How American Student Debt Motivated Me to Become an Entrepreneur
How the 2008 credit crisis affected my worldview
I was still barely a teenager when Lehman fell apart (the 4th largest investment bank in the United States). This crash was not about Lehman, this was the face of the impending global economic crisis of 2008.
I became fascinated by the events that took place thereafter and have read a few dozen books on the subject since then. Books like The Big Short by Michael Lewis and Mervyn King’s The End of Alchemy are classics in my eyes and I think they’re essential reading on the matter.
The central theme of those turbulent events is that traditional banks lost much of their credibility and trust from the public because of the reckless risk-taking their boards allowed them to take. So much recklessness that the repercussions of their actions had implications not just in the United States, but for savers and workers across the globe.
Think about it for a moment: Bitcoin probably never would have existed had it not been for the fallout from Lehman Brothers, AIG, Bear Stearns, etc.
People want change, they’ want incentives, better outcomes, fewer — or no — intermediaries; they want transparency, options, and flexibility.
One of the biggest fallouts from the credit crisis is that many people to this day are still denied access to credit.
Why do you think rent prices in New York, Chicago, and LA are booming? Because no one can get a loan.
This is especially true of the young, who are stuck in their parents’ basement seemingly forever.
They’re not buying homes; they’re not starting families. They’re stuck in debt from college loans; they can’t refinance or buy a car or even get a credit card in many cases.
This a national crisis — and we want to demonstrate to people that a fresh perspective can go a long way.
Why I believe crypto peer-to-peer lending could save the day
When I was in college at Penn State, my American friends would come to me one by one and ask to borrow money. Now the sums of money they asked to borrow were relatively modest, but I thought it was ironic:
Here we were in the richest nation in the world, yet why was it that so many college students were completely broke?
Eventually, I mentioned this phenomenon to some of my other classmates — who were also foreigners — studying in the United States and they were finding the exact same thing: all their American friends needed to borrow money.
This personal experience in college was the impetus for Alchemy Coin.
Before continuing, I should mention that nearly without fail, all of the students who borrowed money from me paid me back on time or did everything they possibly could to do so. I think it’s a myth that young borrowers aren’t creditworthy, but rather they’re denied access to credit because of the FICO scoring system that requires a long history or debt repayment. And yet, how can a young borrower develop that successful debt repayment history if they’ve been denied access to credit their entire life? This doesn’t make any sense.
That’s one of the reasons that we intend to start with small loans so students aren’t burdened with debts that are too high to pay back.
We believe college students can, and will, pay back their debts on time at default rates on par, or even better, than the national average because they’re highly educated and understand the implications of a default.
Setting my vision into motion
I’m a born entrepreneur — it’s in my blood. I ran my first company from my college dorm room at Penn State and sold it to a family office before finishing my studies. My first company was in the marketing space, but I always knew I’d eventually end up in finance.
I love numbers and love solving problems even more.
The management theorist Peter Drucker says that all business comes down to just two things: “innovation and marketing,” and boy is he right. People often tell me that I’m an “old soul” — something that I personally take as a compliment, but then again you never know for sure, haha.
But on a more serious note, leadership comes naturally to me.
I’ve had no problem hiring almost a dozen experienced veterans, many from Wall Street, and these are people with more years of experience than years in my entire lifetime so far. However, it’s no big deal for any of us: they seem comfortable with me and I certainly am with them.
We all understand the mission; we believe in the team and we believe that blockchain is a transformative technology that presents an enormous opportunity to investors, borrowers, and lenders alike. Thus we’re moving forward with the plan for Alchemy.
These are still the earliest days for Alchemy Coin as the blockchain space is still in its infancy. And while I have no doubt we’ll encounter hiccups along the way, I’m also confident that we’ll get where we want to be and grow this nascent industry.
At the end of the day, I envision a future that fosters opportunity for young people. And I up for the challenge to make it happen.