How We Built the Strongest Modern Tech Solution

Apr 02, 2024 | Posted by Brian Cosgray and Brian Strom

One of the most popular paths when building a new company is to start with one small niche, prove out a minimum viable product as cheaply as possible, and build out a full suite of solutions over time. Author Eric Reis coined this “the lean startup methodology” in his 2011 book, and world-changing companies like Amazon and Uber are case studies of visionaries who have executed this strategy perfectly. Remember when Amazon used to just sell books, and Uber was just chauffeur-driven black cars?

Elevate is not the only company to recognize the problem of outdated infrastructure in the administration of consumer directed accounts – there are about a half dozen of us next-gen platform providers that have raised significant venture capital to build modern systems that challenge incumbent legacy platforms. We are, however, the only entrant to gain real traction in the market, moving clients of real scale (over 100k lives) from these legacy systems to our platform.

How have we gained this market foothold? Our belief is that we have been successful because we did NOT follow the lean startup method. Instead, we raised sufficient capital to build a feature-complete platform that we continue to hear is the only real viable alternative to the legacy platforms.

When we set out on our mission to build Elevate, we had the experience, time, and resources to create a solid infrastructure. Initially, we invested tens of millions and two years of development time, completely distraction-free, to build a fresh technology platform with none of the tech debt of our legacy competitors. We continue to invest millions more each year on automation and feature enhancements.

With this strategy, we were able to avoid shortcuts taken by other emerging solutions in this industry. One shortcut of recent note is now revealing risk for some in this industry—but was certainly tempting for many newer platform providers to save development dollars—the use of a banking-as-a-service (BaaS) partner such as Unit or Treasury Prime. In this model, BaaS companies serve as intermediaries between the platform provider and the bank, providing account management, ledger, payment, and regulatory services.

A BaaS model may seem like a safe and secure shortcut to viability. However, recent news shows that there are significant risks associated with this model. Recently leaked documents from Treasury Prime shed light on the challenges BaaS companies and their partner banks are facing—namely, increased regulatory scrutiny and consent orders. Subsequently, they are pulling back from partnering with fintechs.

Elevate has never used a BaaS intermediary and has no need to ever do so, as we own all this functionality internally.‍

By devoting significant resources to build a direct model from the onset, Elevate not only eliminates the risks associated with such piecemeal infrastructure but also brings increased transparency, regulatory compliance, and operational stability.

We had the foresight to plan for fluctuations in industry regulations and guidance, and we built that flexibility into every aspect of our product. Because we own the technology directly, our clients benefit from more scalable and flexible solutions. There is no time lost to a partner’s development queue and no limitations due to a partner’s software. This allows us to be more receptive and adaptive to our clients’ evolving needs.

Another benefit of our direct banking model is better margins for our clients. In other models, middleware providers erode revenue as their services cut into the operating budget. In our model, because we partner directly with the bank, we do not pay basis fees to a BaaS partner. These savings are passed on in our pricing structure.

At Elevate, we take pride in the fact that we’ve distinguished ourselves with the most stable platform on the market today. One that is scalable, reliable, and free from both intermediaries and tech debt, all while yielding better margins for our clients.


- Brian Cosgray, Elevate co-founder and CEO & Brian Strom, Elevate co-founder and CTO

Read more about the BaaS shake-up here: Recent BaaS Shake-up Shines a Light on Industry Weakness

Learn more about Brian, Brian, and Elevate's story.



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