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Last Update: Sunday February 25, 2018

Key Idea: Grow Your Business by Growing Your Niche

Andy Murstein is on track to take what his grandfather started with one taxi to over a billion dollars in annual transactions.   Homepage    Click on each Key Question to go to more...

Key Question:

A: Andy's grandfather said, "In niches, there are riches." Two generations later, it is still the Murstein mantra.

Q:
What did the founder of Medallion mean when he talked about "riches in niches" and is it still applicable today?

A: Most of us, when we hear the word "niche", think of "niche marketing", targeting the marketing efforts of a business toward a specific class of customer. But at Medallion, "niche" has a much deeper and broader context, referring to the entire business, its strategy and operations. Andy's grandfather owned a cab and a license to operate it, the medallion. He expanded to own more cabs, and more medallions. When Andy's father saw the opportunity to sell some of the cabs at substantial profit, he seized it. Financing those sales, to people they knew, in an industry they were intimately familiar with, was truly mining that niche.

All businesses have risk, and the probability of profitability increases as the risk diminishes. What Andy's grandfather was telling us was the better we know our business, the better we can manage our risks and the more likely we are to be successful. True in Leon Murstein's day and still true today.

Think about it

What are your niches? 

Clip from: Medallion Financial

New York City:  Meet Andy Murstein.   He is the grandson of the founder of a taxi business.   Andy has transformed that business to be a bank for immigrants, minorities, and women.

Andy's grandfather began as an immigrant taxi driver.  By the time Andy's dad joined the firm, they had a fleet.  They then began financing the acquisition of taxi medallions for new immigrants.  They became a Small Business Investment Company (SBIC) and now, after an IPO and subsequent rounds, Andy is buying up finance companies.  Within just three generations, this family business will have become a billion dollar business!

Medallion Financial has become a large SBIC quickly because they were already  making loans to immigrants and minorities to buy their taxi's medallion.  Andy is doing exactly what his grandfather suggested: "Stick to your niche and you'll get rich."


National Association

You can find an SBIC near you.   Listings are within the website of the Small Business Investor Alliance.

Medallion Financial Corp.

Andy Murstein, CEO

437 Madison Avenue
New York, NY 10022
212-328-2100

Visit our web site: http://medallionfinancial.com/

Office: 212-328-2100

Business Classification:
Financial Services

Year Founded: 1937

Grow Your Business by Growing Your Niche

HATTIE: (In the studio) Hi, I'm Hattie Bryant. We've done this show every week since 1994. Most of the businesses we have introduced you to are very strong companies, so it comes as no real surprise to us that some of these companies continue to amaze and astonish us. In 1996, we took you to New York City to meet Andy Murstein and the team at Medallion Funding, now Medallion Financial. First we go back and you'll see part of that original interview, and then we go to a new report. Privately held for the first six decades, today we find a growing publicly traded company under third-generation leadership.

HATTIE: (Voiceover) New Yorkers couldn't function without taxis. The cab industry generates more than $1 billion a year -- with the average ride pricing out at about $6. In 1936, Leon Murstein started in business driving a taxi. His son Alvin grew the business from 2 million to 100 million in revenues. Grandson Andy has his own goals.

ANDY MURSTEIN: Cab riders in New York City, there's 166 million people per year who ride New York City taxicabs.

HATTIE: No! A 166 million people per year ride a taxi in New York.

ANDY: Right. It's a very large niche industry. There's 11,787 taxis, and that's been frozen since 1937. In 1937 when my grandfather got involved, they started selling those medallions for about $10 apiece. They froze that number for the last 60 or so years and today they're each worth $200,000 now. So the value of all the the New York City cabs is over $2.4 billion.

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