Professional baseball players selected in the first round of the Major League Baseball draft are expected to earn $45 million over the course of their career. Such careers, however, are just as volatile as they are promising. These same baseball players also have a 46 percent chance of earning below minimum wage.
The high level of risk involved in these careers intrigued Eric Lax, a member of Forbes 30 Under 30. Lax, who visited Andover last Friday, January 4, co-founded Pando, a company that allows a group of people to pool their future earnings, providing each person with career insurance. In his presentation last Friday, Lax explained this business model.
“Pando is a platform where people in high-volatility careers pool their risk… What we do is we find a group of first rounders with the same expected value and want to invest in each other’s success, and they all come together and agree to put ten percent of their future earnings into a shared pool so that they all walk away with a safety net,” said Lax in an interview with The Phillipian.
While researching career volatility, Lax found that job security is becoming increasingly uncertain. Lax was prompted to research why people do not employ the same safeguards with their careers as they do with their homes and cars.
“We don’t have any control over our careers. You’ve got health insurance, auto insurance, homeowner’s insurance, but our biggest ticket item is entirely undiversified. I started taking a look at trends in career volatility, and what I found is across the board, careers are becoming more volatile. Two people leaving school with the same grades and the same jobs will have increasingly divergent outcomes,” said Lax during the talk.
During his presentation, Lax covered the role of human decisions in the future of one’s career, noting that people will often choose an objectively worse deal in order to avoid the risk of loss. Attendee Alan Fang ’21 found this aspect of career choices compelling.
“I found the talk last night really interesting, especially the part where he talks about human decisions and how sometimes humans make really irrational decisions… It makes me wonder about all the subconscious decisions that we make in our head without really even knowing or thinking why we make those decisions,” said Fang.
Lax created Pando to give people more control over these decisions. According to Lax, current users have been excited about not only managing risk, but also forming lasting communities on the platform.
“I think they got excited beyond just the risk aspect, about the community aspect, about saying this isn’t some financial institution who I’m making a deal with. This is me making a deal with a group of my friends, that we’re going to support each other through thick and thin,” said Lax in an interview with The Phillipian.
Andover by Corner Office, a club co-founded by Isaac Hershenson ’20 and Max Levi ’19, invited Lax to Andover. According to Hershenson, the club aims to invite speakers who, like Lax, focus on fiscal issues and entrepreneurship.
“[We] bring exciting speakers to young professionals who are accomplished, like Eric, to provide the students with interesting insights about the professional life. I think the [All-School Meetings] might miss that note sometimes. We bring in great speakers, but sometimes I think the message is more about equality and diversity, and this is really going at professionalism in the workforce and more business and entrepreneurial concepts,” said Hershenson.
Although Pando currently focuses on professional baseball players, Lax and his team are looking to expand the service to include a wider range of careers.
“I see this being a platform kind of like eBay, where you’re going to come on, and you have a lot of control. We’re going to create a marketplace… Right now, it’s mainly professional baseball players. We just launched football, but we think that there’s a pool for everyone. I would say we’re going to look at a lot of entertainers, actors, actresses, entrepreneurs, and graduates of professional schools. Those are our next areas of growth,” said Lax.
Though Lax was surprised by his placement into the sports category on the Forbes 30 Under 30 list, he attributed his recognition to the hard work of his “pando”— his personal team. Though Lax uses this term to describe all those he has worked with, the term “pando” originally refers to a group of aspen trees whose roots intertwine beneath the surface, forming a single organism.
“I think particularly in the category we were in, [we were] fairly weird. Everyone else is a professional athlete, and me and my cofounder have a combined vertical of like six inches. I think the nice piece is it’s really a reflection of how much hard work my team has put in and how successful they are… I’ve been proud to be working with such an amazing group,” said Lax.
Editor’s Note: Max Levi is a Layout Editor for The Phillipian.