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Last Update: Wednesday June 23, 2021

Key Idea: Stay Flexible

Being flexible means you may have to cut your loses.

Key Question:


Face the facts and when an idea isn't working, drop it.

Q: How does a business stay flexible and attuned to new opportunities for growth?

A: In part of the interview with Andy that did not make it into this episode, he told about a decision he made to invest in a Japanese company? It became a failed venture first attempted and then aborted. What Andy recognizes, what all business owners should recognize, is that not all ventures of successful companies are successful. A business owner who is truly entrepreneurial will have an idea, do his or her homework, execute on the idea, and then dispassionately evaluate the outcome. Unsuccessful ventures need to be abandoned so that losses are mitigated and the core business remains unharmed.

If a business owner is not able to admit defeat, (s)he is better off not attempting the kind of operational expansion that has been executed so successfully by Medallion. Only business owners who can candidly evaluate the results of their innovative efforts are positioned to remain flexible and open to new ventures.

Think about it

In your business, are you selling a product or offering a service that you should walk away from?

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

Visit our web site:

Office: 212-328-2100

Business Classification:
Financial Services

Year Founded: 1937

Stay Flexible

HATTIE: What do you think you do now that you do because you learned it from your father, and then, how do you think you're different from him?

ANDY: That's an interesting point. I think what I've learned from him is to stick with your niche. He always believed, 'In niches, there are riches,' so I've really tried to focus on businesses that he knew originally. What I think I've done different is realize that other people also have niches. So it's really just finding people that share your passion for their business and being able to pool them all together and become a larger, more diversified company.

ALVIN MURSTEIN: They still have 46,000 shares left.

HATTIE: (Voiceover) Andy and his father Alvin Murstein work hard at working well together.

ANDY: I mean he has to recognize, which he does, if I've made a decision, that you should not give anybody the slightest inkling that's going to change if they go to see him. That the door is always open for him to talk to people, but not in that regard. If a decision's been made, it's been made. And I have the same respect for him. Even if I don't really appreciate the decision that he's made, I'll talk to him privately. And I'll -- if he made a decision and I feel strongly the other way, we'll talk about it. Nine times out of ten it will get resolved. Once in awhile it won't, and I'll always appreciate the fact that he started this company before I was around, and at the end of the day, you know, he'd have the final say in that regard.

HATTIE: Is it a lot of talking Andy? Talk, talk, talk.

ANDY: No. It's really seeing how somebody reacts. Reading -- just like with a loan. Again, you really want to be in somebody's face to see how they react to questions. When you ask them something whether it's their vision for the company, their financial history. You can tell if somebody's serious about it, what they're hiding. And it's the same with people. When I sit down with my father, sometimes he doesn't talk as much as my mother, for example. But you can tell by facial movements, by the way people act in certain situations how they're feeling. So just getting together, face-to-face, whether it's making a loan or meeting with somebody at your company, and that's how you can make the best decision.

HATTIE: Give some advice to someone who wants to grow their business who didn't grow up with -- at the kitchen table learning everything.

ANDY: I think that if you have the right attributes, you'll be successful whether or not your family was in the business. Before I got involved here my father never asked me to come work for the business. He actually encouraged me not to. So I worked in investment banking for a couple of years. I always worked. Whether it was in high school I worked, college I worked, after college I worked. And I always wanted to prove myself then just as I do now.

ALVIN: We have to give the generation more credit than we've given them. They -- they see things that we have taken for granted. They are probably more -- more alert as to opportunities and they just have a different perspective. We tend to, as we become successful, we tend to be more conservative and try and preserve whatever it is that we've achieved. Then, they are not that concerned yet. They still want to do things, and grow things and make things larger than they are now. So we'll finish this when I get back.

ANDY: Good. Okay.

ALVIN: You balance it by trying to combine the exuberance and the enthusiasm of youth with the experience of having been there. You just have to use your own wisdom and experience to temper the aggressiveness of the ambition, which is a good thing, of the next generation.

HATTIE: What's this going look like 10 years from now?

ANDY: To get long term capital, we're thinking about starting our own bank and having access to CDs. And therefore, banks basically are in a very good position in this country in that they're taking in deposits. These days they're only paying 1%. They're lending it out to us, let's say at 5%, and then we're lending it out to small businesses at 8%. There's no reason for us to still have that middle man, to use that bank. We want to have our own bank charter and we'll be like no other bank if you come back and see us in 10 years. A bank that really cares about their small-business customers.

HATTIE: How are you going to keep from being like those big companies that you're beating now?

ANDY: I think I'll always remember the faces of the people that we've helped. For example, we made a loan three years ago. The person was handicapped. He came to this country with almost no money in his pocket. No one was willing to give him the loan that he needed to succeed. He came to us, we funded him, he grew his company. He literally broke down crying at the loan table when we closed the loan. And I'll always remember that, how thankful he was that we helped him. And I'll never forget the look on his face when we actually handed him the check and he realized his dream and that'll always be embedded in my memory.

HATTIE: (In the studio) The passage of the Small Business Investment Act of 1958 made way for small business investment companies to form. Today, Medallion Financial is just one of several hundred around the country, and you can find a complete listing on our website and at the National Association of Small Business Investment Companies, Medallion Financial is being driven by a mission to help small businesses grow. It's leadership has the exuberance of youth and the wisdom of experience. With this formula, the $1 billion portfolio goal may soon seem small. We'll see you next time.

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