Social Entrepreneurship and Chicago Booth (Part 1)

Social Entrepreneurship and Chicago Booth (Part 1)

Tom Voutsos, Class of 2022, is a veteran originally from Michigan.  After serving as a Marine logistics officer, Tom worked for a social startup in Wilmington, North Carolina.  In this series, he will discuss his social entrepreneurship journey as a first year student at Booth.  In this post, he discusses how he came up with his business idea, the resources he utilized, and his entry into the John Edwardson, ’72, Social New Venture Challenge (SNVC).

Background and exploring my idea

Before coming to Booth, I worked with TRU Colors, a startup brewery in Wilmington, NC, that hires active gang members in order to reduce violence. Through that experience, I witnessed a housing market that was broken.  Multiple neighborhoods were grouped together as one area and tagged as undesirable and unsafe, but, when you dug into the data, those individual neighborhoods reported materially different statistics.  I saw varying rates and types of crimes, civic activity, and levels of unemployment. 

To the extent affordable housing was addressed, it primarily focused on affordable renting. Given that most mid-sized Midwest cities have a large quantity of low-cost housing stock, I wondered if there was a solution that could make affordable homeownership an option. 

Booth was a place where I could explore these social entrepreneurial passions.  Although I didn’t have this idea when I applied, I knew that Booth would put me in the best position to execute whatever I came up.  Now, with a compelling idea, I was ready to dive deeper and to see if I could turn it into a viable business.

I wrapped up my time with TRU Colors in the spring of 2020 and spent the rest of the year exploring this and asking questions to the Booth community and beyond.  An information session with Booth’s Rustandy Center for Social Sector Innovation led to a follow-up email to Professor Caroline Grossman. Her thorough response included multiple points of contact and different resources that further pushed me down the path.  Those connections ultimately led me to two Booth alumni: Dylan Hall, ’13, and Kyle Johnson, ’19, both of whom made time to speak with me and offer guidance. I went on to cold call or message Booth community members on LinkedIn and by email, and every single time people immediately got back to me with immensely helpful information.   With some advice from Kyle in hand, my outreach to people outside of Booth resulted in a 100 percent response rate.

For me, this was my “Why Booth?” becoming a reality.  Booth is a place where your output equals your input.  The curriculum and structure provide the flexibility to explore areas of interest at your own speed.  When my family was getting settled into Chicago, there was no way I could go pedal to the metal on my idea, even though I wanted to. My wife, our baby daughter, our dog, and I were consolidating our life into a 550 sq ft apartment and adjusting to a new schedule of Zoom classes and socially distanced coffees.  Yet, the moment I was ready, I drank from a firehose of resources and contacts that Booth made available to me.  The openness and insight of the faculty, staff, current students, and alumni have been amazing.

Next Steps: Build the Team and SNVC

My startup idea is called The 200 Project (although this will likely change by the next post), and our goal is to provide a pathway to homeownership for workers living in low income communities. We are planning on purchasing and renovating homes, renting those homes to workers while they improve their credit scores through financial coaching, and then selling those homes to the worker when they qualify for traditional mortgage financing. We are specifically targeting mid-sized Midwest cities.

As I explored the various contacts and resources at the Rustandy Center and the Polsky Center, I attended a networking session they hosted for people interested in the John Edwardson, ’72, Social New Venture Challenge (SNVC), the social impact track of the University of Chicago’s nationally ranked accelerator, the New Venture Challenge.  Started in 2011, the SNVC is a social venture competition with the goal of building a for-profit or nonprofit venture that delivers social impact.  The SNVC is not only a competition, but also a class that includes multiple coaches.  You can spend time building your venture and honing your pitch for the final week with an opportunity to compete for $150,000 in prize money. The SNVC would be an awesome way for me to turn my idea into a real startup.

At the networking session, different people with ideas had a chance to discuss them in breakout rooms based on area of social impact to see if other students were interested in collaborating.  That is where I met my first teammate, Dan Vollman.  Dan is from Oak Park, which borders Chicago’s West Side.  Before Booth, Dan worked at a health-care private equity firm.  He not only had a passion for issues involving wealth and income inequality, but also had experience and skills that I lacked.  Our complementary backgrounds made us a great match.  

We worked on the idea throughout the Winter Quarter, and I signed up for Booth’s Social Entrepreneurship and Innovation (SEI) course. The course is taught by Professor Rob Gertner, with support from teaching assistant and 2019 SNVC alum Kalyan Ray-Mazumder, CEO and founder of Prepmedians.  SEI focused our efforts as we built our feasibility summary, the main component of the application for SNVC.  Additionally, we valued having a space to discuss the idea and practice presenting the different facets of the issue/solution.

During this time, we also finished building our team.  First, we added another first year student, Elijah Schussler.  Originally from Texas, he served as a submariner in the Navy. We connected at the beginning of the year at an Armed Forces Group event (I served in the Marines). He had capital project management experience post-military and had an internship lined up with Bain for the summer.  I really appreciated Elijah’s approach to project management and whenever we would talk about the idea, he asked questions about areas of the venture I hadn’t considered. 

Second, we added Nikita.  Nikita is from the Chicago suburbs and had public sector consulting experience prior to coming to Booth. She will be interning at McKinsey this summer.  Elijah introduced us, and Nikita was drawn to the social impact of the venture.  In Nikita, I found another team member who thought differently than me. In our first in person discussion, her questions exposed our blind spots. She also dove into an area that really needed more research –alternative approaches to determining credit risk outside credit score. 

With the team assembled, we were in a position to put the finishing touches on our SNVC application.  I was extremely proud of the feasibility summary we put together and believed we had put together a compelling application.  Now, we had to wait.

At the end of February, we received the great news – we were accepted to SNVC!

With this good news in hand, we spent the month of March continuing to do research, reaching out to industry experts, and making inroads into our pilot market – Toledo, Ohio.  Dan has been focusing on the financial model and capital structure of the venture.  Elijah has worked on the neighborhood selection criteria, narrative, and the project management side.  Nikita has done research into services that assess credit risk and financial coaching tools. I’ve been working on Toledo-specific items and working on getting partnerships and advisors on board. Everyone had to hit a one-week pause to knock out finals, but then we were in a great position to start SNVC. 

Today, we are only a third of the way through the course, but we have already learned a lot.

Multiple coaching sessions with the five coaches that help teach the course have opened our eyes to expanded possibilities, shed light on vulnerabilities we didn’t know we had, and helped us polish our pitch after our initial presentation (which was structured to mimic SNVC). Guest judges for the pitch included alumni and recent SNVC participants, who provided very valuable feedback. With the backing of these experienced entrepreneurs, and the enthusiasm and ingenuity of our team and partners, we’re looking forward to taking the next step to turning this company into a reality.

Tune in for the next post, where I’ll share how our midterm pitch went, progress we’ve made with operationalizing the venture, and the final preparations we are making for the semifinal pitches!