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Archivo del Autor: Belen De Leon

Elysium and the quest to bottle the fountain of youth

In the latest episode of Flux podcast, I sit down with Eric Marcotulli, the co-founder of Elysium, a life sciences company developing consumer-facing health products based on aging research. The company’s first product is Basis, a supplement that combines compounds designed to increase NAD levels and activate sirtuins, boosting cellular health and longevity.

In this conversation we discuss why precursor companies failed, including Cambridge-based Sirtris Pharmaceuticals, which was bought for $720 million in 2008. Eric explains how Elysium is a platform-based company that will sell a host of products and diagnostics, why he believes direct to consumer is the best market strategy, and what the current user base looks like. The company just announced a new clinical trial this week. Eric gets into the importance of bringing academic rigor and peer review to the supplement category, how he plans to build consumer trust and ultimately pull it into the mainstream. He shares why he believes in open source research, how cellular senescence is a particular area of interest right now, what his personal health routine is and how he thinks about the singularity.

An excerpt of our conversation is published below. Full transcript on Medium.

Eric Marcotulli — Bottling the Fountain of Youth

ALG: Welcome everyone to the latest episode of Flux. I’m excited to have Eric Marcotulli here today. He is the co-founder and CEO of Elysium Health a company that is rethinking healthcare whose first product is a science based supplement that promotes cellular health. Welcome.

EM: Thank you.

ALG: Appreciate it. I’ve been excited about your company for a long time. It’s nice to meet in person.

EM: Likewise.

ALG: As a New York based VC it’s also great to meet New York based companies, especially science focused companies. I’d love to start by hearing the beginnings of Elysium. You started the company in 2014. I talked to one of your investors last summer, he said to ask you the story of how you met your co-founder at Equinox  —  is that true?

EM: So there’s two co-founders and they both have their own stories. I’ll start with my scientific co-founder, Leonard Guarente. Leonard’s run the biology of aging Lab at MIT for the last 25 to 30 years. I didn’t set out to become an entrepreneur. It was a confluence of events.

If you go back to 2011, 2012 I was in business school and in one of my classes we were studying a company that in the field of aging is well known but outside is not. It’s called Sirtris Pharmaceuticals and it was a Boston based biotech company going back to the mid 2000s. What’s interesting about this company is they were studying processes of aging and they identified one in particular. It was a class of genes that we now affectionately refer to as longevity genes. They’re called sirtuins. What they identified was that these genes are found in every living thing and that the activity level of these genes decreases through the normal course of aging. And when they reactivated these genes they saw amazing benefits, regardless of which model or organism you were looking at. They would live to the human equivalent of 120 years old. They don’t get cancer. They don’t gain weight.

ALG: You mean the mice?

EM: That’s right. Life is pretty good at this point if you’re a mouse. It was a monumental discovery in terms of aging research and it got the researchers nominated for the Nobel Prize. One of the researchers involved in that series of discoveries in the late 90s early 2000s went off to Harvard to open his own lab. And being more risk-seeking he was screening for natural molecules that could potentially activate these genes. The hypothesis there, which has since carried over to Elysium, is that aging itself isn’t a disease. It’s about the interconnected degradation or failure of our own biological processes and metabolisms. There is a prevailing hypothesis we are seeing develop that natural compounds will be the most effective interventions. That was the approach taken there, and the researcher’s name is David Sinclair. He screened natural product libraries for potential hits that could activate these genes.

And he found one, a derivative of red wine called resveratrol. Some people have heard of this. If you look back at the ‘04 ‘05 time frame there was a massive spike in red wine sales due to all the media coverage around it. So they started a company, Sirtris. So they make you the protagonist in this case study, and you have to make a decision as the management of the company. What was interesting was that you have a natural product and that aging isn’t a disease. To try and create a traditional pharmaceutical company and go after diseases you’d be trying to fit a square peg in a round hole. You’d likely have to modify the molecule, you would have to start looking at disease models. On the other hand, you could build a direct to consumer company, where you don’t have to modify the molecule, and aging isn’t a disease so you don’t have to go through a laborious long-term and huge cost effort from an approval standpoint. We debated the merits of both of these business models. I was firmly in the camp of the consumer facing effort, because I was reading this research and saying, how could anybody sitting in this room not want this for themselves or their parents or their friends?

ALG: Right.

EM: It ends up not mattering which position you take. [In 2008] GlaxoSmithKline stepped in and bought the company for almost three quarters of a billion in cash, before they read any human data. I was fascinated at this point with the research. If you had played word association with me going into that class and you said “anti-aging� and “longevity� I would have just rattled off “late-night infomercials� and “snake oil.�

ALG: So that class awakened you to the industry and got you interested?

EM: That’s right. I didn’t know this was something you could study. Aging  —  most people think it’s an unstoppable ambiguous force. But it’s not. It’s something that we can now quantify and measure and potentially intervene. That was new to me, the fact that people at MIT and Harvard were studying this and making progress. So I left that fascinated. Shortly thereafter I reached out directly to the the the MIT professor who was the original discoverer of these genes, the sirtuins. I reached out to the scientific co-founder at Harvard. The question I had was, whatever happened to this? Because now it’s almost a decade since the acquisition. There had been little news on it. If you fast forward to today the MIT professor, the one where they made the original discoveries of the longevity genes, is now the co-founder of Elysium.

Elysium Health co-founders Eric Marcotulli, Dan Alminana, Leonard Guarente.

ALG: Leonard?

EM: Yes. Dr. Guarente. Or Lenny as we call him. Lenny and I just started off with conversations around how the research had progressed. At one point Lenny called me and said, “I’ve been approached by a Japanese venture capitalist who has invested in a company in Taiwan. They believe they have a potent sirtuin activating compound that’s very different from the resveratrol molecule.� He said, “I know nothing about the business side of things. We’re dealing with a venture capitalist and you’re a venture capitalist.� I was at the time — before business school I was at Bain Capital Ventures, after I was at Sequoia. He said, “would you want to go with me to look at this potential molecule?�

I said, “I don’t know how much help I can be but I’m happy to go with you.� So Lenny and I met for the first time six months after our first phone call. This was late 2012. We met in San Francisco International Airport and went to Taiwan for a few days. It was a fascinating experience. We ultimately passed on that molecule despite some interesting research. But it was through that that Lenny and I came up with this idea that you could build a direct to consumer facing effort and that there would be more of these types of products, that it wasn’t limited to a single product idea. So this was the vision for creating a platform-based company.

ALG: So that’s how you met him. And it sounds like you explored a couple of different routes in terms of what molecules could stimulate sirtuins right?

EM: That’s right.

ALG: And the one you ultimately went for first is NAD?

EM: So there’s two components to the product we have today, which is called Basis. One of the things that Lenny and his constituencies in the research community had identified was that sirtuins are dependent on a coenzyme called NAD. We didn’t know that at the time that Sirtris was founded. It’s the production of NAD  —  a coenzyme, a fuel that’s used in a variety of reactions at the metabolic level  —  it was actually the production of this coenzyme that was decreasing in all of these living things. So NAD itself is not new. We’ve known about it for a hundred years. Two Nobel prizes have been awarded for elucidating its function. It’s important for things like DNA maintenance and repair, the creation of energy, the way the cells communicate both internally and with one another. Without NAD you’d be dead in under a minute. It’s very important. So this idea that it was decreasing, which we didn’t know until 2012, was a monumental discovery.

ALG: Decreasing over a mouse or human lifespan?

EM: Universally. Whether you’re a plant, animal, bacteria  —  doesn’t matter. You have NAD, you use it for these critical functions and it declines in its production in everything that ages. But not every living thing ages. Jellyfish don’t age for example.

ALG: Oh wow. What’s going on with their NAD?

EM: Well we don’t know yet. But it’s a small number [of organisms]. In everything else you see this decrease [in NAD] when the organism ages. Since we didn’t know this, Lenny said trying to activate these sirtuins would have been a failure regardless. So what we first need to do is restore levels of NAD. Then we need to activate these sirtuins. And we know that resveratrol does not work in humans. So that was another discovery that happened in the subsequent time period after the acquisition.

ALG: So all the red wine articles are baloney?

EM: Well interestingly if you drink red wine you do get the benefit of sirtuin activation. You just have to drink quite a bit of it.

ALG: I can do that.

EM: Ha most people say that. So that’s just an example of removing a high purity molecule from its natural carrier state in the wine to a pill as an example, which was a failure in humans. So we identified a cousin of resveratrol called pterostilbene [an antioxidant], which from a structural standpoint, at the molecular level, is more stable.

ALG: The stuff found in blueberries?

EM: That’s right. If you could choose one food for the rest of your life my recommendation would be blueberries. Some people would disagree with me. Maybe it’s wine. But that was the idea behind Basis. First we need to restore levels of NAD. Secondly we can then go in and activate these longevity genes. And that there would be a synergy associated with that. The best way to think about it would be sports cars. If you’re activating sirtuins it’s like putting a turbo in the engine, but the car still requires some energy source. So if there’s no gasoline, or if you own a Tesla and there’s no battery power, it’s not going to work. But once you have the two of them together there’s a supercar.

ALG: It’s actually an analogy a lot of people use for aging. I don’t know if you know Aubrey de Grey and the SENS foundation, but he talks about aging as a disease. That it’s just like a car and we need to figure out how to repair the car and the many different things that go into that. I also want to ask you more about this reframing of how we think about living longer, and how the healthcare system doesn’t consider aging a problem so far or something to tackle. How does the shift happen?

EM: Part of it is, we are going to have to deal with it regardless. Everything we’re seeing now given the advancements in medicine is somehow related to aging. If you survive cancer you are unfortunately going to die from Alzheimer’s or cardiovascular disease or Type 2 diabetes. I won’t get the number exactly right, but if you cured every single form of cancer it would only add about three years of lifespan collectively, on average.

ALG: Because there’s going to be another disease that kills you.

EM: Correct. So for example, one of the areas we’re interested in is something called acute kidney injury. Thirty percent of people who go in for cardiovascular surgery will develop acute kidney injury, and with too much of it you’ll get kidney failure and dialysis. In 2004 there were just shy of a million cases in the United States of acute kidney injury. In 2014 just 10 years later there were four million cases. It’s not that our surgical techniques changed, it’s that older people are going in for these surgeries more often because our healthcare system is actually getting better. So we’re going to have to deal with these things. Two, from a diagnostic standpoint we are moving  —  out of necessity, at the research level  —  into an area where we’re now able to quantify aging. As an example there is an epigenetic test, a cheek swab or a spit tube type test, developed at UCLA in conjunction with the National Institutes of Health. It can basically tell you your biological age. The age on your passport or your driver’s license is your chronological age. But there’s something that the gene activity expression data we collect can tell you about how you are aging.

ALG: Is that a hard test to do? I’m sure everyone would want to do that if they could.

EM: So we are commercializing this test. Think of it as rings of a tree. Over time you can get a pretty accurate understanding of a single tree. How old is it. Did it go through a bountiful spring or a terrible winter. Was there a forest fire. That’s at the individual level. Then when you look at the macro level, at the forest, you can learn a lot about that particular ecosystem. It’s an oversimplification of the idea but it’s the same thing every time, looking at something called methylation. Every time one of these sites is methylated it leaves a mark. So we can quantify that and say does this intervention or product reverse, slow, or stop the aging process.

ALG: That’s a game changer for you right. Because everyone thinks it’s a good idea to take [the product], why not. But without being able to measure a result, it is hard to say. People do report feeling better in the short term  —  less hangovers etc. I saw one of your advisers say something about his elbows getting softer—

EM: Oh Rich.

ALG: Yeah. A lot of great side effects that sound like they are worth having anyway. Like great energy peaks.

EM: Right. As we move towards aging, we would argue that it should be classified as a disease. But today it’s difficult because it’s not a moment in time diagnosis. It’s not like one day you wake up feeling symptoms and you go to the doctor and he says, “yes we ran the tests and you have aging.� It’s a decades long accumulation of mutations and failures and other things. So these types of diagnostics have been developed by the research community out of necessity. They need to understand does this intervention actually slow, stop, or reverse aging. That’s just one measure. We’re going to see other diagnostics that take shape and form over the next several years. So to your point, that’s important for us. Because one, the conversation today has been around, OK if you can reverse this fundamental process of aging what does it mean for me? It’s one thing to say, the models that exist today could show efficacy in cancer or neurodegenerative diseases et cetera. But there’s been nothing between showing the reversal of that process and the outcome of it from a disease standpoint. So this idea that there’s a middle ground, something where you can say, well the speed at which you’re aging has changed for the better. That is an important step in the entire process.

ALG: That’s super exciting. So what does the roadmap look like? Lets get into the product so that listeners who haven’t seen it know. Out the gate, your first product was Basis, the daily supplement which is $50 a month for a subscription, or $480 for the year. And it’s recommended that you take two pills in the morning. So that’s product one. It sounds like there’s a lot of other things in the works? How do the diagnostics fit in?

EM: Sure. Going back to the hypothesis for the company  —  we sought early on to commercialize these technologies on a platform basis. We knew the diagnostics were coming. We knew that there would be other interventions. The third leg of the stool would be things on the digital front or the wearable front. We’re still a bit aways away from seeing the commensurate rigor in that camp. One is  —  as you mentioned earlier  —  the diagnostics are important to show the efficacy broadly speaking for these products. The other thing that’s exciting is this idea of N of 1. We’re finally going to be able to move into the realm of personalization. First, is this product working for me? Second, what is it doing for me? Third, how would I have to modify my lifestyle or administration of the product?

That’s how we think about the world from a product development standpoint, through these systems. Apple is an exaggerated example but they’ve done a fantastic job from a platform basis  —  of providing the app store and cloud services to integrate all the devices you have. What’s interesting about these diagnostics that we’re developing is that they are very much a subscription in nature. What you’re doing today is going to be different to what you’re doing tomorrow. Your health status may change for a whole host of reasons, genetic or otherwise. Since these aren’t just genetic tests looking at your ancestry, our hope is that 5 or 10 years in the future this is part of your annual checkup.

ALG: And there’s no negative side effects that we know?

EM: No. By and large this is one of the safest products we’ve ever seen, with all of the data that we have and millions and millions of data points in ongoing safety testing. Moving beyond that requires us to prove more digestible and accessible points of understanding. This idea of rate of aging is a step in that direction. We’re also, as an example, doing a study on photo aging of the skin based on both the existing body of literature that’s out there as well as feedback we’ve had from customers. The conversation changes a lot if I can put you under a special camera that shows the UV damage to your skin and then shows you the before and after of someone who has taken the product for six months and how it changed them. Even just showing wrinkles and things like that. Things that people are used to, from a marketing standpoint, but they might not actually see the science in it today. So there is that evolution. The evolution from, yes we can reverse this fundamental process of aging to, well what does that mean for me? Well it means it’s actually going to change the rate at which you age, which is tied to your health and all these diseases. Well OK, now I can actually tell you that it’s going to do XYZ for your skin, brain or whatever it might be.

ALG: You say upfront that this is about improving cellular function, but there’s no guarantee of longevity, though of course the name has connotations there. I’d like to ask your thoughts on longevity. There’s now things like cryo and people are signing up for places like Alcor. Do you think if we all had the ability to live forever, that that would be a good thing?

EM: So you skipped over the easier question. We’re focused on healthspan first and foremost. If you go into a room of people, and we do this all the time, and you say to the audience, “We’re going to take a quick poll. How many of you want to live forever? How many of you want to live to 120 or 150? How many of you want to live to 80?� It’s interesting to see the distribution. If you then say, “you are going to live to that age but you’re going to be as healthy as you are today, would you change your answer?� Most people do. So we are first and foremost focused on quality of life and healthspan. The belief is, ultimately if you improve every day, that you’ll have more days on the back end.

ALG: So it would be fine to go to 90 with a 20 year old’s full health, then kick the bucket. That’s more the goal.

EM: That’s exactly it. We’ve all dealt with it ourselves with loved ones. No one wants to live for another 10 or 20 years in a certain state. Usually the conversation is, what are the implications of that. From our standpoint, every time humanity has had an order of magnitude improvement in health  —  the introduction of antibiotics for example  —  I don’t think we’ve ever seen humanity broadly say, we don’t need this or we don’t want it. I do think the question changes with the singularity. Which is living forever.

ALG: We should probably do another 40 minutes on the singularity, it’s an important topic.

EM: It is. I always say without question in our lifetime we will see a merging with something digital. Musk has announced his Neurolink technology recently and is claiming to make progress on it, so it may happen. We’re not going to be able to predict when it happens. And when it happens it’s going to happen quickly. That’s dangerous for a whole host of reasons. But I’m not sure we have a good answer for, “should we?�

ALG: I guess the answer is in splitting the question into healthspan and lifespan. People are generally in agreement on healthspan. Lifespan is more of a question mark.

EM: Without question. If you talk to anybody in the aging community at the research level, we would be surprised to hear them say, let’s focus on longevity first. Everybody is actually focused on understanding its implications and its role in human health more broadly and how interventions might change that. Then of course the idea is, well if we can get rid of all these diseases of aging, you would think that you’re going to live longer too. In a higher quality state.

ALG: It does amaze me. From a personal perspective I am signed up at Alcor. Do I think it’s going to work? Not really. But I did it for other reasons—

EM: Yes. I think we as a group need to hold companies in this space to a higher standard than we have in the last 10 years in terms of these types of things. I always say when someone brings me a product  —  even the products that I’m interested in  —  What is the research behind it? Where are the studies published? What do they find? How are they designed? If you just look at the supplement portion of our business, the consumer facing interventions, it’s a $35 billion dollar market in the United States.

ALG: And that’s with the current low standards and general snake oil perceptions [in supplements.]

EM: Of course. The other thing is, if you stop someone on the street and ask, “what’s your favorite supplement company?� you’re going to get a puzzled look back. No one walks around with a hat or a bag that has one of these companies on it. That’s because they lack legitimacy. That’s a huge part of Elysium’s mission. Hiring with the rigor that you would see in life sciences on the pharma side, into the consumer market. This is part of the shift. We will see legitimate companies not just Elysium, but others in the consumer sphere, changing this conversation. The market will look like a lot of other markets as opposed to this fragmented, untrustworthy one that we see today. That evolution might take a little longer. But ultimately we’re going to end up in a place where people feel good about the products they’re buying, because only the products that work are going to survive.

The global supplements market was estimated at USD $115.06 billion in 2018. It is expected to grow at a CAGR of 7.8% in coming years. [Source]

ALG: It’s interesting because you’re a pioneer in this area of supplements. There are other supplements startups, such as prenatal which is also taking off. But there’s less controversy  —  people say, prenatal vitamins? Of course, why wouldn’t you take that. With yours there’s more questions. My point on Alcor and backlash was that people have strong opinions on human longevity.

EM: It’s interesting. Our category is hot right now. In a lot of these established categories  —  take prenatal —  there’s great literature supporting the use of folic acid. There’s companies that sell products around that. But they’ll make unique claims or link to literature that’s been done by other companies on other formulations or other delivery methodologies. Those can be dangerous. The data might appear to be good but in fact their own product hasn’t been tested. We have to do it by virtue of what you highlighted, the fact that we are new. But the buyer should beware of whether this exact formulation or exact product was tested for what it’s claiming to accomplish for you.

ALG: So you’re trying to do as much as you can in-house, which includes all R&D at the moment?

EM: Yes. We have a very open source model. One of the things we did, going back two or three years, was we did a randomized, placebo-controlled, double blind study on Basis to show that it could actually restore levels of NAD. We had to show that it actually did what it did. Now that’s mechanism of action in terms of what we’re showing. We didn’t show any tangible health benefits in that particular study, it was just the reversal—

ALG: That was the 2017 study?

EM: That’s right. It was an important first step to show that.

ALG: NAD levels increased by an average of 40 percent in your users?

EM: Yes. In a one month span. Then that was sustained over a period of time after that. And it was done safely. But if a traditional pharmaceutical company had done that study they would have just internally validated that the product works, then continued their research. We chose to publish and announce it. What we found was an influx of research interest from MDs and PHDs all around the world who said, “I’m interested in NAD repletion or sirtuin activation, and I now know that your product can safely and sustainably reverse this decline. Would you be willing to work on this particular health problem with me?� So a lot of it we do internally. And a lot of it is also driven by the scientific advisory board or collaborators that approach us and say we’d love to do something with you. This idea of open source is something that’s important to us and we encourage others to pursue it as well.

ALG: A lot of exciting stuff going on there. To wrap up is there anything else you want to share about the company or what we should expect in the next six to eight months?

EM: In terms of 2019, it is our plan to launch new products in both of the categories we talked about. You’ll see new diagnostics and you’ll see new interventions from us.

ALG: Exciting. I can’t wait to see. Thanks Eric for coming on. It’s great to meet and I look forward to seeing the products when they come out.

EM: Great. Thank you.

ALG: Thank you.


Source: TechCrunch

Traces AI is building a less invasive alternative to facial recognition tracking

With all of the progress we’ve seen in deep learning tech in the past few years, it seems pretty inevitable that security cameras become smarter and more capable in regards to tracking, but there are more options than we think in how we choose to pull this off.

Traces AI is a new computer vision startup, in Y Combinator’s latest batch of bets, that’s focused on helping cameras track people without relying on facial recognition data, something the founders believe is too invasive of the public’s privacy. The startup’s technology actually blurs out all human faces in frame, only relying on the other physical attributes of a person.

“It’s a combination of different parameters from the visuals. We can use your hair style, whether you have a backpack, your type of shoes and the combination of your clothing,” co-founder Veronika Yurchuk tells TechCrunch.

Tech like this obviously doesn’t scale too well for a multi-day city-wide manhunt, and leaves room for some Jason Bourne-esque criminals to turn their jackets inside out and toss on a baseball cap to evade detection. As a potential customer, why forego a sophisticated technology just to stave off dystopia? Well, Traces AI isn’t so convinced that facial recognition tech is always the best solution; they believe that facial tracking isn’t something every customer wants or needs and there should be more variety in terms of solutions.

“The biggest concern [detractors] have is, ‘Okay, you want to ban the technology that is actually protecting people today, and will be protecting this country tomorrow?’ And, that’s hard to argue with, but what we are actually trying to do is propose an alternative that will be very effective but less invasive of privacy,” co-founder Kostya Shysh tells me.

Earlier this year, San Francisco banned government agencies from the use of facial recognition software, and it’s unlikely that they will be the only city to make that choice. In our conversation, Shysh also highlighted some of the backlash to Detroit’s Project Green Light, which brought facial recognition surveillance tech city-wide.

Traces AI’s solution can also be a better option for closed venues that have limited data on the people on their premises in the first place. One use case Shysh highlighted was being able to find a lost child in an amusement park with just a little data.

“You can actually give them a verbal description, so if you say, ‘it’s a missing 10-year-old boy, and he had blue shorts and a white t shirt,’ that will be enough information for us to start a search,” Shysh says.

In addition to being a better way to promote privacy, Shysh also sees the technology as a more effective way to reduce the racial bias of these computer vision systems that have proven less adept at distinguishing non-white faces, and are thus often more prone to false positives.

“The way our technology works, we actually blur faces of the people before sending it to the cloud. We’re doing it intentionally as one of the safety mechanisms to protect from racial and gender biases as well,” Shysh says.

The co-founders say that the U.S. and Great Britain are likely going to be their biggest markets due to the high quantity of CCTV cameras, but they’re also pursuing customers in Asian countries like Japan and Singapore, where face-obscuring facial masks are often worn and can leave facial tracking software much less effective.


Source: TechCrunch

Microsoft Edge can now read webpages to you with more natural-sounding voices

Microsoft Edge has developed more natural sounding voice options for its screen reader feature, Read Aloud. You can test out the new voices by downloading either the Dev or Canary builds of Edge.
Source: Digital trends

Depth of Field: Where Is Jay-Z Taking the NFL?

The rapper-entrepreneur and pro football have a new partnership. But it might be built on illusion.
Source: Wired

Get discounts up to $250 off the 10.5-inch Apple iPad Pro at Walmart

If you’re planning to get an iPad, today is an ideal time to secure a great deal on an older generation of the 10.5-inch iPad Pro. Prices of all variants from 64GB, 256GB, and 512GB are reduced up to $250 off at Walmart.
Source: Digital trends

Asus ChromeBook Flip C434 review

The Asus Chromebook Flip C434 is a very well-built and attractive laptop for its price. It’s more than fast enough for Chrome OS, has a great keyboard and touchpad, and offers all-day battery life.
Source: Digital trends

Catch Rockets With a Helicopter? Yep, That's the Plan

SpaceX was the first to bring a booster back from space and use it again. Other companies are now following in its footsteps—kind of.
Source: Wired

Actually, Gender-Neutral Pronouns Can Change a Culture

In 2012 a non-gendered pronoun dropped into Swedish discourse. Today it’s widely used—and it’s nudging people to see the world a little differently.
Source: Wired

At Twitter, It Seems No One Can Hear the Screams

Twitter’s brass at an event this week struggled to balance the platform’s reputation for viral rage with the conversational mecca it wants to become.
Source: Wired

Launching out of YC, Blair is aiming to reshape the financing of college tuition

It’s generally agreed that Higher Education in the United States has gradually become more and more unaffordable. Students are dependent on external financial resources for which many of them do not even qualify. Students that are able to secure a loan, often have to take on debts they can’t really afford. And if they don’t eventually land a job with enough income, they are saddled with debt for a very long time.

Much of the problem is that most student loan companies are not concerned with the overall financial well-being of their students, who often feel stuck, trying to repay a loan they cannot afford, without a backup organization that will help them figure it all out. We can see that in the figures. The student loan debt in the US has just reached $1.6 trillion dollars and more than quadrupled in the last 15 years.

With the student debt crisis getting out of hand, the topic has become a semi-permanent issue in the news.

Launching next week is a new startup under the Ycombinator accelerator called Blair which aims to address this seemingly intractable problem.

Blair finances college students through what’s called “Income Share Agreementsâ€� (ISA). Students receive funding for their tuition or costs of living and in turn pay back a percentage of their income for a fixed period of time after they graduate. Repayments adjust to individual income circumstances and by deferring payments in times of low income we protect the downside of the students.

It thus provides students with an alternative to debt which is tailored to their individual circumstances to ensure affordability. Blair’s underwriting process is based on the future potential of a student and not their credit score or co-signer, which could be a deal-breaker in traditional settings. Blair’s competitors are traditional student lenders: Sallie Mae, Sofi, Earnest, Wells Fargo, Citizen Bank, other banks. ISA companies include Vemo Education, Leif, Almapact, Lumni and Defynance.

In contrast to traditional student loan companies, Blair relies on being more aligned with the financial incentives of students, the idea being that it supports students in improving their employability by placing them in internships early, giving them access to industry mentors and coaching them individually on their career prospects.

The founders came up with the idea from personal experience. Constantin, one of the co-founders, is on an ISA himself, as are a lot of the company’s friends. They stumbled across the problem of student debt over and over again while studying in the US and noticed a stark difference between their friends in the US and their friends in Germany. The main reason is that 40% of the students at their alma maters in Germany use Income Share Agreements to finance their studies. They plan to use their experience from Europe and make ISAs more widespread in the US.

Students apply for funding on the website, and within minutes and get a personal quote shortly after. If they accept the quote, they receive their funding within a couple of days which they can use to pay for their tuition or cost of living. Once Blair issues the funding, it crafts a holistic career plan for each individual student and starts supporting them in landing the internships and jobs they want. This includes, for example, optimizing their application documents, preparing them for interviews or connecting them to mentors in their target industry. For context, they batch students together in funds and let external investors invest in the funds.

It receives a cut of the student repayments and carried interest if a student fund performs better than the target return. Additionally, it partners with companies that hire talent through the platform.

Blair has raised the first fund for 50 students and disbursed money for the first ten. The rest of the students will receive their money within the next weeks. After YC’s Demo Day the company will deploy a larger fund that will support 200 additional students.

“Our underwriting model is unique since we have based it on data from concluded ISA funds in European countries,â€� says cofounder Mike Mahlkow.

“In the last two weeks, we received applications for funding totaling over 4 million dollars. Many of our students come from underprivileged backgrounds, often without any support network. Our goal is to build a human capital platform where individuals can access capital based on their future potential instead of their past and investors can participate in the upside potential of individuals in an ethical wayâ€� he adds.


Source: TechCrunch

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