Whatever it takes…
How the upstart start-up that became Fincentric and a courageous credit union made business technology history together.
The famous anthropologist, Margaret Mead, might have been talking about the founders of Fincentric and their first customer when she advised that we should, “Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it's the only thing that ever has." Their vision and “whatever it takes” attitude to achieving it set in motion a roller coaster ride to making business technology history when they founded Prologic, predecessor to Fincentric, on June 5, 1984.
Paul Oeuvray, Greg Hope, Gerald Maffeo and Wes Warner had been working for what was then Canada's largest software developer of minicomputer-based solutions. Each had a special expertise and experience in creating solutions for banking: Paul in technology, Greg in applications, Gerald in operating systems and hardware and Wes in engineering and terminals. At a time when mini- and main-frames ruled the world in business technology, they were absolutely convinced that personal computers (PCs) were the future.
The fervent foursome met over pizza and beer and mapped out how to use networked PCs to build application systems. This was in the early days of client-server or network-based solutions. But their employer wasn't interested in their vision. So Paul, Gerald, and Wes swallowed hard, quit, and started their own company. Wes moved from Ontario to California to join Paul and Gerald, and together they named the company Prologic. Two months later Greg joined them and they were off and running. Only they had no products or customers.
“We wanted to use PCs for a monster application,” says Gerald. “Banking was what we all knew best.” So that's where they focused. But finding that first customer was a huge problem. Prologic's vision of having networked PCs replace mainframes was 10 years ahead of its time. Don Tuline at Richmond Savings Credit Union, however, gave Prologic a chance to tell their story. “That first meeting with Prologic was the most exciting meeting of my whole life,” says Tuline. “We agreed fast. We saw it one day and signed a one-page contract the next day.” The enthusiasm was just as strong at Prologic, says founder Greg Hope. “Every successful company has a great customer telling it what to do; Richmond Savings was ours.”
But at the time Richmond Savings was ailing; it had potential losses of $12.5 million in 1984. Tuline saw that Prologic's vision could enable him to achieve his own vision of transforming Richmond Savings from a commodity service provider to a sales organization. He felt that cutting spending was not the strategy; they needed to market their way to success. The credit union had to be able to see the whole customer profile so they could increase the customers' balances, not the number of customers. Today, it's known as relationship banking, but the term just didn't exist back then. Neither did the technology to deliver it. Embarking on the journey to develop the solution was a huge risk. But both partners had the confidence and the courage to make it happen.
Over the next two years, the Prologic team and Richmond Savings' handpicked crew joined forces. It was “ do or die” for both companies. The environment was electric. There was no formal process, just a customer who knew what it wanted and the team at Prologic who were dedicated to making it happen. There was a lot of late hour programming and more pizza and beer. “We were all empowered to just do it,” says Gerald. “It was do what you had to do to make it go. Whatever it takes.” One day that mindset saw Wes taking a crowbar to a locked Prologic filing cabinet late at night to get a part he needed to get on with the job.
Prologic essentially created the first ever large-scale network using PCs. At that time no network to link all the PCs existed, so Gerald created “P-LAN,” saying, “Surely it must be more difficult to write this than to land a man on the moon.” The new system ran in parallel with the mainframe for 60 days before Richmond Savings felt safe pulling the plug and the new system went live in September 1987.
The results were swift and stunning. Richmond Savings saw a dramatic turnaround, moving from negative capital in 1984 to building capital of $34 million in 1988 with a growth rate double that of all credit unions. Columbia University did a case study and the business technology press took notice. Richmond Savings received the Best in Microbanking Award for 1988. Other credit unions and banks came to visit. It was all too much for Prologic's founders' former employer; it sued the fledgling company. The legal action (eventually settled) only slowed Prologic's momentum. The success led to other credit unions asking for customized networked solutions. Prologic had made business technology history. It had proven the value of its vision – and that it could do whatever it takes to make it work.
… More to come in July about Fincentric's early challenges and successes.
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