Charlie Kroll founded the banking software provider Andera Inc. in 2000, when he was still a student at Brown University, and has led the company as it has grown to a client base of more than 300. Kroll talked with Providence Business News recently about where Andera is going and what he thinks Rhode Island can do to attract and retain more entrepreneurs like himself.
PBN: Andera recently signed its 309th client, has more than 60 employees, and is almost 10 years old now. How are you feeling about the company and the business, a decade in?
KROLL: We’re feeling great. We changed our business model a few years ago and have seen almost all of our growth since then, so our culture feels more like a three-year-old startup than a company approaching its 10-year anniversary. We help financial institutions acquire new customer relationships online, and our platform has been chosen by nearly 40 percent of the banks and credit unions opening accounts online in the U.S. today. It’s still an early market, with most financial institutions still originating new accounts in person or by mail, so clearly we have plenty of growth ahead.
PBN: Where do you see Andera going over the next few years?
KROLL: We will continue to evolve into a broader provider of customer acquisition solutions for financial institutions. Like any other business, banks view their own sales and marketing process as a funnel, with leads entering one side and customers coming out the other. We today are very good at helping toward the later stages of that funnel, from the point at which a bank’s prospective customer is ready to apply for a new account. In the future, you’ll see us addressing the earlier stages of the funnel as well, for example by helping financial institutions generate and manage leads, optimizing their conversion process, and measuring it all with data and analytics.
PBN: We’re coming up on the anniversary of the collapse of Lehman Brothers a year ago. Has the turmoil in the financial sector had an impact on Andera?
KROLL: Of course! Our customers have gone through the most traumatic and disruptive period for their industry since the Great Depression. Fortunately for us, online account-opening has been one of the few areas that financial institutions have continued to invest in over the last year, since new customer accounts and core deposits can help address the deep capital problems plaguing the industry. And we’ve had a front row seat to the disruption occurring in the market – when people started pulling their money out of the markets last fall and winter, we saw our account-opening transaction volume surge, as new CDs, savings, and money market accounts were being opened at a record pace industry-wide. We haven’t been entirely immune to the turmoil – our revenue growth has slowed somewhat from the 100 percent annual pace of the previous two years, but we’ve continued adding employees and customers when other companies are shedding them, and all things considered, we feel optimistic and well-positioned.
PBN: I know you were there when Betaspring, the new company helping young startups grow, held its investor demonstration day recently and also spoke to the young entrepreneurs about your own experience. Do you think the Betaspring concept has promise for the Providence area?
KROLL: I couldn’t be any more excited about Betaspring. It’s a private sector program run by well-respected entrepreneurs who could be doing anything they want with their time, and we as a state are fortunate that they have chosen to focus their invaluable efforts on this amazing program. They have done an unbelievable job getting it off the ground on a shoestring, and I’m rooting for them to pull together the resources they need to make it a big success.
Here’s why Betaspring matters: Rhode Island has been struggling with the question of how to create a knowledge-based and entrepreneurial economy for as long as I’ve been here, and the problem is that chicken-and-egg cycles are hard to break. Companies don’t start up here because there’s not a deep talent pool to pull from, and there’s not a deep talent pool because the exciting companies generally aren’t located here. Betaspring actually has the potential to break that cycle, by drawing in world-class entrepreneurs and giving them a reason to start their companies here. In a space that has seen its share of public policy initiatives, this true private sector program has enormous potential to tip the scales and get our sector to the self-sustaining, tax-paying, job-creating economic growth engine we all think it can be.
PBN: In a lot of ways, you’re the kind of person state officials always talk about – you came here to attend Brown, you stayed and built a company. What made you decide to put down roots here? Is there anything you think can be done to get more people to follow in your footsteps?
KROLL: Piece of cake. Just solve the chicken-or-egg problem above and they’ll follow in droves. •
