CommonBond‘s peer-to-peer lending model has received plenty of attention for its novel – and smart – method of helping B-school students actually afford their degrees. With some MBA students graduating with a pile of loans equal to a mortgage, CommonBond's crowdfunding solution is a welcomed innovation. As an MBA myself, I am glad to see that someone understands that future business leaders may need a helping hand as they work on the education they will rely on throughout their careers.
Not only is NYC-based CommonBond shaking things up on the education financing front, but it's also doing something all-too-often left out of business plans – the company dares to believe that businesses should be making the world a better place, along with creating profits for their shareholders.
I had the opportunity to pick CommonBond Cofounder and CEO David Klein's brain about finance, entrepreneurship, and the debt businesses owe society. Klein shares his insight below:
Tech Cocktail: What would you like our readers to know about CommonBond?
David Klein: CommonBond was founded to leverage the common bonds we share with each other to make finance better. We’ve started by building a student lending community that connects studen
We are also the first company to bring the “one-for-one” model to education. Inspired by the likes of TOMS and Warby Parker, we made a social promise to increase access to high quality education at home and abroad: For every degree fully funded on our platform, we will fund the education of a student in need abroad for a full year. As founders, we firmly believe that business can and should be a positive force for change.
Tech Cocktail: How did you come up with the idea for CommonBond, and how does it serve your target market?
Klein: I needed student loans to pay for business school, but all of the fixed rate options were expensive. Surprisingly expensive, especially for creditworthy borrowers, so I decided to change that.
I met my co-founders – Michael Taormina and Jessup Shean – while at business school, and less than a year later, we dropped out of school to keep building the company. Today we're over 10-people strong and plan to be in 20 schools by the end of the year, before expanding to other schools in 2014 and beyond.
Tech Cocktail: What's the hardest lesson you've had to learn so far?
Klein: It hasn’t been so much a hard lesson as a matter of clarity, and that is this: Being an entrepreneur is the hardest job you'll ever have. The hardest work you’ll do, longest hours you’ll work, and most stressed you’ll be. Whether you find meaning in it will depend on whether you get into it for the “right reasons.”
Hint: The “right reasons” to become an entrepreneur are not (a) “I want more freedom” (in fact, you will take on more responsibility for others which by definition will decrease the freedom you have for yourself) or (b) “I want to make money” (in fact, sleeping on couches is more probable than making a million dollars).
Tech Cocktail: What keeps you motivated on the hard days?
Klein: The fact that we've lived through hard days before and come out the other side stronger. That is our guiding light in our darkest hours.
Tech Cocktail: What personality trait has served you best as an entrepreneur?
Klein: Irrational optimism and insane commitment.
You will no doubt face naysayers along the way. In fact, the more disruptive your idea, the more resistance you will face. If you realize that, then you are able to use the resistance as fuel to keep pushing and validation for what you’re doing. That doesn’t mean you can’t pivot in a direction that makes more sense, but it does mean that using resistance as a reason, dare I say “excuse,” to stop what you’re doing is misguided.
Tech Cocktail: If you weren't doing this startup, what idea would you be working on?
Klein: CommonBond has completely consumed me.
Tech Cocktail: What's your crazy, long-term, huge vision?
Klein: To build the financial services firm of the future, combining the forces of cutting edge technology and age-old community.