Building Community in the Millennial Economy
SoFi and the innovation of “social finance.”
Millennials today seem to be fighting an uphill battle in the so-called New Economy. Not only has student loan debt nearly quadrupled between 2003 and 2013, but — according to a 2015 report from the Kauffman Foundation — startup rates among Americans ages 20–34 have declined from a peak of 35% in 1996 to just 23% in 2013. That’s roughly 40,000 fewer new businesses being started each month.
Despite these trends, millennial workers are finding ways to reverse the narrative around indebtedness and entrepreneurship. In our last article about “millennial lending,” we looked at how hyper-personalized loans and mortgages are radically disrupting the financial services industry. This time we’ll explore how community-based approaches to personal like career coaching, professional networking and entrepreneur programs are changing the game for millennial borrowers and small business owners.
The Future of Money talked to three millennial workers about everything from navigating big career changes to starting a new business.
Mike Weller moved to Seattle to pursue his dream of becoming an architect. After finishing up his undergrad degree back East, he was accepted into a master’s program at the University of Washington. He completed his studies and started working in his field. So far so good.
“If you didn’t have time and money invested in the career you’re doing now, what would you do?’”
But after five years working as an architect, Mike had a nagging feeling that he wasn’t in the right place professionally. He felt stuck. So he sought guidance from a career counselor, who asked him: “If you didn’t have time and money invested in the career you’re doing now, what would you do?’”
Mike realized what he really wanted to do was get involved in user experience, known as “UX” in the tech industry, as a product designer. His counselor put him in touch with professionals in the field, and even pointed him toward some classes he could take on the subject. Fast-forward to today, and Mike is teaching classes in UX at the very institution where he learned those skills.
Mike’s story is relatable to many millennials, who go to school with a fixed idea of what they want to do, but realize over time that it’s not the right fit. What may be surprising is that Mike’s career change was fueled — in the form of career counseling and professional connections — by his lending institution.
Given that half of SoFi’s name is “Social,” a large part of the company’s mission is to help members take advantage of the social or community elements of their financial lives — and their network of other influential, professionally-connected members.
Christina Kramlich, a Senior Product Director at SoFi, traces these features back to the company’s origins: “From the very beginning we worked really hard to create a community that helped people that were financially responsible. Initially it was focused on bringing together alumni groups, so it was mostly about alumni funding student loan refinances and having the satisfaction of helping a student from their school save a little bit of money on their student loans. And then it grew into helping borrowers with all aspects of their financial life.”
The benefits go way beyond simply bolstering financial responsibility. SoFi’s career services team helps members do things like negotiate salary, prep for upcoming interviews and even refine their personal brand. Members are also encouraged to connect with each other to trade valuable career advice and guidance. “We leverage the power of community to ensure that our members are not only able to repay their loans, but are able to succeed in every other area of their lives,” notes Amanda Wood, SoFi’s Director of Partnerships.”
Jenny Lewis was working in the food industry. She spent four years at a start-up bakery, where she handled all aspects of the business — everything other than the actual baking itself. But her real passion (like so many of us!) was beer. So when she went back to school for her MBA, she always knew that opening up a brewery was her end-goal. She integrated her passion for brewing into every project and class she enrolled in at business school — which likely led, she jokes, to her popularity during group projects.
After she graduated, she was accepted into SoFi’s entrepreneur program, in which she was able to defer her student loans for up to six months, so that she could spend her time and resources building her company. The program also enabled her to network with — and ultimately secure — early investors from across the Bay Area and beyond. She now runs Strike Brewery, based in San Jose, as a stand-alone brick-and-mortar operation for over two years. Strike’s microbrews are now sold throughout the state of California.
Jenny’s story defies both trends of the so-called New Economy: the prohibitive effects of ballooning student debt and the gradual decline in millennial entrepreneurs. Amanda Wood recounts that “early on, we heard from members that many had entrepreneurial dreams but couldn’t get them off the ground. Fewer people are starting businesses today than 30 years ago, so, we started a program to make it easier and have helped 50 entrepreneurs build their businesses.”
By refinancing and making student debt manageable, new grads are freed up to take risk, innovate, and start companies. And by connecting with other financially responsible, savvy people, entrepreneurs are able to get their businesses off the ground. “We provide loan deferment to entrepreneurs until they can improve their cash flow,” Amanda explains. “We coach them and make introductions to investors and advisors. And we want to share their business with the whole SoFi community.”
Andrea Blankmeyer, Director, Strategy and Business Operations at SoFi, explains how an additional layer of services and a community element can also give millennials the tools and information they need to thrive, even if they hit bumps in the road. “We’ll put your student loans on hold if you get laid off, we’ll help you find a job if you need it, and we’ll invite you to events so you can meet other SoFi members,” she notes. “We invest in our members today because we believe in their potential future.”
Alex Dawson graduated from college and moved to Dallas, and was working for an oil and gas company. He watched as many of his colleagues were being let go, and had a creeping feeling that it was only a matter of time before he got his notice, too. When he was told that his position was being eliminated, he wasn’t quite sure what to do; it was his first post-college job, and he wasn’t particularly well-versed in the complexities of the job-search process. So he reached out to Bob Park, SoFi’s Director of Career Services, seeking to brainstorm ideas for how to transition to a new position, perhaps even, ideally, one outside of the energy industry.
Since Bob’s background was in career services in higher education, he understood that Alex hadn’t really ever been engaged in an intensive job hunt before. College students are often geared toward jobs in their major, Alex notes, “but once we’re in real world, we’re not always sure of what direction to go in.” Bob coached him to scope out businesses kind of like a prospect — that is, how to network and leverage one’s connections to deliver the personal touch that can be make-or-break in a job search. Alex soon found a new job in Florida in the tech industry, performing sales in IT research. He says he’s much happier working in tech than in the energy industry. “It’s a much more fulfilling career,” he said, “more in tune with my generation and background and what I’m interested in.”
“If you commit to working with our career services team,” says SoFi’s Product Marketing Director, Alan Donner, “We’ll identify what you’re looking to do in your career, identify opportunities for you, and coach you through the interview process until you’re in a position to resume making payments.”
Ultimately, Christina Kramlich sees the social and community benefits of SoFi as “less of a profit center and more of a way for us to engage with our members and keep them coming back.” As SoFi’s network grows, so to do the opportunities for members to help each other start businesses, find the right job, or simply figure out what industry or career field is truly best for them. “What we want to do,” Christina adds, “is to build a relationship over time.”
Sponsored by SoFi, The Future of Money is a series of stories that explores a world in which banks no longer control our finances. Learn more at SoFi.com.
