For a fintech startup that wants to break into auto retail, what should the top leaders have on their resume: dealership experience, finance expertise or software programming?
Probably a combination, two such companies' founders say.
Having staffers with no automotive background, along with those who are auto-retail savvy, has been an asset for AutoFi, said Kevin Singerman, CEO and co-founder of the company, which offers dealerships and lenders an online sales and financing platform.
"We wanted a broader perspective of what's happening in all other markets where financial purchases were key parts in the decision-making and purchase process and to really see how the whole consumer experience was changing," he said.
Still, he added, the company has a large group of employees and leaders with dealership backgrounds.
The core constituents of AutoFi's business are the dealership, the consumer and the lender and automaker, Singerman said.
To support that, he built a team from the lending space, the technology field and the automotive industry.
But as a startup, "With limited capital, you can't hire a ton of people, so you have to make very smart decisions around the people that you bring in, where there is very little overlap in abilities but very complementary skill sets."
Roadster has followed a similar strategy.
At Roadster, which offers digital storefronts on dealership websites, the chief marketing officer came from Edmunds, and the COO worked at Ford Motor Co., eBay Motors and AOL's auto brands.
"It's a lot easier for an auto company to adapt to technology than for a tech company to learn to become an auto dealer," said CEO and founder Andy Moss.
AutoFi's dealership team is made up of former dealership general managers, general sales managers and Internet managers.
"They understand their business, and they speak [dealers'] language," Singerman said. But at the same time, "You have responsibility as a technology company to make something so easy to use that it requires very little training and not a huge change in their process of how to do business day to day."
If an auto retail tech company fails to make its product easy for a dealership to adopt, it likely will face pushback from the dealer and the dealership's staff. The change must be slow and steady, Singerman said.
"If you try to do a 180 [degree change on] day one, there is a very high risk of failure," Singerman said. "The important part is really around incrementality."
Jackie Charniga contributed to this report.