Founder Stories: Jonny Price

Access Ventures wants to celebrate the journey of the individuals behind our investments and partnerships. Founder Stories are a series of conversations with entrepreneurs, partners and founders in our portfolio. We will explore the motivation, inspiration, and innovation that drives the spirit of entrepreneurship in the workplace, as well as provide insight to balance our regular workdays.

In this fourth installment of our Founder Stories series, we talked with Jonny Price, Senior Director of Kiva US. Kiva.org is the world’s first and largest crowdfunding platform for social good with a mission to connect people through lending to alleviate poverty. We recently visited Jonny to spend a day with him at his home and Kiva headquarters in San Francisco. We asked him a few questions about his journey to where he is today, what his everyday life looks like, and what’s next for Kiva. Here is what he had to say.

Describe The Path To What You’re Doing Now.

I grew up in London. When I was eighteen I went to teach at a school in Zambia. That was a really life-changing and transformative experience for me. I loved the kids I was working with. I was looking after a dormitory of primary school kids while teaching them music, sports, science, and history. It was an adventurous time but, it was also a time when I was confronted with the worst poverty I have seen firsthand. I think a big part of why I work at Kiva today is because I went to Africa when I was eighteen and it gave me a new perspective. I have always wanted to work in economic development and right some of the injustices that I see in the world. I think that trip to Africa was instrumental in me coming to that career path.

When I went to Cambridge University I studied History for three years. I think I was one of those people that didn’t really know what they wanted to do, or how to do what they wanted to do when they left college. Like a lot of my college classmates, I spent a lot of summers doing internships with investment banks or traveling in Central America, Europe, and Africa. I didn’t really know how to get into economic development. I ended up working in management consulting for six years out of college and I’m glad I did. Four years into consulting, I came to Kiva. While I was at Kiva, I met Ali who I am now married to. We started dating while I was at Kiva. Then we got married, and for the first 6 months of my marriage, I was commuting every week from San Francisco to Toronto on a Sunday night red-eye, working crazy hours, and then flying back Thursday night super-exhausted. I decided that that was not going to work, so I decided to leave consulting. I almost joined the strategy team at Google, which would have taken my career in an entirely different direction. Just as I was about to join Google, Matt Flannery the co-founder of Kiva and Premal Shah, co-founder and president of Kiva, were like, “Hey, we have this crazy idea to launch a direct lending experiment pilot on Kiva. Do you want to help lead it?” I put the Google thing on hold, and came to Kiva to lead what we called, “Kiva Zip.” That was 2011, and the rest is history.

What Is Kiva And Why Specifically Start A Kiva US Program?

Kiva is a non-profit that crowdfunds microloans to entrepreneurs around the world. So at Kiva.org, you can lend $25 to a farmer in Uganda or a seamstress in Guatemala or a food truck in Louisville. That $500 loan to the farmer or that $10,000 loan to the food truck comes from anywhere from 20 to 400 lenders lending $25 dollars each. And as that small business owner repays their loan, you get your $25 back, and then you can re-lend your $25 and help someone else. Unlike other crowdfunding platforms or other non-profits, Kiva is a sustainable model where you’re empowering an entrepreneur with a loan that they’re going to pay back. Kiva’s repayment rate globally is 97 percent.

Since 2005 we’ve had 1.6 million lenders crowdfunding loans to over 2 million entrepreneurs. We decided to launch Kiva US in 2011. At the time it was called Kiva Zip. What made Kiva Zip was not that it was a US thing, but that it was a direct model. The whole idea behind the Kiva Zip experiment was, can we cut out the intermediary and lend that $500 directly from Kiva to the entrepreneur? We thought that maybe we could expand access to entrepreneurs who might be in a region where microfinancing institutions (MFIs) are not operating or who might be deemed too risky for an MFI’s underwriting criteria. We also wondered if through technology, we could lower the cost of doing microfinance and pass those cost savings on to borrowers in the form of lower interest rates. The third reason we launched this direct experiment, and the most exciting of all, is that Kiva’s mission is to connect people through lending to alleviate poverty. So now it’s no longer a financial transaction, but rather a more connected community-oriented financial system. Whereas well as empowering these borrowers with money, we are empowering them with social capital and connections.

What Are You Hoping To Accomplish Through Kiva US?

I want to grow our program. I want to help millions of business owners around the world. I want to do more and more over time so that when you get a Kiva loan, not only are you getting money to capitalize your business, you’re also getting social capital, you are also getting connections to the lenders that want to help you in other ways, you’re getting a sense of community. We take this direct lending model, and we take it international. So scale it in the US, get to a more connected financial system, a more connected model, and expand it internationally.

What Does A Typical Day Look Like For You?

I don’t have a typical day. These days I prioritize my daughter. I used to work a lot more hours than I do now. I used to be in the office at 8:00 am every day, since I have a daughter my nanny gets to our house at 9:00 am and so I would be in the office at 9:30 am so that’s a 7-and-a-half hour sacrifice and prioritization decision that I make every day, every week that is deliberate and important. When I get to Kiva it’s a lot of meetings, with my team mostly, also with funders, as a non-profit you’re always looking for where that grant funding is going to come in order to enable our team to keep doing our work. I try to stay close to our customers, keep engaging with the borrowers that we’re serving. If you look at my calendar its just meeting after meeting. After work, hanging out with my wife and daughter is a really high priority and also just hanging out and getting dinner with friends.

Do You See A Difference Between An Entrepreneur And A Small Business Owner?

I don’t really get hung up on semantic distinctions like that, in my mind an entrepreneur is a small business owner, someone that has their own business, they’re doing something, they’re taking a risk, they could go and get a paid salary job at a bank or supermarket, but they’re saying “no” to that path, which is what most people tread, and they’re doing it, they’re taking a risk. Even if they don’t have aspirations of exponential growth, I don’t think that means they’re not an entrepreneur. For me, I don’t see a distinction.

I think an entrepreneur is a doer, someone that takes action, someone that takes a risk and does something.

What Advice Would You Give To Someone That Is Starting Their Business Or Entrepreneurial Journey?

One, stay super close to the customer. In the early days, especially when your customer base is still small, just get to know them really well. Do things that delight them. Stay super close to them and really try to hear them on how you need to change and improve your product in order to give them what they’re looking for. The second thing will be this principle of ‘lean startup’ this book by Eric Reis, about how you should start small, move super fast, experiment at low cost, fail cheap, fail quickly, and don’t overthink it. So just get going as fast as you can because its only by actually doing it that you figure out what the biggest challenges are, and therefore need to focus on.

Whats The Biggest Risk You’ve Taken?

I think going to Africa as an 18-year-old was a big risk. I think maybe even a bigger risk was moving to America to be in the same city as my wife. I moved over here, uprooted my life, to be in the same city as her and make this relationship work. Maybe I am an entrepreneur because I took a big risk and it’s really paid off.

When It Comes To Income Inequality And Pay, You Guys Have Really Flipped That Narrative, What’s Typically The Least Funded, Is Now The Most Funded, Is That Right?

Yeah, that’s right. Our taxation system is progressive in this country, our financial system is regressive. Our finance system says “if you’re low income then you’re more financially risky, so you pay a higher interest rate on your loans.” I don’t see an easy answer to that. It makes sense from an economic perspective that if someone is a higher risk you charge them a higher interest rate, there are no easy answers. But, what that does is make it very expensive to be poor. So yeah, that’s one example of a paradigm where our finance system is regressive and I want to change that; so at Kiva we’re trying to reach entrepreneurs who are seen as too risky by conventional lenders. Normally they would be charged a very high-interest rate if they could get a loan at all and what we’re trying to do at Kiva is charge them a 0% interest rate, so its very counter to the paradigm. Rather than this high risk, low-income person being charged a high-interest rate, they’re charged a 0% interest rate, its cool. Its kind of counter to the culture.

What Barriers Did You Overcome In Order To Get Kiva US Off The Ground?

I think that there’s been a lot of skepticism about the model here since day one. I think the idea of underwriting loans based on character rather than credit has been questioned from day one. Lending directly to the entrepreneur was a new and more expensive business model and potentially a riskier business model for Kiva, rather than working with financial intermediaries who were larger. Now we have to do due diligence on 3000 individual small business owners and I think innovation and change like that are always hard for any organization. Lending is a really hard business because most companies like Coca-Cola, when you sell a can of Coke, you don’t really care who you sell a can of Coke to. As a lender, you really have to think carefully about who you sell your product, the loan, to because you’ve got to get that small business owner to repay their loan. Small business lending is a really hard business to be in and crowdfunded two-sided marketplace small business lending is an even harder business to be in.

I would say the thing that I will always look back on with the most pride and the most affection is our team. We have an unbelievable team. It has felt like a battle and a real uphill struggle pretty much every day for the last six years. It is an unbelievable privilege to lead this team, I love my job, I think I have the best job in the world.

Are You Creatively Satisfied?

Yes, definitely. Mostly because I’m not very creative! So it doesn’t take much to satisfy me. I think we’ve done some really innovative stuff. I feel like we have a lot of fun inverting paradigms, which is fun and counter to the culture. The private fundraising period that we rolled out where we require a borrow to recruit a number of lenders from their friends and family network before we post them publicly on the Kiva website, is probably the innovation I am most proud of. I don’t know anyone else, crowdfunder, or peer-to-peer lending platform that uses that underwriting mechanism.

It Seems Like You’re Still Pushing Forward.

It’s interesting comparing this journey of Kiva US to consulting. Consulting was six month cases and there was a cadence and you would work really hard towards the end of the case and you would finish the case and start again. There were valleys and peaks but it was kind of manageable, This [working at Kiva] is like climbing a mountain, Mt. Everest, we’re never going to get to the top sadly, we’re never going to get to a good place on income and wealth and equality in my lifetime. We’re not going to achieve that at Kiva, so the mountain is daunting and we can’t see that far up it’s so shrouded in clouds, theres no real respite.

Do You Feel A Sense Of Responsibility To Commit Your Life To That Challenge?

I feel deeply committed to it, so it’s something I really want to do, I’m not really motivated by money, I’m motivated by helping people. But I don’t think that’s born out of a sense of responsibility, it’s something else. I think it comes from my family honestly. My parents and my sister are three of the most generous people I have ever met. Through their own selfless example, they deeply imbued in me the commitment I have to help people. So now I want to spend my career helping as many people in as big a way as possible and trying to do a little bit to chip away at this huge systemic problem of inequality.

How Would You Describe Your Leadership Style And What Is More Effective About It?

I think it’s really all about people, and I think it’s all about hiring outstanding people then inspiring them with vision. One of the really awesome things that make my life easier is Kiva’s mission, what we’re working towards. The impact we’re having on people’s lives, both in the life of an individual small business owner, and on a macro-scale; this makes it easy to attract impressive candidates. You recruit outstanding people, inspire them, and hopefully coach them well. Normally it feels like they’re coaching me! My goals it to trust and empower them and get out of the way. I think I’m the opposite of a micromanager, probably too much so sometimes. I should be managing people more closely. I think that if you are hiring people that are better than you, smarter than you, more organized than you, then the rest kind of takes care of itself.

What Makes The Way Your Team Works Together Unique?

I’d highlight two things, maybe three things. One is a deep commitment to our impact. Everyone on my team takes a big pay cut, so you’ve got to find people that are willing to take that pay cut because they are deeply motivated by our mission. Second, we have a lot of fun. I think this is an unbelievably fun and joyful working environment. The third thing is excellence. We’re a really metrics focused team. I think we’re the most data-driven, analytical, metrics-focused, nonprofit team that I know. So if you look at how many loans we’re making and the results that we’re achieving with a very small team, I think its a testament to how hard our team works and just their commitment, and how capable and outstanding they are.

What Advice Would You Give To Someone New Joining Your Team?

We have this acronym on our team called P.E.E.F, it stands for positivity, entrepreneurialism, energy, and flexibility. And that would be my advice I think.

What Keeps You Positive And Inspired?

It’s the team. I would’ve left this job a long time ago had it not been for the team. They just give me energy and keep me positive when the going gets tough. And then the other reason that keeps me positive is just the impact we’re having. When I see these connections between borrowers and lenders, and I see borrowers’ gratitude and appreciation for this model and this community of Kiva lenders, that are putting their own money at risk to support someone they’ve never met, I see the impact in the borrowers’ lives at the micro-level and that kind of gives me the resilience and the tenacity and the staying power to keep going when the going is tough.

What Personal Rules Do You Live By?

My faith is really important to me. I look at Jesus’ teachings in the New Testament and I really love this idea of grace, and for me that’s basically about getting what you don’t deserve. It’s not like an eye for an eye. One example of that, I had this great talk on marriage before I got married and it was like “if your spouse blames you for a problem, rather than saying ‘well I did this because you did that’, say ‘yeah you’re right, I’m sorry.’” I think in a marriage thats really cool and I’ve tried to live that and it’s hard, it’s really hard, but I think if you can try and see the faults in your own life, rather than looking for them in other people’s lives thats really cool, but its hard to do.

You Are Tackling Big Challenges, What Is The One Biggest Challenge About Your Job?

I think it’s raising the grant funding, getting enough revenue to expand our team. I think there’s a lot of great things about the nonprofit sector, most for profits are legally mandated to maximize shareholder returns rather than necessarily do the right thing by the environment or your employees or your community. As a nonprofit we’re legally mandated to connect people through lending to alleviate poverty. So we’re really legally mandated to do the right thing by society, which is cool. But theres a lot of disadvantages for a nonprofit compared to a for profit. At a non profit we raise grant funding at much smaller increments, 100,000 here, 50,000 here, to cover our existing costs. So the growth of our team has been very incremental.

How Do You Respond To The “Too Good To Be True” Response Given To 0% Interest Loans?

You know I think it’s really great to be working for a team where the product seems “too good to be true,” but its actually true. That’s exciting for me, I don’t worry too much about it. We certainly made a big shift away from what you might call “mass-marketing” towards a more relationship-based or community focused approach to growth. So rather than us running Facebook ads to people we don’t know, or putting mailers through people’s letter boxes that we don’t know, or getting the rejects from other lenders who have never heard of Kiva. But if we have someone come to us through Access Ventures through Central Community Partners or through La Cocina or though one of the thousands of trustees we have throughout the country or through one of the 4,000 small business owners that we have throughout the country, then because of that referral, because of that community-sourced lead, you don’t have to worry about “0% interest is too good to be true” because the trust that that trustee or existing customer has in Kiva, they can then convey to their friend who trusts them.

What Kind Of Legacy Do You Hope To Leave Behind?

I think a lot about equity in our finance system and I think this is a massive challenge for our generation. If you look around the world the trends are relatively positive. Rates of literacy are much higher globally than they were fifty years ago, rates of extreme poverty are less than what they were fifty years ago, more people live in democracy and life expectancy is higher. Globally the trends are good. In the US and I think in the UK, and a lot of Western countries, the macroeconomic trends around inequality are not good. The median household wealth of white households in America is $72,000, the median household wealth of black households is $7,000, and its going in the wrong direction. CEO pay has increased 1000% since 1978, the pay of the typical worker has increased 11%. I think along with climate change, I think tackling this huge problem with income and especially wealth inequality is the issue of our generation and so I want to dedicate my career, my work, to trying to do what little I can to combat that and raise awareness about that and try to give a little leg up of support to the little guy, that little entrepreneur, that working class family.