Financial institutions advised to say yes more often, partner with startups for experiments

Innovator behind first vehicle vending machine shares start-up story with TMG Executive Summit attendees

DES MOINES, IA (June 30, 2016) — With a central theme of “The Power of Ingenuity” for the 2016 TMG Executive Summit, event organizers wanted to show attendees how one individual harnessed such power to set about disrupting the auto sales industry. TMG invited Carvana founder Ernie Garcia to share the story of his e-commerce auto sales business, as well as his perspective on what it will take for traditional financial institutions to become disruptors in their own right.

Carvana was named one of America’s 20 Most Promising Companies by Forbes in 2015. The online auto retailer’s business model creates a new kind of experience for car buyers, allowing them to shop, finance, buy and trade in a vehicle over the Internet with next-day delivery to the buyer’s home (or in some cases, the buyer’s credit union). Carvana has a white-label product that allows credit unions to plug their lending solutions into the innovative car-buying experience.

Among the points Garcia drove home during his 30-minute talk was that mid-sized companies are neither burdened by the slowness or resistance to change of large, legacy companies, nor are they challenged by the lack of resources suffered by startups. Therefore, he said, these organizations have the benefit of choice. Credit unions and community banks, many of which are mid-sized organizations, do not have to behave like startups, which Garcia described as “scrappy, fast and fighting for their lives every day.” Nor do they have to act like large organizations, enamored with the status quo, slowly weighing costs against benefits and generally lacking efficient communication structures to act on new ideas quickly.

Garcia encouraged the leaders in the room to intelligently find ways to experiment “where the down side won’t hurt you too badly.” One of the ways he suggested was to partner with startups to fill in some of the innovation gaps their organizations may have. “Startups want to be your experiment so badly,” he said. “And they will make a lot of economical sense for your experiments. They will work hard for you; they are fighting to stay alive. If it doesn’t work out, it won’t hurt you too badly.”

One observation Garcia has made in his work with credit unions is a wide range in the amount of time it takes to move from decision to implementation. Some are fast; others are slow. He believes more organizations, including community financial institutions, must find ways to say yes more often. “Yes creates volatility,” he said. “No creates comfort. So you can either say yes and something good can happen, or you can say no and accelerate your demise.”

When asked which innovation he fears for its potential to disrupt Carvana’s business model, he cited driverless cars. “When Google or Uber has fleets of driverless cars, it’s going to be hard to defend personal ownership at that point,” Garcia said, adding he believes we are a long way away from that point. “Every company has a threat, and if you’re not aware of it, you’re not thinking hard enough.”


About TMG

TMG is dedicated to creating customized, technology-driven card processing and payment solutions for credit unions and community-based financial institutions across North America. Innovations in fraud management, loyalty programs, alternative payment systems and analytic reporting, and the competitive advantages they create, have helped TMG forge a new standard in offering cutting-edge credit, debit, ATM, prepaid card products and a P2P payment solution. For more information, visit


Kelly Moore Consulting, Inc.

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