business model, customer development, e245, engr245, lean launchpad, lean startup, stanford, startup, steve blank

1. From Pinecone
to Equify:
Our LLP Journey

2. Play Video Here

3. Our Mission: Reduce the burden of student debt
to unlock the full potential of U.S. grads
Equify
Student financing via flexible
and customizable loans
Pinecone ISA
Student financing via income share
agreements
3
Mike Saltzman Amir Damerdji Sam Abernethy Iryna Kryvda Leeor Mushin
Picker
MBA & BS Engineering
Hustler
MSx & MS Engineering
Hacker
PhD Applied Physics &
MS Mathematical Modelling
Hacker
MS Management Science and
Engineering
Designer
MBA & BBA/BA
100+ Interviews

4. How it All Started

5. 5
We had to assemble the right team...

6. First Main Learnings
Who are our customers and
what do they actually want?

7. 7
Test 001:
Which Customer and What Value Prop?
CUSTOMER
SEGMENTS
VALUE
PROPS
PROCEDURE
Undergraduate
s
Law Students
Med Students
Career Insurance
Payment Flexibility
Freedom of Career
Choice
1. Create different ad language for each target
group and value prop, target small batch of
FB ads to each group
X
3 3
Week 2
1. Undergrads & Career Insurance
2. Med Students & Payment Flexibility
HIGHEST
INTEREST

8. Jane
- Med School Grad
- Her debt = $250k
- Wants to pursue career as
family medicine Doc
- Pain point: cannot afford
debt payments early in her
career, so pushed into high
interest income-based loans
John
- Undergrad
- His debt = $35k
- Wants to pursue career in
entrepreneurship
- Pain point: a feast-or-
famine career makes
paying for debt uncertain
After 30+ Student Interviews
We Found 2 Representative Customers
8
Main Want: Career Insurance Main Want: Payment Flexibility
*Names changed / identities masked due to privacy concerns

9. Investors balked at the Income
Share Agreement
What happens when insurance pools
attract lopsided participants??
9
3-5%Earnings %
Students
Interest
Investor Interest
7-10% 15-20%

10. “You guys are selling two products as
one. Which do people really want? Can
you get investors onboard with that
one? Is my pocket square peeking out
the right amount?”
10
According to the CFOracle,
sometimes 1+1 = 0
Week 3

11. We had to face the music: a
financial product without investor
support would go nowhere
11
How can we ditch
the method but
stick to the
mission?
What if we were a
non-profit? Do we
want to be a non-
profit?
What is our real
mission,
anyway?

12. We pivoted our product while
keeping our core value props
A Loan with
Flexible
Payments
True to our mission
AND
investors should be able to
get behind it
12
Week 4

13. Out of
the
building!!
13
Med
Students
Biz
Students
Law
Students
Undergrad
Students
Avg. Debt $200k $80k $115k $30k
Income
Predictability
(1-10)
8 5 6 3
Early Career
$$ Stress (1-
10)
9
Stress?
Lol
5 5
Financial
Illiteracy (1-10)
8 2 5 5
13
In the
building
Week 5
The new product would benefit indebted Med
School grads

14. Business Model Canvas
Medical Students
(test market) - Often
have huge debt loads
and want flexibility
with repayment and
help optimizing their
finances
Educate students and
universities on impacts of
fixed vs. variable payments
Secure long-term capital
partners
Fund diversified group of
medical students
Institutional
Investors
Marketplace loan
purchasers to fund our
book of loans
Medical Schools /
thought leaders to serve
as a potential evangelists
Fees: Take an up front % of all funding issued to
students + Loan Servicing Fee
Capital: A capital base
with long time horizons
Cooperation: we’ll align our
incentives with theirs
Simplicity: we’ll demystify
tricky topics
Transparency: we’ll be up
front about how and when we
make money
Capital Cost: What will investors demand?
Customer Acquisition Cost: How much to attract and sign
up a student?
Servicing Cost: How much to service the agreements over
time?
Trusted Intermediaries:
Partner with financial aid
offices to reach students
Targeted Online Funnels:
Media spend combined with
fast online intake process
Subject Matter Experts:
Associate with online student
financial planning sources,
earn trust through expertise
Delay Payments until you
are more able to handle
them
Smart Repayment that
optimizes across your
circumstances and goals
Transparency and
convenience in monitoring
and controlling payments
Accountability for
individuals who know what
is best for them logically
but who don’t always
execute

15. Our product: student loans with flexible payments,
tailored to borrowers’ income and needs
15
Week 6

16. Our product: student loans with flexible payments,
tailored to borrowers’ income and needs
16
Week 6

17. Our product: student loans with flexible payments,
tailored to borrowers’ income and needs
17
Week 6

18. Our product: student loans with flexible payments,
tailored to borrowers’ income and needs
18
Week 6

19. Our product: student loans with flexible payments,
tailored to borrowers’ income and needs
19
Week 6

20. Our product: student loans with flexible payments,
tailored to borrowers’ income and needs
20
Week 6

21. Our product: student loans with flexible payments,
tailored to borrowers’ income and needs
21
Week 6

22. Not that simple: Borrowers like Jane value
transparency and accountability
22
Week 6
Over 30 Med
Students /
Residents /
Doctors
interviewed

23. How can we help? Think of Betterment, but for loans
23
Jane the Doctor

24. MVP 2.0: Visualizing our loan optimization
24
Week 7

25. Business Model Canvas
Medical Students
(test market) - Often
have huge debt loads
and want flexibility
with repayment and
help optimizing their
finances
Educate students and
universities on impacts of
fixed vs. variable payments
Secure long-term capital
partners
Fund diversified group of
medical students
Institutional
Investors
Marketplace loan
purchasers to fund our
book of loans
Medical Schools /
thought leaders to serve
as a potential evangelists
Fees: Take an up front % of all funding issued to
students + Loan Servicing Fee
Capital: A capital base
with long time horizons
Cooperation: we’ll align our
incentives with theirs
Simplicity: we’ll demystify
tricky topics
Transparency: we’ll be up
front about how and when we
make money
Capital Cost: What will investors demand?
Customer Acquisition Cost: How much to attract and sign
up a student?
Servicing Cost: How much to service the agreements over
time?
Trusted Intermediaries:
Partner with financial aid
offices to reach students
Targeted Online Funnels:
Media spend combined with
fast online intake process
Subject Matter Experts:
Associate with online student
financial planning sources,
earn trust through expertise
Delay Payments until you
are more able to handle
them
Smart Repayment that
optimizes across your
circumstances and goals
Transparency and
convenience in monitoring
and controlling payments
Accountability for
individuals who know what
is best for them logically
but who don’t always
execute

26. 26
Borrower Feedback
“If I could get private
bank rates WITH
income-based
repayment, I would
sign up in a heartbeat”
Irina (MD)
“I love that the loan is
personalized for me.
That’s huge”
Thomas (Undergrad)
“Terrific. I love the
simple online portal-
currently I need 4
logins to download all
my loan data.”
Chris (MBA)
Potential Product-
Market Fit with
Borrowers Conditional
on Similar Rates to
Existing Players

27. 27
Loan Investor Feedback
“Variable liquidity is a
tradeoff between
borrower and lender.
They won’t like it.”
Matt Reeder, Theorem
“You need to figure out
exactly what 1000 loans
like this look like. When do
people delay? When do
they prepay? What asset is
this?”
Derek Weiss, FFL
Partners
“Once you prove out the
first 100 loans, buyers
will take you seriously.
But until then you’ll be
funding loans out of
equity.”
Jeremy Solomon,
Affirm
Product Market Meh,
but promising..

28. We Reduced the Balance Sheet by Making Bridge
Loans
28
Week 8
Reduction of Balance
Sheet Exposure by
83%!

29. We’re moving ahead, with challenges in sight
1. Demand from
potential borrowers
1. Understanding what
investors need
1. Big institutional buy in
1. Working with a smaller
balance sheet
1. Vulnerability to copy-
cating by the big guys
1. Competing with
aritificially cheap loans
1. Efficient, succinct
product messaging
29
Our Strengths Our Remaining Challenges

30. Next Steps:
✗ Majority of team continuing
✗ Secure funding for first round
of loans
✗ Full analysis of “Bridge Loan”
✗ Continue to optimize
customer acquisition model
✗ Build an online personal
finance portal
✗ Find and build partnership with
loan servicer
30

31. 31
Thanks!
Especially to the teaching
team, Mike Dorsey, the TAs,
and our classmates!

32. Appendix
32

33. Freedom: Make the best
career choices for your
future, not for next month’s
debt payment.
Cost Reduction: The price
of education should be
relative to the financial
rewards it provides
Risk Reduction: Never get
squeezed by your fixed
student debt payment, no
matter what happens
Delay Payments until you
are more able to handle
them
Original Business Model Canvas
Mid-tier college
students Typically
have the highest
unsubsidized debt
loads upon graduation
Grad Students (Law,
Med) Often have
highest absolute debt
loads and may want
flexibility with
repayment
Educate students and
universities on impacts of
fixed vs. variable payments
Secure long-term capital
partners
Fund diversified group of
students
Institutional
Investors willing to be
among the first
holders of this (for
now) illiquid asset
Universities willing to
include our ISAs when
they present financing
options to students
Collection Agencies
to outsource the
ongoing servicing
work
Fees: Take an up front % of all funding issued to
students
Performance: Receive an ongoing share of the
repayments from students
Capital: A capital base
with long time horizons
and comfort with
illiquidity
Data: Need the
information to build
advanced prediction
models
Cooperation: we’ll align our
incentives with theirs
Simplicity: we’ll demystify
tricky topics
Transparency: we’ll be up
front about how and when we
make money
Capital Cost: What will investors demand?
Customer Acquisition Cost: How much to attract and sign
up a student?
Servicing Cost: How much to service the agreements over
time?
Infrastructure: how much to develop the prediction model?
Trusted Intermediaries:
Partner with financial aid
offices to reach students
Targeted Online Funnels:
Media spend combined with
fast online intake process
Subject Matter Experts:
Associate with online student
financial planning sources,
earn trust through expertise
Highlight VP and customers