Julian Bond Institute: The Viewpoint
The Viewpoint is the official podcast of the Julian Bond institute for Financial Equity Research at the Center for Responsible Lending. Join us as we discuss economic empowerment, responsible innovation, and a fairer financial landscape, while offering practical takeaways and forward-looking ideas that can shape policy, financial markets, and your everyday financial decisions.
Julian Bond Institute: The Viewpoint
The Viewpoint: The Ambition is There
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By 2050 the communities with the highest entrepreneurial ambition will be the majority of this country. Former JBI President Mitria Wilson-Spotser talks with Shannan Herbert, CEO & President of the Washington Area Community Investment Fund, Inc. (WACIF) about what will it take to meet this moment head-on.
Welcome to episode three of The Viewpoint. The ambition is there, now what? Closing the gap between entrepreneurial aspiration and access in America. There's a finding from JBI's 2050 survey that I think should reframe how every bank, every fintech, and every community lender in this country thinks about their growth strategy. Here are those findings. Two-thirds of black Gen Z, 67%, aspire to own a business. That's roughly double the rate of white Gen Z. Hispanic Gen Z aspires to entrepreneurship at significantly higher rates than white peers as well. By 2050, the communities with the highest entrepreneurial ambition in this country will be the majority of this country. That's not just a distant projection. It is built into the age structure of the population right now. The ambition is there. The question this episode is really asking: what will it take for the financial system to meet it? Today on The Viewpoint, I'm talking to someone who has spent her career working on exactly that question. From the inside of traditional banking, through the world of mission-driven FinTech, and now as CEO and president of one of the most impactful community lenders in the DC region. I'm Mitrea Wilson Spotser. My guest today is Shannon Herbert, Chief Executive Officer and President of the Washington Area Community Investment Fund. So, Shannon, first of all, I'm so excited for you to be here. Thank you so much for making the time to do so. Absolutely. Thank you for having me. So, one of the things that I want people to know is just what an extraordinary background you have had in the financial services sector because it kind of demonstrates your incredible amount of expertise in this area. So I really wanted to talk about your journey and how you learned the rules of the financial services market and more importantly, how you are now rewriting them through your position at WayKiv. So yeah.
SPEAKER_03So oh, okay, well, um I've been in this industry, and I I say financial services industry for almost 30 years. Wow. And that is really hard to believe sometimes when I think about where I started and how I started. I started as a teller, a bank teller while I was in college, while I was at Howard University, I started as a bank teller in a management training program. And I worked for a number of traditional commercial banks early in my career before moving into the CDFI space, community development financial institution. Um I was uh the executive in charge of credit for City First Bank here in DC. And so I stayed with City First through their merger of equals with the uh with Broadway Financial on the West Coast before heading into fintech and working with a startup on uh technology that detected bias in underwriting models. It was such a rich and robust experience for me that really um informed the way that I see technology and the way that I think technology should show up in the communities that we serve at Wake If. And so after being with the FinTech for a couple of years, I left and became the CEO of the Washington Area Community Investment Fund.
SPEAKER_00Wonderful, wonderful, wonderful. And could you talk to us about your work at the Washington Area Community Investment Fund and your customer base there?
SPEAKER_03Sure. So we because we are a CDFI, 60% of our lending has to be in low to moderate income communities. And so we are a lender, we provide uh capital in the form of loans and grants, but we also provide uh technical assistance, coaching, advisory services because we know how important that part is to overall performance and success. Um we like to couple our uh loan products, we like to couple any of our um our our financial products, our programs with technical assistance. Uh we also own the Anacostia Arts Center. Nice. Yes, yes, in Ward 8. In Ward 8. Um, it is um this vibrant community hub where arts, culture, and small business uh intersect. So we have a co-working space in the basement that serves as uh an incubator, but also just as a co-working space for um individuals, small business owners that need uh office space, affordable office space, because we know that that's an issue and a challenge for a lot of our small businesses. And so we make this space affordable. Um we also have retail spaces in the building. The building is currently under renovation and construction, okay, and we hope to be open again by the end of the year. So for folks that are in the area that are looking for all the things that I mentioned, arts, culture, and entrepreneurship, the Anacostia Arts Center is the place where you want to be.
SPEAKER_00All right, y'all heard it here. You need to go, if you haven't already, to the Anacostia Art Center, which will be opening up again by the end of the year.
SPEAKER_03It's a construction project, so you never really know, but we are gonna pass our fingers or make a hack. End of the year.
SPEAKER_00One of the things that I think is so profound about the work that you're doing is that you have this connection with Anacostia. And for those of people who may not be from Washington, DC, I want to talk about kind of Anacostia and Ward 8. You know, for so many decades, I think Ward 8, you know, had this reputation of being the place that people didn't want to be. And yet in reality, there was even within the context of all of the challenges of Ward 8, this incredible community of families, of individuals, of business owners and entrepreneurs who really wanted to be able to showcase their talent, their expertise, and what they brought to the District of Columbia. And so I love about what I love about your work is the job that you play and helping them to realize that ambition, right?
SPEAKER_03Yeah, yeah. I I think that's one of my favorite parts of the the job. Um, helping people, I get to help people every day, but helping people to see the possibilities, helping folks to pursue their dreams uh through the either the programming, through the lending products, through the space, right? Curating spaces for people to come together and hear about new things, learn about new technologies, um, experience art in a way that they may have never experienced art before. That's what we do in the community. And I think, you know, for me coming into this uh coming into this organization that has been around for almost 40 years and really introducing myself to this community and the way that they have embraced me and just kind of wrapped their arms around me and said, All right, come on, you're you're family now. Yeah, right. You family has been just um it it's it's been so warm. Um and it really does keep me going. Uh I will go down to Anacasia on a weekend and just walk around and pop into businesses and you know, go to Zapadillas or go to Grounded or you know, stop into the GoGo Museum and visit, you know, my name, these are my neighbors. That's right. Right? These are my neighbors and just hop in to see what everyone is doing and how they're doing, more importantly. Um, but then also buying things when I'm there, right? And so supporting, right, supporting these local businesses. One of the things that we do at the Anacostia Arts Center is provide pop-up space for small businesses. So if you don't have a brick and mortar, if you don't have a physical uh space to sell your goods, we have folks come in and set up tables so that they can begin to sell their goods, they can hold workshops. We have people that do yoga and sound bath and journaling and storytelling and flower arranging, all of these things that someone is sitting at home thinking about, you know what, I could do this, I could bring this to the community. We've created the space for you to be able to do that, and that makes us all really, really proud.
SPEAKER_00And it and it brings up something that that I think is really key, and it's a part of your model that I want to ask how you foresee the financial, the the broader financial services industry being able to take hold of that model is because you're not just talking about giving people capital, but you're also talking about providing them with the tools and assistance and support system around that uh to help their businesses actually have a fighting chance to achieve success. And and you can't have one without the other, right? You need capital, we all need capital to make the business work, but you also need that other type of support. You need training and and and you need the resources that that that you're often talking about, that community resource. So you can have an office space, so you can have a community-hosted pop-up shop that allows you to bring in your goods without trying to just independently maintain a store, those sorts of things. So, how have you really integrated technical assistance into your lending model so that your customers, your, your, your, your business owners know that they will get the full package?
SPEAKER_03Yeah. So we've been really intentional about this, and it started with looking at the data. So we did a study with um my uh former employer, Stratify. We they came in and they looked at our data and they said, Okay, um, across your portfolio, these this is how your loans are performing, with technical assistance and without technical assistance. And overwhelmingly, the loans that perform the best had some form of assistance, technical assistance, either communication with an advisor, communication with a lender, uh, or someone on the lending team. That that was the difference between I'm a I'm going to pay on time or I'm not going to pay on time. It wasn't credit score, it wasn't some of these other factors, it was that technical assistance. And so from there, what we looked at was okay, well, what is the most appropriate type of technical assistance to deliver to the community, right? And I'm not talking about from a knowledge perspective or coming in with a financial management class or something like that, because we know all of those things are necessary as well. But there was something that we were noticing in the community, um, and it's not just Ward 8, but in other communities as well, where uh small business owners were less likely to engage with financial resources until it was too late. They were less likely to engage with financial resources when they needed help. And it it raised the question, why is that, right? And so what we wanted to make sure of is that we were meeting people um from a a psychological safety perspective with our t technical assistance and support, that we were um really aware of what some of the financial challenges were that people had when they came to us because we would encounter folks and they'd come to us for assistance, and then you'd find out all these other things had happened that were preventing them from running the business. And so when we think about technical assistance or how we thought about it, it was really about understanding the whole person versus just trying to plug and play with different courses or webinars or cohorts. What does it mean to really understand what someone's journey is? But how do you create a space where there's enough trust for someone to be able to share that journey with you? So we went through a whole thing where we worked with mental health professionals, they trained us on what financial trauma looks like, what financial harm looks like. Dr. Plummer and Dr. Malone and I also held listening sessions in the community because we wanted to understand what experiences people had had with financial services, and we used that to inform our lending program. So we have a resilient futures lending program now that really speaks to what those experiences have been and helping people with these second chance type of financing models to help get them back on track.
SPEAKER_00That is beautiful, and also just really profound uh because a couple of things. You are not just helping people with their businesses, but you're you're helping kind of navigate them and meeting them where they are psychologically as well as financially. Um, and so for me, what I think is so significant about that is is again, to your point, it goes back to the data. We have this large population of African Americans and Latinos in this nation who all aspire to be entrepreneurs. And yet we know that these very same communities have had some of the most negative experiences with the financial services market. Um, and so when you talk about financial trauma, right? Um I am just I'd like to hear more about that because I I I think it is inevitable that in some ways this financial trauma could be an impediment, right? Unless we specifically address it. So could you talk more about that and and why you chose to integrate it and how we can use that again as a model? Because part of the work that we do here is to try and figure out how we can scale policy solutions and learn from community models like the work that you're doing at Wakef.
SPEAKER_03So and one thing that I'll I'll note is that financial trauma knows no race, no gender, no culture, no zip code, no socioeconomic status either. It can occur to no to anyone, to anyone. And so when we looked at it across our community uh and started asking those questions, the thing that came up for for a lot of us um was you know, wanting to make sure that people understood exactly who we were and what we were offering. Because a lot of a lot of the feedback that we got was, you know, we we want to work with financial institutions, but we just don't understand how things work. We don't understand terms, you know, the the the bankers don't take their time with us. Um we haven't felt welcome in some institutions. Um and and some of the other uh pieces of feedback that we got, and and there were no no banks named in any of any of these these surveys or or or questions or listening sessions that we held. The only the only thing I said was if it's if it's us, you can tell me that, right? Name me, but don't name anyone. I want to hear about myself. I want to hear about myself. But you know, we don't we're we're not we're not naming any uh any names, but we held four listening sessions and actually six, six listening sessions, and um the feedback was almost identical in every one of those uh scenarios, no matter where we were in the region, the feedback was always the same about this confusion and feeling overwhelmed and not knowing what kind of questions to ask. Um but it it also signaled to us that a lot of what our community needs is more high touch than many financial institutions have the capacity to to deliver. And so this so when we think about scale and we think about models and how we scale these models, it's going to take partnership. It is. This isn't something that one institution can do by by themselves, right? So if you t if if there was a larger institution that wanted to embark on this kind of work, uh partnering with awake if to do this type of technical assistance, listening session, learning, here's the feedback, this is how you design a program, that is what makes the most sense because if you're a larger institution, you just don't have the capacity or the time to do it. Right. Work with the people that are boots on the ground in the community that are already doing it, and then build on a model that way. But that that feels more attainable than asking someone to go out and create it on their own. Work with the community partners that are already doing it.
SPEAKER_00I like that you said that because you know, when people think about business lending, right, historically, you would say, oh, this is the the the essence of relationship banking, right? But if you don't have relationships in those communities, then how do you actually establish that? And and and and how do we ensure that that businesses that are represented in those communities and that their business models are appropriately assessed for risk and opportunity. And so that's why I think the point that you're making is so important because you have to actually know the community. Yeah, right? You have to know the community and you have to know how others in the community will respond to the products if they are marketed to that community, for example, or even if they're not, right? Right. You have to understand the business model, and I think sometimes that can also be a challenge. Um, and so working with an organization that has put in the time and effort and is doing surveys and research around financial trauma, but also looking at walking around the streets of uh Anacostia and going to eat at the restaurant there and and and paying attention to the art museum, doing that on-the-ground involvement on a consistent basis, it elevates what you were able to both see and understand about the entrepreneurs who are coming to you and asking for loans. Yeah.
SPEAKER_03And and it also helps with the design of the programs and the products, right? Everything should have community at the center, the human at the center, right? So if we design for the community, if we design for the small business owner, then the product becomes more accessible, the intervention becomes more accessible, it becomes meaningful. It actually helps. But if we sit in a room and say, you know what, I think this is what the community needs, and we're just gonna go out and do it, then we we've missed it. We we've missed the point of the of the whole exercise.
SPEAKER_00So one of the things that I've been thinking about, and and this is totally off the graph, but one of the things that's fascinating to me is that uh we've created these large financial institutions and and truly our product models are built on scale, right? So we try to pick a product that that we think has, you know, the the the largest reach in terms of you know uh making sure that the product is largely homogenous, and so one size fits all. And yet, as we have this increasingly diversified nation and and diversified consumers, I wonder if the the the true measure of success will be how do you create multiple products that that that serve a diverse sector of needs, right? And so the scale is in the number of people that you are able to serve, but not necessarily in the uniform nature of the products that you are offering. And so I d that that is just a random thought that I've been thinking about, but I think, you know, to that point, as we have an increasingly racially diverse nation, you know, uh gender diversities and household structures and all those sorts of things, you have to meet people where they are, um, and they will have different perspectives and experiences on both what matters, they will come with different financial backgrounds, they will come so you can't use one type of product, right? And expect that you're going to meet their needs, even though they may have the ambition or the talent. Yeah. Um so I because you have been in the industry for so long, what do you say to something like that?
SPEAKER_03I think you're absolutely right. And I think about it from an underwriting perspective, right? And think about all of the new businesses that are starting using innovative technology that are thinking about some of this advanced AI and and all how do you underwrite that? Because the traditional underwriting models may not support underwriting something like that. So the banks are gonna have to change anyway if they want to fund, if they want to be able to fund these products, because the things that they may have been funding previously might be going away.
SPEAKER_01They might be going away. They might be going away, right?
SPEAKER_03And so, how do you change your model? How does the model evolve so that you are still being mindful of risk, making sure people are capital ready, but also funding the future, right because that's what we're talking about, right? We're funding the future.
SPEAKER_00Yeah, yeah. And it is the nature of any successful industry to evolve, right? So that that is that is a core component of it. Um we don't want to be blockbuster, right? We don't want to go out of business. We want to we want to continue to to to make the switch. So let me, so you've talked about the fact of the need to partner with CDFIs, like Wake Heps, organizations that have their hands in the community, their feet on the ground, doing the work and interacting with consumers. Another fun thing that we had a conversation offside so that people will know. And we were talking about, you know, how do we engage universities to do this work? And you said something that I actually thought was a really brilliant idea. Uh, and so I'm gonna bring it back up. We've got this incredible amount of ambition in these communities, you know, over, you know, over high 50% for Latinos, you know, 60 something percent for African Americans who are looking to become entrepreneurs. How do we? Educate people so that they're not coming into your office for the first time and not knowing anything about how to start a business other than they know that they want to do it at some sort of esoterical level. Yeah.
SPEAKER_03So I have so many thoughts on this, but um it and it it goes back to an another conversation that I had about you know the the way that we train people, right? When we think so, think about when I I was in college, when you were in college, we weren't necessarily being educated or trained to be owners. That's right. Right? We were being educated and trained to be employees, workers, to be workers, to be workers. We were trained to be workers, and I think what we've seen um at least in the last year in this region, uh, with so many pivoting from federal work into now entrepreneurship. Uh, and we've seen this through one of our projects, the pivot project. But now that we we're seeing this shift, there's this this gap, right? Of okay, well, I was a I was a worker, now I'm going to be, now I want to be an owner. What does it actually mean to be an owner, to go from employee to owner? And I think this is where the universities have a really, really, really unique opportunity to say, okay, yes, entrepreneurship is a minor, or maybe entrepreneurship is a major, right? Maybe entrepreneurship is now a major, and we start to put some real like suspenders around bells and suspenders around entrepreneurship and what it means to own. What does it mean to start something from the ground up? Or what does it mean to actually go in and purchase a business and run it, but just running the business, right? Not as the worker that's you know beholden to uh someone else or shareholders or you know, but actually like this is my my thing here and I'm building it from the ground up. Um, I I I just think that there's so much potential there to do that work because when people come to us and they need they need help, they need help with things like creating budgets or financial statements. These are things that could be part of that track that we're talking, that curriculum that we're talking about. Strategy, you know, how do you build your business track, revenue models, business models, right? Um, all of these things that we're supplementing now for entrepreneurs that could be taught at the the university level.
SPEAKER_00So anybody who's watching, you heard it here first that Shannon is pro proposing entrepreneurship as a college degree, which I actually think is a brilliant, brilliant idea. Let's do it. Um so let's do it. I mean, and you could do it at the community college level as well as the four-year degree level. I mean, because I think a lot of people who go into entrepreneurship are not interested uh in in obtaining a four-year degree, right? In some cases, maybe it's not even necessary, right? Depending upon the type of business that you want to own. That's right. Um, but having those those kind of tools and this basic understanding of of how to do the work of owning a business seems like it would certainly be key. Um so thank you for for sharing that idea because I think it's brilliant. I want to move to talking about your pivot program because this is actually really powerful. I want to say maybe about is it four or five days ago, uh the Wall Street Journal ran an article and it said black women are creating, you saw that? Like they're they're creating businesses at a record rate. Now, what it didn't say is that 300,000 African American women have been laid off in the past year, many of them government employees in this very region that we're in right now. Um, and so they are pivoting not out of necessarily um, you know, uh, it may not have been the time that they had in mind, but it may be a response to uh uh out of necessity. And so can you talk about your pivot program and talk about how you've been dealing with entrepreneurship that that doesn't come purely 100% at choice at the in terms of timing?
SPEAKER_03Yeah. So when we decided that we wanted to launch uh a program like this, it was really in response to what we saw happening in the the region and wanting to use our resources, um, the partners that we had to be responsive and be helpful, um, you know, as because we worked with so many that uh had day jobs and then side hustles. And it I side hustles. Yes, and I I sat with so many entrepreneurs that told me, you know, yeah, I started my business while I was doing X. And you know, I and now I have this this growing business, this flourishing business, but I started it as a pop-up, or I started it out of my home, or you know, I started it at the Anacostia Arts Center. So so we're so hearing all of these stories, it just it sparked something, and we said, okay, well, what if we create this program now that actually has these classes, right? These are all the things that you need to know as a new business owner. And we create a track so that business owners who are interested, they can come and just dip their toe in, see if it's for them. You know, it it's it's not a commitment. Just come in and see, take some of the courses, see if it's for you. The response has been, I mean, when we launched the program, this response was overwhelming. Over more than a hundred applicants within the first like 48 hours or something like that. And then um through the program, um really strong interest with people showing up and being engaged in the content. Um, most saying that the next step for them, they're they want to continue to pursue entrepreneurship after going through the courses, and now they're ready for the business coach. So they're ready to talk to somebody to actually put something on paper to get registered to start the LLC to get the paperwork in order. And that's what we wanted. That that that was the thing, right? So, how do you start talking about business ownership in a way that is accessible, it's approachable, it's something that feels like you know what, I could do this, I have this idea. And and even if you don't have the idea, we're offering franchising as an option, business purchase as an option. So there's so many ways into entrepreneurship. There's not just one lane, there is, there are a number of ways to get into entrepreneurship, and so we wanted to make all of these possibilities available to the community, to these folks that were looking for for the next thing. Because if if you have control over your destiny and your future, you don't have to worry about somebody later. That's right, that's right, that's right. And so it was it's you know, helping helping community find that, yeah, find their footing.
SPEAKER_00So let me ask you uh a couple of follow-up questions to that, because that's just a very rich space to be in. So, number one, 43% of all businesses in the United States are are women-owned businesses. Um, and so when you talk about, and obviously we just talked about the the layoff rates for African-American women as a kind of a spurring point in talking about the the pivot program. Do you see a difference in the types of questions that that that women business owners ask you uh when they come into your center? Um, because one of the things that I I think is so fascinating is we know that we have racial gaps in terms of opportunities and getting access to capital, but we have gender gaps layered on to that as well, right? Um and so, you know, women business owners have traditionally faced more challenges in being able to scale their businesses and grow their businesses and have the same sort of success rate. So I'd like for you to talk about this, especially given that we are filming this right now in Women's History Month.
SPEAKER_03Yeah, so this is um I'm gonna answer it in a different way. Okay. Uh so when we had um one of our first listening sessions, and the room was predominantly women, and we were talking about access to capital. I was talking about access to capital. And I started with um, you know, before we get to asking for money, there's the relationship building. So how do you build a relationship with someone before you need them? Um and so being really intentional about relationship building, but then the other part to that was storytelling. How do you tell your story? Right? And I think we asked the question, who here feels comfortable telling their story? Right, and nobody raised their hand. And so we asked, okay, so why don't you feel comfortable telling your story? And almost in unison, everyone says shame.
unknownYeah.
SPEAKER_00That shocks me. Yeah, that shocks me.
SPEAKER_03Shame. So there's this um this fear of sharing financial mistakes, this embarrassment around I didn't know and I did it anyway, and now I'm paying the price for it, that holds people back. And I and you asked specifically about women. This room was predominantly women. Yeah, no, and so you know, hearing that come from them um was it was shocking. By the end of the session, they were all they all felt comfortable enough. You know, they're scared at that point. But I think it's that you have to disarm people and say, look, hey, uh everyone makes mistakes. We've there's no one among us that has not made a financial mistake, right? Um, that does not mean you are not worthy of a safe banking relationship. That does not mean you are not worthy of of capital or access to capital. You you have, you know, all these things that are available to everyone.
SPEAKER_00Or that you have to be beholden to predatory loans or no, those sorts of things.
SPEAKER_03And that that's the other thing that we see a lot of with the borrowers that come to us. Um, the the predatory loans, going there first, um, going to the predatory lenders first, and not coming to us. And so we're having to refinance folks out of really high interest and just awful terms. Um, the other one is feeling like they have to do it all by themselves. And so this bootstrapping that we see a lot of. And I was on a panel the other day and someone said something about bootstrapping. I said, you know, we've seen people bootstrap themselves into poor health. We've seen folks bootstrap themselves into stroke. Yeah, help all kind of health health conditions, but then but bootstrapping themselves into walking away from the business. And we don't want that. Right. And so there's the um relationship building, being able, being comfortable telling your story without shame, without embarrassment. But this is not solely on the individual. And so I want to make that really clear. We have to create spaces, we have to create environments that are safe for people to feel like they can share those things with us. If we haven't done that, now you got two folks on both ends of the table unable to communicate. Right, right. Right. So we have to make sure we're creating those spaces where people can say, This is what happened, this is what's impacting me, this is what has affected me. Can you help? And then we can figure out what the solution is at that point, but it all starts with trust.
SPEAKER_00So can I ask you, is that one of the rules that you have rewritten and in in the position as president and CEO of Waykif that you know, you you didn't necessarily always get oh, you worked at some amazing organization, so I I know that you they they have done wonderful lending and work, but you haven't seen as as much of the financial industry be willing to um take that time and make that investment in knowing, you know, the entrepreneur, in understanding the entrepreneur's community, understanding what their reservations may be in terms of talking about, you know, finances and and those sorts of things. Is that is that how you would rewrite the rules?
SPEAKER_03Yeah, and you know, one of the things uh just thinking back to my own training as a banker. So I went through a a commercial credit training program and you know, had the formal credit training as most bankers that came up during that time with me did. That isn't what I'm talking about, isn't part of that training. It is very much how do you analyze a financial statement, how do you look at a business plan, what does this mean, and what do the projections say? And so getting to the story, that storytelling piece, that wasn't part of the training. How to engage with community, that wasn't part of the training. You know, you're that that you're not taught that. These are things that have to be embedded in the culture of the organization, they have to be really intentional, so you have to want to know, right? Um, but again, it is all really high touch. And so if there's not a capacity to do it, um it won't get done. But if you don't know how to do it, then it's going to be done incorrectly and you have the potential to create harm. And so what we want to make sure of is that when we do have these conversations, that we're doing it in a way that is informed by what how who the community is and what they've experienced in the past, um, and honoring that, right? So that we're not we're not um creating additional trauma.
SPEAKER_00It's ironic because in so many ways what you're saying is that the key here is to re is a return to relationship banking, and the changes is who you're building relationships with, right? It's opening up the the network um to to to to engage in relationship and build a relationship with communities that people have not necessarily always done in the past. Now, let me ask you another curious question, and then I know that we have to stop because we you and I could talk forever. I could talk to you forever. I could say that. But but you know, as you say this and you say, look, it it needs to be hands-on, it needs to be more relationship-based, you know, how do you maintain that connection to relationship-banked, uh, relationship-based kind of engagement for entrepreneurs, and yet at the same time recognize the technological innovation and kind of the the kind of abstract nature that that technological innovation is, you know, now everything is an algorithm, now everything is a model. Like, how do you wed the two? To me, that seems to be one of the biggest challenges for thinking about how we move forward.
SPEAKER_03Yeah, um, so one of the things, one of my learnings from being in the fintech space was um you can't just let the machines run. I would say that all the time. Like any of those movies, what was uh the the Will Smith movies or some of those other movies? iRobots. Yeah, I think what happens when the machines take over, right? So you you always want uh to have a human someplace involved in in the process. One of the things that we did in 2025, I think it was, um, was launch an innovation task force. And the innovation task force was created to look at technology and the the type of advanced technology that was being used in other places and see how we could bring some of that to our customers in Ward 7 and Ward 8. Um, because what I was finding, having been in those spaces, is that we were having these conversations about all this advanced technology and all these really cool things, and they weren't happening in our communities. Right. But the people in our communities were either going to be using it or gonna be impacted by it, and so they needed to know. So there was this information sharing piece that we wanted to make sure that we got out there, but then also how do the tools come back into the community so that they can use them? So I think this is where we begin to uh merge the two worlds and say, okay, yeah, we need to have strong relationships, strong community, but let's bring community into this space with us so that we can all learn together, right? So, what's a product that we can pilot potentially? And let's pilot that product together and let's see what our outcomes are and then let's talk about them and write about them and see how they impact our community versus another community. So let's start to do some more of this like research around these tools and around this technology so that one, we're not afraid of it, right? And and we want people to embrace it, but we want to use it safely. We want to make sure that it's being deployed in a safe way. We want to make sure that this being deployed in a way that, again, isn't going to create additional harm in the community.
SPEAKER_00Well said. So I'm going to give the the last thoughts to you by asking two questions, which is uh the first one is this if a financial institution, a banker was watching our podcast right now, what's the one thing that you would like for them to walk away, the one piece of knowledge that you would like for them to walk away with from this show?
SPEAKER_03Um, relationships with your communities matter. These folks want to do business with everyone. Um, but we recognize that not everyone is ready for the big relationships. Send them to us. We got it. We got it, we got it, you know. Send them to us. Uh, and our bank partners are so great about that. They send us customers all the time. I'll just get emails like, here's a customer, you can you work with them? And um, and then what we're able to do is work with them, get them to a point where, okay, now you've outgrown my relationship. We can send you back, we can send you back, we can graduate you. Congratulations, you know. And so that is the the kind of relationship that we want with all of our financial partners. You don't have to tell people no and send them away because they walk away and they may give up after you send them away away with that no. We don't say no, we say not yet. And so we help figure out what that thing is to get you to a yes. So please just send the customers to us.
SPEAKER_00I love that. We don't say no, we say not yet. Very key. Now, my second question and the last question is what do you want, a budding entrepreneur, somebody who has that ambition, that aspiration? What's the one thing that you want them to walk away from uh in terms of knowledge from this podcast?
SPEAKER_03I want them to start building relationships early. Build a relationship with your financial partner before you need your financial partner, before the emergency happens, before you are two weeks away from running out of payroll, build the financial partnership today. Just start talking to folks. Introduce yourself, take them a coffee, come sit in somebody's office if they have an office, right? Just but being intentional about building those relationships because that's how you build partnership so that when the need does arise, you have somebody that already knows who you are. They can they can go and talk to your underwriter. Oh no, we we we know this person, we we've gone into the business, we've seen how the business operates, we understand the model. Especially when we start talking about some of this new stuff that could be coming online. Right. Yeah, no, I know how it works. Let me explain it to you. This is how you mitigate this risk, this is how you underwrite it, this is why the financials are going to look a little different because this is what that model calls for, right?
SPEAKER_00Start early. Start early. Do you hear that? So anybody who's watching and you're an aspiring entrepreneur, building relationships, building relationships with people like Shannon Herbert, the president and CEO of the Washington Area Community Investment Fund. Shannon, thank you so much for joining us today. Thank you for having me. Oh, it's been a pleasure. Mine too.