Innovating & Success: Todd Hills, Founder of Pawngo - Elite Daily

by Ryan Babikian

For this week’s Entrepreneur Profile, Elite Daily interviewed Todd Hills: founder and CEO of Pawngo, one of the hottest startups to watch in 2012. A successful business is one that disrupt and innovates an age-old practice. Todd Hills took this notion to heart as challenged the status-quo of lending and pawn industry. 

Pawngo started almost one year from today, and since then, the company has facilitated millions upon millions of dollars in transactions. Hills secured funding from some of the most revered VC firms, including backing and support from the founders of Groupon.

The concept of Pawngo literally started from the ground up. When Todd was 17, he got a job at a local pawn shop to help his family make ends meet and quickly moved into a managerial role. By his early twenties he opened his own pawn shop, Jumping Jack Cash, and eventually ended up owning and operating more than 25 traditional pawn shops.

A few years ago, Todd realized that the next stages in the evolution of pawning was to take the industry completely online. His concept was grounded in the fact that an online lending model such as his would give customers quick and easy access to funds with the comfort of anonymity.

In 2009, Todd started a company called Internet Pawn to expand the reach of our unique services. When Todd first entered the online lending space he immediately noticed that the customer demographic he was encountering was entirely different than a traditional pawn shop customer.

In light of the recent economic collapse, most loan applicants were individuals and families who used to be financially secure but had fallen on hard times. They were using luxury assets to secure large scale short-term loans. So his company provides a solution to other entrepreneurs struggling to find financial backing for their venture:

We offer large scale loans to small businesses because it’s so difficult to secure a traditional bank loan in this economy. You don’t have to prove that your startup will succeed in order for me to give you funds of up to $1 million.

Hills’ story of success is one that all Elite readers must know. It serves as a lesson for innovation, disruption, and the “kick-ass” mentality necessary to succeed in the entrepreneurial world of today. Here is Elite Daily's exclusive interview with the founder of Pawngo, Todd Hills:

What is the founding story of Pawngo? With any startup, it tends to be that the beginning where the "kill or be killed" environment is the most interesting. was launched this past year after the co-founders of Groupon, Brad Keywell and Eric Lefkofsky, discovered my business and decided to invest in the concept of online pawning. Brad and Eric really opened my eyes to the potential and scalability of bringing this business online. They continue to challenge me and my team daily to think outside the box of our traditional industry.

The pawn shop is one of the oldest forms of lending. What made you transform the traditional brick-and-mortar into a digital platform?

Pawning traces back 3,000 years. We live in a digital world, and, in the past decade, online financial services and marketplaces have popped up everywhere. Back in 2008, I realized that an online business model is simply more accessible and progressive than an off line business.
Instead of reaching individuals and families at the local level, we can now reach people from all walks of life at the national level. The online lending process is quicker and more convenient. Using luxury assets to secure a large scale loan is a fairly new concept. And people want that process to be anonymous and easy. We provide that service.

Do you think the rise of mainstream attraction through television shows – such as Pawn Stars or Hardcore Pawn – made pawning seem more accessible for a higher end clientele?

Reality TV shows such as Hardcore Pawn and Pawn Stars have definitely popularized pawning. They have also somewhat normalized the concept of using your assets to secure a loan. If you watch an episode of Pawn Stars and Hardcore Pawn, you’ll notice that there’s a lot of haggling with pawn shop customers during the transaction process.
And the focus is mainly on the item, not the customer. But there’s also another side to this industry; there are so many life stories we encounter in our interactions with customers every day and they closely parallel what the majority of people are experiencing in our tough economy right now. Higher end clientele are attracted to our services because our process is anonymous and customer-centric.

Traditional loaning gives loans based on credit. What caused you to create a business model for Pawngo that relies on tangible assets, such as luxury goods, as collateral for loans?

We integrated luxury asset lending into our business model because we saw a demand for it shortly after launching Pawngo. Instead of offering the standard short term pawn loan that averages a little under $150, our business model allows us to offer loans of up to $1 million. We pay for shipping and every item is fully insured up to $1 million.

What was the biggest obstacle you faced before establishing Pawngo among the top startups of 2012?

One of the biggest obstacles we faced was completely revolutionizing and breaking the stigmas associated with this 3,000 year old industry. There is a significant issue of trust involved in shipping a high end luxury asset in the mail and securing a loan against that asset online. It is our responsibility to create trust and positive rapport with our customers. We like to maintain the philosophy of the customer being a story before a transaction. In other words, quality customer service comes first. We like to get to know our customers and, in that process, help solve their short term financial problems. There aren’t many traditional pawn shops out there that offer the personalized experience you find at Pawngo.

If you could give a tech startup any advice to hone their business and achieve success, what would it be?

Have ambition, flexibility, creativity and perseverance. Founding a startup and achieving success requires a ton of patience and passion. When you encounter a roadblock, you just have to find a creative way to make things work. When someone says “No”, you get a “Yes” with an even better solution. And, without a team of creative and passionate individuals, success is not possible.

So what’s next for Todd Hills and Pawngo? Any spin-off projects or plans for further development?

We have some really exciting upcoming initiatives at Pawngo! We recently launched our luxury assets division, which is dedicated to providing a more personalized experience for customers who have large scale loans.
The projected customer reach and revenue growth we are expecting to see this next year is really exciting. So we plan on doubling our team member base in the coming months. Additionally, our next round of funding is coming up in the fourth quarter. We look forward to seeing some exciting numbers in that arena.

So you incorporate loans for small businesses as well – is this a push for to help others like yourself in the tech startup community?

I’m really passionate about helping other entrepreneurs secure funding for their startups. When I first tried to get a large scale loan from the bank for my pawn shop business, Jumping Jack Cash, I got rejected by countless banks because traditional lenders thought my concept was too risky.
We offer large scale loans to small businesses because it’s so difficult to secure a traditional bank loan in this economy. You don’t have to prove that your startup will succeed in order for me to give you funds of up to $1 million.

Pawngo is a pioneer in the sense that it is one of the first to really bring personal and business loans to the digital front. Where do you see this aspect of the finance world headed in the future? 

The digital world will only get more digital. Currently, we’re one of only a few online companies that will offer loans of up to $1 million without financial disclosures. In a few years, I’m sure more alternative online lending solutions such as ours will come out of the woodwork.

Where do you see Pawngo 5, 10, 15 years down the line?

Using items to secure a loan is becoming a highly popular financial service. I think in the next year, alternative lending services such as ours will become as common as getting a bank loan. Amazon revolutionized the traditional retail industry. eBay revolutionized the auction industry. We’re hoping to do precisely that with the asset lending industry.

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