How Capital One Garage Reimagines Customers’ Relationship with Money

October 4, 2016

It has been just over two years since Capital One, the $24 billion financial services giant, opened The Garage, an incubator that brings together cross-functional teams to create new products and services. The focus is on Capital One’s home lending and auto lending businesses, and Garage co-founder Gagan Kanjlia noted in a recent InnoLead Live call that a garage is not only where we keep our cars, but it’s also usually connected to the home.

Plus, it’s a place that often spawns startup companies — as was the case with Apple, Google, and Hewlett-Packard, the company at which Kanjlia began his career.”We incubate and accelerate great products,” Kanjlia says. “But also we’re driving this broader business transformation, which is essential for larger companies like Capital One.”

Kanjlia joined Capital One in 2001, and later ran digital product development for Capital One 360 before helping launch the Garage in 2014. In August, not long after our call, Kanjlia left Capital One to take a new role as Global Head of Product, Design, and Channel Management at OnDeck, an online lending startup. Kanjlia says that the Garage will endure; he was looking for a new challenge in the startup world.

What is the Capital One Garage?

The Garage is Capital One’s internal accelerator and incubator in the Dallas metro area. It’s something we started about two years ago because we recognized the need to accelerate our transformation. We started with around 9,000 square feet of space, and quickly outgrew it. We just recently quadrupled it, to 36,000 square feet.

Entrance to the Capital One Garage in Plano, TX. Photo courtesy of Mecca Design.

We have around 200 makers of all types — engineers, user research specialists. We also have product managers and designers. We, in the garage, celebrate and embody this new maker culture.One thing to note is the name [Garage] itself. It’s a place where, of course, startups are born. Many have been. It’s also where the auto and home come together. There are two large businesses here in Plano, in Dallas, that we focus on, and that’s home lending and auto lending.

The Garage is actually the creation of Capital One’s Banking Services president and also the divisional head of technology. It actually reports into our divisional head of technology.Capital One is not just a corporate bank, it’s a forward-leaning technology company, where we’re re-imagining the consumer’s relationship with their money. We quickly realized that there are very few spaces that are as ripe for technology-related interruption as how people relate to their money.

We play [a dual role] in the Garage. We incubate and accelerate great products. But also we’re driving this broader business transformation, which is essential for larger companies like Capital One.

Creating Hybrid Teams

We have two kinds of staff here. We’ve got this full-time resident staff with different talents. They sit in the Garage, day in and day out. In addition, we rotate teams in from our lines of businesses — teams that we handpicked because they’re working on something that is very core to the future of banking.

Working very closely with the lines of businesses, we identify those teams, we get them into the Garage, and then, very importantly, we embed some of the full-time residents I talked about earlier, the digital layer, with those teams. The rotation could be for a few weeks, or it could be a few months.

When they rotate out, typically after a product launch, they’re taking with them a finished product and successes, but also the deep learning from being in this deeply collaborative maker space that we’ve built.

Human-Centered Design and Our Prototyping Process

The core of every single product we build is this deep focus on human-centered design.

If you’re going to be really human-centered in a very deep way, you’ve got to have specialists who understand human cognitive science and user research technology, so we built a dedicated user-research lab on campus. It’s actually part of the Garage.One of the very first things that teams do [is] engage the user labs very early in their journey to conduct generative research. Generative [means] they generate a hypothesis, as opposed to just validating a hypothesis. That’s how they uncover the user personas and needs.

[Then, the teams] conduct cross-functional ideation and rapid prototyping. The teams will often do a lot of qualitative testing with prototypes, one after another, to figure out what the right user experience is. It’s through that fast testing and validation cycle that they land on one concept that they want to take to market.But once that’s launched, the team is then using a whole host of different analytic tools to improve the product, and to get market validation for their hypothesis. That is the process we use for every product release.

It’s about More than Just Building Products

…Transforming a big company is more than just building a great product. You’ve got to evolve your recruiting package, your talent management strategy. Also, we’ve got to engage the local digital community, because it’s no longer just about yourself. It’s about how you play in the ecosystem.

The Garage does all of that, along with building a great product. We’ll regularly do maker workshops for leaders. We will do hackathons. We did a hackathon recently for college kids who had a chance to meet [Apple co-founder] Steve Wozniak in the Garage.

Keys to Success

The most important thing for us is sponsorship and support at the senior-most level. That’s been our foundation. You’ve got to start from the very top.

Secondly, I would say, focus on hiring the best talent, the best maker talent you can find. Keep a high bar. We were perfectly fine waiting longer to find the best [people] to join the Garage.I would say the third thing is the key to creating this maker culture and having makers thrive in that culture is to have a work space that, from the ground up, responds to the needs of the people, so that the work space is designed around the people. …Every inch of the Garage has intent in it.

When folks walk in, after dropping off their kids and navigating the traffic lights and all these other things, they are inspired every day. They can connect with consumer stories as they walk in. We have video walls that remind them of their work, and we have a Hall of Fame that celebrates the best products that come out of the Garage.We have seated and stand-up desks, so folks can be active throughout the day. We have healthy snacks, brainstorming areas, playrooms. It just creates a very virtuous cycle throughout the whole day for these makers, and it pays dividends every time you look around this space.

Examples of Products We’ve Created

One [product we initiated] is Auto Navigator. You can go to Capital One’s website today, go to the auto section. What you’ll see is one of the few experiences where we have combined car research, car identification, from dealers around where you might be living, with car financing.

Typically, you have to go to different places to get that information, and now we’ve put that experience all together. People love it, because it’s all live, it’s national, [and] anybody can use that right now.

The other example I can give you is on the home loans side. We have created a completely end-to-end home loan experience. Everybody knows that there are a lot of challenges that people have when they buy homes.

If you are trying to go an open house on Sunday, and you want to get prequalified, it’s really hard to do that when banks are closed on Sundays. What we have done is built an online, mobile-friendly, online pre-qualification tool that, within minutes, on your phone, can get you prequalified while you’re at the open house. It would even send [a pre-qualification] letter to your realtor, right then and there. Those are two examples of products that are live. The home loans one is actually in a few states, with the possibility to develop it nationally. The Auto Navigator one is national already.