Using Tech and Giving to Power Global Change
Watsi co-founder Chase Adam shares about the link between technology and humanitarianism — and how aspiring entrepreneurs (anywhere) can turn simple ideas into world-changing ones.
Watsi is a healthcare crowd-funding platform that enables donors to directly donate to life-changing medical procedures for individuals in developing countries.
Chase Adam, co-founder of Watsi and recently named in Forbes’ 30 under 30 for Social Entrepreneurship, joined Blueprint for a fireside chat on April 1. He spoke of his journey from college graduate to co-founder of the first ever Y Combinator-backed nonprofit. Chase offered honest advice to aspiring entrepreneurs in the audience and fresh perspective on the intersection of tech and humanitarianism.
The Story Behind Watsi
I. The Peace Corps
In 2011, Chase was serving as a Peace Corps volunteer in Costa Rica.
Six months before ending, he visited the Bay Area and found that most of his friends had pursued careers in business and tech for the past 2 years. Many were well-off, and one had even created a web app startup reaching tens of millions of users.
“At first, it made me devalue the direct but less far-reaching impact I’d made on peoples’ lives through the Peace Corps. With this frame of mind, I returned to serve my last six months.”
II. Learning from Example
But one day, a woman boarded a bus Chase was on and started asking the local passengers for donations to pay for her son’s medical care.
When she reached him, her bag was full of money that people had given. Chase was surprised — most attempts of the kind arouse suspicion and contempt. What was the difference? She had been passing her son’s medical documents and records around the bus.
“That’s when I asked myself: why couldn’t there be a website that makes it possible for people to fund medical care for others around the world who were certified to be legitimate?”
III. Watsi Begins
The experience inspired Chase to start Watsi (named after the town he was traveling through at the time). He spent the last 6 months of Peace Corps asking everyone about his idea and networking with healthcare providers.
Q: Aside from giving you the initial idea for the company, how do you feel like your experiences in Peace Corps helped you with your company?
Exposure, self-discovery, and communication.
Chase says that spending months as the only English speaker in a village with no Internet and a completely different culture/language meant:
- Gaining exposure to experiences and global problems that he wasn’t aware of
- Having a tremendous amount of alone time, which allowed for self-discovery and introspection
- Becoming great at communication, since it definitely didn’t come easily
“And once you learn to communicate with and convince people of a completely different community, ethnicity, and culture, it becomes so much easier to come back to an area like the Bay with like-minded people and convince them of something.”
Challenges as a Nonprofit Startup
The biggest issues Chase faced at each step of Watsi
I. Initial Funding
One major challenge for Watsi in the beginning was finding initial investors.
“Unlike for-profit companies where earlier investors can get more equity, there is no real financial incentive for investors to be the first funders of a nonprofit. Every investor wanted to wait for others to make a move first so they could be more confident in backing us.”
The post blew up, going viral on social media and eventually reaching the top of reddit, NPR, and The New York Times. Such mass publicity also caught the interest of Paul Graham, co-founder of Y-Combinator. The Watsi team was invited to dinner, where he offered a spot in Y-Combinator and their first big check!
Q: What was the incentive of Paul Graham and Y-Combinator to donate to a non-profit startup?
Chase addressed the common misconception that the entrepreneurs and investors at YC only care about making money. The environment there is very unlike it, he says, and more than anything — people there care about ideas. Ideas that can actually work.
“Money comes second as a consideration. Paul Graham believes in this too. He believes in supporting ideas that he thinks has a 5–10% chance of radically changing the world. So, simply put, he funded us because he believed in our idea.”
II. Building a Working Company
After funding, two major problems for Watsi were retention and sustainability.
- Retention: The nonprofit didn’t have a steady source of donors, and the donors it had weren’t re-donating. To fix this, Watsi built a subscription model that pushed hard for people to become monthly donors.
- Sustainability: Watsi wasn’t making any money. It wanted 100% of proceeds to go to charity no matter what. In the beginning, the startup was actually paying the credit card transaction fees for donors (and effectively losing money).
The first solution? Building a community.
“People want to feel like they’re part of a community. Many donor sites focus on connecting donors to recipients, but not donors to other donors. We found that by implementing simple things like showing donors the other donors of the same cause and giving them a specific donor number, donors were much more likely to invite their friends and build a “donor community” that’s great for retention.”
Watsi also started using a tip model, where it asks for an an optional tip on top of donations. The system has succeeded in generating a significant amount of its revenue to date, and Chase sees it working better than one using mandatory fees.
III. Scaling and Expanding
Currently, one of Watsi’s main goals is to scale while maintaining sustainability. This means:
- finding a way to have revenue come from donors (and not have to rely on grants from outside organizations) in addition to
- potentially integrating Watsi into core hospital technology in developing countries, which are quicker to adopt technology than heavily regulated American health care hospitals (and can build an even stronger network of patients)
Q & A* with Chase
*some questions and quotes have been paraphrased with the greatest respect to accuracy and context
I. For Aspiring Entrepreneurs:
Q: Do you have any advice on finding a co-founder?
Chase: “I think the most important thing is to find someone who is on the same page as you in terms of how you see the world — someone you agree with in terms of core philosophies and bigger picture ideas. After that, having complementary skill sets with your co-founder is another plus.
Oftentimes I hear of conflict between founders when it comes time to decide who’s going to be the CEO and who’s going to be the CTO. Ideally, this shouldn’t be the case: one of the two people shouldn’t even want to have a CEO-type position, and the other one shouldn’t even want to be a CTO.”
Q: Do you have advice on recruiting early members for the team?
Chase: “If you go to a large company and ask 10 different people why they are there, you’ll get 10 different answers: “it offers interesting technical problems,” “it gives me good pay and a stable job,” “my friends are here,” etc.
But if you come to Watsi and ask our 8 members, “why are you here?” all their answers will be the same: because they believe in the mission of the company. So, finding people who care about the mission is crucial. But finding people the right skillset is just as important too. In an early team, every member should have a “superpower” — something that they are the best at and every other member can count on that person to do.”
Q: Many students want to join a cause like a nonprofit that they really believe in or eventually create their own startup. However, there is a commonly perceived to be a “tradeoff” (salary, prestige, and potential opportunities). So, most students end up working for large companies for 2–4 years and then do what they really want. What is your opinion of this line of thinking?
Chase: “First, I think the answer to this really depends on who you are as a person. You have to do what your love and what suits you, or you’ll get burnt out.
In my opinion, 80% of people I know are actually best off working at large companies. They can learn the best and grow the best in that kind of environment. You can work your way up, save up money, and then become a donor or support of causes you believe in. If this is you, go for it.
However, there are another 20% of people out there who can actually excel in the chaotic, stressful, and unstructured environment of an early startup — myself included. We want to be directly building the solutions to the problems we see. For these people, I don’t think it makes sense for to say “I’m going to work at Google first for 4 years and learn the skills to start my own company.” You’ll learn more in a week about how to do a startup by doing a startup than working at a large company for 4 years.
That being said, it doesn’t have to be such a polar decision — I actually started Watsi on the side while working full-time. That’s another option.”
II. On Humanitarianism:
Q: Have you ever been worried that the world’s supply of philanthropy will not be able to satisfy the needs of Watsi’s potential amount of patients?
Chase: “No. Here’s 3 statistics on why I think so:
- Charitable giving is only 2% of GDP.
- 72% of funding in the social sector comes from individual donors, not organizations or corporations.
- The richest 20% of Americans donate 1.3% of their income to charity, while the poorest 20% donate 3.2%. The dominant reason for why the poor donate a larger portion of their income despite having less is that they have higher proximity to problems and need. On the other hand, for richer Americans, many problems are “out of sight, out of mind.”
One thing these statistics tell us is that there is a huge potential for many American individuals to donate more of their income to charity.
To be honest, 1.3% is probably less than how much we spend on alcohol, and there is absolutely no reason why we should be spending more on alcohol than charitable giving. The biggest challenge is how to get people to care — how to get people close to the need.”
Q: And how do you get people to care?
Chase: “It’s simple — just connect people.
I absolutely believe that 99/100 of people care about other people. It’s a part of who we are. There are studies showing that if you put someone sleeping in an MRI machine, the most active parts of the brain are the parts handling interactions with other people — in other words, even when we’re asleep, we dream of interacting with other people. Other studies show that if there is a fire in a room and other people are there, we will still hone in on other peoples’ faces before the fire.
So, all we essentially have to do is connect people to people in as personal a way as possible. And there are many ways of doing this, from showing the faces and videos of the actual surgeries that the patients receive to them to establishing a donor community.
That being said, it’s important not to idealize people or try to change human behavior. It’s far more effective to work within the constraints of how you know people to behave.”