By LEE SCHAFER , STAR TRIBUNE
August 16, 2017 - 10:02 AM
In Silicon Valley, tech entrepreneurs have said they hope to “make the world a better place” so often, and so unconvincingly, that the phrase turned into a joke on HBO’s satirical “Silicon Valley” series.
In the small Minnesota town of Red Wing, though, tech company founder Susan Langer said she hopes to make the world better, one person at a time. Unlike in Silicon Valley, it seems perfectly clear she means it.
Her start-up is called Live. Give. Save., but this is business, not philanthropy. She has long thought that there’s an opportunity to help people more easily give away money. That’s particularly true if they can’t quite identify the money in their monthly budgets that they really don’t need.
Langer believes that if the money going to savings and charity is a small slice of everything a person buys, from a latte in the morning to a movie ticket on the weekend, then giving money can be more than just a good intention. And the crimp in the lifestyle will never be felt.
Her business is built around an application, a month or so away from going live to a large group of beta users at the Red Wing Shoe Co., that primarily runs on a smartphone. The revenue will come from fees and advertising dollars from affiliates.
It’s a modern tech company, but hers is not exactly a new idea. She’s been thinking about this business opportunity for more than 20 years, since she went on a trip to Africa in the mid-1990s with a faith-based, humanitarian group called World Vision.
She was then a perfect example of what she now describes. She knew she should have been saving more, but couldn’t seem to find the dollars. She knew she should have been giving more to charity.
She didn’t even know exactly what World Vision did when she signed up for the trip. What she quickly learned on the ground in Africa was that as an affluent young credit card marketer from Minnesota, she was the impoverished person. “I saw the wealth inside of them,” she said of the people she met. “They were filled with grace, with hospitality, with generosity and compassion.”
But the trip also presented a problem she couldn’t quite solve. She was spending a lot, from airfare to souvenirs, and she wanted to make sure that for every nickel she spent on herself she would also give a nickel to World Vision. She quickly grew frustrated trying to keep track. What she needed was a tool or a process, something that’s all but automatic and linked to a bank account.
Every five years or so since then, she said, she took her business plan out of the drawer and noodled the problem further. And the timing until recently wasn’t quite right. One reason is that only recently have we seen broad usage of tools like iPhones and electronic payments, she said.
The product about to get its first users will be set up by the consumer and then linked to spending accounts, such as a debit card. The consumer then sets up buckets for additional money, maybe 5 percent of spending to go into a savings account and 10 percent to charities.
The next time the debit card is swiped, maybe at the coffee shop, 5 percent of the $4 for a fancy drink will go into savings and 10 percent will go to a charity like Habitat for Humanity.
In terms of cash flow, that’s an overnight increase of 15 percent in daily coffee costs, but the beauty of doing philanthropy this way is that it won’t take another decision. The amounts going to charity and savings will seem a lot like a sales tax the user has given no thought to and a tip that’s also more or less automatic.
Having the money seep out over time without a user giving it much thought isn’t perfect, though, because that would strip the act of giving of some of its meaning. Instead, the Live. Give. Save. app will send a congratulatory message when a charitable goal is achieved.
It may be that 5,000 meals for the hunger relief group Feed My Starving Children just got funded. Now the money the consumer didn’t even miss bought something tangible. And it’s the kind of information that might get a person to increase giving from 10 percent to 12 percent.
There are competing services available in the market that help automate savings, such as the Acorns service that basically vacuums up digital loose change and sticks it into savings. But to Langer, the line between saving money and giving it away isn’t so bright, as both mean taking money away from the things that provide immediate gratification.
And that seems to be the key. Users of her service won’t experience a skinnier lifestyle, but a richer life.
The data seems pretty clear, she said, that people who regularly give the most money away feel far more in control of their financial affairs. They are at ease.
She brought up the biblical teaching of what can be accomplished with faith and just a few loaves and fishes — you may know the story, how a kid provided five bread loaves and two fish that managed to feed thousands — when discussing the funding of her young company.
Hopefully the investor capital flows easier once she has users. She’s gotten this far with a bit more than $200,000 of investor capital, her own family’s money including proceeds from a home mortgage, and her retirement savings. She’s even pledged a life insurance plan. “So I put it all out there,” she said. “I believe.”
She turns 56 in September, and she joked that in meetings with other tech entrepreneurs, the other founders “could be my kids.”
But being older than a typical tech company founder isn’t the only thing that’s going to set her apart when meeting potential investors, said Jeanne Voigt, a Twin Cities investor and consultant who has advised Langer. “It’s a big idea, and it’s doable,” Voigt said. “And it’s doable because of her. I’ve never seen anybody as deeply driven by mission. And so good people flock to her.”