Entrepreneur Spotlight: This CEO’s Company Is Making Student Loans Painless
Alumni Ventures Group had a chance to catch up with David Klein, the Co-Founder and CEO of one of our newest portfolio companies, CommonBond. David was kind enough to speak with us about his company, offer tips to entrepreneurs, and share his best resources for inspiration.
“It’s better to push forward, and let the market decide what constitutes a great idea — not naysayers or your own psychology.”
-David Klein, Co-Founder & CEO of CommonBond
These days, who doesn’t have student loans to pay off? With the rising costs for higher education, it seems like a fantasy to leave college and enter the workforce debt-free. It is no wonder that David Klein, CEO and Co-Founder of CommonBond, saw a business opportunity. He noticed these disparities firsthand when he decided to take out student loans to pay for his MBA. David experienced high rates, a confusing process, and poor customer service. There had to be a better way, he thought. So he created one.
CommonBond is a financial technology company on a mission to give students and graduates more affordable, transparent, and simpler ways to pay for higher education. By designing a better student loan experience, CommonBond has funded over $2 billion in loans for its tens of thousands of members. Additionally, CommonBond has been named to the World’s 50 Most Innovative Companies by Fast Company, the 50 Best Places to Work by Inc., and the Forbes Fintech 50.
As an investor in the company’s most recent round of fundraising, Alumni Ventures Group is already familiar with all of the great things CommonBond does in their space. But we had the opportunity to ask David Klein a few questions about his inspirations as an entrepreneur, supporting a social cause, and the future of CommonBond, so we jumped on the chance.
What sparked your entrepreneurial drive?
I come from a family of entrepreneurs. After I graduated college, I was actually the first person in my family to work at a company — everyone else had started their own! After a while, I realized it was time to go into the “family business,” so to speak, and start my own company.
What are the three most important lessons you’ve learned on your entrepreneurial journey?
First, I learned that as an early-stage entrepreneur, it’s common to meet a lot of resistance. So you have to use the resistance as fuel: the more resistance you face, the more disruptive your idea probably is.
Similarly, I’ve learned that you can’t make yourself a limiting factor to your company’s growth. It’s better to push forward and let the market decide what constitutes a great idea — not naysayers or your own psychology.
Finally, I learned that self-doubt is real, particularly in those early days. Every entrepreneur I talk to shares a similar experience. In my case, I remember seeing the cover of TIME when Mother Teresa died; they published excerpts from her diaries, in which she doubted her own faith. That was incredible to me. If Mother Theresa can doubt her faith, then I can doubt whether CommonBond gets off the ground or not.
What makes CommonBond stand out compared to other options?
We like to think of CommonBond as a unique company. We’re able to offer lower rates, we have award-winning customer service, and we have some of the most advanced technology in the industry. What also sets us apart is our commitment to our community.
What kind of benefits do you provide to the community?
We are the first and only finance company to have a “1-for-1” social mission, which means that for every loan that we fund, we fund the education of a child in need. We’ve also given over $100,000 in grants and scholarships to students and graduates in the US. And finally, we treat our members as a part of our community, hosting initiatives like career advice panels or our annual Women in Tech Week, which celebrates and empowers our community — and beyond.
What is the biggest challenge in growing the company?
Changing the conversation about student debt from a frustrating, taboo subject to an empowering one. We’re trying to bring a little bit of sunshine into an otherwise cloudy place. Paying for higher education has a reputation of being confusing and challenging — making it tempting to leave student loans alone rather than finding ways to make them better. Our goal is to help our members take out smarter, simpler student loans and save money.
What exciting things are on the horizon?
Our recent funding has positioned us well to continue scaling on behalf of our members. We’ve set out to build a great company for the long term by focusing on the fundamentals — exceptional customer experience, best-in-class technology, and a strong company culture. So far, we’ve saved our members over $500 million in student loan payments over the life of their loans, automated more of the application experience than anyone else in the industry, and grown our New York team to more than 120 employees.
What do you see in the next few years?
Over time, we expect to continue to grow with our members, which means introducing additional products and services that complement the next steps of their financial journey.
What is a new business opportunity that you’re really excited about?
Blockchain. We’re building out this tech for two reasons: creating the best consumer experience out there and improving operational efficiency. I believe it is going to do for data what email did for communications in the 1980s and 1990s — make it more robust, accessible, and secure. CommonBond has a unique opportunity to accelerate this evolution on behalf of our members.
Which resources or sources of inspiration (podcasts, books, blogs, mentors, etc.) are most useful to you on a regular basis?
My wife and family are big inspirations. I know that sounds trite, but they inspire me and influence my thinking as much as anybody. They’re not tied to the business day-to-day, and they know me very well, so the conversations I have with them are very helpful.
Masters of Scale is a great podcast. I read Shoe Dog recently — the story of Phil Knight, founder of Nike — and I thought it was phenomenal (and inspiring as an entrepreneur). I like reading Adam Grant’s blog and musings in general. And I’m a fan of Patty McCord’s book, Powerful, as well as the original “culture document” that she put together with Reed Hastings at Netflix years ago.
What keeps you going?
There are over 44 million people who are working hard to get out of student debt, and the fact that we have real solutions to help people tackle this problem — that keeps me going every day.
David Klein is Co-Founder and CEO of CommonBond, a financial technology company on a mission to give students and graduates more transparent, simple, and affordable ways to pay for higher education. Prior to CommonBond, David worked in consumer finance at American Express, and started his professional career at McKinsey & Company, where he advised clients in financial services.
David graduated from Brandeis University with a BA in Politics, Economics and International Business, and attended the Wharton School of Business at the University of Pennsylvania. He frequently speaks on topics related to student debt, social impact, and personal finance, and can be seen on FOX Business, CNBC, and Bloomberg West. David is also a contributor to Forbes, Inc, American Banker, The Hill, and TechCrunch. He was named to Crain’s New York 40 Under 40 list in 2016 and is a 2017 Ernst & Young New York Entrepreneur of the Year award-winner.