The Kwikie

MB: Do you think aggression is an ingredient to success? And if so, what does healthy aggression look like within the business world?

Stearns: Of course a way to keep score is to watch your market share and how you rise above your next competitor and those kind of things. And, that’s OK. But when we turn and we say you are the enemy and we are going to try to destroy you or scorch the earth, and all those kind of things, we’ve missed the boat on what we are supposed to be doing when it comes to this industry.

We’re all in this together. When we don’t help each other, we do get into a place that we’re not helping each other. When I sold [Stearns Lending] to Blackstone, two years later, I was sitting in a board meeting. They were talking about … a 28% attrition rate and we had this and that. I said, wait, wait, back up. You said we had a 28% attrition rate? We’ve got 3,500 employees. When I sold the company to you guys, six people left that year. I knew their names. So 28%, you’re telling me over a thousand people leave our company and basically tell everybody else we suck.

That’s terrible. And so what happened? And the difference was that we’re kind and we knew our competitors, and we would call and go, “Hey, it looks like you got a few people that aren’t very happy over there. You might wanna talk to them because we are getting their resumes and maybe you can keep them.”

And when you put yourself in a position that allows you to be friendly and respectful of your competitors, then the next thing that happens is they honor you back. Right?

Watch it on The Interest: Integrity And Rivalry

I’d rather go back to wanting to move the needle, wanting to be aggressive in our programs, in our marketing, in our ability to communicate to brokers or to our borrowers, our ability to have the best technology. I want to be aggressive in my ability to invest in my company and making sure we’re the best place to work so we can attract more people to come over here.

I don’t want to be aggressive in putting down the other lenders in saying why we’re better than them. I don’t have to do that. None of that matters. When people see happy people in your company, then that attracts other people.

I think I have a lot of respect for the other owners. I think they have respect for me and we just don’t get ourselves in a lot of pissing matches, you know?

MB: Sometimes it can often feel like within certain companies that your competitor is kind of cornering you. Price wars happen. For example, the whole competition between UWM and Rocket, it can get pretty vicious. Should you maintain that mentality of sticking to kindness and being a friendly competitor when your competitor is really trying to  corner you?

Stearns: That wouldn’t happen with us. I’d call up [UWM CEO] Mat Ishbia and say, let’s go to lunch. I ran into Mat a while ago, and when we were talking, he said, “Glenn, I never had a better time in this industry then when we were number two and you were number one and we were fighting to try to beat you. We did that for a couple years and we sharpened each other. We made each other better. Everybody needs a very good competitor in order to get better. And I respect Mat for that. I loved that we went toe-to-toe and it was wonderful. When I got back in, I told him, hey, we’re coming after you in a joking way. Right? It was fun.

Now, I don’t want to get in a fight and say, you know, you can’t use another competitor. If you use him, I’m going to be mad at you. I don’t think that’s right. You either come from a mentality of scarcity or abundance. I think there’s enough to go around.

You know, don’t get me wrong, don’t compare kindness for weakness, right? There’s a difference. I don’t mind standing up for myself, but I also don’t have a problem communicating with somebody else, another CEO that we need to. You know the problems happen when you stop communicating. There’s no reason why we can’t coexist. And hopefully in a space where we respect each other. I wouldn’t get into the fights that they did because I’d rather jump on a plane and try to solve the problems.

MB: A really great thing about this industry is that it seems to be populated by self-starters who succeed from difficult backgrounds. So it makes for a lot of great stories. Why do you think that happens? Why do people like that gravitate towards the mortgage industry?

Stearns: It’s an industry that has an unlimited upside and a very cruel downside. Right? It’s a place where you can be very imaginative in your growth, and you can have your ideas and you can gain a lot of traction with people that believe in you and you can. Do some amazing things with a company very quickly and you can change a lot of lives.

So, there’s a lot to gain in getting into this industry. It’s a very cyclical world where if you only look a month ahead or at your present, you will fail. Drastically and fast and quickly. If you look at the cycles and you want to be in it for a career, then you realize you make a lot of money in this industry and you give at least half of it back during the down cycle. If you look far enough out, you understand that you need to always invest in the future and be prepared.

This has happened a few times where people have compared our company or myself to other owners that were living a real high life. I said that’s wonderful that they do that. I don’t feel it’s my money. It’s the company’s and I need to invest back in them. They’ll come a day and we see that today, right? They dividend out a lot of their money and now they need to have that money and it’s not there. You run into some problems. You really have to look in the future if you want to have a strong business.

MB: You said in your book when you’re in business, you’ve got to be willing to think outside the box and try new things. Are there any examples that you can point to in your career where you thought outside the box and succeeded.

Stearns: Right now we’re succeeding in Kind Lending in a world where everybody is struggling. And I’ll give you a couple examples of that and then I’ll tell you why I think it’s happening. If you look at our market share growth from all the reporting lenders, we were up 601% from last January to this January. We’re up over 200% just from January until [the end of April], and we are up a little bit more than that from last year this time to now when everybody else is down 60, 70, 80% from last year.

What’s different about us? Well, I’d say it’s because it isn’t our first rodeo, right? We’ve done this before and this time I’ve thought to myself, OK, what is it that I want to do? Well, I want to be authentic. And an example of that is we had a wonderful software for the broker last time at Stearns, and it was called Snap. It was very quick, it was very efficient, and you could basically utilize that as a tool to help get you more business. And so when we sold the company, they changed that up and they wanted it to be a little bit different. And when they did that, we lost a lot of what was very special.

So when Kind came about, I said, I want to have the easiest software for the broker. I want to make it simple. I don’t want to make it perfect. I want it simple, and I want it fast. So we call our broker portal the Kwikie, right? And it’s the Kwikie because we have happy beginnings and happy endings. If it’s your first time, we’ll go easy on you. It doesn’t have to be hard. And we have all these puns that are very light and fun and make people go, did they just say that? Oh my God, a quickie, happy endings. Oh, my goodness. And it makes people laugh and then they feel like, Hey, you know what? These guys are a fun company. They’re light. They make fun of themselves.