Clay Christensen: Hi, this is Clay Christensen, and I want to welcome you to a podcast series we call The Disruptive Voice. In this podcast, we explore the theories that are featured in our course here at HBS, building and sustaining a successful enterprise. In each episode, we'll talk to alumni of our course and others who are trying to put these theories to use in their lives and in their organizations. It's great fun to hear from them and they hope that you find these conversations inspiring and useful. If you have an idea about a topic or a speaker that you'd like to hear more about, or if you'd like to comment on our work, please reach out to us here at the school.

Anibha Singh: Hello, I'm Anibha Singh, a research associate here at the forum for growth and innovation. I have in the studio with me the founders of LeverEdge, an organization that uses group buying power to save students thousands of student loans, Nikhil Agarwal and Chris Abkarians. Nikhil and Chris are second year MBA students and have brought LeverEdge to life over their time at HBS. While Nikhil and Chris are not BSSC alumni, we are incredibly excited about what they've created and believe the theories may help them think about their journey forward. With that in mind, we are hoping that you'll be able to draw on the theories to help the founders think through their most pressing issues and impending decisions. Welcome Nikhil and Chris, thank you for joining us.

Chris Abkarians: Thanks for having us.

Anibha Singh: I'd love to start with a quick introduction from both of you. What is your journey leading to HBS been like?

Nikhil Agarwal: Sure thing. I grew up in India and moved to University of Illinois, Urbana-Champaign for my undergraduate. I did my aerospace engineering over there and pretty much landed my dream job after that working at Boeing in product development. Did that for about six years, picked up a lot of skills over there, both on the engineering front as well as project management, and then came to HBS.

Anibha Singh: Very nice.

Chris Abkarians: This is Chris. I grew up in Los Angeles, which I wish I were in right now given the weather outside, went to Duke for college, where I focused on public policy and political science. Went into management consulting for a few years back in Los Angeles and then worked at Netflix for about three years before coming to HBS. And my time at Netflix has been pretty transformational for how we run LeverEdge because a lot of what we focused on there in my group was trying to make sense of the dirtiest data we had and negotiating licensing deals, which has translated over to a lot of the structures that we use to negotiate deals with lenders today.

Anibha Singh: That's great to learn. Well, let's jump into LeverEdge. I know you guys have a very interesting founding story. How did the two of you meet and how was this company born?

Nikhil Agarwal: Absolutely. Yeah, that's a fun story. Chris and I were actually working full time jobs. Chris was in LA at Netflix, I was in Seattle at Boeing and we were admitted to HBS. At that time, all the admitted students are put in this WhatsApp group and it was GroupMe actually at the time. And in that group, we heard about a few students in Israel. They went to a bank and were able to convince the bank to reduce the interest rates for their loans, given that all of them agreed to take a loan from that bank. So I thought, hey, can we try this in the United States? And I posted the idea in the group. It was Chris's birthday actually and on his birthday he decided let's start something. So, he reached out to me and said, "Hey, I'd like to help with this." And that's how we got started.

Nikhil Agarwal: We created a Facebook group so that everyone involved could chat with each other, we created a quick Google Form so that students could give us their financial information, how much they wanted to borrow, things like that. And then Chris created a beautiful presentation recovering from his consulting days and helped us create this thing that we walked into bank branches and said, "Hey, we have $5 million of potential loans, can you offer us lower rates than you would normally do?" Not unsurprisingly, none of the branch managers were able to do anything about it. So, we flipped the model on its head and decided to reach out to the C-suite of these same lenders. And fortunately one of the lenders said, "Hey, we can't really do anything for a $5 million portfolio, that's about 70 students, but maybe we can do something if you had 500 students."

Nikhil Agarwal: So with that, we reached out to our network across all the top business schools. And in a matter of 10 days, we had more than 700 students join the group. With that momentum behind us, we were able to go back to the banks, close the deal and that deal ultimately saved about $15,000 per student. That was incredible because all of this was done while Chris was still working full time at Netflix and doing this part time and I was at Boeing in Seattle. So, then a couple of months later, we got to campus, we went to Clover I think and we met there for the first time.

Anibha Singh: Wow. So, a lot of risks and serendipity in the early stages. So, let's step back for a moment, while some of our listeners may be familiar with the industry like myself, I think there will be some that are not. So, can you guys tell us a little bit about the structure of this industry?

Chris Abkarians: Yeah, absolutely. So, before we get to the structure today, it's important to understand how things got the way that they currently are. If you're a consumer, up until the beginning of the last decade, almost all student lending was done by private banks, but guaranteed by the federal government. So a family or a student would get a loan through a Bank of America or a Chase or somebody else, and that loan was guaranteed by the federal government. Towards the beginning of the last decade, that model was switched and the federal government began directly lending to students and families. And by many accounts today, it's the world's largest consumer lender as a result of this program. So, what that means is today there's about 90% of the total student lending market is federal government loans, the remaining 10% is private student lenders.

Chris Abkarians: And the reason that happens is there aren't underwriting criteria for a federal student loan, because there's not underwriting criteria and the prices are set by congress there's room for a private lender to use underwriting criteria and to charge lower rates to people who fit the profile that they're looking for and create this opportunity for there to be a private student lending industry. If you're a consumer today, you're going to business school, you're going into undergrad, you're going to any school or you're a parent of somebody who is, you're presented with a set of options that are some versions of federal student loans and there's a lot of complication of what those look like and a range of private student lending alternatives. And there's a lot of issues with people just not shopping around enough to try to find what that lowest rate for them might look like. That's kind of the overall structure of the private student lending industry today. And we anticipate that, that's going to continue to grow for reasons we'll get into in a few minutes.

Anibha Singh: I would love to get into it right now if you're okay with it. It sounds like there's a lot of shifts that are still in motion. Are there specific points of inefficiency or specific portions that you specifically are interested in or targeting with this business?

Chris Abkarians: The biggest point of inefficiency that we've seen is just a discoverability issue. So, the private lending industry has one very large player in it, Sallie Mae, which a lot of consumers and families still associate as being a federal government lender. It has a lot of brand equity in it and it's the first lender that a lot of people turn to when they need a private student loan. As a result of that brand equity, they're actually able to be quite profitable and charge rather high rates and the fragmented set of players behind them don't really compete that much on rate either.

Chris Abkarians: So, you have an industry where there's a lot of people offering a similar product. They're not competing a lot on rate, but what they are competing on is high marketing costs for new customer acquisition. What we focus on is how do we identify that long tail of potential lenders who might be willing to price lower on the rates they'll charge the students and find a way to help them break out of the noise and get connected to the customers who can benefit from going through them as opposed to going through somebody else.

Anibha Singh: Who do you consider competition in the space and who do you collaborate with within this complex industry?

Nikhil Agarwal: Yeah, I think that's quite an interesting question. So, we have interesting position where we actually collaborate and compete with the same players, precisely the lenders that Chris has been talking about. The way we run as a company, we run an auction process. So, when we have a group of students seeking loans, we go to all the lenders and we kick off an auction process. During the time that auction process is going on, we are collaborating with the lenders. What that means is we are sharing information with them, helping them understand our audience, as well as we are receiving information from them, trying to understand what rates each of those lenders can potentially offer our members.

Nikhil Agarwal: However, at some point we have to decide on a winner. And when we do that, that's the turning point. Everyone participating in the auction, except for the lender that we select becomes competition. And then we are working with our partner lender to get the negotiated rates to the students. At the same time, all the lenders that lost, they are going to continue to try to win the business of our members. For example, last year, we actually saw one lender that dropped their rates post auction. They weren't actually able to drop their rates below what we were able to offer our members through the partner we selected, but it was an attempt on their end to compete with us.

Anibha Singh: Well, that's really interesting. How about companies like NerdWallet or College Hero that provide information or try to connect the lenders to the borrowers as well?

Chris Abkarians: The fundamental difference between what we're doing and what a more traditional lead gen source would be doing is taking an exclusive versus non-exclusive model. So, whereas there are websites like the ones that you mentioned and platforms that do try to build a large amount of content to drive people to links to affiliated lenders, we are focused on delivering value to the consumers and to the lender by adopting an exclusive model. Our winning lender should be better off through the volume that they're getting from our exclusive agreement. Even if they're giving up some margin and by setting up a competition where only one person can win, we're able to get lower rates for our members and they would be able to get it if they went to that lender by themselves.

Anibha Singh: Okay. Let's dig into the business model a little bit. I would love to know who you guys consider your customers.

Chris Abkarians: Our primary customer is students and families. There is a bit of a chicken and the egg to this business in the two sided market, a version of the world where we needed to get a large group of students at first, to be able to get banks interested in giving us some sort of deal. And the larger we're able to grow that group of students, the more seriously we're able to get banks and lenders to take us as an entity. What that means for us is most of the year is spent actually just trying to get in front of students and families explaining what we do, the value we can deliver and giving them a way to sign up for our product with no cost and no commitment to do anything.

Chris Abkarians: We try to make it a version where people view this as a free option that they should at least attempt to use. And then we spend the rest of our time, frankly, focused on talking to lenders about what we're doing about giving them updates for how things are trending, learning a little bit more about what segments of students say might be more interested in so that we can really help one another when we do finally have a collaboration that we run with.

Anibha Singh: So, let me understand this. In some ways, both your members, which are students looking for these loans and the banks or the lenders who you're collaborating with both are your customers in some sense, and you're trying to optimize what both of them get from you being the mediator between that relationship?

Chris Abkarians: Absolutely. The larger we can grow this group, the more lenders we can get interested. And when we do have a partner lender that we work with for an ongoing basis, they are better off and we're better off if we're able to just deliver with a high level of consistency a large number or volume of students to them. And if we're able to do that consistently, then we can have a lower set of rates that we can offer back to those students.

Anibha Singh: That makes sense. Let's run with this idea of the customer for a little bit. Can you tell us a little bit more about in both of these cases, what is the progress that your customer is trying to make and what are those circumstances that shape how they make their decisions?

Nikhil Agarwal: Yeah, it's a pretty daunting task for our customers. If you think about the members and their families, they get admitted, they're really excited to go to college or to pursue a grad program, but they need to pay for it. And as they start exploring their options, many of our members realize that they don't get a lot of tailored guidance. Sometimes they might reach out to the financial aid offices and oftentimes we've heard that they don't get exactly the guidance that they're looking for from the financial aid offices, or they don't get a specific enough recommendation from the financial aid offices. So, then they don't do Google and they start searching online about information.

Nikhil Agarwal: We mentioned some of these blogs earlier, they come across these blogs, but once again, the information is not tailored to them. A very common one we come across is a graduate student pursuing an MBA program, say at HBS will believe that the federal loans are their best option. However, for a lot of our members, almost 2000 plus MBA students, we see that private student loans are a much more affordable alternative to federal student loans. So things like these, they get quite confused and are unsure how aware they can get the most affordable loan for their education.

Anibha Singh: That's helpful. And how about for the other side? For lenders what are the circumstances they are in that inform their decision to come to you?

Nikhil Agarwal: For lenders, there's no risk in working with us. We've already demonstrated over the last two years that we have the capability to deliver a ton of volume. And if we think about the structure of the industry, Chris was touching upon earlier, all of the smaller lenders, the volume we can deliver has the potential to sometimes double how much business they're doing in a year. So for them, it's a huge opportunity to be able to work with us.

Chris Abkarians: I completely agree with everything Nikhil just said. One thing I would just add is, doubling down on the no risk version for lenders, if you're a lender who let's say might have a cost of capital advantage in providing a consumer loan, whether it's a student loan, personal loan or something else, you still often have to get discovered by that consumer. Build up a marketing department, a large amount of outreach.

Chris Abkarians: You might spend a lot of money without having any idea what the payoff might be. What we're able to do is go to lenders and say, "Look, don't spend anything on marketing right now, but let us come to you and show you the size of a group that we might be able to deliver." When somebody goes through that process, they can then let us know what kinds of rates they might want to offer and they don't have to spend anything on marketing until after they've closed loans or gotten value. So, you really just change the ROI dynamic when somebody is making a decision on what they want to invest in.

Anibha Singh: And can you talk a little bit about how you're actually creating this value? So, what are the processes that you have to make this work?

Nikhil Agarwal: It's a fairly simple concept. So, as soon as a student is admitted, we try to get in front of them. We work through nonprofits, student groups and our existing members to make that happen. And we grow the size of the group and we do this until about April each year. In April, we kick off our negotiation process with the lenders. It's a very structured process, there's a set date, leading up to it, all the lenders know that this is coming up. We send them anonymized information about our audience and they respond to that information, giving us an estimate for what rates our audience can expect to receive from each of them. Then we run an analysis to understand which lender is creating the most value for our members. And we select that lender, announce them as the winner and usually they'll provide a unique link that our members can use to get the loans from them.

Anibha Singh: Okay. And as of now, this loan that you've negotiated is available just to your members or is it available more widely once you've negotiated it?

Nikhil Agarwal: So, it's going to depend deal to deal, but for example, our most popular deal till date has been an open one where you still have to be a LeverEdge member to take advantage of it, but you can join after the deal was negotiated.

Anibha Singh: And jumping to a question that a lot of our listeners will have. How do you guys make money? How does LeverEdge make money?

Chris Abkarians: Great question. So, we do get paid a fee by the winning lender for each loan that gets closed. And we make two promises upfront to our users that we think align incentives appropriately. So, when somebody signs up for LeverEdge, we don't charge them anything and we'll never charge them anything directly. We don't obligate them to take a loan or to do anything after they sign up. So, what that means is somebody can sign up today. A lot of people from the HBS class of 2022 signed up this morning and a few months from now, when we have a deal that's negotiated, we'll send back those same members a link with a few calculators we have that show how that might compare to other options out there, as Nikhil mentioned, encourage them to see if there's anything cheaper out there for them. And then if they decide that, that is the lowest thing out there for them, which we're confident it will be, we will get paid.

Chris Abkarians: There has been rare instances where first subsets of people we weren't able to negotiate a deal that saved them a material amount of money. And in that rare instance, we actually decided to give back the fee that the lender gave us directly to the students and that's something that we anticipate continuing to do. We're trying to build a broader brand equity right now with students in MBA, in law school, in undergrad and all over the country that we will make money if we can save you money. And if we can continue that message and do it in a low risk way, then we're achieving our mission.

Anibha Singh: Was there a specific moment that you had when you knew it was worth committing to this business?

Nikhil Agarwal: I think we had an inkling that this could be a good business right when we started the first negotiations, when we were just trying to reduce the rates for ourselves and our HBS classmates. But it didn't materialize into a commitment until a few months later, we both on campus sent out this survey to all the people who participated in it, the previous round in 2018 and the responses we got were overwhelmingly positive. The main thing that stuck out as a negative was, "Hey, you weren't able to close a deal in time and because of that, I had to take a different loan. My friends got such amazing rates. I wish I could have gotten those rates too." And we were reflecting on this survey and we said we really need to make sure that negotiated rates like these are available for every generation of students after us. And that's when we committed and said, we're going to make this happen.

Anibha Singh: Wow. That's great. That's wonderful. And from what I understand, recently you guys have taken on some investors, if this is true, can you talk about your rationale behind this and maybe a little bit about what your experience has been like?

Chris Abkarians: What's interesting about our business model is that it's pretty seasonal. So, there is a lot of work do throughout the year to try to generate demand among students and families. And then there is a conversion that happens. So, the conversion happens after we close the deal and start releasing it to people from May through August. And that's kind of 30 days after that is when our revenue actually starts rolling in. We both have a mindset of trying to experiment on a lot of things and try to figure out what we can learn and what we can cross off the list as something that doesn't work. Raising money allowed us to do that in a much faster way, which was just the importance of that is exacerbated by the seasonal nature of the business. If we don't do it now, we wouldn't really have a very good shot until another year from now.

Chris Abkarians: And then on top of that, I would just add, there's a lot of people who've been in this industry before. There's a lot of people who built businesses that are somewhat like this before in other industries. And we'd already been asking a lot of people for a long time for advice. Those people led to pretty organic introductions to other people who wanted to help us think through how to build this more broadly. And we thought about this investment opportunity as a chance to build a strong network of advisors with operational expertise, who we still talk to on a nearly daily basis.

Anibha Singh: So, it seems like there were probably quite a few investors actually interested in the business. How did you decide who to actually work with?

Chris Abkarians: Again, that's a really good question. The people we ended up working with are people that we had a relationship with from pretty early on when we started doing this. Frankly, some of the people were people we know through an HBS context, judged in an initial round of a new venture competition presentation, somebody who we met through another pitch competition that happened on campus and just continued ongoing discussions with. And just felt really comfortable with how those people saw the future of the business, what they saw as the key points of differentiation that we would have to build. And we're happy to have them in our corner.

Anibha Singh: Yeah, it sounds great. Has bringing on these investors changed anything for your business, maybe your longterm strategy or how you approach the challenge?

Nikhil Agarwal: I would say definitely. I know one of our investors, I would say they push us to think about things beyond the short term a little bit more. I think me and Chris are really good about thinking about what we need to do next and tackling that very quickly, but we can lose sight sometimes of, okay, what is our longterm strategy going to be? What do we need to do to be successful two years from now or three years from now? And I think having investors on board help us, and when we're chatting with them, the discussion sort of evolve around longterm strategy and that's helpful for us.

Anibha Singh: And have any of these investors put in any sort of firm goals or metrics in place through which they're looking at their investment?

Nikhil Agarwal: We haven't had an investor put a stake in the ground saying you need to hit X dollars of revenue or anything like that. I think our investors fully understand the risks associated with the business. And also are firm believers in both of us in leading the business, as well as the direction we want to take the business. So, given that we all are in alignment about the directionality of where we want to go, there haven't been conversations about, we need to hit X dollars or X. Now, that being said, Chris and I have set internal goals for our team saying, "Hey, this year we want to at least help students with X hundred million dollars in-

Chris Abkarians: Going back to testing fast learning, failing, learning again, we've learned what it takes to do this well in the MBA market in large part because we are MBA students ourselves and we understood the customer journey really well, and we're able to tap into something really interesting early on. And the real point of growth for us is just making sure that we understand that journey and are able to recreate that in as many different contexts as possible.

Chris Abkarians: So in some ways, figuring out how to create that dynamic in several new markets is just as important as hitting a high level single number target. And we want to make sure that we don't lose sight of things that... To answer, a good example of hitting a large number of target growth for a single year on the short term is something that you might initially focus on as being what you should do. Having people with a little bit more experience who are looking two years out, helping you think through trying to make sure that you do have an engine running in different segments that might be smaller, but lead to more value in two years. It's something we're thankful for having people push us to think about.

Anibha Singh: And that really explains your thought process. That's helpful. Just so I know that I'm on the same page as you guys, you guys have been able to achieve profitability, correct?

Chris Abkarians: Yes.

Anibha Singh: Okay. So, the investors very much to figure out how to drive growth and make the right investments rather than to figure out how to get to profitability, which is very rare, I think. Coming back to the present, what issues or efforts is there that currently occupy your day to day?

Nikhil Agarwal: There's a laundry list. Let's see. I think we kind of started touching upon this with the different markets and running experiments in each of the markets. So for example, I mean, if you even walk through today, we were serving our existing customers, we had a number of customers who reached out to other customers and we have a referral program. And so we were mailing and packaging t-shirts and sending it to them. And that's essentially growth in the form of rewarding our customers for helping us grow. On the other end, we were talking to a few nonprofits and trying to understand how we can work with them to reach their audiences. For example, we were talking to the Forté Foundation, we were going through, hey, this is a webinar, it can help your audience understand how they can finance their MBA program, how they can finance their undergraduate program, things like that.

Nikhil Agarwal: So, a lot of focus in the short term goals on how can we look at new markets, how can we capture those markets and help the students pursuing those degrees.

Anibha Singh: Okay.

Chris Abkarians: I'd like to add just one very honest, personal human element here that certainly keeps me awake sometimes, I absolutely love everything that HBS has taught us, but I was a bit naive coming in as to what it means to hire people and manage them in previous contexts. It's completely different in the startup context to try to attract talent, is something that sort of exists, but doesn't really exist. It's very different to manage people who are working in a company that doesn't have a huge amount of support functions like there used to exist in my previous jobs that I took completely for granted. Learning that along the way has been really rewarding, being able to lean on other people who've done startups at HBS currently, previously, the people at the i-lab and people in the Rock Center has been tremendously valuable.

Chris Abkarians: And so when I think about our actual, the things that we need to do that we might stumble on every day, the biggest value we've gotten is just getting more comfortable, feeling a little bit vulnerable, but knowing that there is a lot of resources of people that we can talk to and ask questions too.

Anibha Singh: That's great. That's great to hear that you guys feel supported in this ecosystem. And how about for your longterm? Are you guys thinking about your longterm actively working on figuring out what that longterm would look like?

Nikhil Agarwal: There's quite a few, I guess, balls in the air in terms of longterm strategy. We think about a couple of different ways. We think about deepening the value for our members. Right now we know we can help them the first year they need the loan. The second year they need a loan, third year, fourth, the whole education when they graduate, we might be able to help them with refinancing their loans. Then we think about, okay, how else can we create value for these same members? And the other aspect we think about, who else can we create value for apart from our current target audiences. So, we are constantly in light ways thinking about, or conducting surveys or doing user interviews to understand which of these approaches can create more value for our members.

Anibha Singh: Just coming back to the piece about your short term, I know in our earlier conversation, Nikhil, you'd mentioned that you guys right now are hyper focused on looking at the undergrad market. Can you tell us a little bit about what that process of focusing looks like?

Nikhil Agarwal: It looks like taking all the resources we have and concentrating it on that effort. For example, Chris, you want to talk about your campus ambassador initiative?

Chris Abkarians: Sure. So, we've got a couple of pillars that we think are critical to building awareness and creating a funnel at the top. One of those that we're trying out right now is having a large network of campus representatives across many different undergraduate campuses, which means me coming back early from our winter break and just interviewing 300 people and trying to hire a bunch, train them, help them understand basics of finance and how student loans work and seeing if they can have honest conversations with people on campus and get them interested.

Nikhil Agarwal: That's one pillar, and then we do some of the traditional channels. For example, we'll reach out, via Facebook or via Google search ads, things like that. We'll also try to create partnerships with nonprofits that have that audience and are interested in their best interest. We reach out to the universities, the admissions offices, the financial aid offices, pretty much anyone we can get in touch with that can help us reach this audience, we do it.

Anibha Singh: Coming back to the product itself. So, most consumer facing financial service firms tend to adopt a modular product architecture, meaning that they can easily interface with a variety of players. Are you hoping to interface with any player that wants to work with you or are you hoping to plug into a certain portion of the industry with a proprietary solution that requires carefully cultivated networks?

Nikhil Agarwal: Yeah. So, I think we're taking a slow approach over here. We're starting out extremely open. That means we find ways to work with pretty much any lender that is interested in working with us. So for example, let's say there's a lender that doesn't even do student loans today. We have solutions in place that would allow us to work with a lender like that. And on the flip side, they are lenders who have a pretty closed system and they have a very proprietary underwriting algorithm that they don't want to share with the rest of the world. We find ways as best possible because at the end of the day, we do need to understand what rates our members are going to receive. But as long as we can get there, we'll find ways to work with those lenders as well.

Nikhil Agarwal: So, we are keeping it very open. What we imagine is going to happen over time, or what we expect will happen over time is as we get greater confidence about the profile of banks that are going to be more competitive for our certain members, we'll start gravitating towards them, or we may work towards building a more customized solution that would reduce inefficiencies in the process.

Anibha Singh: Right. So, it sounds like currently you're definitely trying to create a very modular architecture, but over time you see that the competitive advantage is, and becoming a little bit more integrated.

Nikhil Agarwal: If you look at the longterm vision of the company, we want to be the first point of contact for any consumer financial product. So, if you look at it that way, it's important for us to develop a system where there's a lot of efficiency on the backend that when a consumer comes to us, they're working through a very efficient system to get their funds.

Anibha Singh: Okay. That's great and very ambitious. And as you're thinking about this, as you're thinking about scaling and where the direction of LeverEdge itself is going, what are the biggest unknowns that you are concerned about?

Chris Abkarians: One really big unknown that gets brought up quite a bit is the future of the market that we're playing in relative to federal legislation. So, you'll hear a lot in the news about discussions on student loan cancellation, on a lot of other hot button topics. One of the core things that's included in a lot of federal legislation that has anything to do with this is the idea that the federal government needs to reduce its exposure to the student loan market, by reducing the cap on how much people can borrow for graduate school. So, what we think about is that quite a bit. To put that in context, federal student loan defaults are north of 20%, private student loans are sub 4% according to a report from a company called MeasureOne.

Chris Abkarians: There's a lot of people who anticipate that the federal government will stop at letting graduate students borrow unlimited amounts. Theoretically, if HBS said that HBS costs $2 million a year, I could borrow $2 million per year from the federal government. So, we think about what happens if there are changes, both challenging for us and both presenting opportunity for us. And we know that a lot of players in the market are thinking about the same thing and no one really knows what will happen.

Anibha Singh: Right. So, a lot of regulatory uncertainty.

Chris Abkarians: Yes.

Anibha Singh: Anything else that you guys talk about or keeps you up at night?

Nikhil Agarwal: I think we are curious to understand how this is going to play out in each of the different markets we are interested in and the breadth of the applicability of this idea. And I'm not talking specifically just about student loans, but across financial products, is this something that's going to appeal to consumers? Is there something about the markets and product we started with that makes it so unique that it doesn't apply in other concepts? So, we need to continue experimenting and trying to understand how broadly this is applicable.

Anibha Singh: Okay. And how about from a bank perspective or a lender perspective? So, are there banks, or do you think incumbent lenders, especially these large incumbent firms that you were talking about that have a lot of brand equity, is there a chance that what you're doing could rub up the wrong way for a lender, especially one of these big lenders that you mentioned?

Chris Abkarians: I think it's a really fair question. And the honest answer is it's still a pretty fragmented market. It's a rather large market and we're very small player within it. What we see as the inefficiency is how much all of these players have to spend competing against one another on direct advertising on literally mailing millions of pieces of potential applications to people's homes during the summers. And if we can find a way to cut through that noise and have a much more efficient acquisition channel, then we might be able to find a way to create value for multiple players in the industry.

Anibha Singh: I like that, it's a very optimistic view. As we wrap up are there any last thoughts you guys have for our listeners? Any last questions that you want to put out there?

Chris Abkarians: On the marketing side, we are thinking about every possible channel that we can use to get in front of parents as decision makers, in front of graduate students, in front of college advisors and counselors and financial planners. And if anybody has any ideas on groups that we should reach out to, or people with whom we should get in contact, please let us know.

Anibha Singh: Great. Thank you, Nikhil and Chris, it has been a pleasure speaking with you.

Chris Abkarians: Thank you.

Anibha Singh: Thank you. A quick note for our listeners. If you have any thoughts for Chris or Nikhil, please comment under the podcast on our website or reach out to us at fgi@hbs.edu.

Clay Christensen: Thank you for listening to us, The Disruptive Voice. If you like our show and want to learn more, please visit our website or leave us a review on iTunes. Until next time, good luck everybody.