Matt Flannery is the Co-Founder and CEO of Kiva.org. This is a transcribed interview that explores how Matt Flannery came to co-found Kiva.
Matt Flannery: I did a bunch of informational interviews when I was younger. I interviewed ‘Jack’ from ‘Jack in the Box.’ I interviewed entrepreneur friends who started companies. I interviewed people who worked for design firms. Writers. I moved to LA for a while and tried to be a writer. I tried to start maybe ten companies.
Yeah. Matt’s sort of a hairbrain guy. It was like I had a midlife crisis at 22.
What kind of businesses did you try to start?
I tried to start so many. I have a list.
A lot of non profits like this though?
No. Just wacky ideas. I tried to start a DVD vending machine company. I tried to start an online clothing rental company.
Clothing rental company? Like for janitorial services or something?
No. Like luxury clothes. They’re stupid ideas.
That’s not that bad of an idea. If you need a suit and don’t want to buy one. But I guess you have to keep a large stock of clothes.
Yeah. I also tried to start a robot company where the robots were connected to the internet. They were always living in a new episode of a story. So you’d have many of them, and every day they would be different characters with a new episode to perform together.
How far did you get with that idea? Did you ever actually have robots?
I had prototypes. I had drawings. Brand name. Stories. Pitchdeck. Never actually had hardware. That’s sort of the breaking point. When you start using your hands to make something, it’s a pretty big step. So I didn’t get to that step. I failed.
I think a lot of those ideas sort of fizzled out. It’s not that they failed, but it’s like a couple months later I was wondering why I was doing it.
You lost your passion for, if you will.
You get some perspective on what you’re doing and you realize it’s kind of stupid. So you peter out.
They got the whole video vending machines now. In grocery stores and stuff.
Yeah. And that happened right as I was trying to do it. As I was trying to do it, then BOOM! I saw this company spring up in Los Gatos and that was a damper on that idea.
I actually had an investor for that idea. (Laughs)
That’s interesting that you were doing interviews like this and trying to put that into personal benefit. Because that’s exactly what you did right?
Yeah. I was really restless, so I was really unsatisfied with most things. When you’re really unsatisfied, every few weeks you try to do something new. It’s not like I was trying to do it all at once and resolving. It was trying something, and a few months later I was trying something with the same set of questions, with the same set of unsettled feelings.
But you had a job at this time? What kind of stuff did you do?
I was building software for TiVo.
How long did you work for them?
So that was your first job out of Stanford?
Pretty much. I also got my master’s degree during that time. That was a little thing I did. A little passion at the moment I had.
I was reading in your bio that once you had this idea in Africa, you came back, and you spent a year researching it. You went around and interviewed people as well, like people in law. Did that feed from the interviews you did prior and seeing the benefit in that?
Sure. It was the same thing. It was a process I had done before which is you have an idea and you shop it around. You talk to anyone related to the idea and you try to get feedback. I spent a year doing that.
How many people did you talk with and how did it play into the development of everything?
We probably talked to fifty people. It created a refining fire for an idea. I think when you have an idea, it sounds really great. It’s like this pristine thing. You’re just so excited. And then you test against reality and things become more discouraging and down to earth. You realize all the complexities around it.
So that year was a tough year because most of the feedback we were hearing was negative. So we almost didn’t start. We wondered what we were doing. It just wasn’t practical.
So how did you overcome that and keep seeing it through?
The thing that set this idea apart from all those other wacky ideas was a few things. First, it was something we could do without much help. We could create a website. We could create loan opportunities in Uganda for very little money. It was something we could do, my wife and I. As opposed to the robot idea where I needed a hundred thousand dollars to start.
That was one facet of this idea that allowed it to keep going. Another thing was it was something a lot of people cared about. It was something that we cared about.
A lot of those other ideas for me were a little empty. It’s like you get over that initial excitement of trying to be an entrepreneur, which is alluring, but once you get over that, and you get to the actual content of what you’re doing, there wasn’t a lot of content there.
‘Do I really care about online clothing rental?’ No. I just want to be on my own because I’m unsatisfied.
A lot of my ideas were negative reactions to my current state. They weren’t proactive movements towards something I loved.
This idea is different. The actual content of the idea I enjoy every day. I actually enjoy working in Africa. I enjoy all the people I was meeting. I enjoy the purpose and cared for it, in and of itself. The thing that kept us going was the actual work, we liked. Rather than the result.
Because if you’re just looking to be an entrepreneur and get rich, or looking to be a successful guy, that’s not very motivating every day. In the end, that’s a nice end point to be at. Sure, I’d like to sell a company and make a million. But, it’s hard to get there and if you don’t enjoy doing the shit work, you won’t get there.
You can’t maintain your momentum every day if you don’t like what you’re doing.
Yeah. This is just my personal thing. I don’t know if everyone’s like this, but that’s how I operate. You’re up against so much negative inertia when you’re trying to do something like an entrepreneurial idea. The inertia of not doing it is so great that in order to overcome that, you need to actually like everything.
I liked programming computers. I liked running the website. I liked designing the website. I liked to talking to my friends in Uganda. I liked working with my wife. I liked figuring out the legal complexities. In and of itself, it was worth it.
We definitely felt like doing this idea was worth it as a non successful idea. Even if it was mildly successful it was still worth it. Even if no one else knew about it, and it was just us, we would have done it. And that’s the difference.
That’s pretty interesting. It sounds like you never set out to make Kiva into what it is today. You just care about it, and you wanted to help some people in Uganda. And if it caught fire, then it caught fire.
Yeah. That’s the initiating difference. We didn’t have a financial incentive. So it took that allure away. We just did it for what it was. It was actually just for us, my family, and my friends.
So did you ever think it would be where it’s at today?
Maybe I had a pipe dream about that, but I didn’t spend much time worrying about that. I spent a lot of time doing what was next.
That’s the tough thing. You have a million ideas of what you want to do, and you think they’re all going to be successful until you start talking with people and getting that feedback.
Also, if it’s a good idea, by the nature of a good idea, you will get a lot of negative feedback because it’s a good idea. A good idea will receive more negative feedback than a lot of bad ideas.
Because what will set it apart is that it will have a contrarian hypothesis. Really groundbreaking, good ideas have a contrarian nature. They contradict the common wisdom. They contradict common sense. A little bit, not completely, but there is an element of that. That’s why no one else is doing it. Because no one else thinks it’s feasible.
If it’s a really, really good idea, a lot of people won’t think it’s feasible. And that will make it a good idea. The fact that they think it’s not feasible.
But just because they think it’s unfeasible doesn’t make it a good idea. There’s this logical syllogism. If they think it’s a good idea, it does not implicate that it’s a good. If they think it’s a bad idea, it does not implicate it’s a good idea. But if a good idea does implicate that they think it’s a bad idea…I’m a philosophy master student from Stanford. So, I go off on logic sometimes. But all really good ideas will have a strong group of people who think it’s a bad idea.
And there’s also the fact that if it’s a real bad idea, people might just not spend the time to be critical of it. A good idea is always harder than you think it is, so when you start thinking about, they’ll be some criticism because you need it be constructive and get the juices flowing. But if it’s a bad idea, people are like, ‘Hey! I got an idea!’ And others are like, ‘Yeah…that will work out for ya.’
People cared about it being a bad idea. There was some passion behind their criticism of it. It was sparking some sort of interest even if it was a bad idea.
I was reading on the site that you do loans because you love the stories that come out of it. I’m wondering what you’ve learned from all of these developing world entrepreneurs, and how that’s affected you as an entrepreneur today.
Primarily, the challenges they face are very similar to the challenges we face. That’s a real powerful idea. When I started realizing that on a day to day basis, that was really connective. The stories make sense to us. A story about a woman selling fish on the side of the street in Uganda, you can get into profit margins, inventory management, the same things that businesses here think about.
There’s a commonality that can unify people. Which is exciting. Because people can relate to business stories in any country.
How often do you go overseas to meet these people?
Maybe two or three times a year. Once this year and twice last year.
Primarily you spend most of your time overseeing Kiva from here? How many hours do you spend and why do you spend them?
My hours have gotten a lot better. My first year, this time last year, we had four employees that were unpaid. We had the same website, and we were four people trying to run it. We didn’t get much sleep. We pulled all nighters twice a week last year. It was a really challenging time.
Our main challenge was fighting the void of nothing. Fighting that we had no customers and very few users. That was our main challenge, was to get the word out.
This year we have a different situation. We have more users than we can necessarily, healthfully handle. Our main challenge is building infrastructure to handle all that traffic.
Why do I do it? Well, because I’m passionate about the cause. It unifies all of my interests. It’s exactly what I should be doing. I love that.
It’s also stressful. All my rhetoric, all my writing, everything I’ve said over the last year is on the line. Things could go wrong. A lot could go wrong. Personally, my ego and reputation are wrapped up into it. Probably more than it should be.
I’m definitely not getting paid a lot. That’s not why I’m doing it. I do it because I feel that we’ve walked this far and we’re on a tightrope. If we screw up now, that would suck. So I really need to create a safety net for everyone.
You mentioned earlier that you have more people than desks here now, and you’re looking to get out of this office and into something bigger, but I’m wondering how you attract so many talented, passionate people. Because I was reading some of their bios, and they’re amazing. They’re impressive and successful and driven. How do you attract those people to a non-profit?
One at a time. Everyone that works here has their own story as to how they entered and how they got to know us, or how we got to know them. A lot of them are old friends. And then you have a currency of doing something people care about. Which is really attractive. If you can combine that currency with actual currency, good salaries, it’s pretty easy to get great people.
We’re a financially sustainable organization. We’re cash flow positive. So we can pay competitive market wages to people. Those market wages combined with a cause that’s greater than ourselves that every one cares about creates an exciting workplace.
Is that the same line with your board of directors, and the companies that have jumped on board to help you guys? Is that ‘We’re doing good, alleviating poverty’ attitude it?
Yeah, I mean, who can argue with that? Alleviating poverty and microfinance. People don’t argue to that. Most people can get behind that. Right wing conservatives can get behind that. Religious rights can get behind that. The radical left can get behind that. And everyone in between. It’s something that everyone cares about.
If you could go back to 22 years old, my age, and tell yourself one piece of advice, what would that be?
That’s a good question. The one thing I would say is to take it slow. When I graduated from college I started with a panic feeling. Like I had to figure it all out now. When I got out of school I had a crisis. Like a mid-life crisis. And then I took a job that I was really excited about. I worked there for four years. That seemed like an eternity. I was depressed. But now I see that time as so valuable. Because I was learning things the hard way. I was going through all the trying and failing at things.
There’s a reason I went through all that. That’s my only advice. To give yourself a lot of grace and wait through the hard times. Don’t rush it. You might be forty when you find your passion. When you’re truly saying that this is my dream job, I have it. You might be 35, you might be 25. But doing something like that when you’re truly doing your passion, I mean, look what I’m doing. I can truly say that I’m doing exactly what I want to do. And that’s a hard thing to get to. Very few people in the world get to a place like that. I’m really lucky to have gotten to that place.
Don’t rush it. You won’t be able to rush it, and if you try, you’ll probably screw up. But always be trying at the same time. Never give up that you can get to that point. Life is so much richer when you’re doing something you care about. It’s not comparable at all. There’s no comparison to a life where you’re going to work, doing something you don’t really enjoy, for forty hours a week. Compared to going to work and doing exactly what you want to do forty hours a week. It’s like light and dark.
Or even sixty hours a week.
Time expands. When you’re doing something you love, time expands, time goes away, like weekends go away. Yeah you work all the time, but it’s not the same. Time feels infinite. You lose yourself in a lot of moments. That’s what my life is like now.
Before I would get to work. Eight hours. ‘Oh good, it’s lunch! Thank God. Oh good, it’s dinner! Thank God. I don’t want to go to bed tonight because then I have to wake up and go back.’
But I don’t think like that anymore. The whole meaning of time has changed for me.
That’s pretty cool. I love your story that you just decided to go be free in Africa for a few months. What actually led you over there?
I didn’t necessarily decide to go be free in Africa. That’s another thing. My wife dragged me there. It wasn’t premeditated. That’s the thing. These things happen unpredictably. The best things in life you can’t really predict or calculate or plan. They sort of happen to you. They feel external. There’s an element of serendipity around the best things.
The two best things in my life was meeting my wife and starting Kiva. Both of those things I could have never planned. It’s not like I planned to fall in love with my wife. It’s not like she’s exactly who I would have drawn a picture of or have planned to meet. I mean, I met her in Washington D.C. And I went to Stanford. It was random.
The only reason we started Kiva was because she randomly dragged me to Africa on a trip I didn’t want to go on. So you can’t plan things that are really special, because they’re gifts. It feels like someone is giving them to you, and you have to be thankful. You can’t just go out and get it.
Did you ever go to Africa before that?
Did you quit your job at Tivo and go to Africa?
No. It was a trip. I was there for three weeks.
And you were doing filming?
Just like you guys.
I often think it’s harder to find opportunity. It’s much more natural for you to be poised to take advantage of opportunity when it comes along. You can’t force it. You have to be ready for it. And you have to be in that mindset. A lot of people don’t even do that. They don’t even poise themselves to be ready when it comes their way. Because you do get a couple chances in your life to take advantage of something good.
That’s how I feel. I’m a religious person. I’m a spiritual person. So I think God gives you a few chances to respond and take advantage of the gifts he gives you. But if you don’t think that way, it’s just karma or the universe gives you a few shots to really grab ahold of your life.
You have to do a lot of work to get to the point where you can take advantage of those shots. And I’ve probably received a lot more in my life that I passed up. Or I was too fearful to recognize.
But thankfully when this opportunity happened, I was in a place and in the right mindset. I was in a restless, struggling period where I was open to a lot of things. And I was able to see it and realize how exciting and worthwhile it could be. And actually grab a hold of it and not let go. It’s easy to let go because so many practical things get in the way.