{"id":1166,"date":"2014-04-29T10:27:09","date_gmt":"2014-04-29T14:27:09","guid":{"rendered":"https:\/\/www.bu.edu\/questrom-magazine\/?page_id=1166"},"modified":"2019-11-14T11:15:20","modified_gmt":"2019-11-14T16:15:20","slug":"think-like-a-googler","status":"publish","type":"page","link":"https:\/\/www.bu.edu\/questrom-magazine\/summer14\/think-like-a-googler\/","title":{"rendered":"Think Like a Googler"},"content":{"rendered":"

You hear this mantra a lot from Google: \u201claunch early and iterate.\u201d Easy to say when you\u2019re worth $356 billion. But what if you\u2019re a fledging start-up taking your tentative first steps? Two ex-Googlers, Anna (Mongayt) Counselman (BSBA\u201903) and Cindy Chin Smith (BSBA\u201905), are showing it can be done. They jumped from the search giant to a Silicon Valley start-up that promised to revolutionize the entrepreneurial \u00adfinancing model. When the market didn\u2019t respond as they\u2019d expected, they took a page from the Google playbook\u2014they iterated.<\/p>\n

Three months ago,<\/strong> Anna (Mongayt) Counselman was head of operations for Upstart, a start-up that helped young people fund their dreams through income share agreements (ISAs)\u2014contracts that enable individuals to raise money from investors in exchange for a percentage of their future incomes.<\/p>\n

Today, Counselman (BSBA\u201903) is still head of operations for Upstart<\/a>, now a start-up that helps young people fund their dreams through peer-to-peer loans<\/em>\u2014financial contracts that enable borrowers to raise money from lenders, usually at much lower interest rates than they could get from a bank.<\/p>\n

True entrepreneurs, Counselman and her fellow cofounders were flexible enough to relinquish their original vision in the face of market realities, tapping their talented team to rapidly rebuild around a new, more bankable idea.<\/p>\n

\u201cThe broader mission is still the same. It\u2019s just that the vehicle we\u2019re using is more traditional and easier to understand,\u201d says Counselman, who left Google to help launch Upstart in Silicon Valley in 2012.<\/p>\n

The new lending platform relies on the same sophisticated technology that powered Upstart\u2019s original crowdfunding platform: an algorithm that uses such information as colleges attended, areas of study, grade point averages, and SAT scores to predict a person\u2019s earning and employment potential. Upstart previously used these data points to help determine how much money an individual could raise on the platform and to help ensure that investors would get their money back. Now the company uses the data to calculate interest rates for its borrowers, most of whom don\u2019t have credit histories long enough to qualify for affordable loans elsewhere. Much like banks, popular peer-to-peer lending sites, such as Lending Club, rely heavily on credit scores to rate borrowers and rarely offer loans to anyone with less than six years of credit history.<\/p>\n

\u201cYoung does not have to mean risky,\u201d says Counselman, \u201cand we think we have a way to identify these prime borrowers at a time when they need money and to service this demographic better than anyone else can.\u201d<\/p>\n

Upstart made the dramatic shift in its business model at lightning speed. Counselman and her two cofounders introduced their idea of offering loans in addition to ISAs at a company retreat in late December 2013. Over the next four months, their team of fewer than 20 employees secured a banking partner, built the legal framework necessary to become a loan originator, figured out how to apply the algorithm to interest rates and origination fees, created an online application that could instantly calculate loan terms, and revamped the Upstart website to feature the new product.<\/p>\n

Loans first became available on the website in late April 2014, and the company immediately saw 150 people a day applying for rates\u2014about five times the demand it had seen for ISAs. Less than two weeks after launching the new product, Upstart announced it would no longer offer new ISAs so that it could focus on loans.<\/p>\n

\u201cWe were onto the fact that young people have a need for money that\u2019s not being well addressed by the market,\u201d says Counselman, \u201cbut the product we had before required a lot of cognitive overhead.\u201d Put another way, everyone knows what a loan is and how it works; income share agreements required more explanation. \u201cAs a young start-up,\u201d the company\u2019s CEO wrote when announcing the end of Upstart\u2019s ISAs, \u201cwe need to listen to what the market is telling us.\u201d And the market was saying it wanted something simpler. Loans are more straightforward, allowing borrowers to easily compare Upstart\u2019s rates to what they\u2019re paying on credit cards or private student loans.<\/p>\n

Letting go of ISAs, a promising new asset class that Upstart had worked hard to promote, was a difficult decision, Counselman says. \u201cBut as a start-up, you don\u2019t have the luxury of a long time line to bring the market to where you are.\u201d When the demographic Upstart was trying to serve showed more interest in fixed-interest, short-term loans, she says, it had to follow.<\/p>\n

Counselman understands all too well the need for funding sources like Upstart that recognize the potential of young people: as one of the first graduates of SMG\u2019s entrepreneurship program, she was determined to start a business of her own, but she eventually ran low on money and decided she\u2019d better opt for a steady \u00adcorporate paycheck.<\/p>\n

\u201cI wish Upstart had existed when I graduated from college,\u201d she says. \u201cSo building this company feels like a way to give back to the next generation of graduates.\u201d<\/p>\n

\n

\u201cWe\u2019ll interview 100 engineers to find the one we want to hire. There comes this point when you\u2019re growing and you need that next person so badly that there\u2019s a temptation to just hire the person who\u2019s sitting in front of you, but it\u2019s worth it to take the short-term pain of continuing to interview until you get that person who\u2019s going to be awesome.\u201d<\/span><\/h4>\n
Anna (Mongayt) Counselman<\/h5>\n<\/div>\n

Upstart is the brainchild of CEO Dave Girouard<\/a>, who previously spent eight years as president of Google\u2019s enterprise division. As he was leaving Google for his new undertaking, Girouard shared his business idea with Counselman (who was then head of Google\u2019s enterprise customer programs) and encouraged her to join him.<\/p>\n

\u201cI originally thought I could spend my entire career at Google\u2014I think it\u2019s an amazing company,\u201d Counselman says. \u201cBut when this came up, I thought, \u2018I can\u2019t not do this.\u2019\u201d<\/p>\n

As a cofounder, Counselman is an articulate spokesperson for Upstart. As head of operations at a tiny start-up, she oversees nearly everything the company does, from how it handles collections to the procedures used for reviewing employees\u2019 quarterly goals.<\/p>\n

Until recently, the only other person on Counselman\u2019s operations team was Cindy Chin Smith (BSBA\u201905), another former Googler. Operations Manager Smith handles a bit of everything (\u201cwhatever needs to get done\u2014it\u2019s a start-up\u201d) but focuses specifically on working with borrowers: verifying their documents, answering their questions, and building the underlying systems that guide them through the loan process.<\/p>\n

Despite two overlapping years on the BU campus, Smith and Counselman first met on the Google campus while working on an operations project. Counselman vividly remembers her first impressions of Smith. \u201cIn every meeting, she was the first person to raise her hand. She would say, \u2018I\u2019ll take notes. I\u2019ll get that done. I\u2019ll put this together.\u2019 She was so ready to help and contribute.\u201d So when it came time to hire her first employee at Upstart, Counselman knew exactly whom to recruit.<\/p>\n

Choosing the right team is among the most important aspects of running a business, says Counselman. It\u2019s a lesson she learned at Google, where hiring is not an art, but a science that relies partly on an algorithm that predicts a candidate\u2019s probability of success within the company. (The algorithm was among Girouard\u2019s inspirations for Upstart.)<\/p>\n

\u201cWe\u2019ll interview 100 engineers to find the one we want to hire,\u201d Counselman says. \u201cWhen you\u2019re growing and you need that next person so badly, there\u2019s a temptation to just hire the person who\u2019s sitting in front of you, but it\u2019s worth it to take the short-term pain of continuing to interview until you get that person who\u2019s going to be awesome.\u201d<\/p>\n

Another Google lesson that\u2019s proved invaluable at Upstart: launch quickly, then iterate, iterate, iterate. You can sit around conference tables debating product features, Counselman says, but it\u2019s infinitely more valuable to get prototypes in front of customers and learn from their responses. Before they even attempted to build an online platform for their initial product, the Upstart team recruited a handful of investors and customers for an offline pilot.<\/p>\n

\u201cI literally drove around picking up checks from people in my car,\u201d Counselman says. That early experience helped the Upstart team iron out kinks in its ISA contracts and think through the mechanics of operations such as billing and collections. The cycle of test-adjust-repeat also established a flexible company culture that allowed Upstart to pivot so nimbly to its new business model.<\/p>\n

While many larger companies cut costs by reducing customer contact, Counselman says, \u201cat a start-up, you have to take every possible opportunity to interact with your customers and learn from them.\u201d<\/p>\n

It\u2019s important, adds Smith, that communication flows both ways. Things move fast at a start-up, she says, and you keep customers happy by keeping them informed of changes.<\/p>\n

Another value Counselman and Girouard brought with them from Google is internal transparency. Less than 24 hours passed between the cofounders\u2019 first conversation about retiring ISAs and an all-company meeting to discuss the idea. \u201cThere were no secret meetings in back rooms,\u201d Counselman says.<\/p>\n

\u201cWe really want everyone in the company to feel part of the team, to be pulling in the same direction,\u201d she adds. \u201cWe saw how empowering that was at Google. A lot of people think the culture of Google is about the free food and the volleyball, but that\u2019s not what makes people so passionate about working at Google. It\u2019s about being part of the team\u2014feeling really connected to the mission, feeling really included in what\u2019s going on.\u201d<\/p>\n

What other lessons have they learned? \u201cFor me personally,\u201d says Counselman, \u201cI\u2019d say it\u2019s \u2018Feel the fear and do it anyway.\u2019\u201d<\/p>\n

Being at a start-up, she says, you won\u2019t always have perfect information and won\u2019t always know what you\u2019re doing. \u201cBut it\u2019s okay to just feel the fear and do it anyway and trust that you\u2019ll figure it out as you go.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

You hear this mantra a lot from Google: \u201claunch early and iterate.\u201d Easy to say when you\u2019re worth $356 billion. But what if you\u2019re a fledging start-up taking your tentative first steps? Two ex-Googlers, Anna (Mongayt) Counselman (BSBA\u201903) and Cindy Chin Smith (BSBA\u201905), are showing it can be done. They jumped from the search giant […]<\/p>\n","protected":false},"author":5806,"featured_media":0,"parent":1164,"menu_order":15,"comment_status":"closed","ping_status":"closed","template":"story.php","meta":[],"yoast_head":"\nThink Like a Googler - Questrom Magazine<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.bu.edu\/questrom-magazine\/summer14\/think-like-a-googler\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Think Like a Googler - Questrom Magazine\" \/>\n<meta property=\"og:description\" content=\"You hear this mantra a lot from Google: \u201claunch early and iterate.\u201d Easy to say when you\u2019re worth $356 billion. But what if you\u2019re a fledging start-up taking your tentative first steps? 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