CEO Stories: The Future Cities Accelerator

This Is Capitalism: Josh Murphy, Jukay Hsu, Jimmy Chen

RH: This is Capitalism. I’m Ray Hoffman. It was in late 2016 when the Rockefeller Foundation went looking for entrepreneurs, social entrepreneurs who build businesses intended to solve some of the problems of American cities. And within just four months, not only did the foundation identify 10 of these social business builders, but each of them had a $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 This is Capitalism podcast, you’ll hear from Jukay Hsu, the Founder of C4Q, the Coalition 4 Queens, the most diverse county in America, Queens County, New York; Jimmy Chen, former Facebook executive, now CEO of Propel, a company that developed a wonderful and much needed app for food stamp users; and Rockefeller Foundation Association Director Josh Murphy, who had to work through a lot of applications for this program in a hurry.

JM: The premise of the Future Cities Accelerator really started on the idea that we have to start engaging next-generation entrepreneurs that are creating change on the ground in their communities in U.S. cities. And as you know, the Foundation does a lot of work in cities right now from “100 Resilient Cities” to “Rebuild By Design Challenge” that we created to our work in New Orleans after Hurricane Katrina. So cities are something that’s very important to us.

By 2025, 75% of citizens, people, will live in cities. So this is definitely something we care about. So Future Cities Accelerator was an extension of that work. How can we engage a new generation in helping us solve a lot of the challenges that we face in cities from poverty, health care, housing access, food waste, jobs, employment?

So this was really a great opportunity for us to do that and to engage new people in this space, young people who are doing amazing work. And you’ll hear about their work today. And this was an idea that came from sort of the belief that philanthropy can and should do more in how it works with young people and engages them in philanthropy and thinking about how do we think about philanthropy in the 21st Century, with all the challenges we face in the world.

So when I called up Teju, who is the Founder and CEO of the Unreasonable Institute, who has been an awesome partner and they’re sort of executing a lot of the components of this, you know, I had never met him before. The Foundation had given his organization a grant to help them expand in Mexico and Uganda with some of their accelerator programs and helping social entrepreneurs get to scale, find mentors, get partners. They’ve done this for many, many years, so they were a great partner in that work.

But I was not a part of that grants. So I just called him up on a Friday afternoon at 4:30, after a coworker mentioned him and his work, and you know, “hey, Teju, do you have 10 minutes to chat with me?” He goes, “sure!” He had no idea what I was about to ask him. I was like, “I had this idea. I want to start this program where we get next-generation entrepreneurs who are doing amazing work in cities, creating projects, executing, working with startups. Can you guys help me do this?” And he’s like, “sure. [Laughs.] What do you want from me? What do I get? What is this about?”

So I said, “this is very simple. If you say yes, we’ll give you a grant to manage this program. We’ll select 10 winners together, they’ll work in a variety of spaces.” We didn’t want to put a mandate on the issues that they had to be working on. As you’ll see from the 10, they’re working in everything from housing to poverty to jobs, and that was on purpose because I felt as though…If we sort of mandated that it had to be this one issue, we’d leave out so many other organizations, so many other entrepreneurs that are working across the country, solving lots of problems.

So that was sort of the premise of having this open competition, open challenge. And that really excited Teju because they hadn’t done anything like that before. Normally they have a focus area. So if they’re having an accelerator, it’s for childhood education or childhood healthcare. Whereas this was sort of we’re looking for organizations that are working in cities in the U.S., essentially changing the world and impacting the lives of poor, vulnerable populations. So the target group was poor, vulnerable populations but no specific issue area.

So Teju was excited, we worked up an agreement obviously with legal and our program staff here and brought it to life over a very short amount of time. [Laughs.] Which in itself was a startup, which was really exciting.

RH: How short of an amount of time?
JM: Oh wow, so we created this, built it in about four months roughly. [Laughs.]  So it was a very fast initiative that we put together, which was a lot of fun, actually. We brought in other partners to help us put this together but it’s been a very collaborative effort and very smooth, to be perfectly honest, yeah.

RH: Assuming that there are a lot of social entrepreneurs with a lot of projects around the country, a four-month window for this thing to get even rolling with their applications falling on top of applications, how much chaos was there? I’m assuming quite a bit, Josh.
JM: [Laughs.] Yeah, the interest was very, very high. And I mean this was the first time we had ever done anything like this so we didn’t really have the baseline to say “oh if we get 50 applications, we’re going to be great.” So we got over 300, which was amazing.

And narrowing that down to 10 required intensive work. So we had multiple interviews with the applications. We reviewed their applications, we did site visits towards the end, which was one of the most exciting, interesting things I was able to take part in. I actually did the site visits for C4Q and Propel, interestingly enough, and getting to meet those two guys and their teams was quite inspiring. I mean, you meet these folks who are doing amazing work at their age. You just imagine 10 years from now, they’re going to be running some of the largest organizations and institutions and their companies are gonna be amazing and having great impact.

And that was a great thing, to go to the site visits and narrow that list down. It was very, very, very hard. It wasn’t an easy task. We spent I think eight hours in Denver, deliberation day, narrowing it down to get to the final ten and it literally took us the whole day to do that.

And some the things we were looking for in terms of how we selected the final 10 was impact. What impact were they already having, what were their goals, did they seem reachable, were they measureable? We looked at scalability. Had they already started to find a market to help folks? Did they have supporters? Did they have board members? That sort of thing. And we looked at their team dynamics. Who were their team, who was helping them address these issues, did they have the right people, the right talent?

And also just looking at over all their potential for growth and impact over a long period of time. You know, we want these organizations to continue doing great work and we just want to help them get to the next level in their ambitions.

RH: Let’s go to you, Jukay Hsu. Your statement says “We foster the Queens Tech ecosystem to increase economic activity.” And I have to admit, I, for a long time, I didn’t even know there was a Queens Tech ecosystem.

So take me back to 2011, the early months of 2012, before the first Queens Tech Meet-Up. How many people comprised the Coalition for Queens and what did your days and nights look like?
JH: We were all volunteers at the time. And so we really believed in this idea of an inclusive technology economy and how can cities be best positioned for that.

RH: How many volunteers were you?
JH: I mean, at the very beginning it was just me. [laughs] So uhh…

RH: That’s what I was trying to find out.
JH: Yeah, uh, yeah, yeah the very beginning was just…

RH: Did you know in 2011 and 2012 what kind of job-training programs you wanted to create?
JH: In 2011, I mean we started out as an advocacy group, just thinking about what is the larger impacts of technology on cities. So that’s the larger problem we were trying to tackle and job training is a great way that you can both serve the needs of these growing companies but at the same time create opportunities for local communities so that people can fully participate in that process and can grow alongside the growth of these cities that are occurring, the transformation of these cities that are occurring.

RH: Tell me about the coding training and the coding jobs.
JH: So right now we have a 10-month program called Access Code. So we primarily serve adults in poverty but focus generally on very simply like a technology community that’s reflective of our larger community. So in our cohorts right now we have about a hundred participants in the program. Through the program they learn everything from coding, learning about access networks, what technology companies are, and then also at the end of it with job placement and also entrepreneurial opportunities.

It’s very measureable and tangible. So through the program last year we increased people’s income from 18,000 at the starting point to $85,000 a year after the program.

RH: Now let me bring in Jimmy Chen of Propel. You’re rather outspoken on the easily provable notion that a disproportionate amount of the benefits of technology go to people who don’t necessarily need those benefits, at least don’t need them as much as others.  Your software company, Propel, working in New York, is quite a leap from working at Yahoo and Facebook and LinkedIn.
JC: I was previously a product manager at Facebook out in San Francisco where I led the Facebook Groups team. And I left in 2014, looking to apply the playbook of Silicon Valley, of building really great consumer software that can be used by hundreds of millions of people around the world, to solve some of the social problems around poverty.

In 2014, I found a nonprofit incubator program called Blue Ridge Labs, based out of Brooklyn, it’s now run through the Robin Hood 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 where Propel started.

RH: Tell me about the beginnings of it.
JC: We learned a lot about the experience of applying for food stamps in the summer of 2014. It was something that no one on my team had personally done before, back in the summer of 2014. And so we spent several weeks ourselves trying to apply for food stamps to get a sense of what it was like to sit in the food stamp office, to fill out the paper forms and to talk to the social workers.

One of the things that struck us is that of the hundreds of people waiting in line at any given food stamp office, the majority of them were passing the time with their smart phones in hand. So these are folks who have the technology and have the hardware to address a lot of these needs that they have and the thing that is missing is the software. There doesn’t exist the applications and the web sites at a high enough quality for these individuals to address their particular needs directly through their phones.

RH: How did you land on food stamps and what else did you look at and realize you probably couldn’t apply your ideas toward?
JC: We looked at a variety of other government services, in particular, safety net services that low-income Americans used. And we ended up settling on food stamps, also called SNAP, primarily because of a few reasons. The first is that it’s a large program. So it’s used by 45 million Americans on a daily basis and that provides a huge amount of impact across the country.

And the second is that it’s also just from a Maslow’s “Hierarchy of Needs” argument. If you can get food and shelter, that’s kind of the core of providing the other types of social services that somebody might need to be successful later on in life.

And so we decided to start with the focus on food stamps. The original intention was actually to build software for a variety of different types of safety net programs but we’ve now spent the last two and a-half years really focused on the food stamp program because we’ve found it to be extremely rich and the opportunities to serve Americans, extremely deep.

RH: Now I noticed that you test marketed this app. You bought two hundred dollars worth of mobile ads on Facebook.  What did that get you and what did you learn? Two hundred dollars in ads?
JC: Yeah. This is back in the early days when we had just started the company. One of the principles of Propel, and a lot of other early-stage software startups, is to build software really quickly and then to test it with your target users as rapidly as possible and then to learn from your mistakes and successes through that as quickly as you can.

So in the early days, we had built the first version of our first website and wanted to get real food stamp recipients to try it for the first time. So a really quick way for us to do that was to run ads online, to attract the attention of people that we wanted to speak to. It gave us really good feedback in the early days and I think overall it pointed us towards the direction that we’re still headed now, which is that there is a massive potential for a great technology to transform the experience of people on these types of programs.

RH: Two hundred dollars worth of ads bought you that information?
JC: Absolutely. You don’t need 1,000 people to try your software or to see your project in order to get interesting signal and data really. You need a handful of people to give you interesting feedback on whether this makes sense or not. I think it really is a matter of supporting the intuition we already had as a team.

RH: Now tell me about the app.
JC: In late 2015, we decided to expand our focus beyond just food stamp enrollment to also build a software product for individuals who are already on food stamps to manage their benefits. So it’s a little bit like a mobile banking app but for people on food stamps. And we found out about that because we were in a grocery store in Philadelphia helping people sign up for food stamps.

On this particular day the majority of people who came into the grocery store were telling us that they already had food stamps and they were there to spend their benefits. So eventually we asked somebody, okay, tell me more about how you spend your benefits. And she pulled out her EBT card. The food stamps program is distributed on EBT cards across the country. It’s a financial tool that looks like a debit card.

The first thing that she did was she called the phone number on the back of the EBT card and before listening to the voice prompt, she immediately pressed one and then three and then typed in her entire EBT card number purely from memory. And so we said, that’s incredible, how did you do that?  And she said well I do this everyday. It’s how I know how much food I can buy for my kids.

That’s what really set us off this path of applying our foundational principles around building modern software that’s respectful and well made and designed specifically for the smart phone and applying it for not just the 8 million Americans who qualify for food stamps but haven’t enrolled but also for the 45 million who are already on benefits and could find easier ways to use their benefits.

JM: Do you want to explain?
JC: Sure. So Fresh EBT is a little bit like a mobile banking app but for people who receive SNAP benefits. So in the same way that if you get a checking account from any kind of major American bank, they might tell you to go download a free app from the app store that helps you manage your balance and to see your transaction history and manage your card. That’s what Fresh EBT is but for people on food stamps.

In addition to these kind of basic services around balance and transaction history, we also help our users identify places where they can spend their food stamp benefits. So we have a map of different stores that accept food stamps close to you. We also curate a variety of different services that help our users save money. So we help them save money in financial services, we also help our users save money when purchasing groceries.

RH: And how many people have downloaded this app so far?
JC: Fresh EBT has been downloaded 400,000 times across the country. It has been in the top 20 Android finance apps for the last three or four months. We estimate there are about 21 million American households on food stamps now and so 400,000 installs means that close to two percent of Americans on food stamps now have tried the app.

RH: What are you seeing there, Jukay?
JH: Yes, I looked at the store map that Jimmy was talking about. So right now it has us at the Rockefeller Foundation, which is on 5th Avenue between 37th and 38th Street, and you can see kind of around us the different stores and food pantries that are available. So if I wanted to find food or use the food stamps I know how to access that.

RH: Now as the recipients of these Innovation Grants, how is this going to change your lives in terms of your responsibilities? In what ways will they deepen and broaden your skill sets, more importantly, make your organizations better? I’ll ask you first, Jimmy.
JC: Well I think we’re really excited about our participation in the Future Cities Accelerator for three very specific reasons. The first is that we’re really excited to get access to the network. A lot of what we can build as a company depends on who we know and getting access to the networks of both the Unreasonable Institute and the Rockefeller Foundation to help us make the right connections across the government sector, the non-profit sector and the for-profit sector is hugely valuable.

The second thing is really the cohort, getting to meet people like Jukay and others, who are building amazing companies that are also helping to build the future of American cities is for us something that’s extremely exciting and something that we’re really looking forward to learning from.

And then finally, the capital from the program is really important for us. It helps us to continue to build our company.
JM: And we’re going to stick with these folks for as long as they need us. They’ll get mentors as well from across sectors with a variety of backgrounds and experiences. We’ll also send each team to SOCAP, which is the huge Social Entrepreneurship Conference in San Francisco that’s held every year. They’ll get a chance to meet potential other supporters and potential funders for their work.

So we really want to see them leverage what we’re providing to get even more support in the long term. We don’t see this as sort of “here’s a one-off grant, good luck.” It’s more like we want to help build an ecosystem, a network, so we can see this scaled even larger and help more organizations, help more people on the need to sort of support in the long term.

RH: With the Rockefeller Foundation at their backs, you’ll be hearing more from these social tech entrepreneurs. The C4Q website is C4Q.nyc. You can read more about Jimmy Chen’s company at JoinPropel.com.

This too is capitalism. I’m Ray Hoffman.