These Guys Built an App That Auto-Donates Your Spare Change to Charity

What is any ocean but a multitude of drops?
-Cloud Atlas

Apps have risen to streamline and solve problems in every imaginable area of our lives, including the tricky realm of personal finance. Good spending and saving habits can be difficult for people to stick to, so a number of apps now step in to remove the need for willpower and automate good choices.

Chime, for example, rounds up every single one of a user’s purchases to the nearest dollar and deposits the spare change in their savings account. An app called Acorns does the same for investing. But what about the ultimate good money deed: donating to charity?

Drops is a Los Angeles-based startup that believes spare change can change the world.

Just link the app to your credit or debit card, and for every single purchase you make, the total is rounded up to the nearest dollar, with the difference automatically given to the charity of your choice. Partnered with organizations like Heifer International, Mending Kids and Big Smiles Program, every time you make a Starbucks run, buy groceries or grab a drink at the bar, you’ll automatically be contributing to making the world a better place.

We caught up with Drops co-founder Shea Rouda to talk about the dizzying journey of entrepreneurship, all-night coding sessions and getting the founder of Tinder to swipe right on his vision.

Net Impact LA: What inspired you to create an app like this?

Shea Rouda: I originally started Drops in college, where I lived in a two-bedroom apartment with nine people. All of us were broke and couldn't afford to buy supplies for our apartment, so I thought a solution would be to start an apartment fund and roundup our purchases towards that group account. The caveat was that if we didn't hit our goal of $200 for the month, the roundups would be donated to charity. We quickly found charities really liked this concept and decided to pursue that model entirely.

NILA: How many apps had you made prior to this?

SR: This is the first! The process has been a lot longer than I expected—and I think most first time entrepreneurs will find that to be the case, too. It's also a bit of a roller coaster ride. We just try to stay focused and keep moving forward at a steady pace.

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NILA: What was the process like for developing this and getting it on the market?

SR: Finding developers took quite a bit of time. As a first time entrepreneur with a background in humanities, I wasn't exactly a candidate engineers were racing to join teams with. So I originally raised a small family and friends round to hire a freelancer. This went well for awhile, but eventually the money ran out and I couldn't afford to keep paying him for simple updates or improvements.

More funding from friends and family wasn't an option, but I believed in the concept too much to give up. So in every class I attended at USC, I'd start talking about Drops and asking for any connections to interested developers.

Most of the time, asking around fell on deaf ears, and months went by without finding anyone who could fully commit. But eventually, I was pitching Drops in an entrepreneurship course when a classmate named David [Maliglowka] started asking me questions, suggesting improvements, and criticizing other elements. We went back and forth in front of the whole class for about 15 minutes, with the professor laughing about how intense our debate had become. But after class, I realized this is someone I should work with.

We met for coffee, he had a background in engineering and design, and the two of us joined forces. After the first engineer joins your team, you instantly gain legitimacy with other developers, and recruiting for tech talent becomes infinitely easier.

With this, we were able to pickup Chaitanya [Pilaka], who's our lead backend engineer, and also met Kevin [Tai], who was working on a similar concept when a professor pointed him towards Drops. The four of us instantly vibed and became cofounders.

Once all of us joined forces, we did not plan on making an app—we wanted to be web based. But this quickly changed when we were accepted on Planet of the Apps, a TV show produced by Apple that showcases soon to launch apps in the app store.

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NILA: You got featured on a TV show before the app was even ready? How did that go?

SR: Apple let us know of our acceptance pretty abruptly, and we only had a week or so until we started filming. At this point, we only had an inclination we might make it, and still didn't have a working iOS app. So once we were accepted, it was a mix of excitement and complete fear. We had about a week to build a fully functional financial application and present it on national TV.

Knowing that it was next to impossible, we decided to get crafty. The old freelancer had built an MVP of an iOS app, and we knew we had to resurrect that code to make this work. So we spent four or five all nighters in a row trying to update the app so it was presentable for the judges on national TV.

On the final morning, literally two or three hours before the app was due and filming was slated to begin, we were still making changes. We found that some features we couldn't code out of the app in time, so we changed them to items we knew the judges would not ask about. For instance, on the old app, one feature was the ability for users to "tip" us a buck or two as our business model.

Instead of having the time to remove that feature, we just renamed it "Terms of Service" and figured the judges wouldn't ask about it. Thankfully, we got lucky, and we were never pressed to open the "Terms of Service." Otherwise that would have made for a pretty hilarious gaffe!

In the end though, we made it onto the show, and after a lengthy pitch with the judges on Planet of the Apps, we were unfortunately turned down. But backstage, I met the founder of Tinder, Sean Rad, and pitched him on Drops. After a few meetings, he liked the concept and agreed to join as an advisor, so it was definitely a worthwhile experience.

NILA: And it got Drops on the market! What have been some of the biggest surprises since people started downloading the app?

SR: I think the biggest surprise has actually come from the charities. We've received partnerships requests from local and regional charities, which we expected, but also partnership requests from some of the largest charities in the world. I think this shows that there is a lot of demand from nonprofits to create recurring, monthly revenue. We've found that a lot of organizations are tired of throwing a gala, then having to budget those funds for an entire year. They want a more predictable, sustainable source of income. And all it takes is a handful of users on Drops supporting their organization to make that happen.

NILA: What was your first milestone?

SR: Within two months of our launch we hit 10,000 roundups donated. That was a humbling feeling to know that the community on Drops is really starting to make a difference.

NILA: Tell us what's coming up next.

SR: We'll be hosting some events with our nonprofit partners in the next couple of months. Stay tuned on where to attend!

Download the app at www.drops.la.

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