(EDITOR’S NOTE: This is the third article in a five-part series spotlighting the start-ups that participated in the latest “What’s the Big Idea 48-Hour Pitch Competition” organized by the Knoxville Entrepreneur Center and held on March 1 at Knoxville’s Scruffy City Hall. Today’s spotlight is on Matt McMillan and Autopilot Finance.)
Like many young and ambitious individuals, Knoxville’s Matt McMillan is concerned about student debt – his, his wife’s and those of others.
As he told attendees at the March 1 finale of the “What’s the Big Idea 48-Hour Pitch Competition (WTBI),” McMillan and his wife have a combined $200,000 in student debt. That’s a staggering amount, but the enterprising entrepreneur says he has a way to help people address their own student debt in a systematic fashion that also is focused on the future.
“Forty million Americans have student debt that amounts to $1.6 trillion,” McMillan says. “It’s a huge challenge.”
Autopilot Finance, the idea that McMillan presented during the WTBI finale at Scruffy City Hall, is a novel approach to the problem. He says it is an approach that was conceived two to three years ago.
“This past December, it kind of hit him,” McMillan says, adding, “I’ve been told it is a moonshot so many times.” The self-described eternal optimist agrees, explaining that “we’ve got a lot to figure out.”
So, what is unique about Autopilot Finance? The answer is several things.
First, it’s the 50-30-20 concept where a person with student debt allocates 50 percent of his/her revenue to living expenses including a mortgage or rent. The other half is allocated as follows: 30 percent to “fun things,” and the balance to savings and paying down the debt.
“It’s smart for me to paydown my student debt; it’s also smart for me to invest in my future,” McMillan says in terms of himself and his wife but also others.
He adds, “Our model will make sure our customers use the 20 percent of the 50/30/20 personal financial rule to tackle their debt while not having an option to forgo putting money into their investment accounts at the same time. Autopilot differentiates itself by doing both, and not making one or the other optional. That way, once we put it in motion, they will not have to worry about managing that 20 percent, even when they get their student debt paid off.”
Second, it’s a really unique way that he sees the initiative working that involves college and university involvement, specifically through their endowments. McMillan visualizes colleges paying-off the debt from the endowments in exchange for a long-term commitment from the alums to repay the institution and, in the process, establish a trusting relationship that would lead to annual gifts and possible major contributions later in life from those former students.
He describes the approach as income sharing and is talking to representatives of higher education institutions now to vet the idea.
“It’s preparing for the future while taking care of the present,” McMillan says.
Since graduating from the University of Tennessee, Knoxville with a B.S. in Industrial Engineering, he has been involved with a number of start-ups, most in the craft beer industry.
“I’m self-funding this on negative income,” McMillan admits. “We know our ‘fast fail’ goal, and it is the end of 2020. Between now and then, we’ll be putting a little more realism to my super-optimism.”
And, if you wondered where the name originated, he says it is simply this: “Put your finances on autopilot.”