The Best Books to Read in 2016


I’m trying to put together my reading list for 2016 and looking for suggestions. What were the best books you read in 2015 that I should read this year?

Here’s what I read in 2015 if it helps spark any ideas for your 2016 reading list.  If you want to start a discussion about any of them, hit me up @ethanaustin


The New Jim Crow:  Mass Incarceration in the Age of Colorblindness by Michelle Alexander

MUST READ:  If there is one book I would recommend reading in 2016 it is this one. I think we are at a pivotal moment in history right now in the fight for racial justice and equality. This is the most illuminating book I’ve read on the subject.  In methodical detail, Michelle Alexander ties together the various components that have created our system of state sponsored oppression leading to the incarceration of millions of African Americans and people of color.  This book was a game changer for me. If you are curious about racial equality and why the Black Lives Matter movement is gaining so much momentum, I highly recommend you to read this book. It will be impossible to stay silent on this issue once you do.

Give and Take:  A Revolutionary Approach to Success by Adam Grant

Good Read. A quasi-business-slash-self-help-book, it’s an easy read filled with lots of fun stories and science to back up the message. The central theme is that people who consistently give to others without the expectation of return tend to wind up the most successful people in life.

The New New Thing:  A Silicon Valley Story by Michael Lewis

Good Read.  I love Michael Lewis books and had never heard of this one until recently. The book was written in 1999 about Silicon Valley so it’s interesting to see what’s held up and what hasn’t.  The protagonist is a guy named Jim Clark, who is most famous for bringing Marc Andreessen out to the Valley to build Netscape.  The book is not as heady as some of his other books like Flash Boys or the Big Short. It’s not as good as those either but it’s still fun to read as Michael Lewis is an awesome writer and Clark was a fascinating guy – kind of like the  Elon Musk of the late 1990s.

Superintelligence:  Paths, Dangers, and Strategies by Nick Bostrom

Horrible Read!!!  Ever since I randomly stumbled into a Ray Kurzweil speech in 2010 I have been super-fascinated by the subject of AI.  Unfortunately, I thought this book was a clunker.  Though it was highly touted by guys like Elon Musk and Bill Gates, I found it to be nearly impossible to read and inaccessible to people of average intelligence like myself.  If you are interested in the subject of AI you can get the gist of the book in one twentieth of the time by reading the ABSOLUTELY AMAZING Wait But Why two part series,  The AI Revolution: The Road to Superintelligence

Man’s Search for Meaning by Viktor Frankl

Good Read.  Not much to say here that hasn’t been said.  It’s a classic.

The Circle by Dave Eggers

Good Read.  This is an eerily spooky farce on Silicon Valley and where things might be heading in the future.  Think:  a modern take on 1984.

Between the World and Me by Ta-Nehisi Coates

Meh. This book has received a lot of praise but I was a little disappointed.  Ta-Nehisi Coates is probably my favorite writer so my expectations were really high and it just didn’t do it for me.

Life on the Outside:  The Prison Odyssey of Elaine Bartlett by Jennifer Gonnerman

Good Read.  If you’re interested in racial justice issues, I’d recommend reading this book after you read the New Jim Crow.  It’s a narrative told through the story of  Elaine Bartlett who goes to prison for nearly 20 years for her first drug offense.  Whereas the New Jim Crow is very academic, this book is gritty and real and illustrates in human terms the horrible effects of our country’s racist drug policies and criminal justice system.

Asylum Denied:  A Refugee’s struggle for Safety in America by David Ngaruri Kenney.

Great Read. The book was written in 2008 and chronicles the story of a Kenyan seeking asylum in the US after he had been tortured by his government  for leading a farmers’ protest for higher wages.  Co-authored by Philip Schrag a Georgetown immigration law professor, Kenney’s narrative shines light on the heart-breakingly inequitable laws we have in the US surrounding the asylum process.  Many of these restrictive laws were put in place by congress after the 9/11 attacks based on irrational fears that terrorists could use the asylum process to sneak into the country.  Incredibly powerful and timely for anyone concerned with the Syrian refugee crisis, I read this book in Dec 2015 amidst all the fear-mongering taking place after the Paris and San Bernardino attacks.  I think what was most powerful about this book was that the introduction written by Schrag in 2008 seems so prescient today.   In it he wrote:

[Overly restrictive] statues and proposals such as these are based on the ludicrous idea that asylum is easy to obtain and that terrorists can therefore evade immigration restrictions by masquerading as refugees.  Actually, asylum applicants must go through an exacting examination based on documentary evidence to prove their identity and the truth and validity of their claims…a terrorist would be poorly advised to apply for asylum, because an applicant comes to the attention of officials who question every aspect of the individual’s life.

A Hologram for the King by Dave Eggers

Horrible Read.  This book was a bag of poop.  Not Dave Eggers best work.

The Art of Asking; or, How I Learned to Stop Worrying and Let People Help by Amanda Palmer

Okay Read.   I don’t think I learned anything particularly novel from it but it was entertaining and fun to read.  It was written by rock star and TED speaker, Amanda Palmer.  She tells her own story about vulnerability that is very real and honest.

Harvest of Empire:  A History of Latinos in America by Juan Gonzalez

Okay-to-Good Read.  I thought this book was interesting.  It tells the immigration story of Latinos in America and  how different each group’s story is.  It highlights, Mexico, Puerto Rico, Dominican Republic, Cuba, Guatemala, Panama and a handful of other countries I can’t remember. The biggest eye-opener for me in this book was how much Puerto Rican citizens suffer due to PR’s  limbo status of being an American Commonwealth.

Bossypants by Tina Fey

Good Vacation Read:  Easy, funny vacation read.  Good for when you need a break from the real world.


Tagged ,

How To Win At New Year’s (Or How To Never Feel Bad About Not Meditating Again)

45% of Americans made new year’s resolutions two days ago.

The rest of us ate a donut.

Let’s admit it. New Year’s resolutions kind of suck.

So here’s an idea for 2016: GIVE IT UP!

That’s what I did four years ago, and today I’m a happier, healthier and more productive person because of it.

With that one decision I expunged from my life the feeling of failure and self-loathing that would inevitably arrive every January 4th when I remembered how much I hated meditating and eating kale. (Side note: Fuck kale. Seriously.)

With the exception of super-annoying people like Tom Brady, who eats avocado ice cream for his cheat meal, most real human beings can’t just say “I resolve to do X” and then will themselves to becoming an awesome person.

As a species we are just not programed to work that way. Science backs this up. Only 8% of Americans will actually achieve their resolution in full this year.

So why do we continue setting ourselves up for failure every year in a game where the odds are so stacked against us?

For me, it was convention. It was simply easier to do what everybody else was doing than to actually think for myself.

When you realize the odds of a game are stacked against you, either play a different game or change the rules to shift the odds in your favor.

In 2012 I chose to play a different game. I finally quit making new year’s resolutions.

This didn’t mean I’d given up on self-improvement and resigned myself to a life of Tombstone pizzas and sweatpants.

when brittany leaves

I’ll admit at certain times in my life, I’ve given serious consideration to the Tombstone and Sweatpants route

Instead, I opted for different path to self-improvement.

In December of 2011 my friend Patty invited me to a new year’s day vision board party.

“A what party?” I thought to myself. “I am too old to be doing hallucinogens.”

I googled ‘vision board party’.

As it turns out, it was completely different from what I had been picturing.

A vision board party is where you get a group of friends together, cut out pictures from magazines of things you want in your lives and then paste them on a board that you can keep throughout the year . The idea is that by envisioning this life you want, you are more likely to manifest it.

I’ll admit I was skeptical. Going to this vision board thingy seemed like an awfully slippery slope to becoming a full-blown, new-age mystic.

All sorts of questions raced through my head.

Will I have to start listening to Enya? Will I start wearing patchouli? Is my future going to look like this? I’m not sure if I’m prepared to make this leap.

But my friend really wanted me to come. So I agreed to go. When I got there I was blown away.

First off, there was no Enya. Second, it was fun.

Creating a vision board gave me an opportunity to reflect on my past year, and more importantly, it gave me an opportunity to be purposeful about what I wanted out of life going forward. After a few hours of cutting and pasting pictures out of magazines I had a visual representation of the way I wanted my life to look like in 2012 and beyond. Since that time, I’ve made a new vision board every new year’s day.

Yesterday I pulled out my original board from 2012. Amazingly, about 80% of the things I put on it in 2012 have now become a part of my life.

For example, in 2012 I had never climbed a mountain before and it was something I really wanted to do. So I put a picture of a guy scaling a mountain on my vision board. I then hung my vision board over my dresser so that every morning when I got dressed I saw the picture of that guy scaling the mountain. This created a daily visual reminder throughout the year that mountain trekking was something important to me.

It was something I stayed focused on for the year and eleven months later I summited Table Mountain in South Africa. Granted this was a far cry from scaling Everest but it was a start in right direction. I loved the feeling of sitting at the top and looking out at the world. It was a feeling I couldn’t shake.


Summiting Table Mountain, South Africa 2012

The next year, I put another picture of a mountain on my vision board. That year, my wife and I got married on top of a mountain in Banff after a 7 mile hike with our families.
wedding photo banff

Hiking up the Plain of Seven Glaciers for our wedding in Banff in 2013

For our honeymoon we went heli-hiking in the backcountry of British Columbia.

Hiking Mt. Nimbus in the Columbia Mountain Range our honeymoon in 2013


The next year, I didn’t need to put a picture of a mountain on my vision board. I no longer needed a visual reminder. Seeking out the mountains is something that had become ingrained in me.

Why Vision Boards are Better than New Year’s Resolutions

What I love about vision boarding is that unlike new year’s resolutions that are binary and end in failure 92% of the time, vision boarding is more of a continuum.

 You don’t have to achieve all the things on your board in one year. Nor do you have to create narrowly defined goals of what you specifically want to achieve. (e.g one year I just put up tacos).

I like to treat vision boarding like OKRs where I hope to do maybe 60-70% of the things I put up on my board. For me, it’s more about starting down a path of making continual improvement than it is about hitting specific milestones and achievements within an arbitrary timeframe.

Four years after my first vision board, I have not accented any of the world’s seven summits. Nor have I even done any serious mountaineering yet. But what I have done is taken the first step — the hardest step. I’ve shown up.

Little by little, I have made hiking a part of my life and I’m so much happier because of it.

Yesterday, I was at REI and purchased an alpine jacket for a 10-day hiking trek my wife and I are taking this year in Patagonia. Nowadays, I can’t imagine my life without the mountains being a major part of it. I have my vision board to thank for it.

 — — — — — — — — — -

If you liked this post, please share it, follow me on Medium  or subscribe to get more posts like this in your inbox.

The Four Most Powerful Words in the English Language

I believe in you

I believe in you.

These are the four most powerful words in the English language. When we share these words with someone, everything in the universe becomes possible.

Yesterday I met with a couple of GiveForward’s early angel investors. These were the dudes who bet on us in our first funding round in 2010 before crowdfunding was even a thing. They believed in us before anyone else did.

I told one of them half jokingly that while I appreciated all the advice he’d given us over the years, in all honesty most of his tactical tips on management and leadership went in one ear and out the other.

His eyebrows raised up as if to say, “well jeez, thanks…you dick.”

But then I said

You know, that’s not the point. It doesn’t matter what you said. It’s how you made us [my co-founder and I] feel. That’s the important part. Whenever we left a meeting with you we felt like a million bucks — like we could go out and tackle the world because you believed in us and you always let us know that.”

The ‘value add’ he created as an investor wasn’t his wisdom, it was his character.

As a founder, I’ve tried to model my behavior after his. For many years when someone would ask what I did at work my response was simply,

“I’m the head cheerleader. My goal is just to make people believe in themselves.”

Everyone Needs a Head Cheerleader in Their Life

When we build people up rather than break people down we achieve so much more in our classrooms, in our homes and in our companies. Study after study backs this up.

In a study conducted at Harvard, Asian women were given math tests. Before the first test they took, they were told to think about the fact that they were women (who are stereotypically worse at math then men). They later took a second test of equal difficulty, but this time they were told ahead of time to think about the fact that they were Asian (who are stereotypically good at math). The second time around they scored far better simply because they were primed to believe in their own abilities.

Similar results have been seen in African-American students who were given tests the day before President Obama got elected in 2008 and the day after Obama got elected. The day after his election test scores rose dramatically because having a role model in the white house temporarily freed the kids from self-doubt and internalizing negative racial stereotypes. (H/T Shawn Achor)

But it’s not just academic studies. The power of believing in people is real. I see it day in and day out.

Yesterday I got an email from a GiveForward user — a teacher at an inner city school where almost none of the students’ parents went to college. A few months ago she raised $3000 to take her students on college campus tours. As the money was rolling in she wrote that her students couldn’t believe that strangers on the Internet were donating to their trip. For many of them it was the first time a stranger had ever said “I believe in you.” Today twelve acceptance letters have come in and eleven of them have come from colleges where the students had toured.

They visited the campuses. They met with alumni from their high school who had gone through the same program. And now they are beginning to believe in themselves and their abilities.

The teacher asked if there was anything they could do to return the favor. I said,

“Make sure that the students know it’s their obligation to mentor the next class and then the class after that.”

If Anyone Has Ever Believed in You, You Have an Obligation to Believe in Others

I grew up in a very privileged environment. Throughout elementary school, high school, college, law school, and then in the startup world, both my inner circle and society at large told me I could do whatever I wanted. For most of my life I never gave any thought to the fact that this isn’t true for everyone.

I feel strongly that we need to make it true for everyone. If you have ever benefited because someone believed in you, then you have an obligation to believe in someone else.

Last night I got a text from a buddy who was one of the first in his family to go to college. When I met him a few years ago, he was trying to get his feet under him in the startup world. Today he’s absolutely killing it and was just recruited to join a venture capital firm. He texted me:

He said he would. I just hope he looks good in a cheerleading skirt.


Peak San Francisco

I was at a tech conference the other day in SF. My buddy was one of the speakers. All the speakers got a bottle of wine.

Buddy: I’m going to Shyp the wine home so I don’t have to carry it around all day.

[Shyp is an on demand shipping app where you take a photo of something and someone comes to pick it up and mail it]

Me: you realize that is pretty much the most San Francisco thing you could have possibly said.

Buddy: yeah, it was, huh? But I don’t want to carry it around all day.

Me: What if it’s shitty wine and the cost of it isn’t even worth the shipping costs?

Buddy: Oh, good call.

[He then proceeds to pull out another app that scans the bottle label and spits out the price of the wine. Upon realizing it was cheap wine, he leaves it on the table.]

I’m calling it right now. San Francisco has officially reached peak craziness. This town is nuts.

Why Crowdfunding Isn’t Enough

why crowdfunding isn't enough

When we launched GiveForward in 2008, we were innovating a brand new concept. The term crowdfunding hadn’t been popularized yet, Kickstarter was still months away from launching, and the idea that one could simply set up a site on the Internet and ask friends and family to contribute to a medical fund was completely novel.

Today, we are in a different world. It’s hard to imagine someone who hasn’t contributed to a medical crowdfunding campaign either for a friend, a family member, or for someone they read about in the news.

To date, millions of people have visited GiveForward and raised over $170 million for out-of-pocket medical expenses and life-saving treatments. We boast a net promoter score higher than Apple or Zappos and our office walls are filled with handwritten cards from users (we call them “hugs”) exclaiming how GiveForward has changed their lives. It’s been easy to feel good about what we are doing.

But the reality is we grew complacent.

Simply put, we stopped innovating. Until one day last year we finally woke up and realized that the industry we had helped pioneer had become commoditized — a giant indistinguishable mass of crowdfunding platforms all offering a nearly identical feature set. Even more remarkable than this convergence towards the norm was the realization that every platform, including GiveForward, looked and functioned almost exactly as it did five years ago. Complacency had steamrolled innovation.

So late last year we decided it was time to take a step back and reexamine EVERYTHING. We asked ourselves a single question:

Are we really solving the problems of our users?

When we opened up a dialogue with our community the answer we got back was a resounding no. We were only solving a tiny portion of the challenges our community faced. It turns out crowdfunding just isn’t enough. So we set out to build a better solution.

Evolving Beyond Crowdfunding

Someone going through an illness or a challenging life event needs much more than financial support. They also need meals coordinated and delivered, extra help with childcare, transportation to and from treatment, and a way to communicate updates with friends and family. Most importantly, they need a community to rally behind them and let them know that they’re not alone. Until now, people would have had to navigate four or five different sites to tackle all these needs.

Starting today, they will need just one: GiveForward.


This morning, we announced the launch of the new GiveForward, a centralized place where friends go to help the people they care about in many different ways — everything from sharing photos and “thinking of yous” to coordinating meals, sending needed wishlist items and raising money for out-of-pocket expenses. We want GiveForward to be the first place people turn when someone they know is going through a major life event. But just as importantly, we want it to be the place they come back to again and again to support their friend throughout their journey.

What’s really exciting for us is that we’re already seeing this happen. During our beta period of 1650 new GiveForward pages, we saw a 322% increase in returning users as compared to our legacy fundraising pages. People are coming back, sharing and giving in new and different ways. We see this as a beacon of promise.

Looking Towards The Future

Our new vision has made 2015 our most transformative year yet. This evolution beyond crowdfunding helped us attract a new CEO and some of Chicago’s best executive and product talent to our team. It also helped earn us our biggest partnership to date. This month marks the beginning of our partnership with Nationwide Insurance, a company whose mission aligns so much with our own. When we told them about our vision for the new GiveForward, we couldn’t believe how quickly they embraced it and moved to help make it a reality. Nationwide is a Fortune 100 company, but we’re lucky that they also happen to be one of the most innovative companies in the world. We believe that the new GiveForward will be built on partnerships like this one with companies that share our values and care deeply about making people’s lives easier when they need it the most.

For GiveForward, 2015 is going to be a year of taking what we started to the next level. In 2008 we pioneered the world of medical crowdfunding, but we didn’t go nearly far enough. Today we’re evolving the world of crowdfunding into something that truly solves the needs of people going through life’s biggest challenges. It’s exciting to be innovating again. Suffice to say, we’re through being complacent.

Colleges Should Get Rid of First-Week Orientation and Replace Them with Startup Weekends

image via Webrazzi

I attended my first Startup Weekend in 2012. I fell in love. It was raw and exciting, and the energy coursing through the building was electric. While there I met two guys, Jimmy Odom and Kirk Lashley who were working on an idea called Ratingskick in a hallway covered in pizza boxes. For the life of me, I couldn’t understand what their company was actually supposed to do, but I loved the passion that these guys had. It was contagious. They ended up winning the “Most Innovative Company” award.

After the weekend, Kirk and Jimmy (who had just met eachother at the event) decided to try to bring RatingsKick to life. It didn’t work out, but a few months later, while Kirk was on vacation, Jimmy attended another Startup Weekend with a new idea for a delivery service. This time Jimmy met Daniella Bolzmann. The two of them would work on a company pitch and ultimately they won the competition.

After winning, Jimmy, Kirk and Daniella decided to make the company a reality. They called it WeDeliver. They built a product, raised a seed round, hired a team, processed millions of dollars of transactions and two years later were accepted to join the Chicago Techstars class of 2014. On top of a great company, the three of them created lifelong friendships out of random couple of weekends. That’s the magic of Startup Weekend.

WeDeliver team with Mayor Rahm Emanuel at Chicago’s Techweek

Earlier this week Techstars announced that it had acquired UP Global, the parent company of Startup Weekend. This is a big win for Techstars and an even bigger win for the global startup ecosystem.

In acquiring Up Global and their 1000 global startup events per year, Techstars Techstars is helping to facilitate serendipity, or as David Cohen likes to say helping people become more “open to randomness.” Perhaps most importantly, Techstars is helping to widen the highway of the entrepreneurial journey. It’s making entrepreneurship more accessible to millions of people around the world and widening the funnel for the global startup talent pool. Not every company will become the next WeDeliver, but more people will, for the first time in their lives, truly believe that entrepreneurship is a real career path they can pursue. And this is a great thing.


Techstars has made it clear that it doesn’t plan to change up anything major with Startup Weekend, but if their goal is to truly widen the highway for the entrepreneurial journey, I think they should partner with universities across the world so that all students are exposed to technology and entrepreneurship at an earlier stage.  Imagine if colleges got rid of their regular first-week orientation activities and instead replaced it with a Startup Weekend?  How cool would that be?  How many more Wedelivers would the world have today?

UPDATE:  5/25/15

A day or so after I published this post, WeDeliver was acquired.  Congrats to the team!

Tagged , ,

Is Social Entrepreneurship a Scam?

Compassionate Capitalism

Former Chester French frontman, D.A. Wallach wrote an essay on Medium the other day called “When Mother Teresa Drives a Ferrari: Why Compassionate Capitalism is Kind of a Scam.”

In it, he argues that compassionate capitalism is not a viable path and that the worlds of business and social good should be separate. He specifically points out the alleged inequity of the one-for-one model popularized by TOMS shoes, which he believes exploits the poor in order to sell more commercial products. At the end of his essay, he invites the public to post their rebuttal. Here’s mine.

Don’t Throw the Baby Out with the Bathwater

As someone who has run a for-profit, social venture for the last seven years where the societal good is baked directly into the product, I can assure you that the TOMS one-for-one model does not represent the entirety of the compassionate capitalism movement. In my opinion, the best social ventures, those like Kickstarter, bake societal good right into the product rather than tacking it on at the end.  I personally think TOMS does more good then harm, and while Wallach may have some legitimate concerns with the TOMS model, reducing the entire compassionate capitalism movement to a single shoe retailer is a whack argument.

Profit and Societal Good are Not Mutually Exclusive

In rejecting compassionate capitalism, Wallach argues for a future where we celebrate the “baldly ambitious capitalists” rather than the “confused philanthro-entrepreneurs ” — a future where social justice is exclusively the domain of do-gooders working at non-profits, and making money is exclusively the domain of the “rapacious business person.”

For example, in Wallach’s world:

If you start an oil company that poisons the earth for future generations you should be celebrated for your baldly ambitious thirst for wealth. Well done, sir! Enjoy your G6.

Or what if you start a candy company that uses child slaves in Africa to pick the cacao so you can sell a Snickers for just 99 cents? High-five for you, you savvy capitalist. That’s a great comparative advantage you’ve discovered!

But if you start a shoe company like TOMS that donates a pair of shoes to an impoverished child for every pair of shoes purchased? Whoa, whoa, whoa. Hold up, there, you wolf in sheep’s clothing!!! You’ve just crossed a serious ethical boundary.

How does this make any sense?

It doesn’t.

If we take Wallach’s argument to its logical conclusion we are accepting a society where doctors, nurses, fireman and teachers deserve to live in poverty because they choose to help others, while those who work in fields that yield no societal benefits (think high frequency traders) deserve to profit off of others simply because they are explicit and open about their profit motives. This is not a world in which I would like to live.  The idea that profit and social good must be bifurcated is a false dichotomy we should reject

Who Has the Right to Drive the Ferrari?

To make his point that doing good and doing well are contradictory in nature, Wallach asks the rhetorical question:

“What if Mother Teresa drove a Ferrari? You’d be bothered, right?”

My answer to that is a resounding no. If Mother Teresa is generating an abundance of societal good in the world, then let her drive as many Ferraris as she wants.

Getting bothered by Mother Teresa driving a Ferrari is about as logical as a CEO telling her top salesperson to stop making so many sales because it’s not fair he’s personally getting rich from his commissions. If the salesperson is creating an abundance of enterprise value for the company, give him the Ferrari. If Mother Teresa is creating an abundance of value for society, she deserves the Ferrari too.

And you know what? The reality is that the Mother Teresas of the world already do drive Ferraris — They have for a long time. They’re called pediatricians and they are the ones who save kiddos’ lives on a daily basis. They possess a scarce set of skills and create an immense amount of societal good. Because of this, the average pediatrician earns $173,000 a year. And yes, some of them do, in fact, drive Ferraris

Is that okay? I think it is.

If, as a society, we can largely agree that it’s okay for a pediatrician to earn $173,000 a year in exchange for all the value she creates in society, why should we be uncomfortable if a twenty-one-year-old social entrepreneur does the same?

The only major difference between the doctor and the social entrepreneur is scale.

For instance, let’s say a surgeon can perform 100 life-saving surgeries per year and earns $7000 per surgery for a total of $700,000 per year. The limiting factor of her earning potential is her ability to scale. But what if she figured out a new technology that allowed her to perform 1000 life-saving surgeries per year instead of 100, and she was able to do them at half the cost? As a society, we would all benefit from this technological advancement. She would save 10X as many lives at half the cost to the consumer. In exchange, she would earn $3.5million a year for her work. Everyone in this situation is better off.

This is EXACTLY what compassionate capitalists do. They tackle the world’s biggest problems, like healthcare, hunger and global warming, and they use technology to figure out how to solve these problems at scale.

Elizabeth Holmes is a prime example. Holmes is the 31-year-old founder of Theranos, a blood testing company based out of California. After her uncle died of cancer that was caught too late, Holmes dropped out of Stanford in 2003 determined to find a way to detect diseases earlier. Fueled by her passion to improve the world, she developed a way to test a drop of blood at a fraction of the price of commercial labs. According to Forbes, the Theranos process is faster, cheaper and less painful than traditional blood tests and can run up to seventy screens at the same time. Holmes’ ingenuity will help save millions of lives and has already created an immense amount of societal good. Today her company is worth $9 Billion and she is the world’s youngest self-made woman billionaire with a networth of $4.5 Billion

THIS is compassionate capitalism at it’s finest. This is a formula that works.

As Dan Pallotta eloquently explained in his 2013 TED talk, the existing non-profit model — the Wallach model, is dead. The Holmes model is the model of the future.

My Own Experience With Compassionate Capitalism

Having started one of the first startups in Chicago to have success with a compassionate capitalism model, my co-founder, Desiree Vargas Wrigley and I have faced a continuous uphill battle trying to convince the D.A. Wallachs of the world that this new paradigm works. In the early years, it was the old-school VCs who would often say things like “I love everything about your business, but there’s just one thing I can’t get behind. It feels like you should be, you know, a non-profit or something.”

They couldn’t wrap their heads around this new world where black and white is not clearly delineated. To be fair, it wasn’t exclusively Chicago VCs, it was almost all VCs. The idea of a for-profit business that did good simply made their heads explode.

In fact, in 2012 when we were raising our Series A, this issue became such a deal breaker with so many VCs that eventually we decided to get the question out of the way before we’d even open our deck.

We would start pitch meetings by saying:

“Before we go any further, how do you feel about investing in a company that is going to do a ton of good in this world and is also going to make you a ton of money?”

When we pitched Phin Barnes and Josh Kopelman at First Round Capital, Josh responded “Are you asking if you need to add gambling to make us interested?”

Of course, Josh was joking.

The forward thinking VCs, like Josh and Phin at First Round Capital, Eric Paley at Founder Collective and Matt McCall at Pritzker VC — they got it. They understood that the world was changing and that for-profit businesses could both do good and do well at the same time.

Fortunately for us, they all decided to invest. And because of that, today we have helped save thousands of lives and kept tens of thousands of families out of medical bankruptcy. To me, this is an unqualified and resounding win for compassionate capitalism. There’s simply no way we could ever have done what we are doing as a 501(c)(3) non-profit. Our company could not have scaled. Families would have gone bankrupt. People would have died. And this, in my opinion, is why D.A. Wallach is wrong.

Tagged , ,

GoFundMe’s $500 Million Valuation – How Medical Crowdfunding is Eating the World – Part 2

When TechCrunch reported last week that GoFundMe was raising capital at a $500 Million valuation, I decided to write a two-part blog post discussing how a crowdfunding site not named Kickstarter could attract such a high valuation. The short answer is that it has to do with the exponential growth of medical crowdfunding.

Part One of the post laid out the reasons why medical crowdfunding is quickly becoming the largest category in crowdfunding. Part Two of this blog post answers the question of “why now?”

To recap from Part One, the rapid growth in medical crowdfunding over the last five years has to do with three underlying factors:

1.  There is a massive healthcare problem in the US

Americans spend $400 Billion on out-of-pocket medical expenses each year for things that insurance doesn’t cover like co-pays, travel to and from treatment and lost wages)

2.  Healthcare costs are rapidly outpacing wages.

Increasing income inequality is hurting average Americans.  Healthcare premiums have increased close to 200% over the past 15 years while wages have only increased marginally.

3.  Medical crowdfunding changes lives.

Medical Crowdfunding campaigns have become the modern day way of letting someone know “we love you. You’re not alone.”

But Why Now?  

Modern day crowdfunding sites have existed since around 2008. Yet the New York Times reported in January that the tidal shift in the  medical crowdfunding space is just beginning.  If medical crowdfunding truly is eating the world, the next big question is why now? Why 2015?  The answer has to do with changing demographics and the evolution of social norms.

1.  Demographic shift –  Crowdfunding is moving beyond the twenty-something-early-adopter and towards the thirty-something early majority.

To understand the story of medical crowdfunding, we need to first understand the history of crowdfunding and who were the early adopters.  The story begins with Kickstarter and artists.

If we imagine someone starting a Kickstarter campaign in 2010 to produce a new album or a documentary, we could imagine that he might look like this guy.  Let’s call him Sebastian.

Hipster dude

Or if he was launching a really successful successful campaign maybe he even looked like this mustachioed  gentleman.


In general, the Sebastians of the world were twenty-something, tech-savvy, early adopters. The people using Kickstarter were cool, the projects they were creating were cool, and everything about Kickstarter exuded cool.  Had crowdfunding started with a different category like medical, it probably wouldn’t have caught on because it doesn’t have the same “coolness” factor, and the tech-savvy, early adopter cool kids never would have tried it.  To be absolutely clear, while crowdfunding existed before Kickstarter, modern crowdfunding would never have taken off without Kickstarter.

Flash forward to 2015.  If we imagine a person starting a GiveForward, GoFundMe, or IndieGoGo Life campaign she might look more like this. Let’s call her Jenny.

soccer_mom (1)

Jenny is a busy mom in her thirties raising money for her high school friend battling breast cancer.  She’s at the age where for the first time someone in her peer group might have an early cancer diagnosis.  Jenny’s not a technology early adopter. She’s the early majority.  She doesn’t use crowdfunding because it’s cool.  She uses it because it’s useful.  

In short, crowdfunding is growing up. It was popularized by Sebastian and the cool kid crowd (arts and technology) between 2009-2011.  Between 2012-2015, it began to cross the chasm beyond early adopters.   Over the past few years, much of the growth in the sector has been due to the early majority adopting this technology.

Put another way — remember when your mom first joined Facebook or got a smart phone? Crowdfunding is starting to go through a similar maturation process.  It’s not just for the young’ns any more.  It’s for everyone.  Because like Facebook and smart phones, crowdfunding is moving from cool to important.

2.  Changing Social Norms – The Shift Away from American Rugged Individualism

The other tidal shift we’ve seen in the past few years has been a shift in an American values system that has traditionally placed a stigma around asking for or accepting help.  This stigma stems from a false narrative of ‘American rugged individualism’ and has caused millions of families to suffer in silence rather than accept help from those who love them.

Over the past few years, however, social norms have begun to evolve.  This shift, at least in part, can be traced back to 2013 after the Boston Marathon bombing when tens of thousands of people across the country rallied for the victims by setting up crowdfunding campaigns on their behalf.

One such fundraiser on GiveForward raised close to $900,000 for a young newlywed couple that both lost limbs in the bombing.  Another on GoFundMe raised over $800,000 for a double amputee.  At the time, these were the two most successful medical crowdfunding campaigns to date.

The Boston marathon fundamentally changed something in the American psyche and the way we perceived crowdfunding.  We realized this wasn’t just about the victims. This was about all of us.  Crowdfunding was our way of simultaneously giving the finger to the perpetrators of this horrible crime and offering our unified support to those who were injured or killed.  It was at this moment in time that crowdfunding became a legitimate vehicle to voice our collective will.  Crowdfunding had moved beyond arts and technology.  Crowdfunding had become patriotic.

Most importantly, with the Boston Marathon fundraisers, there was no stigma attached to accepting help. And why should there have been? These victims didn’t deserve what happened to them, and there’s no way they could have ever planned financially for these types of expenses.  Why should their financial futures have been ruined because they happened to be at the wrong place at the wrong time?

So, for a lot of people, that’s when it clicked.  It took a horrible tragedy to bring us to our senses and help us realize that placing a stigma around accepting help for things outside our control is inherently unjust.  Once this wall cracked, we started applying the same logic to similar events in our lives like when a friend got diagnosed with cancer or had a child born premature.

In essence, the Boston Marathon fundraisers helped break the stigma and normalize the idea of medical crowdfunding for much of the country. To be sure, in 2015 the wall has not fully crumbled.  But the cracks are getting bigger and it seems only a matter of time before love and compassion triumph over shame and the damaging lie of American rugged individualism.

GoFundMe’s $500 Million Valuation – How Medical Crowdfunding is Eating the World

Yesterday, Techcrunch reported that GoFundMe was raising capital at an expected $500 Million valuation.  Some folks have been surprised at how big the valuation is but when I heard the number I was surprised how small it was.

I’ve been saying for a while that GoFundMe is a $1B company.  Here’s why.

Medical Crowdfunding is Eating the World.  

Last May I gave a presentation on the trends in the medical crowdfunding space at NYU Stern’s crowdfunding conference. The presentation was called “Medical Crowdfunding is Eating the World” and argued that within five years, medical crowdfunding would be the biggest vertical of all crowdfunding.

Less than a year later, I think it is safe to say that this prediction is going to come true, and probably a lot sooner than I thought. Medical crowdfunding is already the #1 category of three of the world’s top ten crowdfunding platforms including GoFundMe, GiveForward and YouCaring with medical crowdfunding accounting for anywhere between an estimated 25%-70% of the dollars contributed on these platforms.  On top of that, the world’s the second largest crowdfunding platform IndieGoGo, recently joined the club this past December with the launch of IndieGoGo life.

Why is Medical Crowdfunding Eating the World

There are three reasons.

1.  Medical crowdfunding is an insanely massive market.

2.  Our healthcare system is shit and trending shittier.

3.  Medical crowdfunding changes lives.

Massive Market

Deloitte estimates that Americans spend $400 Billion a year on out-of-pocket medical expenses.  This is an insane amount of money.  And these are just the expenses that insurance doesn’t cover like, co-pays, travel expenses to and from treatment, and lost wages.   These are the things people raise money for when they run medical crowdfunding campaigns.

When you compare the potential size of the medical crowdfunding vertical with the size of, say, the technology crowdfunding vertical, it’s not even close.  The need for medical crowdfunding is far greater than the need for technology crowdfunding.  As a rough comparison, in 2013 venture capitalists invested $29.3 Billion into early and late stage technology companies.  Even at the height of the bubble, the total amount invested by VCs topped out at $105 Billion.

$400 Billion vs $29 Billion

If I had to hazard a guess, I would estimate the potential size of the medical crowdfunding market at roughly an order of magnitude bigger than potential size of the technology crowdfunding market.   Simply put, not everyone needs seed capital to start a business or a Bro app. But EVERYONE does need healthcare.

Our Healthcare System is Shit and Trending Shittier

Every 30 seconds an American family goes bankrupt due to medical costs, and the situation is actually getting worse for the average American.

This graph below is called the Milliman Medical Index.  It shows that the cost of healthcare for an average family of four more than doubled between 2002 and 2012.

Millimen Index

The average family of four now has more than $20,000 per year in healthcare costs.

On top of that, families are paying more out-of-pocket today than ever before as insurance premiums and workers’ contributions continue to outpace wages.

Screen Shot 2015-04-24 at 12.20.03 PM

In sum, our healthcare system is broken, and over the past decade or so, it’s only gotten worse for people.  In comes a solution.

Medical Crowdfunding Changes Lives

Medical crowdfunding saves lives.  It keeps people out of bankruptcy.  And it provides millions of people with hope in their darkest and most difficult days.

All you have to do is watch either one of these videos below and you intuitively “get” why these campaigns are popping up everywhere.

(Justin’s GiveForward Campaign) (Mark and Jenny’s GiveForward Campaign)

Medical crowdfunding is not a frivolous activity.  It’s not potato salad.  It’s not a fad.  Medical crowdfunding is the same thing people have been doing for centuries when a loved one is sick — coming together and letting that person know that he is not alone.

Medical crowdfunding is empowerment. It’s compassion. It’s love.  And that’s why it’s eating the world.


Part II

If Medical Crowdfunding truly is eating the world, why now?  In part two, I’ll discuss the evolution of crowdfunding from 2008-2015, the demographics of the space and why medical crowdfunding is just now crossing into the mainstream.

The Evolution Of The Chicago Startup Community – Going From Zero To One

I had a great conversation with Jeff Carter yesterday on Twitter about the evolution of the Chicago startup ecosystem. (H/T to Chicago Inno and this interview of J.B Pritzker for prompting the conversation).  The question at hand was: how do you build a startup ecosystem?


In building anything significant, there is always an order of operations.  For instance, for legendary 1980s Miami startup entrepreneur, Tony Montana, the order was as follows:

1. Build high-margin pharmaceutical business (get the money); 2.  Whack boss/competitor, Frank Lopez (get the power);  3. Proceed to order the Peking duck (get the duck).

In the world of startup communities, the order of operations looks something like this: 1. Build Big Sexy Startup that draws in top talent; 2. Talent spills over to rest of community helping fuel new startups; 3. Venture capital begins to pour in.

Or…if we’re using the parlance of Scarface, first you get the startups, then you get talent, then you get the money. Here’s a brief history of how this has played out over the last seven years in Chicago.

Chicago Startup Community Timeline

2008–2009: The Tech Desert Era

When we launched GiveForward in 2008, the startup ecosystem didn’t really exist in Chicago. In fact, I honestly don’t think I even knew the word ‘startup’ at the time.  That’s not to say there weren’t a few burgeoning tech companies and tech meetups sprinkled throughout the city, but it was still very much an underground movement.  If you were looking to join a startup or invest in a startup in 2008, it was pretty much a tech desert we aint found shit

Today, it’s easy to take for granted all the mentorship programs, accelerators, co-working spaces, and educational events that take place every night of the week in the city, but in 2008 none of that existed. There was no Techstars, no Technori, no 1871, no Lightbank, no BuiltIn, no Techweek, no Starter League, no Dev Bootcamp, no Internet, no Impact Engine etc. Here’s what did exist:  Midventures, BARcamp and Ron May. MidVentures (which later became TechWeek) was three dudes, (Geoff Domoracki, Jonathan Pasky,  Brian Mayer) and a lobby. Every three months or so they’d have a startup event called MV Mixers where four or five companies would give a 10 minute pitch in front of 15-20 people in the fancy lobby area of Geoff’s apartment building.

Here’s some photos from a February 2009 event where GiveForward and Groupon were both pitching.

Midventures Gropon GiveForward 2009

In early 2009 Groupon was a side project and Andrew Mason was actually still pitching The Point.

Midventures 2009 MV MIxer with GiveForward and Groupon

This also happened >> People had Blackberries.

midventures 2009 blackberries

BARcamp Then there was BARcamp.  If MVmixers were for the suits,  BARcamp was for the true nerds and it was even scrappier than the mixers in Geoff’s lobby.   Anyone who wanted to be a BARcamp sponsor pretty much could be, including GiveForward. Hooray!

Screen Shot 2015-04-19 at 1.03.37 PM

Mind you, in 2009, we were bootstrapped, we had made a whopping $6000 in revenue at that point and our website looked like complete ass.  We had no business sponsoring events but we did it anyway, because why not. We were like, you know, one of the biggest startups in the city. Yep, we were total big shots!


The startup bench was pretty thin in 2009, so event organizers would take any crap sponsors they could get. Hell, they even took us!

That was 2008-2009 in a nutshell. In general, there was some small underground stuff going on but there was no national spotlight on Chicago. That would all change in 2010.

2010: Groupon blows the fuck up and Techstars comes to Chicago

In 2010 Chicago got its Big Sexy Startup.   Groupon started blowing up, big time coastal VCs invested, and all of a sudden people are starting to look at Chicago in a different light. At the same time, something else awesome is taking place: Excelerate Labs (now Techstars Chicago) launches.  GiveForward was super-lucky to be part of the inaugural class.  For us, it forever changed the trajectory of our business.  But I think from a more meta-standpoint, Excelerate Labs helped change the trajectory of the entire Chicago startup community. Everyone wanted to be the next Groupon, and now there was a program that could help make that a reality.  It was a paradigm shift for the city.

2011: GrubHub blows up.

In 2011 GrubHub quickly followed Groupon as the next big success story when they announced they were raising a massive $50M round of funding. The business was going gangbusters and by this point they are well on their way to an IPO.

2011–2015: The Groupon + Grubhub Talent Explosion

As much as our low-interest-rate fueled, Techcrunch addicted startup culture lionizes the ginormous funding rounds and valuations we’ve all witnessed in the last few years, investment capital is not the primary driver of a startup ecosystem’s success.  The real driver is a deep talent pool. The effect of Grubhub and Groupon on the Chicago talent pool cannot be overstated. Engineering, product, ops, and marketing talent all moved into the city from elsewhere to be part of these rocketships. And once these companies IPO’d, many of their employees eventually spilled out to join the city’s new generation of startups.

Screen Shot 2015-04-19 at 10.08.43 AM

At GiveForward, I can say we’ve been very fortunate and have benefited in a huge way from all the post-IPO talent on the market from Groupon and GrubHub. Our online marketing manager came from Groupon, our Dev Ops guy, came from GrubHub, our CTO was formerly the CTO of Grubhub, and Mike Evans, the founder of GrubHub is one of our board members. On top of that, two more of our engineers are graduates of Dev Boot Camp, a three month intensive engineering program started by two former Groupon guys, Dave Hoover and Elliott Garms. All in all, about 15% of our team came from either Groupon, GrubHub or some derivation thereof.

Silicon Valley is Silicon Valley not because of access to capital.  It’s because of access to talent. As, Jeff Carter, founder of Hyde Park Angels and West Loop Ventures and one of the pioneers in the Chicago angel investing community stated so perfectly on Twitter, ‘Talent plays the biggest role.  Without it, there is no investment capital.’

With this influx of talent coming into Chicago in 2011-2014, the Techstars, 1871’s and Starter Leagues of the world began to spring up.  The Mentorship, office-space and educational programs that these organizations provided were instrumental in helping the Chicago startup community take hold.

2015 and Beyond: The Final Piece of the Puzzle

The final piece of the puzzle is capital.

While it’s great to have coastal VC firms investing more and more in Chicago, it’s critical to have homegrown firms ready and able to invest into Chicago companies.

Though this last piece of the puzzle has been the slowest to progress, I think we’re close to a tipping point where we are soon going to see an influx of early-stage investors moving into the midwest.    Last week alone, I had conversations with three next generation investors who are raising seed funds right now. All three of them are under 40. One of them is under 30. And two of the three were in Chicago.


Get every new post delivered to your Inbox.

Join 3,836 other followers

%d bloggers like this: