2259 - Why Entrepreneurs Need Both Therapy and a Good Score with Nav's Levi King

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0:51Also, don't forget, the thoughtful entrepreneur is always looking for great guests. Go to upmyinfluence.com and click on podcast. I'd love to have you.

1:05With us right now is the founder and CEO of Nav, nav.com. It is Levi King. Levi, thank you so much for joining us. Thanks for having me. I appreciate it. Well, listen, Nav is a brand that I've been familiar with for quite some time. My background in the fintech world, I think, helped us make a connection. And, you know, Levi, what I love about what Nav did, especially back in the day, was, you know, we're going to get into all this, I promise, but you really stepped in and provided a lot of support in an area for small business owners that really just didn't exist. So we're going to get into all that, just kind of tease it out a little bit.

1:50Because like I said, I'm a fan. I've been a user of Nav as well. But Levi, before we start talking about your work, what are you currently doing for fun? Or what have you been into lately? It has nothing to do with work? Well, the family keeps me busy. My wife and I have six daughters, but when it's just time for me, I'm kind of a nerd as it relates to nonfiction. So I'm always usually listening to a book and reading a book at the same time, sometimes pretty dense. Other times a lot more lively, like right now I'm reading the biography of Muhammad Ali, which is a lot more just fun. I finished a biography of Steve Martin.

2:29Usually though, I'll read something a little bit more science-y. Yeah, what's something science-y that you've read lately? Or if someone say, you know, I don't read a lot of science. Like, what are some of the maybe science-oriented novels that you've read that have been, like, mind-blowing? I read one recently, shooting, I'm forgetting what it's called, but it's on the Umwelton of Insects and Animals, which is a word I learned when I read the book, which is how they experience the world, their senses, you know, because they have senses we don't have. We can't communicate through radio waves and things like that.

3:07Can't say there was any business utility in learning about it, but it was certainly fascinating. And any human characteristics in the insect world? Yeah, more on the instinct side of protection, self-preservation, looking out for either insects or animals around them with the same species. It's called unconscious world is what it was called. Oh, Unconscious World. And that's about Insect and Unconscious World. I'm going to look that up. You know, we were just watching, you know, we love the, my wife and I always, we try to watch like a nature show on Sunday evenings. and we're watching the North American ones on Peacock, but they were talking about army ants in the Amazon.

3:53And I mean, they are basically the control alt delete of the jungle. When they move into a portion, they pretty much just like wipe it all out of, you know, any other living organism. And then they kind of move on and it's actually needed because it kind of just restarts it. You know, the grasshoppers, all the other stuff just get kind of gobbled up by all these ants that work together. And it's amazing just the stuff that they do, you know, building bridges, you know, with their own ant bodies to go across branches and stuff like that. It's just it's just bonkers to watch, you know, how they know how to do all that stuff.

4:32So I actually read a book about that to Jeff Stiebel, who's now the CEO of LegalZoom, who has a Ph.D. in brain science, wrote one. And again, I'm forgetting what it's called, but it's specifically on ant colonies and networks and how they communicate and organize. So it was the written version probably of what you watch, but it was fascinating. Wow. Wow. All right. Is that, it's not innumerable insects, was it? No. No. Okay. We'll look it up later. We'll look it up later. We have in the show notes for somebody who wants to learn more about bugs. All right. Let's learn more about NAV. Levi, what is NAV?

5:09NAB is a credit financial health platform for small businesses. The idea came across the years. I was a small business owner five times over in different industry verticals. It was always really difficult to understand how credit applied to me as a business. As a consumer, there's lots of resources out there to understand how does my personal credit impact me if I want to get a mortgage or an auto loan. It's just so much more complex in the business credit world. And so NAV was early on clunky, but an attempt to start to bring transparency into how does business credit work? How does it relate to your financial data?

5:44How do you manage it all so you can leverage net 30 terms, get business credit cards, get better business loans? But it was really born of my experience being a small business owner and having nowhere to go to to have a resource to get real answers. So, I mean, how I understood it at the time, for the very first time, there was finally a credit karma for business. That's right. And do you mind maybe just kind of giving a quick 101 on how business credit works and what's out there? And I know that there's actually been some very recent changes, too. So if you want to address that, you're welcome to as well.

6:22Yeah, you bet. So there's three big commercial bureaus, Experian and Equifax, which everybody knows of on the consumer side. But a lot of times the small business owner is surprised to find out, wait, there's a commercial bureau as well. And then, of course, Dun & Bradstreet. And unlike the consumer space where there's three major bureaus and there's high data consistency bureau to bureau, there's not high data consistency bureau to bureau. So when Credit Karma came out, it was first just TransUnion. But if you, with 97 % data consistency between the bureaus, if your transunion was buttoned up, you could safely assume the other two bureaus were buttoned up as well.

6:55The commercial space is not the same. They have different coverage on where they get the reporting from, how they productize it, how they create their scores. And so Dun & Bradstreet, Experian, Equifax, you really got to keep your eye on all three. Because if you're setting up internet with Comcast, it's more likely they're going to pull an Equifax business credit report. And if you don't have good business credit, you're going to have to mail a check for a deposit. When I started NAV, I had to send him a$2 ,000 check because we didn't have any business credit established yet. Whereas Dun & Bradstreet kind of dominates the trade and supplier ecosystem.

7:28So if you want net 30 or net 90 terms from your vendor, more likely it's going to be a Dun & Bradstreet report. If it's business credit cards and business loans, it's usually all three that go into those underwriting scenarios. And so it just varies widely based on what you're trying to accomplish inside your business, which report or reports is actually going to impact you. And Levi, do you mind explaining a little bit more specifically how NAV works and who should be plugging in and using the resources that you provide? yeah so anyone that owns a small business and you could be a you know we have about a million customers right now half are sole proprietors so it isn't just for people to have a c-corp or an llc or an s-corp but you go through our signup flows we authenticate your identity as a consumer because your personal credit is going to get a matter and come into into play in lots of different financing scenarios and then we hit an api not just with the consumer bureau but with all three commercial bureaus, we match you to your business credit, and then you can tap us into your checking account so we can stay on top of cash flow insights for you and really give you a global view across all your credit and finances.

8:42What are the decisions you should be making? So then you can track it over time. We give you lots of recommendations on how to improve this score, that score, or if we, you know, based on our AI models, if we think you're going to bounce a check in your checking account, say, hey, not only do you need to get ahead of this, here's a line of credit we know you're qualified for because we're sitting on top of all of your data. Why don't you tap this line of credit so you don't get an insufficient funds bounce on your checking account? And so we're always connecting the dots between the data and what could you be doing better to get in a better spot over time?

9:14So we've got countless stories of customers that signed up and they were subprime. Everything was a mess and they took our advice over time and improved it and then eventually get an SBA loan or something super favorable on the financing side. but we're always using that data to connect the dots, not just to advise. But here's what you can do with it today. So maybe today the best you can get is a subprime financing option. If so, we're going to make those recommendations. But more importantly, explain why are these your only options? So then it's actionable and you can make improvements. Or for some of our users, NAV is the only place you can see your FICO SPSS score, which is the business score that the SBA uses to issue insurance on loans.

9:57So almost every SBA lender, if not every single one, uses that score so they can automatically get insurance on SBA loans. Into that score is your personal credit, all three commercial bureaus, and your cash flow data. So it's just a global score on the whole business. And you can see the score. So if your score is above 165, you know you meet the minimum thresholds that the SBA requires to insure a loan. And then we'll connect the dots and say, here's two lenders you can go to to get a loan. So it's always about where am I at? What can I do about it? And how can I leverage my data right now? And Levi, in the business world, too, if there's one thing I can say.

10:40So my background with Savings Angel is I've been a consumer advocate forever. And, you know, obviously, I want consumers to make smart decisions with their money. And, you know, clarity is one of those things that can really make a big difference. You talked about the differences that can happen for business owners based upon whether or not they've played by the rules in kind of the business credit system. And I said played by the rules, you know, just kind of know, you know, start getting lines of credit going, build a credit there. But it can make a huge difference. You know, in the lending world, too, I don't know if you have any thoughts on this.

11:20Wow, it is the Wild West out there still. And, you know, there are some business lenders, holy cow, are they punitive. I mean, if, you know, and I think anyone who's in business for themselves knows the volume of junk mail they get. And someone's paying for all that junk mail, Levi. Do you mind giving us just a quick peek into that world? And is it still as unregulated as it was like a few years ago when I was like just flummoxed by how egregious some of these lenders can be? It is still mostly unregulated. The reasoning behind that, as far as the cost of financing, as a consumer, you can assume most consumers, their income is fixed.

12:04And so there are irresponsible times that you would borrow against certain costs. In theory, as a small business owner, your income is never fixed. And so that's one of the reasons it's not regulated is if you want to pay 100 % interest on a loan, as long as you understand that, and you bake that into the cost of whatever you're doing to make money, it may make sense to take an expensive loan. But because it's so unregulated, a lot of lenders will package the costs in a way that's pretty difficult to unpack. So now we're pretty strict about who we'll partner with, but not strictly as it relates to the cost of the financing.

12:38It's more about the transparency into, you know, how do we calculate this? What are you really going to repay? Can you really afford to repay this loan? And then we really scrutinize lenders on their sales practices, their sales ethics, as well as their collections ethics and practices. And so we just stay away from anyone that we don't feel like is a good actor. But if you're looking at a purchase order that you know you have a 300 % margin on and your cost of financing is 50%, maybe it pencils out. In that case, it probably does pencil out. And so we're a little bit agnostic to is the cost of the financing right or wrong?

13:12And we're not at all agnostic to what are the sales ethics? What are the disclosures? What's the transparency into how you explain pricing and repayment terms to your customer? but it started about close to 20 years ago where I think it was Advance America, now called Canned Capital, figured out, hey, what if we redirect the payment flows from the merchant processing to a repayment account? So if we take charge of that flow, then who cares what their credit looks like because we know we're gonna control the money coming into the business and give them the piece that's not the payment that they owe us.

13:45That's evolved material over time to include the cash flows beyond just the merchant processing. but there's always a new lender out there looking for a new angle on risk arbitrage and they price it according to the risk that they take and some of that risk is expensive but even you just mentioned direct mail like the customer acquisition cost is high so you've also got to price that into your pricing not just the risk of loss but the cost of getting that customer and it's expensive and that's why some of the built-in financing programs by PayPal Square QuickBooks have been so popular because they already have the customer.

14:21So that the cost of the financing isn't artificially driven up by the CAC. They got to repay. And so those are usually a lot better deal if you're taking kind of captive ecosystem financing. I know one thing that, do you mind just sharing what the NAV Prime card is? I know that that's something new that NAV has introduced. At least it's new to me. I haven't seen this before. Yeah, we developed the card after making hundreds of thousands, if not millions of card recommendations over time for our users. Go get American Express Blue for Business, get a Capital One card. So we're making recommendations for all these business cards.

15:00And you've got to have really good credit, business credit, personal credit. You've got to be really buttoned up. A lot of times you've got to have a certain time in business. And so we said, okay, what's something we can do for the white space that needs to improve their credit so that they can get the American Express Blue for Business or one of these difficult to get cards, but that are pretty favorable products. And so we looked at kind of the gap in underwriting of our partners. So we don't compete with our partners where we make referrals. The goal with the card is to help you improve your business credit.

15:30So we took a look at cash flow and said, okay, we can underwrite daily a risk that no one else is willing to take. And so it's a daily repayment card. And then over the course of a month, there's a maximum amount of credit we extended, you used some percentage of that, you either paid us back on that last day, or you didn't. And so it reports as the monthly charge card, similar to the American Express gold for business card, which is a very positive impact to the business credit. And that was working really well. And it's been a very popular product out in the wild with our users. But the problem is then their business credit would improve, but their personal credit was still lagging behind because so many small business owners, myself included, starting their first business, you kind of leverage your personal credit because you can't leverage anything on the business.

16:16that the business doesn't have revenues and doesn't exist yet. So it's really common to beat up your personal credit when you're starting a business. And so we realized that that's kind of a hole in the product. So for anyone with a credit score under 680, they can choose to have it also report to their personal credit. So we'll start to improve their personal credit as well. And it's the only card on the market. It's daily underwriting and repayment. It's the only card that you can choose. I want it to report to my personal credit, not just my business credit. And so it's been a wildly successful product for us, but more importantly for our customers.

16:49They see score improvements historically just on the business side and now on the personal side as well. And that hopefully helps them then graduate from our card, which I know sounds counterintuitive, that our goal is actually to help you not need our card because now you qualify for something better. But that's the goal with the card is to help our users graduate to something better. I like that. I like that. Levi, one final thing I wanted to ask you about, because I know you've been an advocate for mental health, particularly among founders, CEOs, leaders. You know, we get wrapped up in our identities as, you know, I kind of, you know, whenever I get too serious about stuff, you know, I always kind of make fun of myself.

17:29And I say, oh, Mr. Big Boy with his big boy business pants on, you know, trying to, you know, you know, it's like when I get too wrapped up in that identity, you know, kind of causes me to take a step. back and like, man, don't take this stuff too seriously. But it's hard not to when we have so many responsibilities, we have the livelihoods of, you know, both team members and clients and audiences. I mean, there's a lot of pressure there. And I know that you've advocated, you know, for being mindful of that. And I think exercising some practices that are good for mental health. Do you mind maybe just talking a little bit about that before we kind of finish up here?

18:06Yeah, no, I'm pretty open about this because it hit me like a train in my early 40s. I started and sold five small businesses in my 20s, Main Street, very old school type businesses. They were all successful. I've done two fintech companies, raised hundreds of millions of dollars in venture capital. And Nav, of course, is the one I'm CEO of now. When we raised Goldman Sachs, led our RC round 45 million bucks at the end of 2018 at 60 million bucks in the bank we weren't profitable yet but we were a couple years from being out of the woods and and so it seems like it should have been like a low stress low a lot lower stress than the early years of building the company right yeah and and then out of nowhere I started having panic attacks and they were frequent they were debilitating I'd never had any mental health challenges my whole life um in fact this is meant to be funny but it's true i had just binge watched the sopranos i never watched it when it came out yeah in the first couple panic attacks i didn't realize what was happening i felt like is it food poisoning what is it and then i connected the dots like wait a minute this is the panic attack this is like tony and the sopranos right right he was going through that's how i figured it out and like an entrepreneur i got to work on it uh i tried five different meds they all had a pretty negative quick side effect hired a therapist a psychologist, ended up stepping down as CEO of my company a couple of years later.

19:31I eventually discovered psilocybin was like a miracle cure for me. Oh, my God. You and me both. Oh, my God. Yeah. Yeah. And I'm so sorry to interrupt, but you didn't share that publicly. And I was wondering if that was part of your journey, because I'm so sorry, Levi, to interrupt you, but I'm just I'm sorry. Oh, my God. Me too. We need to talk because you're right. It it's like, I was able to get done with years of therapy within a couple of hours. Like all of a sudden everything, I just had clarity on the roles that I bought into, you know, the, the unfair expectations of myself that I had, you know, Oh, this happens completely outside of your control.

20:22but what that means is you're a bad business owner or something like that. All of these dumb rules are just like beliefs that consciously, I would tell you it's complete BS. I don't believe that. But subconsciously, the shadow work, it was absolutely there. I'm so sorry, Levi, for interrupting you. I'm just so grateful that you brought this up. because and by the way my experience with this comes from my world of as a veteran and working with a lot of fellow vets that suffer from serious PTSD stuff and I heard far too many stories of those guys and gals being able to like you know finally break through of it so I just want to say thank you so much for sharing your story Levi could you please continue it before I so rudely interrupted no no that's great glad we have that in common uh so I'd studied a ton and you know know, I'm a left brainer.

21:17I was this is gonna sound so this sounds silly to me now. But I was worried I would lose my edge because you read stories of like, yes, it helped them. But then like, they decided to like, go be a farmer in rural Idaho. And I'm like, I got responsibilities, like I respect your capital. I'm pretty sure I like the lifestyle I have. And so I was doing other things because you asked about other things like I still for years now, I've meditated twice a day, sometimes three times. I take time for myself. I was just pushing all the time. It was either I was given to my family or I was given to work. And so just to take time to, even frankly, time, I mentioned nonfiction, but like just to watch something frivolous, watch a standup comic, things that are like selfish, or I would have thought were selfish, but now I'm like, that's just a normal part of life.

22:03It's not selfish to take time for yourself. But the, I was making a lot of progress before I tried the psilocybin. Fortunately, I live in California. It's legal. with a therapist who was trained in it. So I did go the safe route. And now it's something I laugh about because like you can't get addicted to them. Like they're safe. But I was making a ton of progress, but I never had a panic attack after I took them. And so I think the other stuff that I do with mindfulness, it keeps it away. But I can point at that one thing and say, I had not escaped him in two years. They were maybe a little less frequent, but they weren't less intense.

22:42and so you know it's that my advice for other entrepreneurs is don't push yourself till you break because when i first started working with the psychologist i said hey i've had a mind that's a steel trap like what happened and she said your mind is just like the 50 year old that you bend over to pick up a pencil and your back goes out it wasn't picking up the pencil it was a you accumulated a lifetime of non-care of your back said your mind is the same way and so now my recommendation is to people's get ahead of it like don't get to a breaking point like i i got to that I had to recover from, get ahead of it with mindfulness and other practices that you can employ to make sure you don't get to that point where you start having panic attacks.

23:19But I was, like I said, I consider myself, mine was a steel trap, like nothing could get me. Never in a million years did I predict all of a sudden I would start having panic attacks. Yeah. Yeah. Yeah. And again, you're obviously someone who's very learned, like you've done all of the cognitive work, but yet there was just something in the undercurrent and in the emotion and the gut and the spirit or whatever, in the soul, there's just like not accessible is easily accessible by the brain. And so that's where, you know, there just is another layer of work. I've learned that has to be done in a way that's more than just head knowledge.

23:58Like you're going to have to somatic breathing meditation, like you're going to have to access that stuff in a different way. Psilocybin is one of those. I mean, there's ketamines out there. I mean, there's, you know, as long as you're working with a professional and know what you're doing and it's legal where, wherever you are, if that's an option for you, I've sounds like Levi, what you're saying is do your research. Cause that might be viable. I could, it's, it's very promising to hear you say that because my experience was just seven weeks ago and so far so good. Like, and I have made some pretty big shifts in my life.

24:35I'm not going to do the farm in Idaho, but I'm definitely saying no to a lot of stuff. I'm like, no, you know, that's just not my zone of genius. I'm not meant to do that. I don't want to do that. It's not what I want to create in my life. And so it's given me, I think, a lot more permission to kind of be my own architect as opposed to, you know, still trying to satisfy my dad's wishes for me or something, you know, whatever, you know, wherever those beliefs originally came from. And guess what, my friends, we all have them. Levi, thank you so much for this conversation. Obviously, NAV is at nav.com.

25:14Take a look at the new NAV Prime card, because again, this might be a good solution for you. If you're looking to just, again, and kind of build your credit with your business. I'm a big, big fan of that. Life is just easier when you have better business credit. Like if you need access to capital, you just get much more favorable rates. And NAV is just that great ecosystem that helps you to become more valuable. We were using it. And as such, we finally qualified for a really great SBA loan. We used that and that made some really amazing stuff happen for our business. So anyway, Levi, thank you so much for everything you've created.

25:56Thank you so much for your transparency and being a guest today. You bet. Thank you for having me.

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