“When I was a junior in high school, I sent my resume and a cover letter by snail mail to several companies in the Bay Area, asking for an internship,” said CS alumnus and LendUp Co-Founder Jacob Rosenberg.
A small company replied with an offer. Few people had heard of Yahoo! but Rosenberg was excited. “The Internet was new and I had been playing around with it at home. Yahoo! had just IPO’d –I was their 80th employee, although we grew to 300 by the end of that summer. Most of the staff were ‘surfers,’ who spent all their time categorizing web sites. In addition to typical intern activities like cold calling, I actually got to work on some software that summer.”
He already knew he wanted to focus on electrical or computer engineering in college and his summer internship at Yahoo! confirmed it. As he considered colleges, Rice University’s reputation for excellence in fields like electrical engineering and computer science prompted Rosenberg to visit. “I absolutely fell in love with the campus and the people,” he said. “It was small, esteemed, and I really enjoyed the time I spent there.”
He arrived at Rice planning to major in electrical engineering, but switched to computer science, deciding he really wanted to focus on the craft of code.
Unlike most of his Rice CS classmates, Rosenberg interned with the same company each summer. “I worked at Yahoo! every summer while I was at Rice, and at one point left school to work full-time for them one year,” he said. “Learning the theory and various aspects of computer science at Rice and learning real-world applications on the job was a powerful combination.”
Rosenberg graduated in the summer. As soon as he had met his degree requirements, he headed straight back to the Bay Area went to work for Yahoo!
Having started with Yahoo! in its earliest days, Rosenberg felt a lot of ownership in the company and his emotional attachment to the company made it difficult to leave after thirteen years. But a trusted friend encouraged him to consider a role at Zynga. “It was a gaming company doing some really interesting work, and I’m a nerd – I love games!” said Rosenberg, who joined Zynga as a lead developer and soon became a CTO of one of Zynga’s platform technology groups at 29 years old.
That connection made Rosenberg recognize career advice he now shares with other CS students and employees. He said, “I really trusted that friend and former co-worker who encouraged me to leave Yahoo! for Zynga. As you build your network and maintain your relationships, remember who you really cared about and connected with. You are going to need those kinds of people later, especially if you are going to be an entrepreneur – you’re going to need them to come work with you!”
Entrepreneurship had tempted Rosenberg for several years, but he had not found a cause that inspired him. Coincidentally, his brother, Sasha Orloff, was fueled by twin passions: entrepreneurship, and making financial services more accessible and affordable to the bottom half of the U.S. population.
“Sasha’s entire background is in financial services, including micro-lending and opportunities to improve financial services inclusion. But he was frustrated by the limited opportunities to make big and impactful changes while working at a large bank. Each year over Thanksgiving, he’d talk about his frustration and I’d say something like ‘oh, that sounds like a software problem’. The challenge is that many banks outsource their software instead of building technology in-house, so it’s hard for them to adapt rapidly.”
In 2012, the brothers decided to launch their own financial services company – one that put software front and center. They felt the way financial services worked for 56% percent of the people in the U.S. was broken. These are Americans who may have a low credit score (generally defined as below 680), or a thin credit file, and as a result, are shut out of traditional banking. The fees for small, short-term loans were much higher than for large loans. The loan or credit application process was more cumbersome, and the likelihood of being approved was much lower for the bottom half of the U.S. – those with the least money in the system.
“Sasha finally looked at me and said, ‘Let’s do this,’ and I realized that financial services empowered by technology and grounded in social impact was a challenge I was eager to take on,” said Rosenberg.
The mission of their company, LendUp, is to provide anyone a path to better financial health. They launched with personal loan products and have since expanded into credit cards. “People using payday loans can switch to our product to get loans at lower costs, and more efficiently, with great customer service,” he said.
“As they pay back their loans over time, many of them are able to build a credit history that can earn them lower rates and larger dollar amounts. But we also embed financial education into our products. That means we’re able to teach them the importance of better financial behaviors and as they continue making progress, they are working their way back into the prime financial market and can become eligible for bank-level credit cards.”
One of the groups who benefit most from LendUp’s services are people in the gig economy – employees in hourly jobs or those who are paid for completion of individual tasks or projects. “If their income shifts from month to month, there’s a greater chance that they may have an unexpected gap between what they earn each month and their bills,” said Rosenberg. In fact, LendUp research shows that about 70% of its customers report having month-to-month income fluctuations. More than half (57%) report that their income can fluctuate by $100+ per month, and one third report that their income can fluctuate by $200+ month.
Because Rosenberg had spent years building efficient communication channels and social cohesion systems, he knew that technology should not shrink opportunities or make them worse.
He said, “That was a huge motivating factor for me – to make things better for these Americans. You have so few opportunities to write code that has a massive, positive impact on people’s lives. But at LendUp, you can clearly see you are having a genuine, positive impact. In my previous roles I had a lot of fun and I learned a lot about the craft, but there is something special about the work I, and all 200 of us, do at LendUp.”