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This is Capitalism: Up Close, Inspired, Explained

Feb 20, 2018

Ray Hoffman introduces the topic. It was in late 2016 when the Rockefeller Foundation went looking for entrepreneurs — social entrepreneurs to build businesses intended to solve some of the problems of American cities. Within just four months, not only did the foundation identify 10 of these social business builders, but each of them had $100,000 in funding and a whole lot of new connections and mentoring as part of a program called The Future Cities Accelerator. On this episode of This is Capitalism, you’ll hear from Jukay Hsu, the founder of C4Q, Coalition for Queens, the most diverse community in America, Queens County, New York, Jimmy Chen, former Facebook executive and current CEO of Propel, a company that developed a wonderful and much-needed app for food stamp users, and former Rockefeller Foundation Associate Director, Joshua Murphy, who had to work through a lot of applications for this program in a hurry.



Key Takeaways:

[1:14] Joshua Murphy tells Ray Hoffman how the Future Cities Accelerator was designed to engage next-generation entrepreneurs who are creating change on the ground inside U.S. cities. Joshua cites previous Rockefeller efforts such as 100 Resilient Cities, Rebuild by Design, and work in New Orleans after Hurricane Katrina.

[1:39] By 2025, 75% of all people will live in cities. The Future Cities Accelerator is an extension of the Foundation’s work in cities to help solve city challenges like poverty, healthcare, housing access, food waste, and employment. This is an opportunity to engage young people doing amazing work in this space.

[2:19] How do we think about philanthropy in the 21st Century, with all the challenges we face in the world? Joshua called up Teju Ravilochan, Founder and CEO of The Unreasonable Institute (Uncharted) and invited him to help set up this new initiative of an open challenge with 10 winners to be selected for grants. Teju accepted.

[4:25] The target group was poor, vulnerable populations. There was no specific issue. Teju was excited to organize the challenge. They worked up an agreement with ‘legal,’ and with the Foundation program staff. They built the challenge in about four months.

[4:59] They brought in other partners to help put it together. It’s been a very collaborative effort and it came together smoothly.

[5:06] Joshua had hoped for up to 50 applications; over 300 applications came in. They reviewed applications, held multiple application interviews, and did site visits toward the end to select 10 grant recipients. Joshua visited both C4Q and Propel. It was quite inspiring to meet the folks doing amazing work.

[6:16] Narrowing the field was very hard. The team spent eight hours in Denver on the deliberation day, to get to the final 10. What they looked for was the impact the applicants were already having, their goals, scalability, their market, their supporters, their board members and their team dynamics, and overall potential for growth.

[7:03] Joshua and the team wanted to see these organizations continue doing great work over a long period and getting to the next level in their ambitions.

[7:09] C4Q fosters the Queens Tech ecosystem to increase economic activity. Jukay Hsu describes how it began in late 2011 before the first Queens Tech Meetup. The Coalition for Queens started as volunteers who believed in an inclusive technology economy, and how cities can be best positioned for that. Jukay was alone, at first.

[7:57] C4Q started as an advocacy group for the larger impacts of technology on cities. Job training is a great way to tackle the long-term problem, serving the needs of companies while creating opportunities for participation within the local community, to grow with the cities as they transform.

[8:34] Jukay talks about coding and training. There is a 10-month program called Access Code, serving adult learners in poverty, who are learning coding and networking. They also get help with job placement and entrepreneurial opportunities.

[9:08] The program has increased people’s income from $18K at the start to $85K after the program.
[9:18] Jimmy Chen, formerly a product manager at Facebook, is CEO of Propel. Jimmy saw that a disproportionate amount of the benefit of technology goes to people who don’t need it much. Jimmy left Facebook in 2014, looking to build really great consumer software to be used by hundreds of millions of people to solve the problems of poverty.

[9:56] In 2014, Jimmy learned of a nonprofit incubator program, BlueRidge Labs, based in Brooklyn, now run by The Robinhood Foundation, that takes aspiring entrepreneurs and helps them identify challenges faced by people in poverty and to start software companies that solve some of those challenges. That’s when Propel started.

[10:13] Jimmy tells how Propel began. They studied how to apply for food stamps to get a sense of the process, the forms, and the experience of talking with the social workers. Of the hundreds of people waiting to apply for food stamps, most were passing the time with their smartphones in hand. So they had the technology, but no app to help them.

[11:03] Jimmy explains why food stamps became their selected project to address. They had looked at a variety of government safety net services for low-income people. They settled on SNAP (Food Stamps) because it is a large program with 45 million users daily and it’s one of the core basic needs of life.

[11:49] The original intention at Propel was to build software for a number of programs, but SNAP became the program of focus because the opportunity to serve Americans was extremely deep.

[12:04] Propel started marketing with $200 worth of ads on Facebook. Their model was to build the software very quickly and test it as fast as possible on the target market, cutting out mistakes and expanding on successes as quickly as they could. The first version was a website, and ads online attracted attention to try it. They got feedback.

[12:50] Their early experience pointed them overall in the direction in which they’re still headed. There is a massive potential for a great technology to transform the experience of people on these types of programs. $200 worth of ads gave them the information they needed. They just needed feedback from a handful of people.

[13:21] In late 2015, Propel expanded their focus beyond the initial enrollment in the program to managing the benefits. The app, FreshEBT, is like a mobile banking app for SNAP. Propel created the well-made app to be respectful of the SNAP user. Users manage their balance, see their transaction history, and manage their card.

[15:05] FreshEBT helps users identify places they can spend their benefits, on a map of stores that accept SNAP. FreshEBT can also help users save money on financial services and when purchasing groceries. There have been 400,000 downloads of FreshEBT. It’s been in the top 20 free Android finance apps for a few months.

[15:41] With an estimated 21 million American households on SNAP, 400,000 is about 2% coverage.

[15:52] Jukay samples the app. He sees that they are at the Rockefeller Foundation address, and the various stores and food pantries around them that accept SNAP.

[16:18] Ray Hoffman asks how the recipients of these innovation grants will improve their organizations. Jimmy gives three reasons: use the access to the networks of Uncharted and the Rockefeller Foundation, get to meet people like Jukay and others who are building amazing companies, and finally, use the capital from the program.

[17:20] Joshua says the program will stick with these people as long as they need it, and they will get mentors from across sectors with a variety of backgrounds. Each team will go to SOCAP, the huge social entrepreneurship conference in San Francisco. They will get a chance to meet other potential supporters and funders.

[17:42] Joshua wants to see them leverage the grant and the program to get even more support, long-term. The goal is to help build an ecosystem — a network — to see this scale larger to help more organizations and more people.

[18:00] With the Rockefeller Foundation at their backs, you’ll be hearing more from these social tech entrepreneurs. See the links below to learn more about C4Q and Propel.



Mentioned in This Episode:

The Rockefeller Foundation




100 Resilient Cities

Rebuild by Design

The Unreasonable Institute (Uncharted)




BlueRidge Labs

The Robinhood Foundation

Jukay Hsu

Jimmy Chen

Joshua Murphy

Teju Ravilochan

This Is Capitalism