Today the team at Upstart announced what we’ve been up to over the past three months.
The Upstart mission is inspiring (see Founder/CEO Dave Girouard’s blog post here), the team is world-class, and the culture of the company is…well…a ton of fun. I’m especially thrilled to be joined as a “Backer” by two close friends and trusted colleagues in Boston, FrankMossand JimDougherty. Their leadership in supporting young people who want to turn their passions into careers as entrepreneurs is exemplary. I’m also thrilled to be working yet again with the fantastic partners at KleinerPerkins, NEA and GoogleVentures.
Briefly, Upstart is a new approach to funding and mentorship. Using a crowdfunding model, it allows college grads/would-be entrepreneurs in virtually any field to raise capital in exchange for a small share of their income over a 10-year period. Upstart aims to provide a modest amount of risk capital, paired with guidance and support from experienced backers, to help grads pursue less-traditional and more-inspiring careers.
I believe that Upstart has the potential to supercharge the US Innovation Economy – as Dave says “When politicians say we need more entrepreneurs, what they mean is that we need more people creating jobs, rather than taking them.” I couldn’t agree more – it’s time to do the heavy lifting required to create more entrepreneurs so that they can do the heavy lifting required to drive job growth over the next two decades. Upstart believes that one of the key factors in creating more entrepreneurs is early intervention in their career development. Some of the key principles that are driving us include:
● Innovative and ambitious young people should be empowered to pursue their passions when they are young. If we don’t empower them when they are young, they risk being numbed by the bureaucracy of the larger organizations that they often join for lack of a viable alternative path as entrepreneurs. It’s not that big companies are bad. It’s just that young people who have a high risk/return profile can quickly lose their edge and passion as they succumb to the broader interests of a large organization vs. pursuing something that they care about deeply. 65% of our job growth over the past 2 decades has come from companies with less than 500 people – over the next 2 decades it’s the Millennials/Generation Y that will create those companies and create the bulk of jobs that our country needs so desperately – we need to empower them as much as possible. It’s time to bet on Generation Y.
● It’s fundamentally valuable for our economy to balance the recruiting machines of large organizations with a social networking-based system that facilitates young people who want to follow more independent, highly individual paths. This generation just wants to connect with people who could be their mentors in pursuing their interests and passions. Mentors just want to connect with inspiring young people. Upstart makes those connections easy and automatic.
● Not every young person has a high risk/return profile, but many more young people will pursue entrepreneurial interests if they have a little bit of financial flexibility at the right time. Modest amounts of financial support as young people graduate from school, along with some strong support and encouragement from great mentors, can go a long way. I know because I’ve had fantastic support from many great mentors during my career.
● Mentorship is just as rewarding for the mentor as for the mentee – if only we can make the right connections. What’s been missing is a system to connect potential mentors and mentees around shared interests and affinities. I’m a software guy who is interested in the life sciences, so I’m naturally prone to want to mentor smart, young, enthusiastic people who share those interests. But I’m also passionate about rugby, so anyone who is involved in rugby always gets more of my time than those who don’t 😉 When young people who share my interests ask for my help – I’m compelled to help them – because I get way more back than I give.
● Most mentors who have the financial resources – when provided with the opportunity to earn a return similar to bonds – would be thrilled to invest their own money in promising young people with similar passions and interests. Upstart matches mentors with the young talent who will power the growth of our economy over the next 20+ years – and does this at scale. I can’t think of a better investment – definitely better than T-Bills.
● To scale entrepreneurship in the US, we need to scale our ability to empower and coach young people who are capable of taking risks and executing on their passions. I’ve spent a lot of time starting companies from scratch. In my experience, the older and more successful people get, the more they are prone to take for granted the value of a small amount of coaching and financial resources early in the career of a budding entrepreneur. Small amounts of time and money directed strategically and without friction at scale, can have a huge positive effect on our economy.
● Most entrepreneurs need help, coaching and advice in order to achieve their missions. Most people are not the kind of superstar entrepreneurs that the media popularizes every day: Steve Jobs, Bill Gates, and so on. At the same time, these young people contribute the bulk of the job creation through the number of companies they start and the never ending flow of their ideas, energy, passion. A big part of what Upstart provides to young entrepreneurs is a network that can fill the gaps in their experience, knowledge and contacts so they can reach their full potential.
Let’s take the “post-industrial reins” off our brightest, ambitious young people and empower them to leverage the Information Economy to change the world for the better. Our country was founded on a core principle of rugged individualism. Let’s coach our young people to take control of their own careers, professional lives and interests and pursue their passions. We will benefit as an economy and a society in ways that we can’t begin to imagine.