This Founder Wants to Build Better Financial Futures For Underbanked Millennials
This piece originally published on November 6, 2018.
As a child, Sheena Allen noticed that people in her community were either unbanked or underbanked. She would follow her grandmother to check cashing centers and her great-grandmother never even had a bank account. When she got older, she set out to find a technological solution to a problem affecting approximately half of Black households.
Allen built CapWay, a mobile-first financial technology company focusing on building healthy financial practices for future generations. The fintech company is designed to address the financial needs of Millennials and Generation Z by delivering access to financial services to prevent negative generational cycles.
AfroTech spoke to Allen about how she founded CapWay and how what she’s building will have an impact on underserved communities for generations to come.
AfroTech: What is your background?
Sheena Allen: I’m originally from a really small town in Mississippi. I double majored in Psychology and Film in college because I wanted to write and direct movies. I was always really big into the arts, but I had an idea for an app in my senior year of college. I was definitely not a tech buff, but I had an idea for this app so I just designed it in Microsoft Word. That actually ended up leading me to found my first startup called Sheena Allen Apps, which I started in college. That company eventually got to the point where we had five different apps with millions of downloads( 10,000 downloads per day). We were making money, things were great.
AT: What was your journey to starting CapWay?
SA: I eventually moved down to Austin, TX when I was going through a transition period with Sheena Allen Apps. The company was still doing well, we bootstrapped it completely, but we were trying to figure out what was next. Do I raise money? I ended going back home to Mississippi for Christmas that year. And when I got back to my community, I started realizing that people, including family and friends, were handling their finances completely different than the way I had become accustomed to seeing how my mentors handle money.
As an entrepreneur, when I see a problem, I want to solve it. I thought there has to be a way for technology to also change the financial world when it comes to people coming from my community.
I took a step back from Sheena Allen Apps and really wanted to dive deep into this problem. We did an entire year of research going across the country from Oakland, to LA, to Detroit, Chi, to NYC, the Delta in the south, and Miami. I realized this problem was everywhere. There were people living paycheck to paycheck everywhere, people depending on predatory loans everywhere.
Even though we have so many financial institutions trying to penetrate the market, what I realized was that an advantage I had as a founder was I understood the people of the market. Everyone else only really understood that there is a problem in the market. I grew up taking my grandmother to a check cashing place, so I really understood the psyche of the person.
AT: What advantages does CapWay have over other competitors?
SA: We don’t position ourselves as a finance first platform. We are a social platform first. We’re more of social finance options versus a strictly finance or fintech options.
With CapWay our users are connected to a platform that understands their needs. We take a very holistic approach. We’re giving you information about money, but we also give you the tools to put that money to use. The biggest value is a platform that understands their needs and it’s going to help them achieve financial health and financial wealth in the long term.
AT: How do things like Predatory lending disproportionately affect the demographic you aim to serve? How is CapWay working to combat this?
SA: Payday lenders, check cashing services, title loan services, and pawn shops. When it comes to the people in my community, these are the only options that are available.
People are only going to do what they have access to, especially if they can’t afford to do anything else. What we realized is that every person who is deep in the cycle of the predatory economy were likely to be unbanked or underbanked.
Our goal was to figure out, how do we go to that audience that no one really understands? How do we catch them early enough before they get deep into the predatory economy and speak directly to their needs?
AT: What challenges did you face building CapWay?
SA: When you’re getting something off the ground, you need capital. As a Black woman, it’s not the easiest to raise. When it came to investors, the two big issues we had was 1) a lot of them were not educated on this market and 2) investors are going to invest in what they know. At the end of the day, this is a company being led by a Black woman in her 20s. And when you think of fintech companies that are actually founded and run by a Black woman, you probably could count them on one hand.
AT: How did you build a tech company with no technical background?
SA: When I first started, I was quite discouraged because I didn’t know how to code. I learned a lot through trial and error. Even though I hired freelancers to get the first app done, I went back and studied code, so I learned backwards. Now, can I sit down and code an entire app by myself? No. But, can I code and fill in gaps and know if you’re BSing me? 100 percent.
People think that in order to be in the tech world you have to know how to code, but there’s so much more that goes into having a tech company than coding. The developers are super important, but you also need someone who is doing UI/UX, someone doing business strategy, and someone doing marketing.
You have to be able to take your failure bow and get up and keep learning
AT: What advice would you give to other founders?
SA: I think that we see social media and the magazines and everybody wants to be a startup founder because it looks cool. No one talks about the other part of this lifestyle. I think a lot of people come in with these expectations based on social media and think it’s all glamour and all easy. If you’re going to come into this, know that it’s tough.
You have to be ready to work. Not only do you determine if your company stays afloat or not, but you also determine if the people who are working with you are going to eat and if their family is going to eat.
It’s not as pretty as it looks on social media.