Growing a Business from Limited Capital with CMI Financial Group's Bryan Jaskolka

Bryan Jaskolka is a serial entrepreneur and the visionary founder and CEO of the CMI Financial Group. Bryan is a driving force in the Canadian private lending and mortgage financing industries and has been recognized for his leadership and innovation. CMI is Canada’s premier private mortgage lender, a leading provider of mortgage funding and investment solutions, and one of Canada's fastest-growing companies.

In the Snippets episode, Bryan tells us how he grew a booming business from only $1,000. He describes the importance of exponential thinking over linear thinking, inspiring through bust periods, and thriving as a leader when meeting online.

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Transcript

Special thanks to National Bank of Canada for helping us bring you today's Snippet podcast. Welcome to our Snippets Podcast. I'm Leon Goren CEO and president PEO Leadership: North America's premier peer-to-peer network and leadership advisory firm. Today I'm very excited to welcome Bryan Jaskolka, the CEO of CMI Canadian mortgages Inc. Bryan is a driving force in the Canadian private lending and mortgage financing industries. Under his leadership, CMI has become Canada's premier private mortgage lender, a leading provider of Mortgage Funding and investment solutions. And one of the fastest growing companies in Canada, US named Entrepreneur of the Year at the 2021, Canadian SME National Business Awards and recognized on the 2021 mortgage global 100, an elite group of mortgage industry professionals making an impact on an international level. Bryan recently joined PEO Leadership as part of an entrepreneurial group led by Tina Young, is an awesome addition to their group and the greater PEO Leadership community. Bryan, it's great to have you here with us today.

It's a pleasure to be here.

We're gonna go back in history when you started it, you gone from humble beginnings tech entrepreneur, and then into the alternative lending business, totally different than the technology part and into the financial institution part. So maybe give us a little bit of history about how that'll happen.

You know, a funny story, we, when I was a kid, and I was sort of a serial entrepreneur, right from the get-go. And I remember being probably 10 or 11 years old, sitting around my parents' kitchen table, talking to my dad about how I recommended him starting up, you know, some business venture not dependent on the day, you could say, you know, when I was 16, I started up this roof technology company and a large part of what I did, there was other marketing and run the business operations. And when I sold that business, I sort of had identified this opportunity in the mortgage space at the time, which was really pretty brick and mortar backwards at that point and said, I'm going to bring my technology expertise to the mortgage industry and be a disruptor in the mortgage space. And so that's how I got my initial start on the mortgage side, even though I didn't come from mortgage background. And you know, over the years, that business has transformed into something quite different, which is really an alternative investments company today, we kind of made that pivot after the first financial crisis about 10 years ago.

 Now you founded the business with $1,000. It's almost unfathomable, like you sit there and go, How does one become a private lender? And he's got $1,000 to start a business. Now today, I know you're managing hundreds and hundreds of millions in aum. But who did you talk to with $1,000? To get this off the ground?

You said it's sort of almost unimaginable. And when I tell people my story they asked, you know, did I imagine having this large business operation? You know, when when I first started things, and you know, the reality is always sort of aspirational in terms of what I could build a business into. But definitely, I don't think I had the vision of where CMI has become today. And, you know, a lot of it was just sort of, I think one of the things that I've learned about being an entrepreneur or startup, you know, how to bootstrap things is, you know, when you're finding something that's working, and you just keep reinvesting into that, using your retained earnings, you know, you can generate a lot of growth yourself without having to go externally for financing once sort of, you're able to kickstart things. And that's sort of what I did, I and as the business was successful, I just kept reinvesting my profits into growing my model further out.

Was there a point in time that it was sort of like a pivotal moment, that sort of transformed your business, from a small tiny business is something that was, you know, an SME, there's something special that happened.

Because of my origin story, right, being sort of a basement business that I wasn't independently wealthy before I formed this company, a rate-limiting step, for me, it had been capital. And so I think, as the business, you know, started or achieve some critical mass, and I was able to generate more additional net free cash flow, I could turn that into further capital, which I really hadn't had before. And as I was able to reinvest that into the business operations, that sort of became a little bit of a self-fueling catalyst, obviously, the external market conditions come and go. So you have boom periods in real estate investing, and you have bust periods. And so I think part of that is we've done well in the boom periods. And inherently we sort of run a quality product is our focus. So in the down periods, we perform well and outperform as well. And so we tend to sort of surge in the in growth periods and then hold steady and in any rough, rough markets.

To our listeners, just give them perspective. I mean, you got three programs. This isn't small business, three funds, you do private placements with high net worth that are specifics, probably around different deals. And then you also manage institutional dollars now, so it's coming really long way.

So you also mentioned exponential versus linear linear thinking. That's part of your growth? How do you sort of come to work every day? And inspire people with that? Like, how are you communicating that?

You know, that's, that's a good question. You sorta always gave me the answer. And, you know, it's communication, I think it's a big part of that, when you're at the beginning of that journey, you know, you have to sort of be inspiring, and really get people to see your vision and believing that as you start to make your way through that journey. The success begets success a little bit. So people start to believe you a little bit more when you say things like them, like, I'm going to double the company in the next year, or in the next couple of years. Usually people think you're crazy. But if they look, then back at your track record for three years, and they say, Well, you've actually successfully done that, naturally, they're going to also see that visual a lot faster and believe that more but the communication ultimately is really key for having everybody be part of that growth vision. And I look at CMI as a growth company. Like even though today, we're obviously a lot bigger than where we started, I don't see this as a, we've reached close to a billion dollars in AUM, and we're going to sort of tread water for me, this is just the beginning of what will hopefully become another five or 10 fold larger and and part of that is just getting people to see that vision.

So you know, cuz you don't have an office, you you've never really had an office, you've got 125 staff, talk to us about communication, like how do you communicate? You know, we always talk about role modeling, people will follow the leader, the leader will totally communicate here on Zoom most time. So what's the magic formula for you here?

For me, it's just been being authentic. And being myself and being highly engaged in my business, I think that's a little bit part of my leadership style, as well. So I'm very much a lead turnout front type of business leader. And so often my staff will comment to me, you know, that it's inspiring to them, because it's not just I'm asking them to work hard, or I'm asking them to do something for me, I'm right there, beside them in front of them behind them, supporting them, pushing them, helping them if they've, you know, stumbled to get that end goal that I'm not just delegating it to them, and, you know, expecting them to be accountable. So my staff over the years, many different types of backgrounds or skill sets, you know, different departments, so to speak, people, I've generally kind of have a bit of a consistent comment around that. And so yeah, we do meetings, and also do in person events, generally on a quarterly basis. And sometimes regionally, sometimes nationally, a big part of it is just with myself, and really all of my leadership, our staff really sees that we're engaged in the business, and we're there working hard alongside them. And I think, when people see that, and they feel that, and you know, they then understand that vision, or that sort of common goal that people are working towards, it seems that if you hire the right people, these to match your corporate culture, we found that that's been very successful for us.

Like it, there's a lot of conversation going on a lot of groups these days around the hybrid, bringing people back and maybe even happening to your group as well. You don't even think about that. What do you tell those companies that are concerned about? I gotta get my people back? I need them in the office three to four days, sometimes five days a week? Are they just living in old dream? Or? Or is it your business specifically, that can actually do this,

people will always take a strong position one side or the other, I think there we have to recognize our certain types of businesses or industries that simply may not lend themselves to the same model, which is those are excluded to begin with, in my view. So we're talking to the companies which are, you know, in a similar type of industry or business format that they can operate. I think, you know, and I don't mean to insult anyone by this comment, or make anyone feel bad, but I don't own any commercial real estate. So I don't have any vested interest in my lease payment, or, you know, legacy costs sunk into those types of operations. And I could see, as a business owner, if you had money that you put into this, there's some love, love, you enjoyed that environment, or some level of you don't want to see that being a waste. Obviously, if you're the ownership level of that asset vacancy is not positive for asset values, you know, so I, you can see the market forces there a little bit pushing against, in our case, none of that ever apply, because we were always decentralized. And so some people will say, how do you monitor performance? Or how do you know people are working but you know, your business, right? It's your your company. So if you're an active owner, and you know, how many widgets somebody can make in 12 hours? Or how many reports they should do in a week or a day? You know, does it really matter that they're next to you, or if you're a bigger enough corporation, you're in a building with six floors, you're not really physically looking at each person and what they're doing anyway. So like, really, what's the difference in the grand scheme of things you lose out a little bit on that, you know, watercooler environment, which I think is I'm not saying is there's no value to but at least for us, the the benefits of certainly outweighed any of the negatives for sure.

On your quarterly meetings, do you do anything special? Or are they just full-day meetings?

Usually it's something social. Yeah, it's meant to bring the team together. So maybe it's something at a restaurant or a bar or wine club or some kind of, but it's, you know, social events, it's not really meant to be business focused, it's just really an opportunity to bring colleagues together and for them to interact in person a little bit.

So what's your what's your, you know, I know, you're still thinking big. What's the dream? What success look like for you? You've already been successful here. You're very young, get number two on the way, we're sitting here five years? And today, what are you gonna? What are you gonna be smiling about?

That's a good question. I mean, I think for me, I just really enjoy being a business owner and running a business. So you know, I don't think selling my businesses in my five-year horizon, definitely, we're still aspirational, I'm aspirational in terms of what I think I can do with this company. So, you know, hopefully, in five years, my company I would 10 times where I am now would be probably my goal. Whether we hit that or not, I guess the future will tell us, but it's definitely it's something that for us, I still see a lot of upside growth. So we're definitely pushing hard on that.

And you were you're doing residential? What type of mortgages are you doing?

We do only residential mortgages, we lend nationally, you know, with a few exceptions. And so, you know, we basically find for good credit or bad credit, or we do urban, we do rural, we really do a pretty wide variety, but essentially, we're amongst the largest residential private lenders in Canada. So it's not for the bank, somebody gets turned down by a bee lender, which most of them are some form of bank these days anyways, then they come from the private channel through a mortgage broker. And so we're, we're sort of one of the mortgage brokerage industry household names.

And do you worry about this uncertainty and the volatility these days? Or do you think it's settling down now?

I'm an optimist in, in my sort of hopes, and then I'm a pragmatist in terms of my actions. So, you know, there's certainly positive things happening right now in the market that I'm optimistic, we'll maintain are sort of in line with what we've been expecting broadly. At the same time, we've really over the last year spent a lot of effort on mitigating risk within our portfolio, making sure that we are positioned for further down, you know, or negative environment. And for me, that's half the battle. So it's great to grow the business and, you know, always do these things, but we're in an investment space, and I'm judged predominantly on my losses and how I see it. So, you know, our losses are incredibly small percentage of our portfolio, something like, you know, five to 10 basis points. So over all time, so you know, it's very, very minor. And that's the way I like it. And so usually, in sort of turbulent markets, we do have to be a little bit more cautious as a lender, but it's, if we have to sacrifice growth, to make sure that we're being cautious I'd rather take that trade and I know over the next five years my business will keep growing as the industry itself grows.

Well as Canadian housing market grows right it's insane to pick the right country right now.

Yeah, and private space is one of the fastest-growing segments of the credit markets in general even though it is a small base but it's one of the fastest-growing segments as well.

Thank you so much for joining us and sharing some of your insights. I know everybody will be interested in listening to this and learning a little bit of of you if they hadn't even heard of CMI if you're interested in any of our live webcast the way forward live and or any other Snippets, please take a moment and visit peo-leadership.com. You'll find on our site various recorded webcasts with guests such as Morgan Housel, David Rosenberg, Professor Janice Stein, Jason Selk, Mitchell Goldhar, or Vanessa Bohns. The list goes on an on. Time, growth, uncertainty, mental health, leadership, and the new world. Thank you very much for joining us today and we look forward to seeing you again.