<http://schema.org/articleBody>
"One of the pieces of advice I hear regularly for startup founders looking for a business idea is to find a problem they\u2019re experiencing and set out to solve it. It\u2019s excellent advice \u2013 some of the best companies have been built on that premise \u2013 but it also has an enormous blindspot.\r\nIf tech entrepreneurs come from similar economic backgrounds and demographics, then the solutions they come up with will cater primarily to the needs of their peers.\r\nTake an app like Uber. When it first launched, it made on-demand car service more affordable. Its pricing, however, still meant that only upper-middle class folks could take advantage of it. To Uber\u2019s credit, the company has since rolled out other offerings priced for a wider percentage of the population, and it has worked to ensure drivers make a living on the platform. But, Uber still has little impact on the large percentage of Americans that must rely on public transportation to get to work.\r\n\r\nEven as the tech scene in Silicon Valley faces criticism for being insular and privileged, multiple factors have combined to make now a great time for technology to improve the lives of the traditionally \u201Cnon-tech\u201D crowd. For one, connected devices have reached a significant footprint in the US. In the early days of computing, startups were building for a limited audience. The first PCs were mostly used by scientists and engineers, but computing is now readily available.\r\nThe rise of mobile devices has piggybacked off the progress made with PCs to bring technology to a wider section of our society than ever before. Today, many low-income families use smartphones as their primary devices, often skipping a PC altogether.\r\nAsymco analyst Horace Dediu recently described the US smartphone market as in the \u201CLate Majority phase\u201D with roughly 70 percent market penetration. That figure is expected to approach 90 percent by 2020. As the smartphone reaches near-ubiquity, products that resonate with the lower segment of incomes will represent a sizable opportunity for new companies.\r\n\r\n\r\n[caption id=&amp;quot;attachment_792341&amp;quot; align=&amp;quot;aligncenter&amp;quot; width=&amp;quot;490&amp;quot;] Source: Asymco[/caption]\r\nTouchscreens and mobile interfaces have also advanced enough to make it easier for people to start taking advantage of technology. Just about anyone, from children to the elderly, can get started on a smartphone or tablet. That\u2019s an improvement from before, where folks who were starting out with a computer would need to take classes to learn.\r\nTech education is also much more readily available. Online courses offer affordable ways to learn to code, and access to devices isn\u2019t limited to just top-tier universities with big computer science budgets. These shifts in education can make it possible for low-income Americans to build their own tech solutions to problems. They\u2019ll also be best positioned to give back to their own community when they succeed.\r\nWe\u2019re encouraged by the growing number of companies that are seeing beyond their own circle of friends to create technology that can help the underprivileged. Thankfully, there are more founders working toward a positive social impact than we have the space to highlight. For this article, we spoke to the teams behind Blue Ridge Foundation\u2019s Significance Labs, mobile wallet app Wipit and international gift card service Quippi learn more about the joys and challenges of designing for America\u2019s working class.\r\nNext up: Significance Labs\u00A0|\u00A0View as one page\r\nImage credits: Mark Wilson / Getty Images, Asymco\r\n\r\nSignificance Labs\r\nFor those trying to help the fortunes of the underprivileged from a position of relative privilege, one of the first problems they\u2019ll run up against is understanding what the true needs of the community are. Without the necessary first-hand experience, there\u2019s a risk of simply projecting problems and solutions onto the demographic.\r\nBlue Ridge has been incubating tech ventures for 15 years, but it just launched Significance Labs\u2019 Solve for {S}ignificance fellowship earlier this year. The program involved a 3-month fellowship for five entrepreneurs and teams that focuses on helping them to build empathy for their customer base before building their products.\r\nSignificance Labs aims to help American families that make less than $25,000 per year. By its count, there are roughly 25 million people who fall into that category.\r\n\u201CWhat we centered on\u2026was this notion that a lot of the benefits of technology are primarily accruing to folks that were already well off. They\u2019re not targeted at folks at the lower bracket,\u201D Significance Labs co-founder Hannah Wright said. \u201COur hypothesis was that it\u2019s really hard to design technology for people that you don\u2019t know. With things that you\u2019ve never experienced yourself, it\u2019s harder to design well-fitting solutions for them.\u201D\r\nSignificance Labs CTO Bill Cromie, who served as technical founder for two startups in New York before joining the program, put it this way:\r\n\r\n\r\nIf you have the ability to build something, anything \u2013 a cabinet, a chair, a boat or software \u2013 you build those things to solve your own problems, to scratch your own itch. Everyone is their own best and first customer. That\u2019s not a moral fault by any stretch. It\u2019s nobody\u2019s fault that they build a chair and it\u2019s really comfortable for them.\r\n\r\nThe fellowship\u2019s mandate, then, is to counter startups\u2019 natural tendencies to solve their own problems, by getting founders to first listen to underprivileged people talk about their obstacles.\r\nAfter launching the program in March, the foundation received more than 150 applications. From those, Significance Labs\u00A0chose six fellows to participate on five different teams. The group includes the former product lead for Facebook Groups, a journalist who previously worked as a product manager, a pair of founders from a digital strategy consultancy, a former product manager for Facebook\u2019s Growth team and the founder of a startup focusing on college completion. Blue Ridge intentionally chose entrepreneurs that were mid-career, usually with 4-15 years of experience.\r\n\r\nThe first stage of the program involved sending the fellows out to conduct user research. The team went out and did in-home interviews with working moms, immigrants, and community college students.\r\n\u201CSignificance Labs was born out of the idea that if we wanted to help technologists and designers and product managers build products for lower income and underserved communities in the US, [we needed to] find a way to build connections between those two populations,\u201D Wright added.\r\nAfter spending the first month learning about their target populations, the fellows then moved into building and testing cycles. At this point, the founders began working with teams of designers and engineers who had\u00A0signed on to help with the project at reduced rates.\r\nIn the run-up to a demo day on August 12, the Significance Labs teams thought through next steps for their companies. Entrepreneurs had to decide whether to pursue a for-profit or a non-profit model and figure out how much funding they\u2019ll need to move forward with their products.\r\nInterestingly, Significance Labs operates with a \u201Csingle mother clause,\u201D which dictates that no one in or associated with the organization can get paid more per hour than the single mothers who come in to help with user research. That\u2019s a bold policy, considering that the compensation rate is $25 an hour and the foundation is based in New York.\r\n\r\nBuilding social enterprises is a tricky business for a foundation. Wright and the rest of the core team have to continually talk through \u201Cthe tension between reach and importance, or reach and impact.\u201D\r\n\u201CPart of what\u2019s tough is that I think the social sector has historically said, \u2018We want to maximize impact, figure out what\u2019s the optimal behavior that people could be doing.\u2019 They figure something out that\u2019s got great impact but really hard to get it to scale,\u201D she said.\r\nTech startups, on the other hand, are engineered for scale. However, many of them, such as the latest app fads, have massive reach with minimal impact.\r\n\u201CI\u2019ve seen incredibly, incredibly smart people building things that will probably make them lots of money and lots of people will use, but don\u2019t necessarily improve the lives or station of managing the human species in a way that I think is possible,\u201D Cromie said. \u201CInstead of trying to make better selfies, we could try to make a better world.\u201D\r\nSignificance Labs includes both reach and impact as part of the discussion early on its process with entrepreneurs in order to aim for the ideal product.\r\nSince products birthed out of the program don\u2019t have to stay in the non-profit sector, there\u2019s also the concern that a Significance Labs startup could go on to have an enormous exit without giving back to the low-income demographic it\u2019s supposed to be serving. The foundation\u2019s approach was to lean on a strict screening process for fellows to ensure they have the right motivation coming in. In short, Significance Labs is trusting its fellows to do the right thing once they graduate.\r\nSignificance Labs also counted on the fact that founders in it just for the money probably wouldn\u2019t be drawn to the program.\r\n\u201CIt\u2019s a relatively large investment of time and opportunity cost for people who are mid-career and as successful as our five [teams] are,\u201D Wright said. \u201CWe feel like they\u2019re really committed so that\u2019s been our internal screen.\u201D\r\nFellows can take a small living cost from the fund if needed, but the program is otherwise unpaid.\r\nThe foundation operates under the assumption that, contrary to some expectations, under-privileged Americans are very strategic and savvy and can discern which products are helping them.\r\n\u201CWe believe that, with the folks we\u2019re working with and talking to, to the extent that there\u2019s a product that\u2019s wildly successful, it will be successful because it provides value in their lives,\u201D Wright said.\r\nWright did say, however, that she\u2019s worried that the startup community can sometimes approach technology as providing a \u201Csilver bullet\u201D for low-income problems.\r\n\r\n\u201CI think that optimism is great, but the idea that we\u2019re going to be able to build a phone app that triples graduation rates or puts kids in high quality day care \u2013 these are complicated problems in complex ecosystems with rules and regulations,\u201D she said.\r\nSignificance Labs stresses that it\u2019s important to keep our expectations realistic about what technology can do. For the team, tech is a tool that\u2019s great for solving \u201Csmall opportunistic problems.\u201D Wright compared its role in alleviating poverty as helping to stave off the proverbial \u201Cdeath by a thousand cuts.\u201D\r\n\u201CThere are lots of small challenges. Tech could be a really good way to go after one, and another, and another. If we make lots of small improvements, the cumulative effect on people\u2019s lives could be really positive,\u201D she said.\r\nPart of the importance in starting the fellows off with empathy and user research is to also identify which technologies are available to their demographics. It\u2019s not enough to know that many low-income Americans have smartphones. User behavior has to be studied in order to decide cases like whether to deliver a service over an app or the Web and whether users will have access to data.\r\n\u201CIt\u2019s really helpful to understand the technical constraints with which you need to build those products compared to the types of technology solutions you build in comparatively higher-end [circumstances],\u201D Wright said.\r\nThe fellowship program isn\u2019t the only avenue that Blue Ridge and Significance Labs have taken\u00A0to help foster better understanding between the tech community and underprivileged Americans. The foundation also runs other programs, such as a half-day of shadowing that brings tech workers to talk to and hang out with students and citizens.\r\nThe goal is to provide options for different levels of availability. Not everyone can take three to six months off to build a company from scratch, but some can help out for a weekend or an afternoon.\r\nStill, when it comes to the fellowship program, Significance Labs is hoping to cycle of the fellowship process in order to show the importance of having authentic user conversations as you build a product.\r\n\u201CWhat I think the power of what we\u2019re doing is giving opportunity for people who have a powerful skill set \u2013 a skill set of building tech and building solutions \u2013 and giving them an insight, a means and a method for helping a population that\u2019s been traditionally underserved by the tech community. I think the desire is very much there, I think the path and the platform aren\u2019t. That\u2019s what we\u2019re trying to provide: path, platform and the opportunity,\u201D Cromie concluded.\r\n\r\nThe Fellows\r\nTo hear first-hand experience about how the program went, we spoke to two of the fellows, Jimmy Chen and Ciara Byrne, several weeks into the program.\r\nChen came to New York from Silicon Valley after spending two years at Facebook as a product manager and two years at LinkedIn as a junior product manager.\r\n\u201COne of the reasons I got interested in Significance Labs is the argument that a lot of the social good created by tech companies is unevenly distributed\u2026a lot of low-income folks are being left out,\u201D he said. \u201CYou could imagine a single mom with two kids trying to finish up at community college. She can find photo sharing apps and fun games, but there\u2019s not a lot there that address her day-to-day needs directly.\u201D\r\nDuring the research phase, Chen conducted numerous in-person interviews and visited potential users\u00A0in their homes to have frank conversations about their lives. In his view, taking the time to listen to the community provided context around who would be using his product.\r\nA pattern that he noticed while meeting with folks was a general dissatisfaction with the process of enrolling for government benefits.\r\nTo that end, Chen is building Propel, a \u201Cmobile Turbo Tax\u201D for applying for food stamps. In the same way that tax filing software sits on top of the tax code and ensure we\u2019re getting the maximum refund, Chen\u2019s product would serve as an unofficial API for the Supplemental Nutrition Assistance Program.\r\n\r\n\u201CWe can\u2019t save the world with the program, we need to set our sights on something that\u2019s feasible,\u201D Chen said. \u201CThe way that I think about it is definitely not trying to parachute in and make an app that will change someone\u2019s life, but we can provide a lot of utility.\u201D\r\nFor her part, Ciara Byrne previously worked as a software developer before transitioning to writing about tech. Significance Labs co-founder Parker Mitchell originally pitched the program to Byrne for her to cover as a journalist, but she\u00A0turned around and applied last minute for the fellowship instead.\r\n\u201CMy thought process was: per the course of my tech career in startups and companies, I got to work on really interesting stuff, challenging stuff, sometimes fun stuff, but nothing I thought was really important,\u201D she said.\r\nAnother factor in her decision was that her time as a journalist had her jumping from subject to subject and she wanted to take time to go more in depth in a field. Byrne came to Significance Labs without a specific idea in mind, so she went into the interview phase searching for a need to fill.\r\n\u201COne of the biggest problems for me has been narrowing it down and picking a focus area. This isn\u2019t like a traditional accelerator where you have a product coming in. We just had a target population,\u201D she said.\r\nAfter a representative for the National Domestic Workers Alliance came to talk to the group, Byrne decided to build Neat Streak, a tool for helping housecleaners manage their client appointments. She was drawn to helping domestic workers because roughly 95 percent of them are female, they\u2019re often undocumented immigrants, and wages tend to be low with few regulatory protections.\r\n\r\nWhile on-demand cleaning startups, such as Homejoy, already exist, Byrne wanted to focus on creating a service from the cleaner\u2019s point of view. Here's her description of the product:\r\n\r\n\r\nNeatStreak is a mobile tool which lets housecleaners create clear cleaning agreements with clients by selecting tasks from a cleaning menu, adding custom tasks and recording what the entire cleaning job will cost. Clients can use NeatStreak to review the cleaning agreement and give feedback after a cleaning appointment.\r\n\r\nSpanish-speaking cleaners can use NeatStreak in their native language while clients receive all communications in English or vice versa.\r\nThe first class of Solve for {S} fellows has cast a wide net when it comes to the demographics of their expected users. While we only talked to two of the participants from Significance Labs, the other products coming from the rest of the fellows include:\r\n\r\n\r\n\tReBank, a service from Stephanie Raill Jayanandhan and Avi Karnani for helping underbanked populations find affordable banking services\r\n\tOnTrack, a mobile dashboard by Margot Wright that helps students keep track of financial aid eligibility, academic performance and upcoming assignments\r\n\tEasyDroid, a launcher and screenshare app by Shazad Mohamed that helps elderly Android users get the most out of their phones\r\n\r\n\r\nMany of these products aren\u2019t a natural fit for the traditional Silicon Valley funding pipeline. In setting out to help unreached demographics, these startups will have a tougher time with user acquisition. The limited scope will also make it trickier to reach massive scale, and founders will have to get creative with their business models. Still, these are products that deserve to be built, and we\u2019re eager to see how things progress. If successful, Significance Labs\u2019 model could inspire new batches of\u00A0 community-driven tech products for underserved populations.\r\nNext up: Reaching the Underbanked and Tech for Immigrants\u00A0| View as one page\r\nImage credits: Significance Labs,\u00A0Oleksiy Mark / Shutterstock\r\n\r\nReaching the Underbanked\r\nPlenty of companies are tackling the mobile wallet space, but most of them are focused on reaching customers who already have bank accounts. Wipit, however, sees an opportunity to build a mobile financial service that works for the same group of people who buy prepaid cellular service. The company provides the technology behind Boost Mobile\u2019s Mobile Wallet service.\r\n\u201CWe\u2019re specifically targeting this underserved community of prepaid wireless customers, the unbanked and underbanked,\u201D CEO Richard Kang said. \u201CTo move the needle that will make a positive difference, we need more than just philanthropy. We need a sustainable, profitable business model that does good as well.\u201D\r\nWipit revolves around the same online-offline experience that prepaid mobile operators use. With Boost Wallet, you have the option to add cash to your account at retail stores. For Kang, the inclusion of the retail experience is core to Wipit, as it adds a familiar human interaction that helps customers make the jump to a mobile wallet. Alternatively, customers can set up direct deposit with payroll or government assistance checks.\r\nReaching the underbanked comes with its own set of challenges. Kang described the current financial regulatory environment as \u201Ctumultuous,\u201D noting that laws are changing to adjust to technology. Stricter identity verification requirements, for instance, make Wipit\u2019s job harder.\r\nAlso, investor interest tends to be lower for companies targeting an unconventional demographic.\r\n\u201CA lot of the investment hype and energy goes into the cool First World services. People who are making the big decisions get those products because they can imagine using them,\u201D Kang said.\r\nWhen Wipit first started pitching its product, Kang had people tell him he was crazy. Some didn\u2019t believe prepaid customers would upgrade to a smartphone, while others were incredulous that there were people who would choose not to have a bank account.\r\n\u201CIt\u2019s hard for the people who have power to relate, to see that there\u2019s something valuable and interesting there,\u201D Kang said, adding that he\u2019d heard from a well-known VC that most Silicon Valley investment dollars go toward serving \u201Cthe people who are on the Google bus.\u201D\r\nWipit is backed by Core Innovation Capital, the investment arm of the Center for Financial Services Innovation, which is a network for companies building financial products for the underbanked.\r\nConsidering that most of Wipit\u2019s team probably has bank accounts of their own, I was curious what steps the startup took to make sure that it\u2019s actually meeting the needs of its user base instead of projecting them. Kang said that in addition to using Wipit, the team approaches the problem by getting in tune with the customer from a sales and marketing perspective.\r\n\u201CWe have a long history of being able to sell and market services to the unbanked and underbanked. We\u2019re relying on expertise in that particular area,\u201D Kang said.\r\nFor instance, Boost Mobile\u2019s network of independent dealers help validate whether Wipit\u2019s products are really in touch with their user base.\r\n\u201CThese store owners are really close to the consumer. They see them every day, in many cases they live in the same neighborhood. The rationality is that the dealer, just by saying, \u2018Yes, I want to sell the product,\u2019 is saying, \u2018Yes, this product makes sense.\u2019\u201D\r\nWipit\u2019s dealers also provide regular feedback about features and messaging that Wipit needs to fix.\r\nMobile wallet adoption among mainstream consumers has been slow, but Kang believes that Wipit\u2019s target market can get more value out of the service than middle-class users who already take advantage of online banking.\r\n\u201CThis idea of wallets has been long beaten to death because, for the most part, everybody says wallets have no value proposition,\u201D he said. &amp;quot;I think in most cases that\u2019s true. In our case, for our particular consumer, we\u2019re not just another way to use your credit card, we\u2019re the very first electronic payment mechanism in your life, the very first debit card period. We think we\u2019re approaching and solving real needs.\u201D\r\nStill, Wipit is venturing into difficult territory where its demographic often views technology as scary. That\u2019s why it combines the technological aspect with a human point of contact.\r\n\u201CVery fundamental to our DNA is that people are the things that solve these problems, at least at this point in time they\u2019re the ones that are going to help cross the chasm,\u201D Kang said.\r\n\r\nTech for Immigrants\r\nNew immigrants also represent an underserved segment of the American population.\u00A0Quippi is doing its part with a cross-border gift card service designed to replace international money transfers.\r\nThe startup sells gift card codes in the US for top Mexican retailers. Customers purchase the cards at a retail store or on the Web\u00A0and then share the required PIN code with their family members across the border.\r\nQuippi CEO Michael Aleles started the company with the goal of providing a fee-free financial service for immigrants. The solution turned out to be a pretty simple one: have retailers pay the fees.\r\n\r\nRecipients get the full face value of the cards that friends and family send over, while retailers get guaranteed business. Quippi estimates that it puts 5-15 percent more money in its customers pockets by removing fees.\r\nIn order to help senders have piece of mind about where their hard-earned money is being spent, Quippi limits its partnerships to basic goods and services, like grocery stores, pharmacies, department stores, electronics and medical services.\r\nWith roughly 1/3 of the money sent home by immigrants going to rent, Quippi is focusing on the other 2/3 that is spent at retail.\r\nAccording to Aleles, US residents send $23 billion to Mexico every year, which would make it the second largest industry in Mexico, behind only the oil business.\r\nWhile Quippi has set its sights first on reaching the US-Mexico audience, there\u2019s no reason the business model couldn\u2019t work for other communities.\r\n\u201CWhat we do really works between any two markets in the world where there\u2019s a population in one market supporting families in another,\u201D\u00A0Aleles\u00A0said.\r\nQuippi\u00A0takes pride in keeping its\u00A0technology in the background so it can offer a \u201Clow-tech\u201D solution to the consumer. While 90 percent of the startup\u2019s Web traffic comes from mobile, customers can also order over the phone or purchase at a retail store.\r\nThe fact that Quippi is going after an under-acknowledged\u00A0community\u00A0gives it a competitive advantage. Aleles continued:\r\n\r\n\r\nThere are very few venture-backed startups that go after the underbanked, underserved. We\u2019re fishing where nobody else is fishing. I spent my career in two places: Silicon Valley and Latin America. This is the blend of what I\u2019ve done. I saw first hand how in Latin America, consumers really get abused by many different industries, but particularly financial services.\r\nWe\u2019re offering a service which many others could go do but no one else is doing. The way we look at the world, wherever there are high fees, there\u2019s an opportunity to turn the tables upside down.\r\n\r\nConclusion\r\nPoliticians like to lean on the phrase \u201CA rising tide lifts all boats\u201D when discussing economic progress, but the aphorism doesn\u2019t always apply in the tech world. On one hand, low-income Americans have certainly benefitted from new mainstream technologies like the Android operating system and the app ecosystem, but on the other, they\u2019ve also been neglected by the growing number of homogenized tech startups that build products to meet the demands of their own privileged and educated founders and employees.\r\nThe underprivileged and underbanked among us have unique needs that deserve their own solutions. Organizations and companies like Significance Labs, Wipit and Quippi are just a few of the endeavors that are working to make tech benefits more inclusive. At the same time, we need to remember the importance of empathy and the limitations of technology in order to build realistic problems that address actual needs instead of projected ones.\r\nThe root causes of poverty and lack of\u00A0education are\u00A0too systemic for any one startup to\u00A0address on its own, but our\u00A0society \u2013 press, investors, entrepreneurs, engineers and users alike \u2013 can do more to encourage\u00A0companies to build meaningful products that offer help to the millions of Americans who are often forgotten by the latest trends."^^<http://www.w3.org/2001/XMLSchema#string>
<http://thenextweb.com/insider/2014/08/23/tech-solutions-low-income-americans/uber-13/>