CEO of Palo Alto Software, Sabrina Parsons, and she had an interview with Alex Blumberg.

Peter: Alex Blumberg, famous for his work on Planet Money, and then moving on to the StartUp podcast which saw great success, but was also the recommended podcast from Noah Parsons last week.

Jonathan: That’s right, and Alex started the Startup podcast because he’s co-founded Gimlet Media which is a new production company that produces podcast shows, so they’ve got two that they’ve had out for a year now, and they’ve got a new one coming out as well.

Peter: Cool. Let’s sit back and give this a listen together and see if maybe there’s anything interesting take away.

Jonathan: All right, sounds good.

Sabrina: I wanted to focus and ask you a few questions about Gimlet Media and you as a founder and your struggles with what kind of a founder, what of a business Gimlet was going to be in terms of lifestyle business versus super high growth business.

Alex: When I first heard the term “Lifestyle business”, it was the first time I’d heard it, and when I first heard it, it sounded really good to me, like somebody described it as “I don’t know. It’s a business, you don’t have that much work except a couple million a year, small time,” and I was like “That sounds like a dream for a lot of people.” Also, I think it is a dream and that I don’t think there are many businesses like that that you aren’t born in to, but if you’re starting … I don’t know. I haven’t come across people where “Yeah, I don’t do much work on my business and it kicks off a couple million a year.” That seems a little bit of a fantasy, and so I think it’s a little bit of a pejorative term where one is not needed. You know what I mean? I don’t know why you have to throw shade at small business people who are working every bit as hard, probably, as people trying to build the next Uber or whatever.

Tell somebody who’s starting a restaurant for the first time that they’re not working that hard and you’re out of your mind, and then also even the distinction between … Even as a useful term for describing the scale or scope of a business, I don’t think it’s really that helpful, basically because I feel like there are certain people for whom your personality is huge, world dominating “I want to be bigger than everything, that is in my DNA”, and then you’re by a knock, “I want to just start a restaurant,” “That’s not for you,” and then there’s other people who are just like “I want to create this one space that I love and I feel very proud of that is my business” or my restaurant, or whatever it is, and that’s what drives me, and I’m going to be working just as hard.

You’re working night and day on that and thinking about it all the time, but I just have a very different ambition than somebody who’s trying to start the next Google. Every business is a lifestyle business, it just depends on what kind of lifestyle you’re going after, and like Travis Kalanick, the founder of Uber, I think he enjoys that lifestyle of being the head of a multi-billion dollar company, and I think there’s lots and lots of people who would not enjoy that lifestyle, who would be killed by that lifestyle literally. It’s just not in their DNA to even enjoy that.

Sabrina: Now that you’ve brought up Uber, because that was another question I had, you have that great conversation in one of the episodes of StartUp with Chris Sacca, and he told you that story about Travis visiting his family and how just singularly focused he was at being the best no matter what. Almost a year in to it and you have great venture capital investment and you guys are growing, do you look back at that conversation in any different way? Do you feel like you’re changing and embracing a different Alex Blumberg or are you still looking at Travis and saying “That’s great, but I never want to be-”

Alex: I think that conversation was very clarifying for me. Clearly, I’m not Travis Kalanick, obviously. Nobody would ever mistake me for him. I’m officially middle aged now, I’m almost 50, I’ve got 2 kids, and I come from public radio. If I was Travis Kalanick, I would have been on my 4th venture and I would have been doing the Silicon Valley thing for many, many years now. I had to get comfortable with that, as like “Here’s the kind of founder I am” and it’s fairly obvious to all of our investors that that’s the kind of founder I am, including Chris Sacca. He’s one of the smartest guys in the business. He knew who I am, right?

My prognostications about the future of my company are probably that I’m the least qualified to assess because that’s not what my strength is. I don’t know, I have no idea what 50 million dollar company looks like. I have no idea what a hundred million dollar company looks like. I have no idea what kind of offices, how many employees do you have, what are you doing, that is not my strength. My strength is understanding. Here’s this world where I felt there’s an opportunity and I’m acting to meet that opportunity, and that’s all I can do. If huge growth is in the future for us, which I think there’s a definite possibility that it is, that’s wonderful. I don’t think that it will have the trajectory of growth that Uber has. I don’t think you can start a media company, and we’re basically a media company. I don’t think you can start a media company and grow from zero to infinite in the span of time that something like Uber or Google or some breakthrough technology can do.

Sabrina: In terms of that, when you think about growing and getting more people on board and all the people management that goes a long with it, how have you dealt with continuing to make sure that the culture is what you want it to be and that you have time to think about it? You guys are growing, there’s a lot of pressure, more shows, hire more people, how do you have time to deal with that and make sure that you build the culture that you need and want in the context of “But we don’t have enough people to do everything we want to do?”

Alex: That is a really good question and something that I think about a lot, because right now, my main focus is still editorial. My job hasn’t changed that much from what it was at Planet Money. A lot of what I’m doing is listening through to first and second drafts of the shows that we have. We have 3 shows, I’m still hosting this season of StartUp, I will probably continue hosting next season of StartUp, and I’m still the executive editor for StartUp and for our new show, Mystery Show. I have gotten a little bit out of the executive editing business for Reply All, which has been fantastic, and their team is just really gelling and getting more self sufficient in producing some of the best work that they’ve ever produced. That’s been wonderful to see, and what I hope is that that will be the process. It’s just raise them basically so that they can stand on their own and then watch them flourish. That’s my dream.

You want the host of the shows or the people who are running these shows to feel that ownership of them. All our employees have stock options that we’ve borrowed from the Silicon Valley world that’s nice to be able to offer people, but more than that, what most people that I’m interested in working with, what they want is they want to feel like they have creative ownership to execute their vision, but they also want the support to help them do that. That’s where I feel like I understand that dance. You want help in executing a vision, but you also want somebody who’s not going to come in and big foot it out or whatever, and that’s a tricky dance, and I think a lot of people don’t fully understand it. They’re either like “Okay, everybody’s like a super perfect self starter and we’ll just give them a desk, and then they’ll create something magic,” and that doesn’t happen, or you’re working for us and you do what we say. I don’t want that either.

I’m trying to create a home for people where they can really do something they’re proud of and are supported in that, but ultimately, it feels like theirs.

Sabrina: What is the hardest part today of running Gimlet and executing on your vision?

Alex: The hardest part today is still the hardest part in the beginning. It’s really hard to make good stuff. That’s the thing that we’re focused on every single day, how do we make these shows great and how do they stand out and how do we make sure that we’re doing that … The hardest part is the creative process. It’s always been the hardest part, and I think there will come a time when that’s not the hardest part for me, where the company is so big that I’m no longer involved in any part of that, and I’m not sure how I feel about that, and I’m not sure if that will actually happen, but right now, at the size of our company, where it is right now and where our number job is to just continue to produce stuff that people respond to and enjoy, that’s the hardest thing. It’s just doing that. It’s hard to make something good, and things want to be bad all the time and you have to continuously fight to make them good.

Sabrina: That’s a great point and something that a lot of people who will listen to this from Bplans should remember. You see a lot of it in products out in the marketplace, are they just out there to make money or are they really something that is trying to be really good and make a difference in some way? There’s different kinds of founders and small business owners. Some people are out there and all they want to do is make profit, and other people really have a vision and quality as a very important piece-

Alex: Yeah, and I feel like that’s … For us, our bond with our audience is the most important thing that we have going, so that’s the thing that I’m just constantly thinking about and making sure that we’re providing stuff that our audience will enjoy that feels honest and transparent. That is the thing that’s always on my mind, and how to continue that as we scale.

Sabrina: Alex, I really appreciate your time. My 11 year old was very excited I was talking to you. He said to tell you that “Timmy says hi.”

Alex: Say hi back. That’s really nice. Tell him I’m very touched.

Sabrina: All right, great. Thanks so much.

Alex: All right. Thanks. Bye.

Peter: Our special guest segment, today we got Levi King, founder and CEO of Creditera, and also Levi started and sold several small businesses before he started with Creditera, also started a company called Lendio, so really an expert in small businesses and also financing and funding, and now with the credit scores on the personal and business level. Great guest to have around, really excited.

Jonathan: Awesome. Thanks for joining us, Levi.

Levi: Thanks for the invitation.

Peter: We just wanted to talk through a little bit of these major questions. I think that small businesses have some of these knowledge gaps that a lot of our audience might have out there, so feel free if you’ve got any other questions that you’d like to write in, share with us, do so any time. In the meantime, let’s talk a little bit about why does business credit exist? Why is it important? What’s the deal with business credit, Levi? Is that a vague enough question for you to get started?

Levi: Sure. Business is just like people start to develop a scored credit report over time as they develop payment history or credit relationships, something [inaudible 14:00] they can develop a score and a report without much content just from public records or the fact that they’re in business and somehow the bureau picks up maybe a revenue number and they can associate that with time and business and in industry, and start to predict some level of risk, but just a way to assess risk on a business in isolation, typically for trade purposes with creditors like wholesalers and suppliers or service providers, but then in conjunction with personal credit and/or other data becomes important in any fact for financing scenario.

Peter: That’s great. That makes a lot of sense. Monitoring the credit score, that’s important. Knowing what it is important, but there’s this other thing I’m not really clear about. There’s the personal credit and there’s the business credit, and I remember years ago there being this issue about businesses being like people, so is this just another case where businesses are like people or is there more to it?

Levi: That’s an interesting way to look at it. The problem is that most businesses owners, they know about personal credit, typically when they start their business, they don’t know anything about business credit. They have resources as a person and so they use those resources in their business so they start to mix their personal finance and their business finance. They use their personal credit cards, come back with these line of credit, friends and family money, [inaudible 15:18], all that are personal assets or relationships or resources, they use that in the business. Over time, they’ll typically start to build business credit whether they know it or not or like it or not, but it’s slowed down by the fact they’re focusing using their personal resources, and in that case, it’s almost like the person is the business. You don’t feel a difference, whereas if they developed their business credit, then the business can start to stand on its own 2 feet and feel like a standalone entity, and that’s something that can be passed on if you sell your business, whereas obviously, as a consumer, we don’t die and leave our credit history to our kids. We can’t do that, we can’t sell our credit history, but a business that has good business credit, that is a part of the value of the business.

It does feel like, in a lot of small businesses, that the business and the individual are one and the same, but that’s not how it should be. It should be that the business can stand on its own 2 feet, and it’s really a test of the strength of the business.

Jonathan: Levi, could you tell us why you would want to separate your business from your personal credit and maybe why it’s not a good idea to be relying on personal credit for your business?

Levi: Sure, and to be clear, I don’t want to oversell the importance of business credit because there are lots of financing scenarios where your personal credit will always still be involved, but if you have good business credit, it helps to get better terms and such, so you’re not just relying on the personal credit, but as a small business owner myself through several businesses, and for example, my first business I owned was a manufacturing company. We manufactured electric signs, awnings, and neon, and I had to sign a personal guarantee with the signs supplier, with the plastic supplier, the steel supplier, the paint supplier. Every single piece of financing, every trade account, personally guarantee, and it always made me sick that those were always piling up. My personal credit was getting checked all because I didn’t have good business credit or any business credit at all.

That’s one important reason and all those established relationships, you can start to get away from having your personal credit checked, signing a personal guarantee, and always, you’re the business, not business as itself, but you’re the guy that owns it and runs. You start to get away from that. Another benefit is just to get better terms. I was cash on delivery with most of my suppliers unless I sign a personal guarantee, and then as I got better and better credit, they would give me net 60, net 90, net 120 terms so that I could manufacture, install, and invoice to get paid on the job before I had to pay for the materials went in to the job. Lower cost, more flexible payment terms, and really just keeping your personal credit clean. Extra inquiries for revolving debt, those types of things really hurt your personal credit score, and then that in turn will hurt anything you’re trying to do as a consumer, you’ll have worse options.

Jonathan: What if I have poor personal credit but good business credit? Is that even possible to have or is my bad personal credit going to completely tank my business credit?

Levi: You can have amazing business credit and terrible personal credit. They’re completely detached. The bureaus don’t share data with each other in that regard that they can’t share data in that regard. It’s common to see that a business owner has bad personal credit and bad business credit just because they make the same decisions and they have the same habits, impulse, but one doesn’t cause the other … Completely separated.

Peter: How do I learn more about this? Levi, you’re with Creditera, so obviously that’s one tool, definitely tell us how that works, but what do I do as a current small business owner, maybe even someone who wants to start up a new business one day on the future. How do I get started in this world again, make sure everything’s lined up properly, make sure I’m not forgetting anything? I think this is one of the big fears that a lot of people like me have. I didn’t even know that service existed or I didn’t know I was supposed to get duns number or whatever. These kinds of things, if anyone tells me to do them, I might not do it, so what’s the main tips you would give and the main tools you might use?

Levi: Our product at creditera.com is similar to Palo Alto software or Live plan, Bplans, in a sense that you do a great job with yourself for providing a roadmap so that it’s really hard to do it wrong. You follow step 1 then you get to step 2, so we do something similar on our product as it relates to business credit and personal credit where there’s checklist. Do this and you can burst right through our products, so it isn’t like your heading out for a bunch of homework somewhere else, but if you’re a new business, you come through and make sure everything is set up properly, register your duns number and a few other things. If you’re already an established business, you can scan your raw credit data in our product and dispute things that are wrong.

Outside of Creditera, there’s a few other good websites like businesscreditfacts.com which is sponsored by [inaudible 20:19] and commercial, lots of good content. Dun and Bradstreet, dandb.com, they also put out a lot of valuable content. The benefit of Creditera, of course, is we mix it all together so that you don’t have to go to multiple places, but [inaudible 20:34] do an okay job. Their core customer is not the business owner, it’s the third party that wants underwrite the business owners so their, with the exception of Dun and Bradstreet, credibility which is now part of Dun and Bradstreet, I would say the bureaus don’t do an amazing job at education, but there’s lots of good places.

Peter: Sounds like a great way to get started.

Jonathan: Yeah, awesome, and we can link to those websites and those resources in our podcast notes so our listeners can check those out.

Peter: Listeners, tell us what questions do you have about credit rating, credit score, business versus personal. We’ll funnel them all over to Levi and maybe even send some life questions, life goal questions, what else will we send, Levi? Let’s just flood his inbox, people.

Jonathan: Yeah. Gifts, small gifts.

Peter: Why not? It’s going good.

Jonathan: Levi, thanks again for being with us. I had a question for you. LivePlan is a cloud based subscription service and so is Creditera, so what are your general thoughts about cloud based services for small businesses?

Levi: I think that it’s an area that’s largely untapped. There’s a lot of companies now, good companies like ZenPayroll, that are offering products, invoice to-go’s and other strictly mobile product that help small business owners invoice on the spot and collect payment from their customers, and I think it’s been a laggered area of tech development because it really required the cloud, of which you guys obviously understand very well, and in fact, I would say one of the top examples of a company that successfully transitioned from desktop software to the cloud and probably early in that process, but also then mobile. It fascinates me going back to the late ’90s when I was first learning how to process payroll in my manufacturing business or a couple of years later, the hotel I owned was such a pain, it was misery, and now, with ZenPayroll, you can do it right on your phone in minutes. It’s easy and it’s simple.

We now have computers on our hand, and I think we will see fundamental changes in how small business owners operate, whether that scheduling appointments, managing their day, their CRM, customer service management, I think we will see fundamental changes in how all those things are executed on in the small businesses, and ultimately, I think their customers will. It’s going to make, and their employees, but I think we’re just scratching the surface of the changes that will come over the next, probably 10 to 15 years.

Jonathan: Have you seen any resistance on your end for people who don’t feel like the cloud is secure enough or is that not something that you guys run in to?

Levi: That’s an interesting question. I had a conversation with this CPA recently who’s probably in his late 50s and I’ve mentioned QuickBooks for example, he was talking about QuickBooks. I asked him, I said “What percentage of your customers are using QuickBooks Online versus desktop?” He was spewing venom at the danger of the cloud and how not a single customer and any that ask, he tells them they can never do it, it’s so risky, and I wanted to say “I’m telling you right now that in to it’s cloud is way more secure than the desktop and that small business owners, and the office at the back of pizza shop, way more secure.” There’s no point in arguing, but it hit me.

Some generations will actually have to retire. There are some people who have to retire before it changes entirely, but i don’t think that’s a fair representation of all CPAs, but for whatever reason, he’s just stuck in his ways, and I think there’s probably small business owners like that too. It will take some kind of turn over in the space, but by and large, I think that it will become more and more common, people trust the cloud, especially when they see how easy it is. Just that can entice you. If you’re looking at the misery, for example, payroll. The old way or you can do it right on your phone. It’s like “Okay, maybe this is risky, but good hell, it’s going to save me a lot of time and misery.”

Jonathan: Obviously, you wouldn’t know it in the sound of my voice, but I’m a spry 85 year old, and I think the acceptance of the trends is not a clear cut line between this generation and old generations. There are a number of people who are older who are willing to accept change and move forward. Do you see some of that too on your end?

Levi: Yeah, for sure, and the only reason I mentioned his age is because I didn’t … I was saying it because he isn’t that old. That was surprising to me that he’s probably in his 50s somewhere and doesn’t seem like an old guy but he was so old school and his mentality, so I totally agree. We have, at Creditera, it fascinates me because in customer service, we will have people, in order to access your credit through our website, you have to authenticate your identity, we ask them questions that are nearly impossible to fake the answers to or we’re not going to serve up your credit, so obviously a security protocol that we follow. We have people, on a regular basis, that will call us and say “I was nervous to put in my social security number online. Can I give it to you over the phone,” which is way less secure, but there’s lots of young people doing that.

Like you said, you can’t group people in to a specific age group. Maybe there’s some correlation with age, I don’t know, but I don’t think it matters. I think over time, it will change just as more and more people do it, but we see that and it always fascinates us, like “Let me give it to you over the phone” versus online, and people across all the age groups. It’s obviously not the majority but there is always that subsegment that wants to do it over the phone.

Jonathan: That’s great. I had a fun question maybe we can go around and answer for ourselves, but when it comes to cloud based services or products, are there any others on your list that either you use personally or just that you want to recommend for our small businesses?

Peter: What about you first, as a spry 85 year old, what do you think is first?

Jonathan: I love my music, and when it comes to cloud based, the example that I go to, the fastest is Spotify. I use that just about everyday and I don’t own any of the music. I stream it live and pay a monthly fee for it.

Peter: It’s interesting. I started using Spotify a little while ago, and it really does change the way you think about that concept of music. You’re not buying it anymore, certainly purchasing fewer albums, it’s a certain amount of money a month, it’s an interesting different approach and I think that’s a little bit of what Levi was saying on the cloud based apps here. It’s not just the fact that it’s betters offer, it’s not just that it’s cloud based, it also introduces this slightly different business model, the slightly different approach to the whole thing. Levi, what about you, on a personal level?

Levi: Personal level, I’ve loved Evernote. It’s obviously, you install it but it’s also cloud based. Probably my favorite piece of software. It’s come out within the last decade. I also like Trello which is a project management software. Spotify was a great example. Probably my favorite, another one I’ve loved in the business is BambooHR for HR management. Those would be some of my top ones.

Jonathan: What about you, Peter?

Peter: I don’t know man, I think this is going to sound maybe cheesy, maybe like a spry 85 year old, but I got to be honest, the Maps app, that was life changing for me. I’m going to combine, if I had to make one thing, I would say a Maps plus Yelp. That was a killer one. Maps, I no longer need to know where anything is anymore. I can get anywhere I need to go as long as it has an address, and with Yelp, if I’m in Los Angeles or Texas, I can find out what people think about the local places, find out what’s in walking distance and get there. It’s one of those few things, and Spotify’s getting this way too where I’m really not sure how we live before they existed. It’s very strange.

Levi: Those are great examples and affects specifically Waze for a mapping app just because the social connection made it real time and you could actually trust the time estimates. That’s a great example. Another one I would throw out there would be RunPee. I’m going to give you a good example, because when you’re in a movie and you got to use the rest room, you use the RunPee app, they tell you when the breaks are and what you’re going to miss. Where would life be without that one?

Jonathan: That’s a good one. I haven’t used that one yet.

Peter: I’m still here holding it like a sucker.

Jonathan: I just go before.

Peter: That’s what your mom told you to do.

Jonathan: Exactly. Always listen to your mother.

Peter: Your 105 year old spry mother.

If you have a question you’d like us to answer on the show, send us an email at Bcast@Bplans.com or send us a tweet @Bplans.

The Bcast is brought to you by Palo Alto Software, makers of Bplans.com and LivePlan.

AvatarJonathan Michael

Jonathan is the Engagement Marketing Manager for Palo Alto Software, and has spent the last 9 years developing and implementing digital marketing strategies. During that time, he has learned that empathy and authenticity are strengths by which companies can effectively engage with individuals at every point throughout the customer journey.