One of the privileges of being a designer, and specifically working at Handsome is the variety of products, services and sectors we get to touch. MMKT is a startup in the finance space that was trying to create an exchange for middle market loans. Most of us, myself included, had not heard of the middle market, and if we were honest with ourselves could not tell you what made an exchange an exchange. But through rigorous research, synthesis, modeling, and rapid prototyping we not only were able to gain a thorough understanding of the terminology and interactions surrounding loans in the middle market, but we were also able to ship designs that set up our client for a rapid development, and then help QA the final product before release.
- Creative Facilitation
- Design Research & Synthesis
- In depth interviews
- Persona development
- Process flow modeling
- Insights, Breakdowns & Design Criteria
- Interaction Design
- Interface Design
- Design QA
Background on the middle market and MMKT
The Middle Market is a term used to identify companies with annual revenues between 50 million to 1 billion dollars. Companies in this space, unsurprisingly, need to take out loans usually between 10 million and 250 million dollars. To get a business loan of this size, one can’t just go to a local bank and ask to be given tens of millions of dollars. Instead, you have to find people willing to give you this money as an investment, and trust you (and really the business) to make enough in revenue to eventually pay it back.
Historically investors have been people or investment firms that can easily write a check for anywhere between 20-250 million dollars. Often what will happen is a single investment firm will do an extreme amount of research and vetting of the company looking to secure the loan, and set up parameters such as interest rates, and requirements or “covenants” that the business receiving the loan has to keep in order to be in good standing with the lender.
After writing a check for say $250 million dollars, this initial lender will then try to sell-off or ‘syndicate’ pieces of this loan so they can expose themselves to a little less risk, and gain some cash or ‘liquidity’ to invest in other companies.
Compared to other types of loans or investments, loans in the middle market have been sound investments. They earn interest rates between 7 and 14 percent, and companies rarely default. However, access to participating in these loans has in the past only been reserved for the infamous 1% (or more like 0.25%) who have the networks and the cash to find these types of deals.
MMKT was seeking to make this market accessible to more people, with a founding team of savvy entrepreneurs and investors, they had the experience, network and capital to make this a reality.
Expansive Process Flows
Finding someone to give a company a sizeable loan is a delicate process. The borrower’s identity has to be protected, lest a competitor or broker catch wind of it and use it for their unfair advantage. At the same time, the borrower has to allow prospective lenders to evaluate the risk associated with a loan. To balance these two needs a careful and regimented process of evaluations, information disclosure and approvals were needed that allowed all parties to maintain trust in the system, but also made for an efficient discovery, diligence and closing process.
To understand everything that needed to happen for a deal to close, and where the major points of friction were, we relied heavily on modeling. This included: Mental Models of primary users. Process Flow Models, And Brauche Rummler Diagrams. Snapshots and/or simplified versions of each of these are shown below.
Seeing the world through the eyes of a billionaire
For this project we talked to a variety of types of investors. Some of which had a net worth of over 1 billion dollars. It was fascinating to see how they viewed the world and made decisions, in general and specifically as it related to middle market loans and technology products.
“If I think I’m investing alongside people who don’t know what they are doing, then I’m out.”
Rapid prototyping and design
Our clients had a strong development and design background in the enterprise software space. This allowed us to maintain a rapid clip for design development, and rough prototype testing.
Thoroughly reviewing before launch
For this engagement, the client was handling the development, but before the first launch, we were fortunate to be able to do a thorough audit of the system to identify possible gotchas as well as challenges to address for subsequent versions.
It was great getting to work with such an experienced client team, in a sector that has such influence over the world. While an enterprise trading platform to some may not be the sexiest of challenges or products, we were incredibly proud of our team for throwing themselves into a foreign and chaotic problem space, and quickly coming up with a design solution that could be taken to market within the year.