The Situation:
Amid a punishing recession with interest rates in the high teens and home prices in decline, Bill and his brother Steve launched First Franklin with $10,000 in savings and a basement office in Santa Clara, California. Their competitors were national banks with billions in capital.

Bill’s Approach:
Bill's approach was contrarian: grow when everyone else pulls back. The company started as a niche hard-money lender before evolving into a secondary funding source for loans banks wouldn't touch, then scaled to mainstream operations. He brought on a seasoned advisory board early and treated employees as the company's primary customer.

The Outcome:
Sold 85% to DLJ Merchant Banking (now Credit Suisse) for nearly $50 million in 1994. When profitability declined under new ownership, repurchased the company at a significant discount. Sold to Bank of America for $230 million two years later, then to National City Bank for 50% more than the prior sale, and finally to Merrill Lynch.

 The Lesson:
“Know the difference between an industry in cyclical downturn and a dead industry. Find the niches others ignore. Expand when competitors are hunkered down."