Doug Lebda, founder and CEO of LendingTree, which is widely credited for transforming the financial services landscape, died at 55 in an ATV accident on Sunday.
The company he founded and the example he set for young entrepreneurs will live on.
Lebda launched LendingTree, which was originally called CreditSource USA, in 1996, following his own frustrating experience navigating the mortgage process.
The company pioneered online loan comparison shopping and now connects users with a network of 300 lenders for mortgages and personal loans. LendingTree doesn’t offer loans directly, but it helps consumers compare rates.
On September 26, a few weeks before his passing, he appeared on “The Deal Ranch,” a finance and real estate podcast hosted by Matt Lutz, to share his experiences as a founder. Here is some of Lebda’s advice for those looking to found a business.
1. Maximize your ‘wet feet’ moments
Lebda said that “wet feet” moments — instances of personal inconveniences — tend to spur entrepreneurial ideas.
Lebda was working for PwC when he needed to visit the bank to obtain a mortgage for a condo. However, in the pre-Internet era, Lebda said his journey to obtain an ideal rate was difficult because he had to physically visit each bank to compare rates, and the rates were often not the same as advertised in the newspapers.
At the same time, Lebda watched as some of his clients easily made trades based on the natural gas price difference between Cleveland, Pittsburgh, and Seattle, all within a quick and automated system.
“I was thinking back to my mortgage situation, going ‘Wait a minute. You can trade this obscure freaking financial instrument, and you can’t even go get price clarity on a mortgage somewhere. It’s ridiculous!” said Lebda.
“And so that was really the ‘aha,'” Lebda added.
2. Validate demand cheaply
Lebda did his market research in the most affordable way possible before deciding that LendingTree was a viable idea.
“One of the very earliest things I did when I was in business school in ’96 to ’97, and I was debating whether to do this, is I spent — I believe it was $500 — on Yahoo ads,” Lebda said.
At the company’s earliest founding, Lebda said he asked people to fill out a form and promised that he would be able to get them the credit they deserved. He received hundreds of responses, with individuals willing to provide their names, addresses, Social Security numbers, and credit scores.
“So I used that to model out what my customer acquisition cost would be,” Lebda added.
3. The value of a complementary cofounder
Lebda said that a non-technical founder must partner with a strong technical counterpart in order to succeed.
“I learned later in business school that it’s statistically impossible for a non-technical entrepreneur to start a tech business unless you have that person, because you need to iterate back and forth,” said Lebda.
Lebda said this is why he brought on board Jamey Bennett as a cofounder, who had previous experience as an entrepreneur, as well as Rick Stiegler, who has experience in trade, as LendingTree’s CTO. Stiegler died in March 2004.
“So, for example, I hired Rick from Wall Street who had built trading systems like high volume trading stuff that needed to be precise and accurate in volume and speed,” Lebda said.
4. Automate the drudgery
LendingTree is leveraging AI to reimagine the boring work that nobody really wants to do.
“Everybody’s job has drudgery and joy,” said Lebda. “Automate the drudgery. Spend more time on the joy. And that’s what we’re trying to get everybody at LendingTree to do right now.”
Lebda said that his chief of staff invented “Doug’s daily digest,” where ChatGPT reads all his emails and links to the important things he needs to dedicate time to.
“For the average employee, you’re sitting there with Slack, email, text messages, conversations, notes, summaries — it’s not centralized,” Lebda added. “But with like a ChatGPT enterprise, you can see the day where you’ve got like an institutional memory of the company, and everybody’s on the same page.”
5. Flexible leadership
For Lebda, leadership is contextual, and the role is constantly changing.
“It’s a continuous change management job, and you have to be more like a conductor sometimes than a general. But sometimes you need to say, ‘We’re cutting x million dollars out of this budget by this period of time, go do it,'” said Lebda.
For Lebda, he likes to focus on curating the consumer experience as his main area of focus and what he does best
“I think it’s knowing when to dig in, when to let go, when you actually can add value, when you can’t, and then trying to work on stuff that only you can uniquely do,” Lebda added.
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