March 22nd, 2012
This article first appeared in Techi
Startups are a big part of President Obama’s economic plan, with more than $48 billion in tax breaks earmarked for small companies creating jobs, annually. The initiative was bolstered by a recent report from the Kaufman Foundation stating that fast-growth companies making up less than 1% of US companies are responsible for up to 10% of national hires in a given year.
Amidst this push for growth in the Internet sector, a new class of tech startups has sprung up aiming to help Americans on Main Street. These small but growing businesses have set their sights on assisting users with difficult daily realities like getting out debt, improving their FICO scores, and finding the best insurance rates. And while there are of course traditional companies already providing these services, the new breed is leveraging web technologies to introduce new levels of transparency and customer satisfaction.
“We deal with complexity behind the scenes, so our users only have to worry about picking the best insurance policy from a straightforward list of options,” says CoverHound founder and CEO Basil Enan.
Enan’s company presents competing insurance rates from the major brands, which users can then go ahead and purchase. Insurance shopping has been relatively scattered and confusing for Americans in the past.
Insurance and debt reduction have rightly become vital organs of the economy since its near collapse in 2008, and it seems now the Internet has finally established firm grounding in its offerings to regular Americans in these areas. Whereas there has been clear and remarkable growth in social and enterprise software over the last half decade, attention is now turning toward what some are calling “the pragmatic sector.”
"Nearly 100 million Americans revolve credit card debt, and the younger generation is managing nearly $1 trillion in student loans," says ReadyForZero co-founder and CTO Ignacio Thayer. "Our site helps people make wise financial choices and pay off debt in a responsible way."
Another ascendant element of the nascent sector is peer-to-peer lending. Young companies like Kiva, Kickstarter and Lending Club have to a large extent democratized the money-lending space. Borrowing money and receiving financial gifts are no longer lorded over by big banks with their own, monolithic agendas. Now, consumers can mete out small loans for themselves, at interest rates of their choosing. This is an easy and relatively safe way to turn a small profit, while ostensibly helping others with their endeavors.
Debt relief, fiscal protection and job creation are prescriptions for the economy on which almost everyone can agree. And while we still may joust over how to best to approach these goals, innovation dedicated to helping people on Main Street represents a great start.