00:00welcome to the a 16z podcast I'm Michael
00:03Copeland Bret Hagler was on a trip to
00:06Haiti after the 2010 earthquake where he
00:09saw too many of those displaced by the
00:11natural disaster still living in
00:13tattered blue tarp shelters what struck
00:16Hagler was the need for more permanent
00:18housing that could not only offer
00:20much-needed safety for families but help
00:23foster the community that was split
00:25apart following the earthquake the
00:27nonprofit startup news story is Hagler's
00:30answer to that need Hagler joins this
00:33segment of the a16 z podcast along with
00:36new story co-founder alexandria laughs e
00:38to discuss the startups social media
00:41powered approach to giving and why even
00:44as a nonprofit startup they think and
00:46act like any other for-profit tech
00:48startup looking to make a mark
00:51Alexandria Brad welcome glad to be here
00:54hi Michael having us new story charity
00:57why charity it sounds so charitable I
01:01thought you know we're in a world of
01:02nonprofits why is this a charity yes so
01:06we what we do is we crowd fund houses
01:09for families living in danger around the
01:12world and the name news story is really
01:16what we go by the charity piece is is
01:19there to not confuse people because
01:21sometimes they'll think that you know we
01:23are a for-profit organization because of
01:26the way our platform set up and so we
01:28have that in there just to make it
01:30simple to make it very clear that yes
01:31this is in fact a non-profit or yeah
01:33okay well you mentioned that you know
01:35your job and your mission is to to build
01:38houses for people who have been
01:39displaced by a natural disaster right
01:41let's get to the origin story how does
01:44this come about because I know you both
01:45have had long experience actually
01:46outside of the valley and the startup
01:48world but working on this kind of stuff
01:50yeah so the story starts I woods down in
01:53Haiti and on a mission strip and
01:56actually went to a tent slum where these
01:59people were placed because of the
02:01earthquake back in 2010 right so when
02:04the earthquake happened there was a lot
02:05of you know immediate help temporary
02:08relief tents were given out as as
02:11band-aids which were needed at the time
02:14but they were only supposed to last for
02:15about four months turns out they've been
02:17around now for five and a half years and
02:20so I was down there in the tenth slums
02:23and learned about the problems these
02:25people face so just tell us a little bit
02:27describe for us you know a five year old
02:29tent you know community that was meant
02:32to last six months what does that start
02:34to look like and how do people have to
02:36manage yes so probably the worst problem
02:40is when you kind of think of Maslow's
02:42hierarchy like Safety's at the bottom
02:44right so if you think of a tent that has
02:45a mom with three young kids in it they
02:48have no protection it's just a tarp tent
02:50so what happens is you know dangers like
02:53child abduction and sex trafficking
02:56you know dis horrible diseases because
02:59from the sanitation inside these things
03:01another example that's just crazy but
03:04it's so hot inside of these like imagine
03:07to being 98 degrees inside of a blue
03:09tarp tent with no ventilation people are
03:11starting to go blind
03:13Michael it's crazy so those are like you
03:15know when you think passes the initial
03:17couple months of being in a temporary
03:19place those are the problems that that I
03:21come come forth and if you just think of
03:24like simple inconveniences in our daily
03:26life right like here in Menlo Park today
03:29it's you know a little rainy right it's
03:30slightly inconvenient but when it rains
03:33and you're living in a piece of tent
03:34that's tattered in multiple places
03:36that's a catastrophic event I think of
03:38someone once it's like a newborn baby
03:39right rains the floor becomes mud you
03:42know rodents start to come in the entire
03:44family large families are crowded on one
03:47bed they're sopping wet everything is
03:49drenched something as simple as rain can
03:52be a catastrophic event for a family
03:55down there there's a big portion energy
03:58and kind of will to help in this first
04:00responder kind of way but then after
04:04what you're saying is when you know
04:06everybody kind of packs up their tents
04:07as it were and and goes back to wherever
04:09they came from and and these people are
04:11left you know just struggling so how
04:14does news story then how do you like how
04:16did you think about that problem and
04:17then how did you come up with what news
04:20stories solution is so I mean the name
04:23news story kind of says itself like you
04:25know these people have been living this
04:28so long and we want to come in and
04:30literally create a new story in their
04:32lives and um you know the optimistic
04:34side here is that there is a solution to
04:37this problem right and so when I saw it
04:40you know I saw the tangible tent it was
04:42like okay you could just get them out of
04:43that and then into a safe home all of
04:46these like life-threatening dangers
04:48would be solved and so and that's what
04:50we originally set up a new store to do
04:52it was to simply take them out of that
04:54tent slum bring them into a new
04:55community that immediately solves those
04:58dangers and then actually becomes a
05:00platform our house becomes the
05:02foundation for really the three pillars
05:04that people get excited about which is
05:06access to education sustained health and
05:10income our entrepreneurial opportunities
05:12so that just really excited us that a
05:14home not only saved people's lives but
05:17it had all these far-reaching
05:18implications and there was all these
05:21ripple effects that could come from that
05:23okay let's let's break that down then
05:25from getting the house actually built
05:27funded and then built to than these
05:29implications of Education and
05:31entrepreneurialism and the third one is
05:33safety yeah some opportunities I think a
05:36great example is probably from my
05:39personal life so I was a Teach for
05:41America teacher I taught in Anacostia
05:42which is in Southeast DC so my students
05:46about a third of them at some point in
05:48the year they were homeless if not for
05:50the entirety of the year and if you
05:52think about their kind of their life
05:54when they're homeless when they come to
05:56school you know if they come to school
05:58first of all their attendance is
05:59impacted right if attendance has
06:01impacted your performance and then your
06:03overall academic achievement is impacted
06:05so that's really where kind of Education
06:07ties in and then of course you know if
06:09you don't know where you're going to be
06:10sleeping at night depending on the
06:12safety of that situation your mental
06:14health is impacted many times your
06:15physical health and that's true of my
06:17students that was true of their siblings
06:19that was true of their parents their
06:21parents ability to you know attain or
06:23retain a job was impacted and so you
06:27know that's here in the US and then you
06:28know those problems are just you know
06:30magnified when you're in the developing
06:32world before news story sort of happened
06:35you went through Y Combinator YC did
06:38news story was that an idea in your head
06:40when you entered YC and you entered Y
06:42see as a non-profit so unlike other
06:45classes of Y Combinator startups so
06:48first off did you come in with that idea
06:50or did it sort of you know and you were
06:52driven to do it and that's how you found
06:53YC or YC found you there's really two
06:56problems for solving for the first one
06:57is what we've been talking about which
06:59is this you know the problem on the
07:01ground the the life problem and then the
07:03other one is how the idea for news story
07:06came and that's just we thought you know
07:08traditional charity was very old school
07:12we had a lot of problems such as a lack
07:14of transparency a lack of efficiency a
07:17lack of innovation and that's how we got
07:20the idea for news story you know it's
07:23how a lot of startups start it was I was
07:26actually trying to give to a bigger
07:28organization online and my experience
07:30was just so poor and I had no idea where
07:32my money was going to go I didn't know
07:33who it was gonna help and at the end of
07:35the day I just felt like a drop in the
07:36bucket and so we wanted to create an
07:38experience I was the opposite of that
07:40that's how news story came about that's
07:42how we get early traction and then we
07:44applied the Y Combinator and said look
07:46we believe the future of philanthropy is
07:47with two things its transparency and
07:50then technology to scale the impact just
07:52so happen Y comment believe the same
07:54thing in December of 2014 is when we
07:57launched as an organization and then the
07:59Y Combinator batch started in June of
08:022015 your wife she experienced was it
08:05dramatically different than than others
08:07or I mean was everyone like wait a
08:09second your business model is to not
08:11make money how is that you know how does
08:13that work it was surprisingly the same
08:15yeah and so the thing here is the way we
08:18think about this is our business model
08:20is actually to make as much money as
08:22possible right so the only difference is
08:24that the revenue we're bringing in is
08:27being distributed back out to families
08:29right but but the way the organization's
08:31set up as far as how we set up our
08:33operations how I set up our platform how
08:35we set up for scale our product all
08:37those things is the exact same way that
08:40a for-profit technology company is set
08:42up and we believe that's the best way
08:45that's the way nonprofits should operate
08:47and there should be no difference in
08:49mindset right just you're trying to
08:50bring in the same amount of money or
08:52you're starting at an incredible amount
08:53of money with efficiencies and build
08:56like the people love so that's that's
08:58how we think about it so so I go to the
09:00site now and and what happens how do I
09:01then help contribute to building a home
09:05in this case in Haiti and you've started
09:06in Haiti and the plan is to go elsewhere
09:09I imagine yes so you come on to our site
09:11and you get to meet a family like
09:14literally see the mom and her kids you
09:17see their ages their stories their
09:20picture and then you give directly to
09:22them 100% of your donation goes to
09:25funding their home a one home cost
09:27$6,000 right now once the home is funded
09:31you then takes about two and a half
09:34months to build the home which is all
09:36built by local construction where $6,000
09:38correct and describe for us what those
09:41homes what $6,000 in Haiti can can build
09:43yeah it is a concrete block home they're
09:46built to Miami Dade County and Broward
09:48County hurricane standard so they're
09:50built to last and with sand you know
09:52natural disasters that might continue to
09:54come to Haiti they are four hundred
09:57square foot homes and yeah built with
10:02with concrete reinforced with steel
10:04rebar the families also what's really
10:07important is the families own the plot
10:09of land that the home sit on a huge
10:11issue in development is when building
10:14happens and then you know maybe a few
10:17months later or a few years later a
10:19government entity or a private owner
10:21wants to use that land for something
10:23else and then those people are then
10:24again displaced know exactly and we are
10:27building solutions that last not just
10:29the homes are you know constructed to
10:32last but these families are able to stay
10:34there and that's really impactful
10:35because you know that means that we're
10:37not just impacting those individual
10:39families but we're really providing a
10:40foundation for generations to come
10:42and how not to get too into the weeds in
10:44this way how do they bring in
10:45electricity I mean I don't know what to
10:46say a state of running water is
10:47especially infrastructure is a mess I
10:50know but yeah there's a water
10:51cooperative so that's you know those are
10:53that's a really important question
10:54because other things that we definitely
10:55think about we want to build sustainable
10:56thriving communities and energy and
10:58water those things are critical so
11:00there's a water co-op that is run by the
11:02community and the area is actually lit
11:05by solar energy that the Clinton
11:07Foundation has partnered with and
11:10so I identify my family I contribute
11:13what I can and a hundred percent of my
11:15donation so don't you guys have overhead
11:17so I've if I give you five dollars you
11:20put five dollars into the house how do
11:22you guys run your organization um so
11:25real quick for answer that I just want
11:26to finish the experience so you would
11:28donate you know the exact family that
11:29you're giving to and then when the home
11:31is built we actually take a video of the
11:33family when they move into their new
11:35home and we send it back to every single
11:37donor so that's kind of the full
11:39experience and so right now over
11:42primarily the next two years we set it
11:45up we said the simplest way to do this
11:46is just have two bank accounts right so
11:48one is Republic donations that goes to
11:51the whole construction our promise will
11:52never touch that the other ones for opps
11:54and what we're doing right now is
11:56basically raising an angel round of
11:58operations through private donors just
12:00to cover the operations I see we value
12:04sustainability as well so we are putting
12:07you know we are putting measures in
12:10place so that were not always reliant on
12:12you know private investors and
12:14foundations for our operational costs
12:16you know our goal is that we would only
12:20need those outside funders when we're
12:21looking to expand or to you know do
12:23something brand new but you know we are
12:26putting measures in place right now in
12:27order to sustain ourselves one that we
12:29launched recently is the option to allow
12:31our donors to opt in to contribute to
12:34new story operations that's been going
12:35extremely well over 60% of our donors
12:38actually opted in to help fund our
12:40operations so that's one strategy
12:42splitting the bank accounts seems like
12:44an interesting solution to this problem
12:46of transparency like you say so now I
12:47know 100 percent goes to that I gave to
12:49building a home goes to the home it does
12:51it still solve for the operation so like
12:54you know do I know you know that you're
12:58not all riding around in limos like red
12:59cross executives or whatever or I mean
13:02how do you does that solve that question
13:04and then a follow-up question around
13:07that is that like then you know you you
13:09came through Y Combinator you're in the
13:10startup world how do you measure success
13:12like and then how does that get
13:14transmitted and broadcast back to donors
13:16um so yeah so with the operational bank
13:20account one we will make everything
13:23right so people will see what we're
13:25we're making public and we're also
13:27operating at a basically a 6x so one
13:30dollar that's put into operations is
13:33going to yield six dollars out into the
13:35field it's like that's our goal and
13:38that's you know what we're striving to
13:39hit and so people will know okay what's
13:42going inside the input versus the output
13:45and we'll make that as transparent as
13:47possible yeah and as far as measuring
13:49success the most obvious answer is the
13:52number of homes and infrastructure
13:54projects were able to build right but
13:57you know that's just the first kind of
13:59layer like yes we are getting people out
14:01of these extremely dangerous tents into
14:03safe homes and that of course is great
14:06but you know like Brett mentioned
14:08earlier you know we do know and our
14:11hypothesis that we're proving is that
14:13homes don't just provide safety they
14:16have these farther reaching implications
14:17again and to health and to education and
14:19to income opportunities so that's when
14:21we get more granular into kind of really
14:24showing why a home is the best
14:28investment when you're talking about
14:29poverty alleviation when you're talking
14:31about improving communities I also want
14:33to throw out anything else great I throw
14:35an example of the Red Cross because you
14:37mentioned that so the Red Cross this is
14:40an article that came out a couple months
14:42ago they raised what was called a half
14:45billion dollars for Haiti after the
14:47earthquake and they made a lot of
14:49promises to build homes and things like
14:51that and after five years they've built
14:54six homes in this area they made
14:56promises to and I won't go into details
14:59of you know exactly why that happened
15:01but we know that pie you know not having
15:05allocation for every dollar that comes
15:07in there's trouble and when they go to
15:10you know distribute that money it's just
15:14like this big bucket of money and and so
15:16what we do is not only in our experience
15:19not only is it great for the donor to
15:20know the exact family that are helping
15:22but it really helps our operations
15:24because we go okay this money is tagged
15:27to this family and we know that this
15:29home supposed to be built in two and a
15:31half months and we're gonna track that
15:33and if it's not if it doesn't happen
15:34that we know exactly why we go fix it
15:37say I know that the the intention of the
15:39Red Cross and other organizations is
15:41always a good one but you say that the
15:43the on-the-ground specifics of how
15:46things go down is I mean hard to to know
15:50how many houses have you guys built in
15:52Haiti thus far yeah so we have funded
15:56now a hundred and thirty one homes
15:58during YC we did this campaign we said
16:02let's pick a crazy goal during YC and so
16:06we said Oran try to fund a hundred homes
16:08and a hundred days and you know we
16:10launched this campaign and we got we got
16:13fortunate and we did a hundred homes and
16:1591 days and so those are some have
16:18already been completed and all the other
16:20ones are under construction right now
16:21yeah we have 38 that are completed and
16:25that's because again you know we over
16:27the summer we had a huge number of homes
16:28that were funded and so we have about 25
16:33that are currently in construction and
16:35the rest are set to be built before the
16:37end of the year ago and are these homes
16:39like you say is that a community of the
16:41zoo no new story homes together is that
16:43a neighborhood or are they spread out in
16:46in different areas no we are in the
16:49business of building communities and
16:50homes are a part of that so the home the
16:53homes are all together in one community
16:55like I said there's a water co-op there
16:57there's solar power there we believe
16:59that you know neighborhoods the
17:01sustainable communities is really what
17:02helps individuals guys does the
17:04neighborhood have a name do people call
17:05it anything in particular Levesque
17:07Levesque yes Yeah right Vic yeah and so
17:10you think like the vision going forward
17:11in five years there will be you know
17:15dozens of new story communities around
17:18the world and that you'll have of course
17:21the homes because there's the foundation
17:22and you'll have a school clean water and
17:24sanitation a health clinic anything else
17:27that yeah that community needs for that
17:30particular climate I want to ask a
17:32little bit about how you know the
17:34experience of being in Y Combinator and
17:37being in the startup community has has
17:39made this company and what you do
17:42different now you mentioned you get to
17:44see a video of your family moving in
17:46which sounds to me very kind of social
17:48media like there it is and like I get
17:50this kind of gratify
17:51that you're used to getting on Facebook
17:52right so what kind of dials or levers or
17:55tools are you using that you kind of
17:57borrowed or a you know modified from
18:01from the world of technology that are
18:04working well so I'll give you one
18:05example of how how we're really how
18:08we're scaling so there was actually a
18:10gentleman from a 16z named Chris Lyons
18:13he's a good man and he set up a what we
18:20call a birthday campaign and what that
18:23means is you come onto our platform and
18:25start your own fundraising campaign and
18:28so birthdays just one example but
18:30basically instead of asking people for
18:32gifts or like a dinner party that you
18:35have every year it's hey let's ask for
18:37donations instead so you set up a
18:39campaign right and then you send that
18:41out to your friends and family now on
18:44average that campaign brings in 13 new
18:47people that are now new story donors and
18:49expose a new story that we could have
18:51never reached right and then the viral
18:53piece is 20% of them will start their
18:56own campaign so that there's a there's a
18:59variety piece to how we grow and scale
19:01as opposed to old old-school traditional
19:04charity models which is more of a direct
19:07sales approach some inside sales
19:09approach galas things like that we're
19:12actually having active ambassadors go
19:14spread news story digitally and then our
19:17responsibility is to create the best
19:19product possible that's going to make
19:22people love it and want to engage what
19:25do you have to keep a really close eye
19:28on like you know you have this contract
19:30with the people who donated money
19:31whether it's for operations for homes
19:33and and some of the things that you that
19:35we see especially Minh in in this sort
19:39of nonprofit microfinance world things
19:42go astray so what are you trying to make
19:46sure that that you do that that to make
19:49sure that that doesn't happen yeah I
19:51think the key there is the
19:53organization's on the ground that we
19:54choose to partner with so our model is
19:57you know we're not we're not the ones
19:59down there you know making relationships
20:00with contractors and governments we rely
20:04reputable nonprofit partners that are
20:07uniquely positioned in the countries
20:09that we're going to be working in to do
20:11that work so you know making sure that
20:13they're an organization that has the
20:16necessary connections let's say the
20:17government entity so that the families
20:19do own the land at the home sit on that
20:22have been building quality
20:23infrastructure for years so you know
20:27making sure that when the next
20:28earthquake or the next hurricane happens
20:30that you know the homes that we're
20:31building are not going to fall apart and
20:33organizations that also have partnered
20:36with other organizations and have done
20:38it very well so you know ensuring that
20:41we have very trustworthy partners that
20:43are going to work well with us have you
20:45know the solid communication that we
20:47need in order to you know get those
20:49videos back to our donors there to you
20:51know make sure that these homes are
20:53being built in addition to having the
20:57necessary structures in place on the
20:58ground to actually get it done do you
21:01guys ever run into so for example in the
21:04auto industry Tesla comes in and like
21:05look we're gonna show Detroit how to
21:07make cars and Detroit's like yeah yeah
21:09good luck and turns out actually Tesla
21:12does a lot to show Detroit how to make
21:14cars but there's this there's this kind
21:16of like okay here comes the
21:18technologists with all their software
21:20and all their solutions to fix the
21:23problem do you get any of that and if so
21:27how do you respond and whether that's on
21:29the ground from traditional nonprofit
21:31charity organizations do they ever give
21:34you this like well who the hell are you
21:35and how should why should you be fixing
21:37this problem yeah I think from the from
21:39a you know kind of the experience the
21:41donor experience side and the tech side
21:43it's a it's very evident that this is a
21:47better way to do it it's more
21:48transparent the donors appreciate this
21:51as opposed to other options right like
21:53that's that's been acknowledged and
21:55proven the thing where we get a little
21:57bit of shade for is you know how do we
22:00how do we know that we can trust your
22:01local partners and things like that and
22:03I think the best way for us to explain
22:06that is by by proving that we're
22:09building these homes in a very short
22:11amount of time and we're accounting for
22:13every single home that we're saying
22:15we're funded and it's like look this is
22:18efficient and it is scalable and it
22:20makes a lot more sense than to try to
22:23build your own in-house capacity to do
22:25these things collaborate right like use
22:28partnerships use channels just like just
22:31like SAS companies do right use channels
22:33to to get the end product complete it
22:37sounds like you know this is an
22:38incredibly efficient
22:39you know well-oiled machine that you
22:41guys have built but what's but it can't
22:43be I know that I'm always be like that I
22:45should say so what's been hard like
22:47what's been you know between the theory
22:50and the practice what have you guys had
22:53to kind of overcome I think one of the
22:56things that we're definitely you know
22:57putting time and energy to now is really
23:00scaling our experience right so as we
23:02continue to fund homes at an increasing
23:05pace it's going to get harder and more
23:08time-consuming to get these videos and
23:10edit them and send them and that's a
23:11critical component to our donor
23:13experience to proving that we are a
23:16reputable accountable organization and
23:18so you know one of the tenants that we
23:20kind of knew it before YC but it's
23:21definitely preached throughout YC is
23:23this do do things that don't scale right
23:25and I think that that's probably one of
23:26the reasons why larger nonprofits
23:28haven't done something like sending
23:31video to every single donor of the exact
23:34family that they funded but you know we
23:36are committed to it and we're doing
23:39these things that don't scale we're
23:40baking it into our process very early
23:42but it is definitely something that we
23:44have to work through and using that
23:46example how you're gonna pull it off I
23:47mean I have one of the amazing things is
23:48like most people have smartphones that
23:49can shoot a video I guess but yeah so
23:51yeah to Ali's point out this past
23:54weekend I was in New York for the Kling
23:57global initiative and there was a lot of
23:58other way bigger nonprofits than us
24:01there and it was telling I mean like
24:02what we're doing and I won't mention
24:04names of the organizations and you know
24:06they kind of looked at it as like whoa
24:07that sounds great but we could never do
24:10that you know and maybe they can't just
24:12cuz they're so big and their ops are
24:14already set up but from day one we're
24:16baking it into our operations and then
24:19we're gonna be as formidable as possible
24:21to make it scalable I mean it sounds
24:23like that's the approach of most
24:26startups and actually that's the you
24:28know the advantage you have to because
24:30they probably can't do it yeah
24:32which in this context is sort of sad
24:35because what they could do is help more
24:36people in the business context that
24:38means that you know you guys will reach
24:39more and more people
24:41ideally which brings me to my final
24:43question like where where do you go next
24:45I'm not not to say that Haiti's by any
24:47means you know done but where might you
24:50be focused next that's something that we
24:53are working on right now we're looking
24:54to announce our second country location
24:57by the end of the year the thing as I
24:59mentioned that's the most critical to
25:01where we expand is our nonprofit partner
25:03that we're going to be working with so
25:04you know we do have a number of
25:06locations right now that we're
25:07considering and really the final
25:10decision is going to come down to which
25:12partner on the ground shares our values
25:14is able to kind of keep up with the you
25:17know technological demands that we do
25:19have of them as well as you know being
25:21able to get the work done on the ground
25:23it could be somewhere that was recently
25:26hit by a disaster like Nepal or it could
25:28be an area like El Salvador where there
25:31has kind of been many internally
25:33displaced populations for a number of
25:34reasons such as you know drug you know
25:36drug trafficking and things of that sort
25:37there's just need on an ongoing basis
25:39yeah yes Brett Alexandria thank you guys
25:43so much we look forward to talking to
25:45you guys again and then kind of see
25:47where everything goes and news stories
25:48charity go check it out it's been a
25:51pleasure thank you guys
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