If you like a story about an unusual start in the business world that ends in originating a billion-dollar corporation, then reading about David Zalik is for you. From Zalik’s first experiences owning a company to inventing an almost risk-free lending model, his accomplishments are worth examining.
Zalik and his parents moved from Isreal to Alabama when he was 4 years old. After acing the SAT’s, he skipped high school and went to Auburn University. At Auburn, he bought computer parts, built computers, and sold them for a profit. Soon he dropped out of college to focus on the business which he named MicroTech. When he was 22, he sold MicroTech for a few million dollars. From there he invested in a bank and started a consultancy firm. Both businesses failed, but the lessons Zalik learned in the process led to GreenSky Credit.
GreenSky Credit offers loans for home remodeling projects, using building contractors as salespeople. The contractor can offer the homeowner instant financing through a GreenSky Credit app. With an excellent credit score, it only takes 40 seconds to get an approval with no interest and no payments for the first year. This access to credit helps sell more expensive remodeling jobs.
The real value of this business model is that it transfers most of the work and risk to outside parties. Contractors pay 6% of the loan balance to use the app which matches the customer to a bank that makes the loan. Banks pay 1% of the loan balance to get the loan and have GreenSky Credit service it. Since the banks make the loan, GreenSky Credit is not responsible for any defaults. They are a middleman that turns a profit on each side of the transaction for servicing the loans.
David Zalik has gone through successes and failures in business, using both to found a company whose profit margins are around 25% with $250 million in revenue a year. He has definitely had a notable career.