Using the “Silicon Valley Playbook” to Strengthen Financial Health: An Interview with Jimmy Chen

Jimmy Chen, Founder and CEO, Propel

After working in some of Silicon Valley’s most innovative tech companies, Jimmy Chen wondered why those same innovations weren’t being used to help address some of the nation’s biggest and most important social problems. He decided to do it himself, beginning with the $70 billion food stamp market.

What is Propel, and what is the problem your company seeks to address?

Propel is a software company that provides a free app for smart phones, Fresh EBT, that enables recipients of food stamps to manage their benefits. Today, more than 40 million Americans receive more than $70 billion annually in food stamps, and they receive them on debit cards known as EBT cards. Each time a recipient goes grocery shopping, he or she has to call a 1-800 number to check their balance so they know how much money they have to spend on that shopping trip. We offer what is, effectively, a mobile banking app so that recipients can check their balance right there on their phone, without having to make that call.

At least, that’s our hook. The average Propel user checks their balance nine times a month, so the question is how can we use those nine interactions to improve a user’s broader financial health? We do that in three ways. First, we empower users to stretch their food stamp benefits. It’s impossible to budget if a person doesn’t know how much money they have. We did a study with the Harvard Business School around how spending changes when a recipient of food stamps uses Fresh EBT. We found that on average, spending slows down by the equivalent of one day per month, meaning the user can stretch their benefits to last an extra day every month.

Second, we help our users to save money by offering grocery coupons through the app. To date, our users have clipped over $15 million in coupons. That’s money going back into their pockets to spend on more food or other needs. We also help our users to save money by helping them to find other programs they might qualify for.  There are lots of programs funded by the federal government and administered by private companies that provide valuable services to low-income people but that sometimes struggle to reach potential participants.

Finally, we help our users find work through a job board inside the app. We partner directly with employers big and small, offering a wide range of work opportunities – on demand, part time, full time. To date, Fresh EBT users have applied for over 60,000 jobs through our app. 

Last year, you told the New York Times that the goal of Propel was to “apply the Silicon Valley playbook to poverty in some way.” What is the Silicon Valley playbook?

In my mind, there are three core elements of the Silicon Valley playbook. First is the focus on the user. What is the experience like for the person using this technology that we have created? For any technology company that faces consumers, the user experience is a sacred cow. So when you apply that to people on food stamps, you’re looking at a model where people have to call a 1-800 phone number or check a paper receipt to get their balance. To us, that shows a need to modernize the delivery of social services.

That said, it is important to recognize that the delivery of social services is a lot more complicated than a standard transaction in the private sector. Federal social service agencies are complex bureaucracies, and whereas a private company only has to concern itself with the user, federal agencies have other constituents as well. So I want to be clear that we aren’t faulting the people who are working for those agencies. We have a huge amount of respect for them. It’s just as a private company we have more flexibility regarding  how we approach the user experience.

The second component is the focus on technology. As a tech company, our approach is to use the most modern tools—the same tools other technology companies are using—and apply them to food stamps and other areas of the social safety net. This insistence on using the most modern technology tools is a challenge for the public sector. They have a lot of institutional barriers, due to the procurement process, in many cases.

The third element it to grow really quickly and constantly iterate. To me, another sacred cow of that playbook is to launch a product consistent with someone’s need, but then to not be satisfied with what that product is, to always try to improve upon it. That cultural bias towards iteration, towards throwing away old versions and asking what else we can do, or how we can do it better, is something Silicon Valley does quite well, and an approach we take, too.

Do you think there’s a growing trend around applying the Silicon Valley playbook to issues of poverty and opportunity?

I think we are in the early days of a trend. Both with new ventures and also folks working in existing organizations, we are seeing a push in this direction, certainly in fintech, where there are new companies focused on low- and moderate-income workers, but also with organizations like Code for America, and with the people in the federal government who worked on  If I think about what the world will look like in 2040, it’s hard to believe that a lot of the best practices in technology won’t make their way into the delivery of social services and into the market for low- and moderate-income consumers. It’s just a question of how long that takes to happen and what bumps there are along the way.

We really have a lot of respect for the people in the public and social services sectors that have worked for decades and continue working on programs like food stamps. Our hope is not to disrupt that work but to supplement it. We see ourselves as hopefully bringing a new skill set—one focused on technology—that can build on what they’ve done. We share the same goals, we just want to turbocharge the great work they are already doing.

What research or data would you like to see as you think about opportunities to move your work forward?

I would love to have more information around what the playbook is to get out of poverty. Obviously that’s a huge anthropological, sociological question and of course there’s no one-size-fits-all answer. Still, we’d love to get more in the weeds specifically about what are the big movers, what are the things that will have long-term effect. What I mean is, if you were to coach someone who is low-income to improve their economic opportunity and financial health, and you had the chance to work with that person for multiple years, what are the things you’d ask them to go do and in what order? We want to be a company that helps people get back on their feet, but one thing that is challenging about our approach is that is it piecemeal. We look at things our users want and things the market can provide and try to make that connection. And while that’s definitely a net positive, it’s still piecemeal. What about thinking about this from the perspective of identifying the things that a family needs to meaningfully improve their financial health? If we had that, we would definitely use it to inform our products and strategy going forward.