The Social Promise: an Interview with David Klein, CEO and Co-Founder of CommonBond

David Klein, CEO and Co-Founder of CommonBond


David Klein, CEO and Co-Founder of CommonBond, knows that his people are the most important predictor of his company’s long-term success. On this episode of  The Best Team Wins Podcast, we dive into how CommonBond’s social promise impacts their culture and their recruiting efforts, what it takes to build a long-lasting company, why non-monetary compensation is more important than anything else you can give employees and much more. This episode is not to be missed!

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Connect with David on Twitter and Linkedin.




























Adam Robinson: Welcome to The Best Team Wins Podcast, where we feature entrepreneurs whose exceptional approach to the people side of their business has led to incredible results. My name is Adam Robinson and for the next 25 minutes, I’ll be your host as we explore how to build your business through better hiring.


Today on the program, David Klein is the CEO and co-founder of CommonBond based in New York City. CommonBond was founded in 2012, currently has 85 employees and is backed by a who’s who of venture funds, including Social Capital, Tribeca Venture Partners, August Capital and others. We are so excited to have you on the program today. David, welcome to the show.


David Klein: Thanks Adam. Great to be here.


Adam Robinson: We are going to focus on the people side of CommonBond. To set the stage for our listeners give us 30 seconds on who you are and what you do.


David Klein: Sure. CommonBond is an education finance company. We lower the cost of student debt for those who graduated from college and university. We lower the cost of student debt for those currently in school. And we lower the cost of student debt for employees through a suite of student loan benefits that we provide through employers. Our mission really is to make finance more affordable, more transparent and much easier to manage.


Adam Robinson: What are a few of the ways, just to give our listeners some context, ways or products that you’re doing then?


David Klein: Sure. I’ll mention two things. The first is what we became well-known, and that’s our refinance product. That is to say, if you went to college university and you needed to pay your way with student loans, just like I did when I went back to business school. Then you are eligible to refinance your student debt upon graduation. The reason people tend to like to refinance their student debt on the CommonBond platform is that we save people on average about $24,000 when they refinance with us. In large part because of how we use data and technology to better underwrite folks and give them a fair shake on their interest rate. That’s the refinance side of the house.


We also do the same thing for students in school. But the second piece that I wanted to mention up top here, that might be interesting for your audience, is something that we call our employer platform. We’ve built an enterprise technology platform that has a suite of student loan benefits that employers like to offer their employees as a way to attract and retain top talent. For example, one of those student loan benefits that we offer is something we call student loan contribution, or student loan repayment.


We’ve built technology that enables an employer to contribute say $100 a month towards employees’ student loans. We call this the 401k of student loans. It’s relatively nascent. A lot of people are clamoring for it on the employer side, certainly on the employee side. It’s something that we’re very excited to be providing to the broader market through employers.


Adam Robinson: Pretty awesome. I can imagine that the interest is pretty high, particularly from employers, on how to add that benefit. If folks want to learn more, where would they best do that?


David Klein: Sure. Go to our website at, that’s commonbond, one word, dot CO.


Adam Robinson: Fantastic. Thank you for that. Let’s dive right in. I want to start off talking about the mission of your organization. I of course had student loan debt with my MBA. It sounds like the founders of the business, from what I’ve read and researched online, you guys started the business having debt yourselves.


I think everybody understands that it’s pretty intense to try to pay, certainly a graduate student loan off, if not undergraduate student loans. The mission’s pretty noble. How does that mission, to make life a little easier for people, play into your ability to market your company as a great place to work?


David Klein: Yeah, I think it has a lot to do with it. Actually in our case I think we’re uniquely positioned in that we have what I would call a dual social mission. The first has to do with the very core of what we do. We exist for no other reason than to save people money and make their lives easier. That is why we exist. When I had to take out student loans to pay for my graduate education, and I realized that rates were too high and the process was too complex and the service was really poor, I knew I wanted to change that. That’s why we exist.


In fact, we’re the only company in the space. I like to say that’s a FUBU company, For Us, By Us. We’re the only company in education finance that refinances, that provides student loans, that had the personal pain ourselves and through that pain as well as our backgrounds in finance and our entrepreneurial ambitions, did we start CommonBond. That’s number one, we exist to save people money and make their lives easier.


Number two is something that internally we call our social promise. This is something that’s pretty unique in all of finance and all of education. We’re the first and still only company to have a one for one social mission, whereby for every degree funded on our platform, we fund the education of a student in need. We do that through a partnership we have with a group called Pencils of Promise based here in New York, with a chain of over 400 schools globally.


That in concert in what it is that we do every day I think has been refreshing for a lot of folks in the workforce who are looking to work for companies whose values they share.


Adam Robinson: It’s incredible, that social promise, which is very prominent on your website. How has that impacted the kind of talent you have opting in, saying, “Hey, I think I’d like to learn more about what you guys are doing.”


David Klein: Yeah. You know, I would say that if I looked at the floor today, probably 80% of the people who work here, either heard about us and wanted to work here because of our social promise, or rather heard about us because of the social promise, or accepted our offer because of our social promise.


Adam Robinson: Pretty incredible.


David Klein: It’s a pretty high number. It is remarkable. When you meet the people who work here, they are equally remarkable people. These are people who are committed and caring and smart and hungry. The kinds of folks that you want around you, especially at this stage of business building, where you’re looking to build out a company, a great company, for the long term. I feel very fortunate with the types of folks that the team is able to attract to work here over time. I do think that is at least in part driven by our social mission.


Adam Robinson: One of the things our listeners tell us they really love to hear is that inflection point moment in the business, where you went from co-founders and an idea, to, “Wow, this is actually working,” and it’s time to bring some outside people in. Wind the clock back for us and take us back to that moment, that it was time to [inaudible 00:08:08] people in from outside that founding group. Talk to us about the thought process there, and to what degree did you know what you needed and what you were building, versus just trying to put some good utility players on the team and figure it out?


David Klein: Yeah, there are a lot of questions in there. Let me start with what it was like to bring on the first couple people outside the founding team, and then we can go from there. When I think about our first employee, our first employee is a guy by the name of Nate. Nate I had originally met about a year before we ever launched the pilot for our company.


The reason I met him is because I was going to business school at the time in Philadelphia and there was something called the Drexel University Entrepreneurial Legal Clinic. I was going to Penn at the time, I was going toward a business school. I had applied to the Penn Entrepreneurial Legal Clinic and had been roundly rejected. So I applied to the Drexel Entrepreneurial Legal Clinic and was roundly rejected again. But because I kept pursuing both and Drexel was the one that ultimately responded to my continued push for feedback, I was able to work with a group of second and third year lawyers at the time, to put the very first formation documents of our company together.


The student, the third year law student at the time, who was lead in that clinic was Nate. As it would turn out several months later after our first summer as a business, and between first and second year of business school, we had done a number of things. We had posted on social media, hosted community events that we had put on. Nate saw those and he just reached out cold, after several months of those formation documents, and said, “Hey, I’m around. I noticed a lot of the activity on social media. Are you interested in some help?” Of course as an early stage founder, when somebody is offering you help, you take it.


Adam Robinson: Heck yes.


David Klein: It just so happened that Nate’s timing was impeccable because the day after he reached out and I said yes, we had secured our very first outside investor term sheet. We were able to-


Adam Robinson: That’s good timing.


David Klein: It was fantastic timing. He came to us, not necessarily looking to get paid immediately, he was looking truly to help. I feel grateful that we were able to pay him after he was on board helping us for about a month or so after we had closed our first round of outside capital.


Adam Robinson: Nice work Nate, good timing there. You know, that first employee hire is so fascinating to me, because they have such an out-sized impact on the early trajectory, and really frankly whether or not it’s going to work. It sounds like Nate was the right person for that job.


So, the term sheet happened and of course the funding close. How did that change your mindset as an operator now that you’ve got this talent machine you needed to crank up so that you deployed capital wisely, but also quickly enough to meet the growth gates that you know you needed to meet?


David Klein: Yeah, the mindset goes from a couple folks who are working together every day, either directly or virtually through technology. To now, you have some capital, you all get it together in one room so to speak, or our very first office. By the way, our very first office was also the same place that I and my other operating co-founder Mike and Nate our first employee, lived for over a year together, but also worked out of.


It was at that point that we said, “Okay,” with a little bit of money, not a ton, but with a little bit of money and with some runway, “it’s time to,” as you mentioned, “scale up with people and the right amount of people.” And so we went out about hiring folks. We hired a product manager. We hired folks to focus on marketing and operations and customer service and credit risk, in our case it’s very important to the business.


I’ll be honest, it’s not an easy thing to do. Especially if you’re a first time founder of particular scale. Why is it that somebody would work inside of a very small startup with just a handful of people, when they have other options and opportunities in front of them? Add to that the fact that as an early, early stage company, you’re not going to be able to pay a whole heck of a lot of money from a cash perspective, relative to what somebody could find at a traditional place of employment.


There has to be a very, I think there has to be a very strong shared belief in what you’re doing. From an altruistic perspective, kind of from a day in, day out source of motivation perspective. As well as to believe that the stock that you have and the equity that you get in the company as an early stage employee will one day turn into something that is meaningful. Again, not easy to do. It really requires really strong shared belief in what it is that you’re doing. The rest I guess as they say is history.


Adam Robinson: Currently then what informs your decision when it comes to whether or not someone sitting in front of you might be right person for the job or not?


David Klein: What’s interesting is now it’s a very different calculus. We’ll get a few hundred resumes for each role that we have open. We’ve been able to develop a little bit of a name for ourselves, certainly in our space. I think increasingly so in the talent market, in part because the social mission that we have as mentioned before.


The way we think about bringing new talent on board, because culture is important to us, because culture is ever-changing, because culture is the result of human interaction, which is really complex and impossible to nail down at any given point in time, we’re looking for certain qualities or themes of qualities that people have.


When I think about what a top performer looks like at CommonBond, it comes down to three things. One, they have a great attitude. Two, they demonstrate real ownership. That is to say they exert great initiative. They’re stepping up and into gaps and they’re filling those gaps either themselves or by bringing others together. Three, they deliver meaningful results. That is to say, if attitude and ownership was how someone went about doing their job, meaningful results was all about what someone was able to accomplish in their job.


If someone can accomplish meaningful results consistently over time on the what, and deliver that with a great attitude, and having demonstrated real ownership on the how, that’s a top performer. So when we go through our recruiting process, we are looking for those qualities who comes on board to help us to get to where we’re going.


Adam Robinson: David, you have mentioned earlier in our discussion this belief driven, or mission driven, or share understanding or belief of what you’re doing as an organization is important. Do core values play a role? Is there a documented belief system that you use to manage the business?


David Klein: There is. We have 10 specific company values. We probably should reduce that. It’s a lot to remember. But it runs the gamut between putting our customer first, to being kind, to working hard, playing hard, to having really high standard, holding people to it and constantly getting better, to solidarity, in that we’re all in this together, the rollercoaster ride of building a company from scratch.


I’d say those are the documented values, or the themes of values that we have documented. I also think there are unspoken values that I think any company has, and certainly we do too. I think the unspoken values have to do with why we exist as a company, what it is we do to positively affect the community around us, inside the office, outside the office, at home and outside the office abroad. I think those are the kinds of things that signal to whether it’s prospective hires or current team members, signals the kind of company we are, to give them a sense of, “Is this a place that I want to go into work every day?”


For example, I talked to you about a one for one social mission. That’s one thing. But we also have something every year called the CommonBond Social Impact Award. That is to say that every year we go on a search for the country’s top social entrepreneur. We believe our goal and our mission in part on the social side is to encourage, empower and inspire other social entrepreneurs. That is to say, people who use for-profit principles and motives to drive social good. It’s a $10,000 award that we give out every year. We’ve done it for four straight years. We’ll continue to do it.


This last year the team came to me and said, “Hey David, you know there’s a lot in the press about women in technology.” Really, from the Trump election on there’s been a lot written in the headlines, and much of it is negative. My team had come to me and said, “Hey, we’re women in tech. We really like it here. We think this is a great opportunity. We think that with some more data and a productive storyline and narrative we can make tech and finance a much more welcomed place for women.”


So the team put together the first Women in Tech Week, endorsed by Mayor de Blasio. We had many different corporate partners, including the VMBA, ClassPass, The Muse, Betterment. A whole host of companies came to join us to really encourage, empower and inspire women in technology and in finance. We’ll likely continue, we’ll certainly continue to do these things over time. We’ll likely continue to add to our suite of, what I’ll consider social impact driven activity.


I do think that speaks volumes and signals to folks externally to come aboard. By the way, we don’t it to recruit great talent. We do it because that’s who we are. It just so happens that it speaks to a large broad swath of folks who are in the job market.


Adam Robinson: Well, I can think of no better way to make those values truly authentic, than to live them in that kind of a way. Hats off for putting values into practice and demonstrating what that looks like in the real world. I think it has a big impact when it’s not just words on a page.


David Klein: Absolutely.


Adam Robinson: Let’s shift sides of the brain here and talk more operationally about how you actually manage this stuff. Let’s start with your compensation philosophy. Think of the different components, it’s either base salary, upside, equity, you’re going to learn more than you would somewhere else. Talk about your general approach to what the value you deliver as an employer to people work for your organization, and perhaps how that fits into your recruiting strategy.


David Klein: Sure. I think from a pure monetary comp perspective, our approach is relatively simple and straight forward. That is, we want to be fair relative to market, and we want to be consistent relative to other folks internally. While that seems kind of simple, if we were able to, if the company was able to deliver on that 100%, 100% of the time, then we’d be in good shape.


So, fair to what’s market for a particular role and experience set, consistent internally amongst employees. That’s from a monetary comp perspective. Then I there’s non-monetary comp. Part of non-monetary comp is what we talked about already. Which is, how does one feel about the company they’re working for? Are they looking forward to coming in to work every day? Do they feel as though they’re effecting positive change in the world? Do they feel as though they have responsibility to deliver real impact?


We’ve talked about that already, and I think that’s incredibly important. There’s another piece of non-monetary comp, and that has to do with learning and development and recognition. It’s very important to, again a broad swath of folks, to learn and develop. What I tell my company is, “Hey look, CommonBond was built to be a professional playground for top performers,” and I really mean that. What that means is want to ensure that this place continues to be a place where people feel like they are learning, they are developing, by doing their everyday job. That’s really important to me and I think it’s really important to the folks that we bring on board.


I also mentioned recognition. I think that can come in many different forms. I think that can come in peer to peer shout outs. I think that can come at the team level, calling individuals in teams. I think that can come out at the company level, whether I give a shout out to an individual or a team at our Friday lunch and learn, where I’ll spend 30 minutes to an hour in Q&A with the company, or over email after the product team releases notes after a big release to call out certain individuals and certain teams that were really influential into getting something out that’s going to move the business in a meaningful way. I think there’s the learning, development and recognition piece of non-monetary comp as well.


Adam Robinson: Weight that for me David, how important is the non-monetary recognition or the peer to peer uplift, relative to overall satisfaction? On the left hand of the scale let’s say a fair trade of time for money gets it done, versus we really have to lift each other up through daily acts of recognition. Where does it fall in terms of your focus philosophically?


David Klein: I actually think the non-monetary comp is just as important if not more important than the monetary comp. In fact, many times monetary comp is nothing more than a proxy to somebody about how appreciated they feel, or how recognized they feel. Sometimes if people feel less recognized and less appreciated than they should then, I’ve seen this before, what can tend to happen is that they want even more money to compensate for that.


I think our comp philosophy, as mentioned before we want to be fair relative to what somebody could get in market for a similar job. We’re able to kind of pay market for various roles, certainly now than we were when we were just starting out. I think as long as we do our job and meet that fairness threshold, fairness to market threshold, it really does come down to, how well can we as a company, how well can we as leaders across the company show appreciation and give recognition to our people?


Adam Robinson: As we wrap up here our time, look back over the last four years and connect the dots for us. What would you sum as perhaps the biggest lesson learned or thing you know now to be true that perhaps you didn’t know before you started this incredible hyper growth journey?


David Klein: I don’t if this is something new that I learned, but it’s certainly been validated and affirmed 100 times over. That is, in my opinion, the most important thing to a company at any stage vis-a-vis its long term success, is its people. I know that might sound trite to say, and I remember when I was an employee at large companies in corporate America before business school and before I started CommonBond, where I heard leaders say something similar. But having been in those shoes now, having started something from scratch, realizing what it takes to build a great company that lasts a long time.


I have zero doubt in my mind that the quality of people we can bring on board, and the quality of our culture to make great people even greater and retain those people over time, is in my opinion the single most important predictor of long term success at a company. This is something I think a lot about. This is something that keeps me up at night. This is something that is always at the forefront of my mind. It’s effectively, people and capital, people and capital, people and capital. The things that in my opinion happen to be the existential cornerstones of what it means to build a great and lasting business. That’s what I would say to your question, and how important I view people and the culture that they operate in.


Adam Robinson: There it is, ladies and gentlemen, in black and white out there walking the walk. Final couple of questions here, is there a particular book that you’re reading now that you would recommend to the audience, that could help inform their thinking on this topic, or management in general? Something that you really liked or really has stuck with you.


David Klein: Yeah. You know, I’d say one of the books I’ve read in the last year that I’m glad I read was, The Hard Thing About Hard Things. I’d say that was a good one. I’d say that in terms of a management book, or a people and culture oriented book, I don’t know if it’s couth to say and if not you can edit this piece right out, but there’s actually a podcast that Reid Hoffman does, Masters of Scale. He has one podcast where he interviews Reed Hastings, CEO, co-founder of Netflix. Netflix is known to have a pretty incredible culture.


In fact they created what’s called the Netflix Culture Document, 127 PowerPoint page document that Sheryl Sandberg called, “one of the most important documents to come out of Silicon Valley.” In any event, that podcast I think anyone who’s serious about people, and building culture as a way to build a sustainable company long term, should listen to that podcast, if not also read all 127 PowerPoint pages of the Netflix Culture Document. Big fan.


Adam Robinson: Excellent. Excellent recommendation. If you were to come back on this show a year from now, and share with us whether or not you were able to successfully tackle the single biggest talent or people related issue, or opportunity, that you have in the business, what would you be telling us happened?


David Klein: I would tell you that we were able to grow our employee count substantially, and come out the other side a stronger organization because we had the right people process and governance in place to absorb that people growth in a way that turned growth very positive and productive. I think one of the things that goes maybe a little more underappreciated than it should is, we think a lot about growth and it stops there.


We think that growth on its face is a good thing. “Oh, you’re growing your company by 50%,” or, “100% employee count over the next six months,” or, “12 months. That’s fantastic.” It is fantastic, if you’re able to pull it off well. I think that’s where the conversation ends, but frankly that’s where the really rich conversation comes. How do you pull off that kind of growth in that short period of time, in such a way that allows you to maintain your culture, allows you to maintain the self-governing values that help people operate in a day to day basis.


How do you think about the quality of people management throughout your organization? How do you think about people management skills improving over time because as a company and organization grows, so too does the complexity of what you need to do as a manager and leader of people. That to me is where the real conversation starts. That to me is the sign of a great company, a company that can absorb 50% to 100% headcount growth over to six to 12 months increments, consistently over time. If we’re here a year from now, then I’d be happy as a clam to be able to tell you, “We grew substantially over a relatively short period of time, in a way that our organization was able to absorb and productively use as a platform to going to the next level of scale.”


Adam Robinson: That’s the final word. Ladies and gentlemen, you have been learning from David Klein, CEO and co-founder of CommonBond. David, thank you. Super, super thoughtful and really deep experience share there for our listeners. I know they’re going to get a lot out of having listened to you tell that story. Really appreciate you being with us today. Thank you.


David Klein: Great. Thanks Adam.


Adam Robinson: That’s a wrap for today’s episode of The Best Team Wins Podcast. We’re featuring entrepreneurs whose exceptional approach to the people side of their business has led to incredible results. My name is Adam Robinson, author of the book, The Best Team Wins, which you can find online at Thanks for tuning in and we will see you next week.