E402: HandUp wants to solve homelessness and make money doing it

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Rose Broome was walking on a cold night in San Francisco when she noticed a homeless woman living on the street. She thought, there must be a service to help people in need get crucial items like food and personal hygiene products, with some amount of transparency. When she couldn’t find one, she founded HandUp. The for-profit benefit corporation partners with local charities and city services to get more aid directly to homeless and poor people in San Francisco. People in need – members – join HandUp and can create a personal profile on their website. Donors can read individual stories, or give to people they meet in the city via SMS or from the site. Broome isn’t only civically-minded. She’s ambitious. With progressively minded technologists in the Bay Area looking for ways to give, a large needy population, and millions of dollars in government aid issued in the form of debit cards, she sees HandUp as a tool to solve homelessness through a for-profit venture. Think: a privately-run Food Stamps or SNAP program. Jason gets excited about tackling the seemingly insurmountable issue of homelessness, and how maybe charity isn’t enough. Stay tuned for a surprise at the end.

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Highlights:

1:48 One of the issues in San Francisco and a lot of cities is homelessness. Technology has had an impact in a lot of areas, but there’s some resistance to it
3:05 How many homeless people are there in San Francisco and why is this such a persistent problem?
3:37 In San Francisco, it’s pretty shocking for people who come to this city particularly. Why is the homeless issue such a hot button issue here particularly?
4:30 Do you think there’s something different about the San Francisco homeless problem compared with other cities?
6:03 What are you doing at HandUp? Is it a nonprofit? How does it work?
6:53 How does it technically work?
7:45 Is this all to get around the issue of, ‘I don’t want to give money to the homeless because I’m afraid it’s going to go to drugs or alcohol.’
9:30 When the money comes to you, does the member have to say, ‘This is what I want to use it for’?
10:50 Did you get rich at Google or Twitter and decide to do something good for society? Who are you and why did you do this?
15:12 Were you attacked for coming out and saying I want to build a technological solution to help solve homelessness?
16:00 That’s a very diplomatic answer. But people were attacking you, saying, ‘Oh naive technologists, thinking they can solve homelessness.’
17:00 There is resistance. It almost feels like there is a group of people working on this problem for awhile, and they don’t want anybody else to come in and work on it.
18:10 Let’s talk about the project in more detail. If click on the picture of one of the members, you can see their profile. It looks like a social media profile or Kickstarter page. What was the background behind making a profile?
20:35 Does this making a bond between individuals and the people supporting them, does it lift up the person who’s being helped? Does it increase their chances of breaking the cycle?
22:40 When you’re looking at some of the lessons from Kiva and even AngelList, the reward is seeing someone get out of homelessness.
24:15 What are some of the largest donations members receive?
25:07 So that’s super powerful, because they have a landing page, the people who knew them before they were homeless they can then go connect with them.
26:59 Some people might want to alleviate suffering, and some people might want to feel like they permanently got that person off the dole… permanently changed their lives.
27:30 With 6,000 homeless people in SF, and 60 people in the pilot, you have 1% of the homeless population?
28:04 You could conceivably get a substantial portion of San Francisco’s homeless population into the system.
28:40 What’s a benefit corporation?
29:10 But you’re not going to make a profit off of this business.
29:50 So you could take a percentage of the donations to fund the company?
30:20 Does that get rid of the regulations that you have, being a benefit corporation?
34:13 What percentage of homeless people in San Francisco are suffering from mental illness? Is that something you can address?
37:15 What percentage of homeless people in San Francisco have drug or alcohol issues?
38:13 What do you need to take it to the next level?
39:15 So you did this all with no funding. How are you living?
40:33 What do you think it would take to run this, to the point that you had 10% of the homeless in the system? What would need to have 600 people in there?
40:50 Do you yourself walk out on the street and say to Marvin I’m going to make a page for you on the internet, where you can get money?
38:55 So getting 600 people and making it sustainable?
42:15 Sounds like you’d need about $500k per year to have a little office, pay the team a decent wage, and have some technology resources. Is that about right?
42:35 Well let’s get this started. I’d like to be the first investor. Can I invest? I think that this is super important. I would like to put $10,000 in, is that okay? And then maybe can I put it on AngelList perhaps and get some of my rich friends to invest?
43:21 But I’m a little bit concerned or confused about the for-profit nature of it. Because I don’t want to make any profit off this.
Rose: Wait, why are you afraid of that? You’re not afraid… you’ve put all this investment in all these other companies! But not into one doing something good? C’mon!
Jason: Well here’s the issue. We have to make some sort of commitment then. If I invest the $10k and let’s say this company goes to 50 cities and starts generating some kind of profit. I would feel bad about if I turned that $10k into $1m.
Rose: And meanwhile solving homelessness?
Jason: I get that but it just feels … incongruous. I can’t get my head around it.
Rose: Well you are welcome to donate your returns back in, but we really believe that this is a strong model.
Jason: Do you have a revenue model?
Rose: In the beginning, we take the opt-in support fees. Then we have other options as we scale.
46:20 One of the things I find most interesting about what you’re doing, is the building of the story. A Tumblr or blog for a homeless person that can update the donor… maybe I’ll do more. Have you thought about that ongoing donation process?
48:20 Is Kiva for-profit? Where do you think this winds up? Is it like Tom’s Shoes? I’m still having trouble with this for-profit part.
Rose: Why is that so hard? We’re pioneering something here by providing technology for homelessness and we’re also pioneering something here by being a socially driven for-profit. Do you think that the for-profit business model is powerful? Do you think that it’s more scalable than a nonprofit?
49:45 I guess the question would be, you know at some point, if this business made a lot of money…
Rose: If this business made a lot of money and solved homelessness in the United States?
50:15 I’m all about profitable businesses. But a profitable business that… I’m having a mental challenge. I’m thinking if I made the profits, off the homeless, I would feel very guilty about that… It’s absolutely unacceptable that with the amount of wealth in San Francisco that this problem has not been solved to a better extent… I was looking at it as making a profit off the homeless, when I guess it could be making a profit off of solving the problem of homelessness.
52:42 I like it. This is a message to all my followers. Anybody who invests $10,000, I’ll take you to dinner at the Battery, I’ll take you out to dinner, with Rose. I’ll take the first 9 people who do that.

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  • William

    When this gal was pressed about her business model she evaded the point completley. The reason as far as I can tell is this. The business model apparently works as follows: People give money to homeless people and her company….. takes some of it. Hence its not very good PR.

  • earthman

    They should have the funds transferred in to a digital currency and participating merchants would accept these currencies taking the ability of the individuals to use funds for drugs, alcohol and so forth.

  • Daniel R. Luke

    Great presentation. Kudos to you, Jason for helping to fund this important start up. Super cool. I think Rose definitely made the right decision to make this a for profit. I for one have lots of ideas about how this could make money.