Mmmm, chocolate. Mmmmm, peanut butter. Hey, you got peanut butter in my chocolate! No, you got chocolate in my peanut butter! What? Delicious! You’ll recall this classic Reese’s Peanut Butter Cups narrative. It’s classic because it’s about a powerful idea. In logic, it’s disjunction. In politics, it’s the “third way.” In new age religion, this idea is often referred to as “both and.” It’s a powerful idea because we’re so easily stuck in our ways: I love my chocolate while you love your peanut butter. And because choosing beyond “either or” — choosing “both and” takes vision and courage and conviction. The developed …
Mmmm, chocolate. Mmmmm, peanut butter.
Hey, you got peanut butter in my chocolate!
No, you got chocolate in my peanut butter!
You’ll recall this classic Reese’s Peanut Butter Cups narrative. It’s classic because it’s about a powerful idea. In logic, it’s disjunction. In politics, it’s the “third way.” In new age religion, this idea is often referred to as “both and.”
It’s a powerful idea because we’re so easily stuck in our ways: I love my chocolate while you love your peanut butter. And because choosing beyond “either or” — choosing “both and” takes vision and courage and conviction.
The developed world functions in no small part at the will of the free markets’ Invisible Hand. But sadly our free markets and our financial systems have also left a toll on millions and have yet to touch billions. Over 80 million Americans are incredibly poorly served by our financial services industry. And I’ll go further: the promise of the middle class is eluding a significant majority of Americans. The bottom 90 percent of the U.S. is no wealthier than they were 30 years ago. And globally, 2.5 billion people are outside of the financial services ecosystem.
Most of us are just trying to play by the rules and get ahead. We’re focused on providing security for ourselves and our family and to do a good job at work. We may not be solving world hunger, but hey, no harm, no foul. To make a point, I’m going to call us “Mercenaries.” Chocolate.
The few among us who dedicate our careers to financial inclusion or economic development are important crusaders. But after 40 years, all these mostly nonprofit organizations reach is only one half of one percent of the U.S. population. Great intentions. Little scale. These are the “Missionaries.” Peanut butter.
For decades on end, in most of our companies, in most nonprofits, Mercenaries and Missionaries just do their thing. Either, or.
But there are rare leaders who are neither Mercenaries, nor Missionaries. They align the focus and pragmatism of the former with the audacious ideals of the latter. They leverage the power of markets to address profound social challenges at scale. They are “both and.” We call them Visionaries. These Visionaries understand that creating social or environmental value can also create great enterprise value.
These Visionaries are changing the nature of financial inclusion and financial empowerment through high-growth financial technology business. As an example, after just three years, the companies in our portfolio reach more than 6 million low and moderate income customers and save them over $2.4 billion per year. They do this by leveraging technology to create impact at scale.
Take for example Progreso Financiero. This mission-driven, high-growth company provides affordable, credit-building loans to underserved Hispanics. Their customers cannot secure a loan at mainstream alternatives and must look to payday or other less desirable sources for credit. Progreso uses a proprietary algorithm to score this population and extend credit. To date, Progreso has loaned more than $1.2 billion to its customers, saving them significant dollars versus other available sources of funds but still building a successful business in the process. Progreso’s commitment to responsibly serve the millions of underbanked Hispanics in the U.S. means they must also grow and scale the business — a “both and” proposition.
But this type of impact does not happen at startups alone. Some of the most well recognized brands in the world are also making a difference and building enterprise value through impact. Just last month, our firm recognized Ken Chenault, the CEO of American Express, as a Core Visionary.
Why? Not for reaching a market cap of $90 billion, or capturing 24 percent of all card transaction volume, or leading the firm through 9/11 and the 2008 financial meltdown. Certainly not for its ground-breaking Centurion card. But for how Mr. Chenault is reinventing American Express for the digital age. Ironically, they are doing this by going back to their populist roots manifest in their original product of the travelers check.
Mr. Chenault has led a large scale effort to address the un- and underbanked. In 2012, American Express launched its Enterprise Growth Group, which introduced Bluebird and later its alternative checking account, Serve. They’re serving millions and by our estimates saving them over $300 per person, per year. Amex Ventures now includes a Financial Inclusion mandate, and they recently launched a Financial Innovation Lab, which will work with researchers to better align financial products with financial health.
These are not “either or” initiatives. Not just business as usual or a philanthropic side show. This is “both and.” This is Visionary. I challenge all of you to be this kind of Visionary in your organizations.