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Giant Robots Smashing Into Other Giant Robots

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Oct 6, 2022 • 23min

443: Airbrake with Göran Sandahl

Hello UK Giant Robots listeners! Our next event allows you to hear from and connect with both Founders and Investors on all things Fundraising. The event will be 1 part panel discussion and 1 part breakout sessions. We hope you can make it! Register today at: tbot.io/fundraising-uk Göran Sandahl is Director of Growth at Airbrake LogicMonitor, frictionless error monitoring and performance insights for your entire app stack. Victoria talks to Göran about having a product-led growth engine, how Airbrake can help developers identify and solve errors and bugs in applications, and developing a product geared towards a specific segment of the market. Airbrake Follow Airbrake on Twitter, GitHub, Facebook, YouTube, or LinkedIn. Follow Göran on Twitter or LinkedIn. Follow thoughtbot on Twitter or LinkedIn. Become a Sponsor of Giant Robots! Transcript: VICTORIA: This is The Giant Robots Smashing Into Other Giant Robots Podcast, where we explore the design, development, and business of great products. I'm your host, Victoria Guido. And with us today is Göran Sandahl, Director of Growth at Airbrake LogicMonitor, frictionless error monitoring and performance insights for your entire app stack. Göran, thank you for joining us. GÖRAN: Thanks for having me. VICTORIA: Wonderful. So just tell me a little bit more about Airbrake and how it all got started. GÖRAN: So Airbrake is, as you said, an error and performance monitoring tool. It was actually, funnily enough, started as a side-project within thoughtbot. So it's a little bit full circle here joining this podcast here. But I'm a recent addition to Airbrake, so I don't know the details of the time when they started over ten years ago. So talking about Airbrake and the journey since then, lots of things have happened with Airbrake. It has gone through multiple acquisitions since then, both from industry players on the infrastructure side to various venture capital investors buying the company. And now Airbrake is owned by LogicMonitor, who bought Airbrake somewhat like a year ago. And it focuses exclusively on the developer audience for LogicMonitor. And I lead growth, so I work with our growth team. We have a product-led growth engine. So we don't do a lot of traditional sales or anything like that, so a lot of it is word of mouth. And this is something that drew me to Airbrake was its strong kind of grassroots movement in Ruby and other web and application languages. So that's what I know about Airbrake's early days, which isn't a lot. VICTORIA: Right. It was the very first exception monitoring service in the world. And we grew it to have three people working full time on it. And then, like what you said, it was sold to someone else who went on to continue to grow it. And it has been through several acquisitions. And from your perspective today, where is this service originally called Hoptoad [laughs], and then now it's Airbrake? And what kind of scale are you seeing? What are your customers like today? GÖRAN: Obviously, I don't know exactly how the product looked like back then. But a lot of it, I think, has stayed the same. It focuses on simple error monitoring, simple performance monitoring, and simple deployment tracking. So it's pretty much the same focus I believe in the product. This is what makes it stand out still today. We can talk about observability, and happy to do that. This is my third company that I've been working for as a monitoring company, so I know fairly a bit about it. Airbrake today is heavily focused on...we focus on what we call lean dev teams. We focus on the teams that try to move a little bit quicker, maybe than what they may, doesn't necessarily have the backup of an ops team or a DevOps team. So we really focus on building a product that is fully self-service that you can get started within a minute on your own. So that implies good UX, good documentation, and also that we can meet our users where they are. So we're focusing today on things like community building and those things for supporting our users. So we have lots of customers, really good brand names. First and foremost, super interesting stories from many of our customers who navigate that art of building product quickly. VICTORIA: That's great. I like that you phrased it as your user experience, which is your development teams, right? And do you have more of a perspective around the developer experience and how to capture that and really create something that's useful when you're delivering in those high-velocity environments? GÖRAN: As I said, I've been working for three monitoring companies. The first one I founded was 12 years ago. We built a product that we tried to coin the market called algorithmic monitoring, that later turned into something called AIOps. Yeah, there are a lot of buzzwords around that, applying AI to identifying problems in software. We were really early on that. One thing that we learned from that journey...we ended up selling that company to LogicMonitor, which is why I'm eventually here. What we learned then is that you can have a really good monitoring product, but ultimately, the people that fix the problem that gets discovered is the most important person for a monitoring tool to get into true effectiveness. So when I came across Airbrake, when they were acquired by LogicMonitor, and I had the opportunity to join, that's what drove me to decide to join. It's really that simplicity in terms of I think there are two schools, right? Either you promote a tool that all your software engineers should use, and you try to build centralized, structured processes around that. You make the template thing and things like that so that everybody can get up and running really quickly with monitoring. Or you take the approach of something like Airbrake, where it's built to be easy. If you know the language, if you know the code, then you know how to basically instrument it. And these features are simple enough to get going on your own. So that's the path that Airbrake is on. So it's built to be simple from the gate, so to speak. Now, Airbrake and monitoring and observability is a complicated problem when you have software issues. They're not always easy to diagnose or get to the root cause of. So there's a lot of struggle for users to unwind the bugs and actually fix them. But we try to do the best to provide enough context so they can take the next step. VICTORIA: And maybe you have an example or something to illustrate how that tool can help developers identify and solve those errors and bugs in the application. GÖRAN: All software has issues, right? There are bugs in all kinds of software. I've always been fascinated with something called latent bugs, or dark death is another framing of it, which is essentially the bugs that are hidden in your code. And when we have an outage, something triggers that bug to happen, but that bug was there. So if we think about it like that, that all of our software, all the code we run, all the commits we do is probably adding a lot of value, but they're also adding fragility or potential for problems, then you need to be really good at identifying when those bugs get activated. And sometimes, actually in, the majority of times...so that's why you need error monitoring, right? Just the ability to see that there is an error, there's a new error in production or in our staging environment, or wherever it might be. So that's error monitoring. It turns out about 80% of outages are self-inflicted in a way. They're caused by the changes when we build software or when we reconfigure things. And 80% that means that you need to be able to track changes really well. So you need to understand how and when changes happen so you can understand if what you did worked or didn't, so that's why we have deployment tracking, to be able to correlate those errors with the release, the commit, the line of code you added to the codebase. And then, of course, performance monitoring which is the ability to see where you have bottlenecks, which is not maybe bugs but where you have poor performance or poor experience for users. And it could be in a shopping cart checkout job. It could also be a scheduled cron job that's supposed to clean up stuff that is late. It could be just a rendering time of something that is longer than usual, and you just want to be aware of it. So that is kind of performance monitoring. So those are the three main focuses for us as a product. We like to believe that it is easy to get going within a couple of minutes. And that's what we're kind of focusing on providing. VICTORIA: Yeah, that makes a lot of sense to me. And your tool is able to just spin up quickly, be able to quickly get that insight into what's happening as you're deploying code and as you're pushing changes to production. Do you call that all observability? Or, in your mind, what is observability? And what are the really key things that you think that all developers should be watching? GÖRAN: That is a good question. Part of what fascinates me about the Airbrake userbase and what I've got to learn about Ruby and some of those languages which were a little bit foreign to me as a backend engineer, like an algorithm junkie, so to speak...so what fascinates me is how little monitoring is typically done by many teams that's working on web applications. So coming from the infrastructure monitoring side, that's where this term observability grew. And you have these metrics, logs, and traces kind of triad. And every web application, every web browser has had tracing built in the developer console or the web browser. So some of these tools that are available now to infrastructure monitoring teams in the form of observability have been available to web developers for quite some time, so I don't necessarily think observability is a term that explains a lot for applications and web developers. But for infrastructure, more infrastructure-oriented teams where you have lots of microservices and things like that, we needed a term to explain the full range of capabilities we needed. But I'm not so sure we need the similar amount of complexity because there is a lot of complexity in those tools and lots of data. But I'm not so sure we need the same complexity when speaking about monitoring on slightly more lightweight applications and web apps. That said, we're starting to mimic a lot of the architectural paradigms of the infrastructure, such as microservices, in terms of micro frontends. So a lot of that complexity is entering into the web as well. So, who knows? [laughs] MIDROLL AD: Are your engineers spending too much time on DevOps and maintenance issues when you need them on new features? We know maintaining your own servers can be costly and that it’s easy for spending creep to sneak in when your team isn’t looking. By delegating server management, maintenance, and security to thoughtbot and our network of service partners, you can get 24x7 support from our team of experts, all for less than the cost of one in-house engineer. Save time and money with our DevOps and Maintenance service. Find out more at: tbot.io/devops. VICTORIA: So the customer or clients for Airbrake are developers who are doing web applications and need that kind of just the information they need [chuckles] to be able to make sure their changes to code is not affecting the production and that your product is trending towards observability practices that might be a little overmatch to what you will need. GÖRAN: Yeah, that is what we're focusing on. But when you have a lot of customers and a lot of users, there's always this exotic, for us, exotic use cases. So I'm 100% sure there are really large customers that are using us in a more traditional DevOps fashion and not on web apps. I mean, we have support for most of the languages from Go to Python to .NET to Ruby. So there's nothing keeping Go developers from adopting something like Airbrake. But we do know that we're particularly strong within JavaScript and Ruby, and I think that speaks for the experience that it's easy to get going, et cetera, rather than something like Grafana or another more traditional observability tool that's a little bit out of reach maybe for the web or application developer. VICTORIA: So when you're developing your product towards this specific segment of the market, what other differences do you notice between who you're targeting or who you're expecting your customer to be versus the wider range of people you could be marketing this towards? GÖRAN: So I think everybody wants to go after the developer and the needs of the developer. This is, so to speak, trendy nowadays. And it's obvious because so much of the value and innovation happening is done [chuckles] in the editor. So it's natural that a lot of the focus is being placed there. We're focusing on where we're strong, and I think that's the best way to do it unless the market is small. And I see application development growing for the foreseeable future. I think we're seeing trends of things like no-code, or low-code, or whatever we choose to call it. The infrastructure is being abstracted more and more. So from that perspective, I think we have a good strategy for providing that simplicity that users come to expect when building modern apps today. We're pairing with other kinds of innovations on how you build code, basically from things like Vercel to Webflow to whatever it might be, right? VICTORIA: Right. And do you find that collaborative approach is more effective in business-to-business sales for this type of client? GÖRAN: We're very focused on this just try it kind of approach, so that's how we do most of our direct communications with our users. So we want to let the app speak for itself. And we believe that once usage happens, then additional needs will happen or will arise that we can maybe serve in other ways. So we do have a free tier, free forever free tier, so you can use Airbrake pretty much forever but in a small scale. And then, like normal, when you start adding colleagues or lots of errors and lots of projects, then you need to upgrade to a paid plan. And we're also launching some new tiers here in the foreseeable future as well. VICTORIA: Oh, tell me more about that. GÖRAN: As teams mature...I don't know if that's the right word, but at some point, a lot of these teams may want a little bit more structure when they do monitoring. So I mentioned that we're pretty much self-service, completely self-service. But at some point, when you start using a product a lot, you start to integrate it into your core processes. So new things start to matter, things like who did that change? Who reconfigured that? Who logged in the last time? Has anybody seen that thing? But also to things like payment things. The different issues that can arise change, right? VICTORIA: Mm-hmm. GÖRAN: So we're launching a pro tier in the future that will cater to a little bit more of the needs of the team that has grown into maybe having a manager that asks questions about how things are set up, et cetera, but also, where you can control teams and people a little bit better, where you can also control your costs a little bit. So one of the features is on-demand billing. So the more errors you pay on your tier...you can produce up to a certain set of errors and performance events, and if you go above that, you pay an on-demand fee. And there are some protections built in for that if you're on the pro plan and things like that. So it's about catering to growing needs of a little bit larger teams but still the team that wants to move fast. VICTORIA: Right. And I believe you said that you have plans to communicate and engage with the community, and that probably helps you understand some of those needs. And so what kind of plans do you have coming up that you'd like to share? GÖRAN: So one of the things we know is with all the Airbrake use, we probably have a lot of fans out there, but we might not have been the best to actually tap into that and serve that community. So we want to really invest in understanding, getting to know that community, and serving that in the best way we can. So we will see exactly which form that will take. But it starts with the basics, opening up a Slack community that we can allow users to join and ask questions or maybe hopefully get value out of their peers without talking to us maybe. But we can also serve them in various ways with support, et cetera. So it will start pretty basic, but I think it's a pretty standard playbook nowadays. But for us, it's really about we're genuinely...we think our users are awesome, and we would love to be able to share their stories and connect them with other peers. So I think that's the driving motivation. And then, of course, we have some data that also shows that it is a good investment in itself, that the stories our customers tell are much better than the stories we tell. So yeah, we're excited about that for sure. And it's connected to this bottoms up motion from where Airbrake grew from, that it grew as a solution that served the community really well. And we want to go back to those roots and be the best tool for that kind of user. VICTORIA: Oh, I love that. It sounds like a really great, full-circle journey for the product. And is there anything else you want to share about entrepreneurship and starting up products like this? What advice would you give to someone who had developed this type of product that served the community well and wanted to turn it into a product and a business? GÖRAN: So I think the community building is relatively new for us, so I'm not sure the advice there is so valuable. But in terms of entrepreneurship, I think this is one of the more important decisions you make as an entrepreneur or founder is how will you grow demand for your product and how will you distribute the product? And how will you ultimately monetize the product? And there are so many different ways. And depending on what your growth expectations are, you might be asked to go in one direction or another one. And my advice would be to really find product-market fit and that I think happens best by staying close to the end users, and then you can look at strategies for monetization, including direct sales or channel or, as Airbrake does, product-led freemium basically. But reach product-market fit first so you can decide with knowing how your product dynamics and adoption dynamics works, and let that influence the kind of strategy for the business strategy basically rather than the other way around. VICTORIA: Right. That makes sense. And then, if your product is geared towards developers, they're just like any other users. And you have to reach them and get their feedback and understand how the product fits into the market. GÖRAN: Yeah, exactly. VICTORIA: Yeah. Great. All right. Do you have any questions for me at this time? GÖRAN: Not really. It was a pleasure being on the podcast. I'm a fan so hope you can cover up my errors there. [laughter] VICTORIA: I think that if you want to go back and remove, we totally can. But are there any other major takeaways you want people to walk away with about Airbrake or, in general, about entrepreneurship? GÖRAN: That's about it, I think. VICTORIA: All right. You can subscribe to the show and find notes along with a complete transcript for this episode at giantrobots.fm. If you have questions or comments, email us at hosts@giantrobots.fm. And you can find me on Twitter at @victori_ousg. This podcast is brought to you by thoughtbot and produced and edited by Mandy Moore. Thanks for listening. See you next time. ANNOUNCER: This podcast was brought to you by thoughtbot. thoughtbot is your expert design and development partner. Let's make your product and team a success.Special Guest: Göran Sandahl.Sponsored By:thoughtbot: Are your engineers spending too much time on DevOps and maintenance issues when you need them on new features? We know maintaining your own servers can be costly and that it’s easy for spending creep to sneak in when your team isn’t looking. By delegating server management, maintenance, and security to thoughtbot and our network of service partners, you can get 24x7 support from our team of experts, all for less than the cost of one in-house engineer. Save time and money with our DevOps and Maintenance service. Find out more at: tbot.io/devopsSupport Giant Robots Smashing Into Other Giant Robots
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Sep 29, 2022 • 37min

442: Zedosh & The Attention Exchange with Guillaume Kendall

Guillaume Kendall is the Founder of Zedosh and Attention Exchange, which is working to build a safe place for advertisers, publishers, and consumers to all benefit from fair access to human attention. Chad talks with Guillaume about open banking, changing up who the beneficiaries of consumer attention and data are, and giving companies opportunities to advertise without interrupting consumers with ads. Zedosh The Attention Exchange Follow The Attention Exchange on Twitter or LinkedIn. Follow Guillaume on LinkedIn. Follow thoughtbot on Twitter or LinkedIn. Become a Sponsor of Giant Robots! Transcript: CHAD: This is The Giant Robots Smashing Into Other Giant Robots Podcast, where we explore the design, development, and business of great products. I'm your host, Chad Pytel. And with me today is Guillaume Kendall, the Founder of Zedosh and the Attention Exchange, which is working to build a safe place for advertisers, publishers, and consumers to all benefit from fair access to human attention. Guillaume, thank you for joining me. GUILLAUME: Thank you so much for having me. It's a real privilege. CHAD: If I'm not mistaken, you and I first met in person for lunch one time in London when I was visiting London in; I think it was...I went back and looked at my calendar. It was March 10th, 2020, if I'm not mistaken, either that or it was that Friday of that week. GUILLAUME: It must have been one of the last weeks pre-pandemic. CHAD: It was. I literally woke up on Saturday morning for my flight to come back to the U.S. to the headlines that all flights from Europe were being shut down. [laughs] And I almost dropped my phone until I realized, oh, that's the headline, but the real detail is I can get back. It's all the rest of Europe, not the UK, yet. That was the following week. I made it home, and then the world changed. GUILLAUME: I sure did, didn't it? [laughs] It's funny, isn't it? Because the two-year period in between seems to have flown by. It feels like just yesterday. I remember I think, even what I ate. CHAD: [laughs] And at the time, you were working on a new application, and we were talking about that. But I want to fast forward a little bit to today. Tell me more about Attention Exchange, and then we're going to rewind a bit to how you've arrived. GUILLAUME: So the Attention Exchange...by way of background, I come from the fintech space rather than adtech. And it really, ultimately, the Attention Exchange is a matching engine, using financial terms, that matches the right video content to the right consumer based on their spending data rather than their browsing data. So it's a matching engine. And it looks at rules that ultimately we're able to derive, or actually, I better use the phrase, we can bridge the gap between attention and intention based on our audience's spending patterns. And the reason we can access those is because they give us explicit permission. We have something called open banking here in the UK. It's actually across most of Europe now. But it enables the consumer to own their data and share it outside the bank if they so wish to with other regulated third parties. So we're such a regulated third party, and they share that data with us, as I said, to be matched with video content from brands that are relevant to their spending instead of their browsing. What it ultimately means is we're very well-positioned in this apparent post-cookie world that seems to be heading our way eventually because we don't rely on any other tracking technology to spy on our audience. They voluntarily give it to us. And I guess the kicker which is...people are probably asking themselves, why would they do that? That's because they get paid. So we put cash directly into the bank account or one of the bank accounts they've connected to our platform in exchange for their immutably valuable attention to that content. CHAD: So correct me if I'm wrong, but I feel like open banking has had a significant impact not only on the data sharing that you're describing but just on the banking ecosystem in general in the United Kingdom and now Europe. GUILLAUME: So I think if you were to speak to the purveyors of open banking, it hasn't had as big an impact as they felt it would have had. I think we reached earlier this year only to fact-check this, but about 6 million people in the UK now utilize open banking in one form or another. But I think what was very interesting is that the ecosystem that sprung up around it was mostly around changing the user experience for the end consumer to have a better handle on their financial health, which is a really important topic. And the reason that is is that before, it wasn't really in the bank's interests to tell you if you're about to hit your overdraft or go over your overdraft because they'd charge you an extra 20 pounds for an unplanned loan, and then you'd have to pay it. Your balances (This is going back a little. I'm showing my age. ) was always two or three days out of date, which was weird. So open banking; the first thing that sprung up around it is we'll connect your bank accounts. We'll give you this holistic view of your mortgages, your credit, your debit, your net worth really across various assets. And we've moved progressively towards more of open finance rather than just open banking. You can connect via APIs a lot of your financial identity to these open banking providers. But having said that, no one has looked at it in the way that we have, which is actually this is an advertising play, and it could be potentially a real change maker in the way that consumers benefit from this $400 billion industry which is advertising rather than all the fintech stuff that's been happening around open banking. But yes, so it's not to be sniffed at, you know, several million people are using open banking. But most people, I don't even think, realize they're using open banking. They open the Revolut app, and it says, "Do you want to see your Monzo balance inside our app?" You say, "Well, yeah, okay, that means I don't have to open Monzo." And lo and behold, you share that data. CHAD: Right. Yeah, that's a really good perspective. I think from my perspective; I was thinking it's sort of made it...there's a separation between the banking backends and the user experience, and I think that in part has given rise to these challenger banks and made it more possible for them to do that. GUILLAUME: Yeah, that's a very fair point. I think, certainly, if nothing else, it certainly forced the incumbent players, those that have been around for a few hundred years, to really buckle up their ideas and think about how to react to this new threat. At first, they thought, geez, open banking is going to cause us all sorts of problems, but I think as it's gone full circle. You find that, actually, most people are looking for that user experience, and the banks have been forced to provide it within their existing ecosystem. So now, most banking apps provide really super UI or UX, meaning that you don't have to go use third-party tools to get such a lens. And in fact, the most interesting one I've seen of late, which I think is definitely worth a mention, is a company called Cogo; and Cogo used open banking to carbon score your spending and let you offset it. So if you spent four pounds at McDonald's, it would guess that that's X kilos of carbon and give you several options to offset it. And actually, in the end, NatWest formed a partnership with them. This is a classic use case where actually, now the carbons offseter is available within that NatWest app, and you don't really have any idea it's Cogo. That's what you're seeing is ironically, those who have had success in innovative, exciting use cases have been pulled back into the ecosystem being offered because they still want the scale overnight. They had access to 8 million NatWest customers or whatever the number is. So, yes, I think; certainly, all banking apps have had to, even the banks themselves, have had to reorganize and rethink how they deliver technology to retail consumers who probably had had very little churn in the past because the options were very limited. CHAD: That's great. So tell me about the genesis for this idea and realizing that you could use open banking to view people's financial information and to develop a profile that could be used to opt into advertising. Where's the genesis of that idea for you? GUILLAUME: Sure. So actually, several threads came together very neatly in quite a tight timescale, the first of which is I spent a lot of money, relatively speaking, on a company called Patch Plants. And Patch Plants deliver plants to your house, [laughter] and they have quite a nice way to go about it. All the plants have got human names, and they come with little booklets about how to look after them. And I felt very positive about the relationship I felt I had with Patch Plants until for the three, maybe four months following that purchase, there wasn't a website, or a social feed that I was on that didn't have Patch Plants all over it. And I really took note of my sentiment towards them [laughs] where I thought, go away, Patch Plants. I'm a customer. Why don't you know better? With the amount of data that we provide to the web, you just assume...and maybe this is where it all starts to click into place that actually, it's not that smart. CHAD: The interesting thing is I think it is possible for companies to on target you once they decide to do it, but it seems like nobody does that. [laughs] And it's like, I've just bought a stove. Why am I seeing stoves all over the place? [laughs] I'm not going to buy another one. GUILLAUME: Yeah, again, I think it comes from the underlying infrastructure, which is basically this concept of cookies, which we accept on every single website before we can do anything with it. And you've probably got a number of unchecked-out stoves across the web. And it's not locking on to the fact you've got one checked-out stove. But of course, we're connected to the bank account. And so when we see that transaction, we see the counterparties. We know for a fact that that person has made that transaction with that vendor, and therefore, you probably need to change the message. And that goes from daily purchases right through to the massive, heavy items we can see when people started a car leasing agreement. Well, if you want to get them to think about considering your brand of vehicle in two or three years or three or four years, there's probably a journey that you should take that person on. But then again, once they've made the purchase, don't keep hassling them. So that's the first thing. If you saw my bank account...so I worked with open banking innovation [laughs]. I guess that's pretty important. CHAD: [laughs] GUILLAUME: So I was acutely aware of how the data could be shared and analyzed, so that's the first point. And then, pretty much at the same time, Netflix brought out this documentary, The Social Dilemma, really putting across that these social media applications were basically designed, maybe it's not a surprise, but pretty much as gambling apps. They're exceptionally addictive. And the reason they're addictive is because the longer you spend on them, the more advertising they can slide into; now, I think one in every four posts. And now that we've moved on to short-form video content, there's infinite scroll. We're all on these apps for hours a day. But the only way they generate revenues is through advertising, and the only way they get advertising is by you spending more time. And it sort of didn't sit too well with me, especially after we had the Euro Championship in football or soccer here. And there was a ton of racist abuse that went out to players across social media. Lots of brands and advertisers started pulling away from it for a very short period of time to express their protest. But I realized then that, actually, there is no alternative. If you want to attract attention, you have to fund social media or Google, and that's kind of it. Those are your options as a brand or an advertiser. And the former being social media is really not a very healthy place to spend time. Sure, some good comes out of it. But I would argue that the bad that comes out of it far outweighs any of the good that's come from social media, certainly in the last five years or so, I believe. It's at the center of some major divisions in our communities. But it's all funded through advertising revenue. So that was the second point is that there really is no alternative. And why should Mark Zuckerberg be the beneficiary of my attention, my data, my value whilst putting absolutely no effort in changing or being an arbiter of the content? They're keeping their hands up saying, hey, we're not a publisher. If that content is there, it's there. And it becomes a very complicated argument very quickly around free speech and all of this sort of stuff. But ultimately, there's a ton of really nasty stuff. And then we had a family friend, specifically, who really put herself in a lot of danger, a young girl. And that was a very real impact on human life close to us that was all driven from what she was able to access with alarming ease via Instagram. So those sorts of threads all came together. And then the more sort of...it's one of those things, right? Once you see a yellow car, you're looking out for a yellow car. You keep seeing them. But I don't think I was proactively looking out for it too much. But it seemed that every day almost, there was a new-new story in the front pages of the papers where Facebook was in some sort of trouble, and that obviously materialized last year with the Facebook leaks. And everything we've been just discussing now they've known about. They know about it. They're choosing not to make a difference. So we had a really powerful motivation to try and bring about a different mechanism for this $400 billion industry to operate. And rather than exploit our data, exploit our mental well-being, exploit our communities and everything else in order to drive advertising revenue, maybe the advertiser could have a more direct relationship, a fair and more transparent relationship with the consumer with whom they want a dialogue. And I think it's been the biggest learning curve for us is that brands and advertisers feel weird about paying consumers to pay attention. But we're saying we think it is weirder that you pay Google and Facebook to track these people all over the web and interrupt them everywhere they don't want to be spoken to. Why not just pay them to have a fair, transparent dialogue? I know you have money. I know you spend it with my competitors who are in my market. I want your attention, and this is what I have to tell you. There we go. So that was the sort of the kernel, the genesis. CHAD: I can totally see why advertisers are...scared is not the right word. Just, you know, it's just they've never had a relationship where they're paying the consumer directly for any kind of advertising that they do [chuckles] whether it be TV historically. There's always an intermediary. And the idea of paying people directly is not only different, but in some ways, I can imagine people view it as crude. Like, it's one thing if it's going through an intermediary and you're paying them, and advertising is being run, but it's another to just pay someone to pay attention to you. GUILLAUME: Yeah, but I think this is the point about the open banking. I completely agree with you; if you're paying somebody based on their cookies or any of the other data, the first-party data or third-party data, that's abstracted several layers from that pair of eyeballs that you know has a tendency to buy X on Y time horizon. That's never been possible before. And so through your television, it's scale. You're paying the broadcaster because they've got 3 million people watching Coronation Street on, I don't know, whatever. But it's always based on these tiny, tiny fractions of engagement, and that's always been the way it is. So you need the intermediary for scale. But I think what I'm hoping, what I've literally bet my house on [laughter], that's one thing that's going to change. I sold my house since we started to do this. All those marketplaces are completely saturated, and they are not getting less busy; they're getting more busy. And so okay, TikToks appeared, but the medium through which video content is provided to the consumer, you're lucky to get a quarter of a second or half a second with that person. And so you're right, but what is now the alternative to actually getting a minute, a minute and a half, two minutes with somebody where they're not skipping; they're not going past? You know they're a real person. You know they're human. All of our consumers have to have a bank account. They have to have transactions, and they have to have an income in order to be valuable and receive any adverts into their feed. So it's just never been possible before. The scale play, the intermediary, was always sort of, I think, accepted, and it still is today. There's going to be a bunch of fraud. I think there's like 15 cents in every dollar spent online digitally for advertising is lost. I think it's a $100 billion problem by next year. So I guess the point I'm making is the intermediaries historically and to today have existed because you need to reach millions of eyeballs in order to get a very low interaction rate. With our model, we're able to target thousands of people and achieve a 19.6% average click-through rate even after a minute and a half worth of content because they're engaged and you're not interrupting them. So we think it's a relatively elegant model for what is a saturated, noisy world where eventually also the very mechanism by which they do track and target you is going to be replaced at some stage by Google and Chrome. Mid-Roll Ad: When starting a new project, we understand that you want to make the right choices in technology, features, and investment but that you don’t have all year to do extended research. In just a few weeks, thoughtbot’s Discovery Sprints deliver a user-centered product journey, a clickable prototype or Proof of Concept, and key market insights from focused user research. We’ll help you to identify the primary user flow, decide which framework should be used to bring it to life, and set a firm estimate on future development efforts. Maximize impact and minimize risk with a validated roadmap for your new product. Get started at: tbot.io/sprint. CHAD: You have this idea. It's really challenging the status quo. You're working in open banking innovation at the time. What did you start to do then, to try to bring your idea to life? GUILLAUME: So the first thing was actually my background is in sales and business development but within the fintech and open banking space. So I've worked with a lot of very smart people. And the first thing I really needed to do was quickly validate whether or not this is something. So a guy that we brought on...he's not so much a co-founder, but the other director of the business is a guy called Matt McBride, who's this global head of UX at a company I used to work for. And that was really the first thing is to try and rapidly prototype what the experience would look like and ultimately go out to our target audience, which was Gen Z here in the UK, and ask them whether or not this is the sort of thing they'd engage with. And the responses were actually really very positive. "Hang on; you're going to pay me to watch ads that are relevant to me? No-brainer, please do." And then, we were able to raise 100 grand, 150 grand, which enabled us to take that prototype and build it into something that, after a few obstacles with Apple in the App Store, we were able to get live. So that was really the first thing, I guess is, figuring out the way and the people that I needed to help me out to take this idea into something tangible and then tested it before I went much further with it. I was very fortunate, or I am very fortunate, that my partner is a corporate lawyer; my wife, sorry, now; we've been married since we started. [laughs] And so, actually, the mechanism through which we were able to raise the really earliest funds meant that we didn't have to give very much of the business away at such an early stage, which I think was a key learning point that I certainly share with other founders is you don't have to go give away 25% of your business for a little bit of money just to get it off PowerPoint. There are other ways. CHAD: So I think I remember what I told you when we met and talked. Do you remember what it was? GUILLAUME: You shared lots of very valuable insights with me. CHAD: My memory is that at the time, it was only advertisements in the app. And I think I said, "I get that people are going to want to be paid to look at these things." GUILLAUME: Oh yes, right. CHAD: "But if there's nothing else here, it's going to be really hard to bring people back to do that." And we had seen that in another client of ours that was paying people to browse. And what they'd do is they do it for a while, and they'd hit whatever monthly cap of return that they could get, an amount that they thought made sense. And then, they would switch back to their other browser because it was a better browsing experience. So they were only using it because they were getting paid. And as soon as that incentive went away, they would stop using it. GUILLAUME: Yeah, so I remember that. And you were right. And I guess there are a few things that came about from that, so the first thing is that Apple agreed. So we couldn't get the app onto the App Store if it was just a feed of adverts that remunerated the user to watch them, incentivized the user. So we put quite a lot of additional features, I guess more traditional fintech features, open banking features within the application in order to give the user insights into their spending, week-on-week analysis, and categorization of spend. And we also built this what we call the level up section where every week, you get refreshed pieces of content around, you know, very Gen Z-focused again, but what's the difference between a credit card and a loan? Is buy now, pay later a good idea? What's open banking? So we generate all this content, which they don't get paid to consume but is there, and they do. But more importantly, I think what we realized is that actually what we've got...this is the difference, I guess, between the Attention Exchange and Zedosh being the app; it's the plumbing and the matching that is the real value here. It is the models we're building that understand people's behavior and propensity or intent to buy something based on the data they're sharing with us. And so, actually, what we've built is a solution where you should be able to log in to any publisher that has the additional content, and experience, and value that you're speaking about there, places you ordinarily already browse and frequent. But if you want to, there's a separate tab where there are ads waiting for you that remunerate you, but you go into that tab. So we're trying to remove the interruption, you know, the pop-up even having to accept cookies from your user experience with the publisher moving into a separate, dedicated tab. And the reason the consumer is still going to go click on that tab is because they know that there's some content that's relevant and pays them, but they're still able to enjoy all the other benefits that the publisher provides. So it's kind of weirdly trying to flip this premium subscription model where you pay not to have ads. Actually, you're the first recipient of the ad income, and you share that with the publisher. CHAD: I think this is really cool, and yet I think it also rubs up against or hits up against something that is just so different than the status quo. The idea that companies would not interrupt you with advertising is probably so foreign [laughs] to people that I imagine you get reluctance to that. GUILLAUME: The last two years have been a steeper learning curve for us and all the advertisers and agencies, and players we've been speaking to. But what I'm grateful for is the fact that what we term the ad-pocalypse is coming. And so I was just at an event called MAD//Fest last week, which is basically all the advertising industry got together in London, the UK advertising industry. And every single panel discussion talk was about the post-cookie era. And all that most people are speaking about is how do we gather more data in other ways from the consumer in order to keep doing more of the same? And all of a sudden, when we're talking about the fact that our users give us their banking transactions, we see how much they earn and where they spend it and, therefore, can also attribute without the use of cookies, which is the holy grail of advertising. We started generating an awful lot of interest from really big players. So I think you're right; the status quo is having the rug pulled from underneath them, right? Look at Meta's share price this year. I haven't checked it this week, but last time I checked, it was down 52%. And that's because iOS app tracking transparency is stopping the ability to track and monitor and, increasingly, ultimately, the ability for the user to remain more private. And they all are doing it. Why would they want to be less private in order to benefit Meta? In our platform, they're opting into their most intimate data being shared because they stand to be rewarded fairly for it. So I completely agree; up to this point, "What? No way." This is how it works. And certainly, the thing that will probably remain true is to do more with less isn't of interest because agencies get paid a percentage of the budget. They don't want to do [laughs] the same with less budget. But my point remains that with iOS app tracking transparency...apparently, Android is going the same way, and Chrome is replacing third-party cookies. The status quo simply cannot continue. Something has to change. And so I think with this identity solution often is what we're building. The consumer stands a chance of being the first in line to receive a reward for their attention. And I'm very pleased actually we've got some competition as well since we last spoke, which is new. But this concept of rewarding consumers for attention, I think, will just...how else are you going to get their time? They're not listening to you on TikTok. [laughs] CHAD: I'm happy to hear that you're viewing competition as a positive thing. And I agree competition raises awareness that this is a thing and a potential, and most people will shop around or research it further. And that's a chance for them to discover you. GUILLAUME: I hope so. This company has done a big advertising campaign all over. It's on TV, radio, and the underground in London. And the amount of people who've reached out to me... "Is this company doing what you're doing?" And ultimately, they're paying users in a way for their attention to advertising. But they don't use open banking, and they don't have the data that we have. CHAD: That's an important distinction. One of the things that I've seen our clients worry about...and I saw it happen to one. Even though lots of people worry about it, I've only ever seen it happen one time, but it's still a risk, and that is when competitors come along. And unbeknownst to you, they dramatically over raise and therefore are just able to flood the market, saturate the attention, and build way bigger and faster at a loss than you are willing to do. GUILLAUME: Yeah, or able to do. [laughs] CHAD: Or able to do, right? Because they've raised 500 million [chuckles] or something like that. That's what happened with our client, who was in the group buying space at the same time as Groupon and LivingSocial. And so that's the only time I've ever seen it happen, but it's something that people are worried about. How are you...is that something on your mind? GUILLAUME: It's interesting. So they've raised 15 million Series A, and they've been around since 2012. So they've been around a long time. And it almost feels like they... [laughs] I'm not saying they did, but it almost feels like they landed on my LinkedIn. And we're very anti-social media. The message is really strong on anti-social media. But ultimately, they built an app. And so I think we've already matured past the point that in terms of our scaling and our ability to integrate with any platform, our strategy already goes beyond competing on a direct basis of an app that serves ads. In fact, if anything, at some stage, I'm hoping that they could plug into our engine and our pipes and add an extra layer of data and personalization to the adverts that they serve. So ultimately, when they came, and it was during the Champions League final that they had their first big launch because one of the backers is a football player, my phone just went berserk. Because it was like, wait, what? And at first, I was a bit worried but ultimately, no. I only really, really see it as a positive at this stage. But obviously, yes, they can advertise. They can speak to brands. They've got much more market presence. Everywhere you go on the underground, there are those posters. But we have a very clear, distinct proposition that is quite different. As I said, really, this pulling apart what Zedosh is and what the Attention Exchange is; the Attention Exchange is really potentially the plumbing, the rails for this post-cookie advertising model. CHAD: So that being said, you are doing some fundraising now. That's right? GUILLAUME: Yes. In fact, I don't think I've stopped fundraising [laughter] since this started. And certainly, that wasn't something I was anticipating despite the fact that...I mentioned I'm married to a corporate lawyer. She told me, "Your role as a CEO, as a founder, you're just going to be fundraising." I thought, yeah, well, I'll get some money in, and then we can focus on doing the stuff. But every time money comes in, most often you sort of have already spent it. It's allocated; it's gone. You need to look for the next lot. But yes, we are fundraising. Currently, we're still focused majoritively on angels. We're looking to prove our scalability model with this existing raise, at which point I think we’ll be ready and looking for institutional funds. But we use something called EIS funding which is UK-specific but is so, so rewarding for UK taxpayers. Basically, they get 30% back off the tax amount of their tax return, which is a great incentive, and all the gains from the equity is free of capital gains tax as well. So it almost becomes a no-brainer for people who have money that they're looking to invest in early-stage risky businesses. They're already really risking. The capital risk is under 50% of what they put in because there's also an insurance element; if the company goes bust that you've invested, there's something called loss relief. CHAD: So it's really attractive to angel-level investors. GUILLAUME: Correct. So you have to be a UK taxpayer as an individual to benefit from this specific relief. Of course, I mean, we have had some non-UK people still invest through the same sort of advanced subscription agreement. But yes, it's very attractive for UK taxpayers. CHAD: And do you think...[laughs] you've already answered this question. But I guess when do you think you'll stop fundraising? GUILLAUME: We're looking to change the way the internet works. [laughter] CHAD: Right. GUILLAUME: And so if we're mildly successful even redistributing the 100 billion of ad fraud which is currently being lost out there, we're entering a very cash-rich market looking for solutions at this moment in time. So if we're to raise some cash that enables us to put in place the plumbing and the pipes that we're looking to connect to, then actually, we should be relatively profitable relatively quickly, at which point, I guess we'd no longer need to fundraise. But at which point we'd probably say, "Well, actually, the U.S. is now ready for this. Let's go." CHAD: [laughs] GUILLAUME: I don't think we're particularly a cash-thirsty business. It's all built on AWS. CHAD: And you're right. That's why I asked the question because if your model is working, if you're having the impact you want, there's a lot of money in advertising. And so you should get to the point where you're able to do that profitably. GUILLAUME: Absolutely. CHAD: And start being as big as Google, right? [laughs] GUILLAUME: Yeah. I read a book called Life After Google. I don't know if I shared that with you the last time we met. But it's weird. It was written five or six years ago, but it's coming true. I think this whole premise of Web3, and this decentralization of data, and the ownership of data, the profiting of data at the individual level, is coming to the fore. And I can think of no better way to bridge your value and identity online than having it connected to your real-world assets, income, and spending behavior. CHAD: I was wondering whether you are going to mention Web3. [laughs] GUILLAUME: Huh. CHAD: Because this decentralization of the advertising money directly to users is a very Web3 idea. GUILLAUME: I agree. CHAD: [laughs] So how much do you talk about Web3 in your pitch or when you're talking about it? It hasn't come up until now in this conversation, so maybe not so much. GUILLAUME: It's a double-edged sword, I feel, because I think most people think Web3. They think crypto. CHAD: Yes. GUILLAUME: And we're paying cash in fiat, and although there's every possibility we could have a token-based solution, we're not looking at that because the core immutable value of your attention is linked in your spending behavior on earth and online, but through real transactions with real merchants. 99.999% of transactions, I imagine, aren't crypto yet and don't live on a blockchain, so until that point, I think we steer clear of it. Whether we could have raised more money more quickly if we [laughs] had mentioned it more, I don't know. But for me, there are quite a few steps to go in our journey as I see it having matured from the app to the plumbing, the plumbing now going to more publishers, more publishers meaning more audience, more audience meaning more attention, more advertising. At which point, as I said, the U.S. will probably be there with open banking. There are a lot of things in Web 2.0 that could be resolved. And yeah, if we make it that far, I think we'll be in an awesome position to have an identity solution for Web3 or Web5. [laughs] CHAD: Well, I wish you all the best in that journey. And I really appreciate you stopping by and sharing with us. GUILLAUME: My pleasure. It's been real great and nice to hear from you again. And I hope our paths cross in the real world soon enough. CHAD: Yeah. If folks want to get in touch or learn more or get in touch with you, where are all the different places that they can do that? GUILLAUME: We have two websites, so zedosh.com is the consumer app, attentionexchange.co.uk is our other website. Otherwise, feel free to reach out to me on LinkedIn. And on Twitter, I'm @G_Zedosh. I'm not massive on Twitter. There are a lot of bots on that. CHAD: [laughs] I guess I'm not that surprised. So you can subscribe to the show, find links to everything that was just mentioned along with notes and a complete transcript for this episode at giantrobots.fm. If you have questions or comments, email us at hosts@giantrobots.fm. And you can find me on Twitter at @cpytel. I'm also not very active these days. This podcast is brought to you by thoughtbot and produced and edited by Mandy Moore. Thanks so much for listening, and see you next time. ANNOUNCER: This podcast was brought to you by thoughtbot. thoughtbot is your expert design and development partner. Let's make your product and team a success.Special Guest: Guillaume Kendall.Sponsored By:thoughtbot: When starting a new project, we understand that you want to make the right choices in technology, features, and investment, but that you don’t have all year to do extended research. In just a few weeks, thoughtbot’s Discovery Sprints deliver a user-centered product journey, a clickable prototype or Proof of Concept, and key market insights from focused user research. We’ll help you to identify the primary user flow, decide which framework should be used to bring it to life, and set a firm estimate on future development efforts. Maximize impact and minimize risk with a validated roadmap for your new product. Get started at: tbot.io/sprintSupport Giant Robots Smashing Into Other Giant Robots
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Sep 22, 2022 • 41min

441: Creative Startups with Alice Loy

Alice Loy is a Founding Partner at DaVinci Ventures and the Co-Founder and CEO of Creative Startups, the leading global startup accelerator and company builder for design, food, immersive, and creative companies. Victoria and Chad talk with Alice about what she means by creative companies, how much judgment she must pass as an investor with a love for the "weird and wonderful," and some of the challenges faced in bringing diversity to the rest of the accelerator world. DaVinci Ventures Creative Startups Follow Creative Startups on Twitter, Instagram, Facebook, Substack, YouTube, or LinkedIn. Follow Alice on Twitter or LinkedIn. Alice's Blog Etkie Embodied Labs Follow thoughtbot on Twitter or LinkedIn. Become a Sponsor of Giant Robots! Transcript: CHAD: This is the Giant Robots Smashing Into Other Giant Robots Podcast, where we explore the design, development, and business of great products. I'm your host, Chad Pytel. VICTORIA: And I'm your other host, Victoria Guido. And with us today is Alice Loy, Founding Partner at DaVinci Ventures and the Co-Founder and CEO of Creative Startups, the leading global startup accelerator and company builder for design, food, immersive, and creative companies. CHAD: Alice, thank you so much for joining us. ALICE: Thanks for having me. CHAD: Can you tell us a little bit more about Creative Startups in general but also what you mean by creative companies specifically? Like, isn't every company creative? [laughs] ALICE: Yeah, it's so funny. That's often the first question. And sometimes people I can feel their sense of indignation in thinking maybe I think they're not creative. CHAD: [laughs] ALICE: First of all, the creative industries are pretty well defined globally by the World Bank and entities like that. I'll come back to that. Yes, all human beings are creative. I like to joke that that's what got us out of caves in the first place. But more importantly, all entrepreneurs are very creative regardless of what sector you're operating in. So when we're talking about creative, we're just referencing the set of industries that are measured as the quote, "creative industries." They include film, our museums, design certainly is a core element of that. Increasingly, we're seeing more and more people move toward the creative industries as mechanized labor takes over things like building cars or even running data analysis. CHAD: Has getting support and funding and that kind of thing traditionally been easy in the creative space or hard? ALICE: No. I know you know the answer to that question because you're a designer. [laughs] CHAD: I usually don't ask questions that I don't know the answers to, so... [laughs] ALICE: But it's a great question because actually what it uncovers, you guys, is that it has changed dramatically for people who I call creatives or creators in the last two or three years. It's a little tough to measure with the pandemic, but we know at least $2 billion have gone into platforms that support creators, businesses led by creators. The creative industry has really turned a corner. So when we started this work 15-16 years ago, I co-founded the organization with a gentleman named Tom, who is now in his 80s. But he had come out of what's called the cultural economy, which was the precursor to the creative economy. And, of course, now we're all living in the creator economy. So like every other industry, it evolves. And one turn in this evolution is that creatives are now understood as economic drivers, not just people who add nice flourishes to things at the end. When you're building new products, people think about engineers, but it's really a creative process. And people increasingly bring in creatives from the outset to think about how the design process can be more humanized, can be more effective to solve people's problems so that your products really delight customers instead of just get the job done. CHAD: Is there something you can point to that triggered or pushed along that turning point? ALICE: Well, not to be overly philosophical, but I would say the general sense in the U.S. and increasingly in other countries where we work is that human beings don't want to be cogs in a wheel. They don't want to just be bit parts in a system. When you talk to Gen Zers, they understand that they are complete human beings. And somehow, I think older generations bought into the idea that you have the same job for 40 years. You go to work at 8:00; you come home at 5:00. You repeat the next day. I think the sense in the economy is that people want to be fulfilled. If they're going to give that much time to a job, they want it to be meaningful and valuable. And they want it to solve some of the big problems. Frankly, big tech is not approaching the world in that way these days. And so I think younger people are looking for values-aligned opportunities. And the creative economy is a space where values tend to align with really reaching the full potential of each human being instead of just extracting their physical and occasionally mental labor toward building a capitalist system. And so I think that zeitgeist has helped open the door. I also then think when you look at the kinds of technologies that are being utilized, they're still fundamentally about communicating ideas, and art, and inspiration. That's what Facebook is. That's what TikTok is. That's what even news channels are. And as more people come into the world of saying, "Oh, I can share my ideas, my art, my jokes, my music, my whatever," they see themselves as creatives, and they go, "I wonder how I could get paid for that?" I mean, there are a multitude of factors weaving together to shift. I also think, quite frankly, the SaaS investment area has become so saturated. I mean, if you walk down the street in San Francisco, if you don't bump into three venture capitalists who are SaaS investors, it's like, what are you doing? And so I think other types of investors with a different background maybe are saying, hmm, what about this area over here? How could we make money? So that would be another thread I would say is helping drive. CHAD: It strikes me that what you've shared sort of creates a self-fulfilling cycle too. ALICE: Yes. CHAD: Because once creatives have examples of other creatives that have done this, it becomes an aspirational thing that they understand that they, too, could do themselves. ALICE: Yeah, 100%. So our goal when we started the startup accelerator...we launched the first accelerator for creative founders in 2013 in the world. And we said to ourselves, if we get one company that becomes the poster child for this creative movement and demonstrating that you can be, as we like to say, weird and wonderful and build a company, then we will unleash a flood of people who now see themselves in that light. We were very fortunate in that we got that one poster child, and that has really helped us paint a picture that's clear for a lot of people where they see themselves as entrepreneurs, even though they're a tattoo artist or they're a hard rock Navajo metal band from the reservation or whatever their background is. Now they look and go, "Oh yeah, I could do that," and they certainly could. Being an entrepreneur is really hard but not intellectually challenging; it's more heart-challenging. CHAD: Oh, that's really interesting, more heart challenging. ALICE: Yeah. I mean, you're an entrepreneur. You guys have built a business, so you know that being an entrepreneur is more about being able to just sort of stay calm in the waves than it is about building the world's best boat and being able to steer toward that destination no matter how the winds blow. CHAD: Yeah, I've often referred to it almost as grit, like the ability to, no matter what happened yesterday, get up and do it again. ALICE: Get up, yeah. And unfortunately, I think there's a myth, maybe at least in the U.S., that what drives most people to get up and go, again, is money. And I don't think that's true at all. I think what drives people to get up and go again is their love of customers or end users. And their feeling they're just irrefutable despite there being no evidence feeling that this is going to work. This is going to make a difference in people's lives. And that's why the sort of slog. And there are days when...one of the things we always start a Creative Startup's program with is find your tribe. Cling to the people who believe in you. Ignore the naysayers. The naysayers are ten to one. Blow them off and cling to the people who say, "Wow, dude, that sounds cool. I bet you could do that." Yes, do another coffee meeting with that person. [laughs] Because sometimes you just need people who can say, "You got this. You got this. Just do another day, man." What do you guys do? Let me ask, what do you guys do when things get really rocky for you? How do you guys collect that internal okay, I'm going to get back in the saddle. CHAD: I've talked about this with people before, and I actually think that this is going to be a non-answer, but I'll do my best. I actually don't know exactly what does this for me. But I do know a side effect is I also don't celebrate the wins as much as other people wish that I did. And I think it's because I just move on very quickly from things. I don't dwell on the downs as much. I also don't dwell on the highs as much. And so I don't know if it's just something about me that does it or I just trained myself to do that. But it does have some downsides to it. ALICE: That was a real answer. That wasn't a non-answer at all. CHAD: [laughs] ALICE: Victoria, what about you? VICTORIA: I think to add on to what Chad said is kind of that thoughtbot mentality of viewing things as an experiment. And so if you come in with that mentality, like, this is the experiment. We'll see if it works or it doesn't. And if it doesn't work, there are some lessons to be learned, and we can grow from that and do better next time. And if it does work, great; [chuckles] this is cool. And I actually like to celebrate the wins a lot. I like to really dwell in those moments and feel like we did something right. We should remember this and learn from that as well and then try to repeat it, right? ALICE: Yeah. Oh, I love that. CHAD: You mentioned that when you were first starting Creative Startups, you hoped to get one win, and you did. Which one was it? ALICE: To be clear, as a mom, we don't have favorite children, okay? [laughter] And there are different companies that have had enormous impact in different ways, so let me tick some off. Let me name first Etkie. It's a design company built by a woman named Sydney, who grew up in rural New Mexico with a passion for working with indigenous communities. Her design company makes spectacular handmade bracelets, average price point around 250 bucks. And she sells in about 100 different high-end galleries around the world. She creates 40 jobs for Navajo women on the reservation at twice the annual pay that they would receive if they worked any other job there. Pretty astounding, pretty astounding. Those women have gone on to reinvest their money in things like rebuilding the school, putting in wells for family. The Navajo Nation lacks drinking water all over the place. So really fundamentally shifting the economic and social trajectory of that community. She designs every single bracelet with a woman, and you'll see they're named after the women. And they just do a recollection process where the woman recalls something from her childhood, and they weave a story around that. And then, they create the bracelet design. They're beautiful, Etkie, E-T-K-I-E. The next one I would say that has really inspired me is founded by another woman who does...now she's doing more XR AR, But they started as a virtual reality company doing films for medical providers who needed to better understand the disease experience of their patients in order to come up with not just solutions to their lived experience but actual medical procedures, and technologies, and pharmaceuticals that could shape the outcomes of that patient. So that company is called Embodied Labs, founded by a woman named Carrie and her team out of LA. And they're now selling to hospital systems across California and increasingly in the Midwest, et cetera, changing thousands of lives. And then the one that most people do point to us and say, "Hey, good job," is a company called Meow Wolf. We were their first investor back in 2014. They've gone on to raise upwards of $250 million. They're kind of a competitor now to Disney. So they're in the immersive art and experience realm. They had a million visitors in their Denver spot. So far this year, they've had about a million visitors in their Las Vegas spot. They were founded here in Santa Fe, our hometown. And we didn't even know they existed. They didn't know we existed. [chuckles] The night before our application was to close, somebody wandered into a meeting they were having where they were talking about dissolving the art collective. And somebody said, "Oh before you guys make a decision, you should check out this thing." [laughs] So in some ways, it was angels on our shoulders in that it's a homegrown company, and Santa Fe is a small city. We needed a shift here around our creative economy. And they needed somebody to believe in them. They had gone to every business support organization they could find and had been told, "Well, you're probably trying to start an arts nonprofit." And they thought, "That's not really our vision. That's not...we want to build a company. We think art is something people will pay for if it's put forward in a way that blows your mind," and Meow certainly blows your mind. CHAD: That's really interesting. I mean, I totally get why people would say that just because...but that's like saying...when Disney was getting started [chuckles] people saying "It sounds like you're trying to create an arts nonprofit." ALICE: Yes. And I'm guessing a lot of people did. The future happens when we're all looking backwards, and very few people are looking forwards. And so I think it's important for entrepreneurs to keep in mind you're probably just statistically talking to somebody who's looking backwards because human beings tend to do that more than they look forward. And so better to find people early on who say, "You know, I'm not exactly sure what you're talking about because you're the expert in your startup, and I'm not. But let me ask you this, how could I be helpful?" That's the right question. If they give you an answer and they don't even know what you're talking about, you probably don't need their help. And that's hard for entrepreneurs because there are so many doubters out there that you have to kind of keep plucking through to find the one or two people who say, "That's really interesting. That seems like it might work. How could I help?" Did you guys have somebody at thoughtbot early on who you can remember sort of said, "Huh, that's interesting. How could I help?" CHAD: I think it was our early clients who most did that. ALICE: Oooh, yeah. CHAD: Because we're a consulting company, because we're an agency, finding clients who believed in us and wanted to work with us in part because they liked us was an important aspect to that. If it wasn't for those early clients, no amount of passion would have kept us going because we needed to support ourselves. ALICE: What a great insight, honestly. I think the sort of rhetoric around passion is really abused. Because there's now this sense that, well, if you have passion, you can build a business, and that's just not true. That's not true. I hate to say it, and people are always stunned when I say it because they think that I lead Creative Startups; I must be the core passion champion. But here's what I would say is if you have a passion for solving your client or your customers' problems, then you might have a business. [laughs] There's a huge difference there. There's a difference between well; this is what I want to make. This is what I love doing. That is not necessarily going to answer the question is anybody paying you to do that? And I like to encourage people to think about if you have passion for doing something, you probably have a hobby. If you do stuff that people want to pay you to do, you might have a business. And crossing that bridge is an analytical and a heart-wrenching process. Because usually, what you end up with is I mostly get to do what I love to do. But I do a lot of stuff I don't want to do because that's what building a business is, just like being a parent or any other really amazing, wonderful thing in life. Running a business is not just about doing what you love doing all day; it's mostly about doing what people want to pay you to do. And if you're doing what people want to pay you to do and you love it, that is beautiful. That is a blessed position to be in. It's rare. And you have to ask yourself very real questions and be brutally honest with yourself, or you could waste your retirement savings. You could spend a year or two away from your family before you figure that out, not to be depressing. [laughs] But we always say from our programs we look...not from our more advanced accelerator programs, but we also provide programs that are more; how do you figure out this idea? You have this idea, or you have what we call lucky revenue. A lot of creatives get lucky revenue where their friend sees them doing something, and they go, "Man, would you do one for me?" And then somebody else wants one, and now they have lucky revenue. And they're ready to say, "I think this might be a business." And those people we say you have three outcomes from our programs. One, you realize this is not a business. It's just not going to make any money. The business model does not pan out. Two, this might be a business if I do it differently, and now I need to figure out if I want to do it differently. And three is, yeah, I'm on track. Now I got to go grow it. And all three are valid outcomes. Because we've worked with people who came to us late, took out a loan. And we said, "Well, what's your plan for paying it back?" "Well, we don't know." That's bad. That's really dangerous. That can ruin families' economic futures. And so we're much happier to catch people before that happens so they can ask those critical questions about is this really a market opportunity? Is this a business I want to build? Is this, therefore, a business opportunity for me? And those questions are deceptively simple. In our more advanced programs, we focus on, okay, you've got revenue, you've got traction. You're ready to start maybe thinking about what's the next three years? Where are your cash flow gaps? Where's your, as people like to call it, the valley of death that you have to cross as you grow? What kind of financing can you go raise to help cross that valley? How do you get to 10 million in revenue, 50 million in revenue? People are at different stages of growing a business. MID-ROLL AD: Are you an entrepreneur or start-up founder looking to gain confidence in the way forward for your idea? At thoughtbot, we know you’re tight on time and investment, which is why we’ve created targeted 1-hour remote workshops to help you develop a concrete plan for your product’s next steps. Over four interactive sessions, we work with you on research, product design sprint, critical path, and presentation prep so that you and your team are better equipped with the skills and knowledge for success. Find out how we can help you move the needle at: tbot.io/entrepreneurs. CHAD: How much judgment do you pass as an investor as people who are reading applications about who gets into the accelerator program? How much judgment do you pass, and how do you strike that balance? ALICE: That's kind of a peek behind the curtain; how do people really pick companies? Different people do it differently. For us, we really hue toward weird and wonderful. We actually prefer...and this goes against what people say you should do, [laughs] but we kind of go against the grain in general. And it's worked out. We prefer to look at things that we don't totally understand partly because often creatives don't speak business speak. So I'm pretty turned off by (I'm going to make something up.) the Harvard Business School grad who has a music-sharing platform and doesn't play music. I'm like, how would you know about a music-sharing platform? Whereas a musician who comes with their garage band and they happen to have a computer science degree from the college down the road and they've invented this thing and all of a sudden, it's taking off, and they're not even sure why. I'm listening, and I'm like, oh, that's really interesting. A lot of creatives tend to pick up on opportunities in the market, and they don't frame it so much as a business opportunity because that's just not the language that they've learned to speak yet. But they have an insight into a particular sector or a need that people who are not really in that space... It feels like a lot of the startup world has been overtaken by people who want to be startup founders but don't necessarily have their hands dirty in a particular sector where they know how to really solve a problem that either a lot of people have, or that very few people have but that a lot of people have in the future if you build the market. And that's where you make a lot of money is if you build a market. So we look for things like that. So what does that mean when we're reading applications? We don't ask for financial statements. We ask, how much money did you make last year, and where do you think most of that money came from? We're more interested in are they interested in analyzing their business so they understand where growth could come from next? Instead of, what is your financial statements? Most of the entrepreneurs who come through our programs don't have financial statements. They might not even have a cash flow projection, which is really exciting. We have entrepreneurs who come to us who...I'll tell you a story. We had an entrepreneur come to us who ran underground music clubs in old houses in Denver. And he was like, "I think this is a business, but I don't know anything about business. I just started hosting these a few years ago." And I said, "Well, how many people...like, if you took an average year..." and I said, "You don't charge anything?" And he said, "No, people just hear about it." And I'm thinking, okay, so you get a couple thousand. "How many people in an average year come to your basement music club thing?" "50,000." [laughs] Yeah, I think you might have a business. I mean, those are the kinds of things that you think, wow, why did that take off? What is going on there? That's really interesting. Let's talk. And he had a mohawk. He played in a metal band. Business was not his deal. And so that wasn't the lens he was applying. I think a lot of designers and a lot of people who invent products and solutions start with; I'm doing this for myself, wouldn't this be rad? Without even knowing that, they touched a nerve in the market that now is kind of catching on fire. Those are really exciting entrepreneurs for us to work with. They do have to turn a corner on I'm building a business now. I'm not just doing something that's cool with my friends. And that can be a difficult place because it means you have to cross a bridge into the world of finance, and you're probably going to have to hire product managers. And now you go hire that Harvard Business School grad and they work for you. And a lot of people frankly don't want to turn that corner. And I get it because when you come back to that topic of, is this values-aligned? A lot of that world is not yet totally values-aligned. That's shifting, more impact investors, more investors who want to see more different types of people starting companies, but we're not there yet. And so there's this cultural clash. When creatives walk toward that space, they go, ew, I've been fighting against the man my whole life. And now you want me to get in the car and go on a long road trip with them? No thanks. [laughs] And I'm sitting there with the Doritos going, yeah, man, but I got all the good munchies, let's go. It often does work out. But I also understand why people say, "You know, that's just not my deal now." VICTORIA: Yeah. And you have a tremendous amount of diversity in your alumni. ALICE: We do, yeah. VICTORIA: And so do you find that there are some challenges in bringing in that group to the rest of the accelerator world? ALICE: Yeah, you know, funny, I was thinking about that yesterday. So about 70% of our alumni, and this has been true across the board from day one, are people of color or women. At one point, it was around 30% were women of color. I haven't looked at that number in a while. We've worked with about 550 companies worldwide. In the Middle East, half of our alumni are women-led companies. In the U.S., we are fortunate to be able to work with a lot of indigenous communities. New Mexico is home to a large indigenous population. And it's a lot of the reason our culture is so dynamic and beautiful. So for us, that was always a no-brainer that that was where a lot of the interesting creativity would come from and that that was where the rising markets were. We, for example, accelerated and were the first investor in a company called Native Realities, which is a comic book. And they founded the first indigenous Comic Con, which is now called Indigenous Pop X worldwide. And they saw obviously before even Black Panther, and it became kind of like people said, "Oh yeah, superheroes come from all communities." They saw that that market was rising. There are 300 million indigenous people worldwide. There are two comic book companies. Let that sink in. [laughs] It's like, oh my God, what is the possibility then not just around comic books, but gaming, animation, all kinds of creative tools, film, music? That's a huge market that has not been served at all. And we understood early on that that was an area where people want to tell their own stories. People want to understand the stories of other people. And then people want to build new stories together across those cultural or geographic boundaries. And the technology had shifted such that that was possible. In 1980, that wasn't really possible. The distribution channels of film were such that you had to raise money in Hollywood and have Tom Hanks and whatever. That's just not true anymore. So we saw that early on, and that has helped attract a lot of entrepreneurs who share our passion for really telling those stories. However, I would say for people who want to support rising entrepreneurs out of what I'm going to call distressed communities or communities that have been literally discouraged from becoming their own economic leaders is that the burden that most of the people bear who are building businesses, for example, from Black communities, or native communities, or women in the Middle East, those people tend to bear a larger burden than someone from a more privileged background like myself. They're often the person in their family and for their community who is helping to ensure that people get the health care they need, that that kid was able to visit the college that they wanted to apply to. They become that sort of anchor of support for more people than in situations where we have more support and more what I call margin. They have really little margin. And so to ask them to, for example, join an accelerator full-time for 12 weeks that just doesn't work. Because the decision that they're making, you know, from a very privileged position, we can say, "Well, either you're dedicated to your business, or you're not." But really, what we're saying to them is, well, either you do your business, or you love your family and your culture. That's the question we're asking them, and that's a totally unfair question. That's a ridiculous question. Every single one of us would say, "I love my family. Thanks, see ya." CHAD: So how do you balance that? ALICE: Well, it's tough. I mean, first of all, we have adopted in the programs where it's more for early-stage entrepreneurs, and we're opening doors to entrepreneurship. And we are being first and foremost patient, patient with they're crossing that threshold. We understand that our core outcome is that people come always saying, "I'm an entrepreneur. I'm ready for the journey." That means we do things like, first of all, we do all online. If possible, we do a meeting upfront, so everybody meets each other in person because that kind of sets a tone of just it's a lot of fun. We have food and drink, and we have a good time. And then we do 6 to 12 weeks online, and then we do a gathering at the end. And we build a community first and foremost of people who are understanding how they can help one another. So Creative Startups is a little different in how we do accelerators. We do not ever have people stand at the front of the room and tell people what they should do with their business partly because we're educators first and foremost, and we understand...I have a Ph.D. in entrepreneurship. I understand that entrepreneurs tend to be experiential learners, not all but many. And we're not going to be there in a year building their business. They're going to be building their business. We have to build their self-confidence. We have to build their ability to say, "I know how to row the boat. You're along for the ride." I'm just along for the ride. [laughs] That requires us to do things like, okay, so let's work on your business model and really carefully chunk out here's one piece of that. Let's go deeply into understanding that. Let's tackle the vocabulary. Let's look at how people talk about it online. Let's open that door culturally so that you can take that into your experiences and say, "Oh, I already kind of do that. I just use a different language," which is what a lot of designers do. A lot of designers, whatever your background, already do entrepreneurial processes. They use different language, and it's just a translation. It's literally just vocabulary. So we help people understand that the best way to figure out your client's needs are by listening; all people know that. If you want to understand someone else, listen, and unpacking that into then business speak a little bit, and then giving them opportunities to go do that in the real world. And being patient with how they might do that or why they couldn't get it done this week. Or maybe they want to come back with a different way of describing it than maybe a White person like me might describe what they experienced. And just giving a lot of latitude to people to have that own experience themselves. That honestly...I know that sounds very philosophical. But it breaks down into tactical things that we do in an accelerator that opens the door to a lot more entrepreneurs. And our Net Promoter Score is 9. Over 90% of people would recommend our program. People love our programs. And 70% of our alumni are still in business. So I think it's working. We have a lot of learning to do. We're doing an indigenous accelerator right now, and it's a lot of learning for me. It's very eye-opening. CHAD: As an accelerator specific to indigenous peoples, what made you decide to do that? Some people I know, thoughtbot included, sometimes hesitate to do things like that because we don't want...there's some hesitation around doing something like that. ALICE: So we share all of those hesitations, and we think they're spot on. We are doing this in partnership with a group called Creative Nations out of Colorado. They are all indigenous people. They're a new group. And we envision Creative Startups moving more toward a place of being kind of like the intel, you know, the old intel inside. We are inside, and we're an engine within another organization. So here in Santa Fe, we partnered with Vital Spaces, which serves Black and Brown creative entrepreneurs and artists. And our goal is to help build their capacity to be able to keep doing programs as they see fit for entrepreneurs. And we're standing by as they would like us to help. So we took that same approach with working with Creative Nations. It's been a fantastic partnership. The lead working with us is a woman named Kelly Holmes. She is Lakota Sioux. She's from the Cheyenne River Reservation. And she founded Native Max Media, which publishes Native Max Magazine, the world's first fashion magazine for indigenous entrepreneurs. She is a brilliant, creative entrepreneur. She is self-taught. She eked it out. She has been around ten years now. It's astounding. And you see the magazine, and it's spectacular. It is high glamour, beautiful. And it is reshaping the way not only indigenous people see themselves but how White people see indigenous people. And those reframed stories are so important to building a more equitable society. So I was over the moon to partner with her. Then I learned her mom is one of the few Lakota language teachers. So Lakota is her first language. Her mother teaches Lakota and teaches teachers how to teach Lakota. So she grew up with an educator. So she has taken to building this, again, patient, very exploratory online environment for indigenous entrepreneurs. And then I bring sometimes the more technical like, oh, you're asking a specific question about how to do structured interviews with customers. Sure, let me talk a little bit about that. But as we started out this conversation, you guys, entrepreneurship is not an intellectual challenge usually; it's a heart challenge. I don't mean that in a way to disparage how important it is to be really strategic and smart about your business. But I think at the outset especially, you just have to be able to hang in there and keep doing it. And then, as you grow into that opportunity, you start to see that the intellectual challenges unfold because your opportunities become more complex. But at this outset with Kelly, it's been a conversation with people who are frankly reframing themselves as business leaders, people who own businesses and have employees based on their creative output. And that's a really exciting space to work in. We wouldn't work in this space if we didn't have a partner who shared our vision and who wanted to be that native leader of a program like this. It just wouldn't really feel exciting. CHAD: I think that that's great advice and a framing that helps me think about the things that we've tried to do in the past and the things that we hope to do in the future and realizing that really genuinely partnering with someone in the actual community that we're trying to serve or to have an impact with is sometimes an important missing component that we need to incorporate. That'll help solve a lot of the hesitations that we might have around doing something. ALICE: Yeah, yeah. VICTORIA: Right. And we've all heard before that culture eats strategy for breakfast, which I think -- [laughs] ALICE: That's my favorite line, Victoria. You nailed it. VICTORIA: It makes sense that the more connected you are to your culture and to your community, that's where you'll be the most successful when your heart is in it. ALICE: Yeah. And I want to give sort of a plug for stepping outside of the zone of the way...I went to business school. I have an MBA. I'm really well-versed in that whole world. I'm married to a venture capitalist. He teaches how to do venture capital at Stanford. That whole world is very familiar to me. And it seems to not be helping us solve the problems that we have now as a society. And so one of the reasons I encourage people to go to those partners, go to those places where you're like, I don't fit in here; I don't understand what's going on here; these people speak a different cultural language, form, way of doing things, I encourage that because I think that for people who want to build a different world, we have to stop looking to the world that we already have. And we have to say, "Well, who does things differently? What could we learn?" One of the most beautiful things about working with the entrepreneurs in the cohort right now, the indigenous cohort, is they first talk about taking care of their people, that's first. And it's like, wow, if that's your entire frame, you start to make really different decisions in business. If you're talking about well, I want to take care of the people in my community; I want people to be healthy and happy and be able to pursue their own dreams; that's a really different frame of mind for a baseline for decision making. The other thing that Kelly talks about that I love (I'm stealing it from her.) is she talks about fighting for her business, fighting for her business. And that, to me, is such a great way to feel like, okay, if I'm fighting for my business, I know how much Creative Startups has achieved. I'm not fighting for myself. It's not my ego. It's none of that. It's fighting for my business so my business can keep having the impact. Everything that I think about now in terms of working with indigenous entrepreneurs is this has nothing to do with me. Their frame is very much my community, my people, my business, which is over there. And it's a humble way of understanding one's place. And that is a really exciting reframe for me to think about how we can solve problems like the climate crisis, like the disparity between rich and poor, like the disintegration of our democracy. What if we had a different frame? How could we solve problems differently, maybe better? So for us, these partnerships unlock a whole vast area of new thinking, new ways of doing business, new ways of taking care of other people. And at the end of the day, that's what gets me back in the rowboat [laughs] is this idea of, wow, we are having an impact on other people. And doing it with people who have a different starting point has really shaped a lot of the work that we do. CHAD: Well, I'm sorry that we have to wrap up. Otherwise, we could keep on going and solve the climate crisis and unraveling of our democracy, but -- [laughs] ALICE: Yeah, I have an appointment at 2:00 where I'm doing climate crisis. So I'll let you know how it goes. CHAD: Okay, wonderful. ALICE: [laughs] CHAD: Alice, thank you so much for joining the show and sharing everything with us. We really appreciate it. ALICE: Yeah, I was delighted to be with you guys and hope to continue the conversation. CHAD: You can subscribe to the show and find notes along with a complete transcript for this episode at giantrobots.fm. VICTORIA: And if you have questions or comments, email us at hosts@giantrobots.fm. CHAD: You can find me on Twitter at @cpytel. VICTORIA: And you can find me on Twitter @victori_ousg This podcast is brought to you by thoughtbot and produced and edited by Mandy Moore. CHAD: Thanks for listening, and see you next time. ANNOUNCER: This podcast was brought to you by thoughtbot. thoughtbot is your expert design and development partner. Let's make your product and team a success.Special Guest: Alice Loy.Sponsored By:thoughtbot: Are you an entrepreneur or start-up founder looking to gain confidence in the way forward for your idea? At thoughtbot, we know you’re tight on time and investment, which is why we’ve created targeted 1-hour remote workshops to help you develop a concrete plan for your product’s next steps. Over four interactive sessions, we work with you on research, product design sprint, critical path, and presentation prep so that you and your team are better equipped with the skills and knowledge for success. Find out how we can help you move the needle at: tbot.io/entrepreneursSupport Giant Robots Smashing Into Other Giant Robots
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Sep 15, 2022 • 21min

440: The LGBTQ+ Family Connections Center with Joe Barb

Joe Barb is Executive Director and Founder of LGBTQ+ Family Connections Center. They have a mission to strengthen and empower all youth, however they identify, to overcome obstacles by providing housing, supportive counseling, community education, and advocacy. Victoria and Chad talk with Joe about identifying needs for the center, his own lived experience and connection to the LGBTQ+ community, and deciding what services to provide and evaluating which are most impactful. LGBTQ+ Family Connections Center Follow the LGBTQ+ Family Connections Center on Twitter, Instagram, Facebook, or LinkedIn. Follow Joe on LinkedIn. Follow thoughtbot on Twitter or LinkedIn. Become a Sponsor of Giant Robots! Transcript: CHAD: This is The Giant Robots Smashing Into Other Giant Robots Podcast, where we explore the design, development, and business of great products. I'm your host, Chad Pytel. VICTORIA: And I'm your other host, Victoria Guido. And with us today is Joe Barb, Executive Director and Founder of LGBTQ+ Family Connections Center, with a mission to strengthen and empower all youth however they identify to overcome obstacles by providing housing, supportive counseling, community education, and advocacy. Joe, thank you for joining us. JOE: Thank you. I appreciate it. VICTORIA: Wonderful. So you started the center over two years ago. If you could go back in time and give yourself advice to when you were first starting out, what would you tell yourself? JOE: Wow, very similar to for-profit companies, having the tenacity to keep knocking on doors, never accepting no for an answer, and understanding that tenacity is everything. Nothing happens without continuing the fight every day. VICTORIA: Great. And how did you first identify that need for the center? JOE: A million years ago, when I was a late teenager, my parents had a pastor in their church suggest to them that in order to bring me back to God and back to their church, that they should cut me off financially, you know, I was a young freshman in college prod me in that direction. So my parents took the advice, and I found myself in my second semester of college with no funding. The check for the second semester had been canceled from my family, and I didn't know what to do. So I called a friend in South Dakota that we had met on vacation. And she said, "You know what? I have an apartment building here. I just had an apartment become vacant. Why don't you move to South Dakota, and then we'll work on everything else?" So that lived experience kind of proded the whole thing. And then meeting the youth who had been displaced from home for being a trans youth caused the rest. CHAD: Well, I'm really sorry for that personal experience that you had. But it's pretty powerful and that you've gone on to help others in similar situations is really admirable. JOE: Yeah, it's been quite a journey. And my lived experience, honestly, I was with stability within 24 hours. The more I became comfortable and complacent in my life and then met somebody who wasn't; it brought me back to that. And then just looking at statistics, looking at how youth end up in a houseless situation created something in me that I had to address. VICTORIA: So you had your own lived experience and that connection to your community which helped you identify that need and start out on the center. Did you find there were a lot of resources for building nonprofits? JOE: There isn't. And it's really something that when you go into it, you believe that when you create a nonprofit and you finish that application, you send it into the IRS, and you get approval, that you put a great idea out there and that the community will respond and that everyone will immediately jump on it and say, "You know what? You're right. This is needed. We need housing. We need to make sure that youth are safe." And that's not the way it works. It doesn't work that way at all. It's a lot of connections and community and getting involved and putting the statistics and the numbers out there so that people are aware of it. But it's mostly connecting the stories. The more youth that I've met and worked with and connected them to a story and told their story, the more people respond. VICTORIA: Right. And so, what have you found to be the most impactful in sharing that story and in managing that content to get to the right people who can help you with this need? JOE: The most impactful part is people just aren't aware. We all know that there's a homeless population. No matter where you live, there's a homeless population, and it impacts communities. But what we aren't aware of is we all typically believe that the government is funding these things and it's being taken care of and that maybe those people just chose homelessness and don't realize that the resources are very limited. Until those resources are able to show a data of need, that person may not be counted that you saw on the corner. CHAD: You're pretty active socially online. I think where I first saw you was through a mutual connection on LinkedIn, and your posts started to be in my feed, and I liked and subscribed, I guess. How much of the awareness that you're putting out there is coming from social networks and online versus in-person and local communities? JOE: I'd say it's probably a good mixture of both. Locally, obviously, I'm deeply involved with other service providers, and I'm involved with local government. I'm on any kind of board that you can think of that impacts youth homelessness. So there's that within my community but having those LinkedIn...just this weekend, we had our pride, and at our pride, someone walked over to me, started talking at our booth. And he said, "Well, I know you from LinkedIn. CHAD: [chuckles] JOE: I noticed your picture with Sylvan Lake behind you from your LinkedIn, and I just had to come over to meet you and say hi." And I thought, how impactful is social media that someone who lives in Florida happened to be in South Dakota came to pride and recognized me from a picture? VICTORIA: Wow. Yeah, it makes our world feel a little smaller sometimes, doesn't it? JOE: Absolutely. VICTORIA: And the problem of youth homelessness and LGBTQ+ homelessness is very complex. And I think other nonprofit founders might be interested in how you decide what services you're going to provide and how you evaluate to see which ones are the most impactful. JOE: We did things kind of backwards. So I formed the board of directors, and typically what happens with the board of directors is they want to become your advisors. And I thought these people have great professional experience. We have doctors; we have PhDs, we have scientists literally on our board. And those people don't have the lived experience. So I thought, who do we go to to develop programming and support for people that are in need? And the answer was glaringly clear; it had to be the people who were in need. So I formed a Youth Action Board with the State Continuum of Care. And it comprises of youth ages 13 to 24 who have lived experience. We keep it at 66% have to have lived experience. And technically, most of them have even much more than that. But we connect with them through service providers who assist youth. And those were the people that we used to formulate what they needed, decide what was most beneficial to help them during vulnerable points, and then help them get out of situations. VICTORIA: Right. And I think that user experience, that experience bringing that into the products and services that you're creating, just makes a lot of sense for us, and that's what we bring into our design as well. JOE: Yeah, I mean, we do it in almost every industry. Whatever you create, whatever product you create, whether it's something tangible that you hold or whether it's a service, you bring in a test group. And that test group typically is people that you're seeking to utilize or buy your service or your product. And in doing that, we end up developing a better product. It's the same thing with a nonprofit. We had to get the voice of those who we would be serving in order to make sure that we were doing what they needed, not what we thought as professional people or personal opinions was the way forward. CHAD: Was there something as you were talking to people and learning that surprised you? JOE: Probably the same thing that everyone develops is an opinion of homelessness. We all think that people that experience homelessness it's typically through some self-inflicted issue; typically, drugs and alcohol come to mind and some type of cause that brought you there that you had influence on. And I've learned that most of the kids that we serve had no influence on their homelessness other than to be born where they were or to who they were born. A lot of our youth are coming from, oh, they've lived in shelters, or foster care, or aged out of foster care. It just changed my dichotomy of thinking that we would be serving people that had addiction problems or alcohol problems when in case of the youth...currently we're at, I think 68 youth served. I've only met one youth that had a previous addiction. CHAD: It's really just that lack of a safety net. And all it takes is your family not supporting you and not having a safety net. JOE: Absolutely. And that's just it. You said it very well. Most of us, when we have an incident in our life that we need some help because there's a vulnerability, we have people around us that we go back to. We have either family or close friends that we can say, "You know what? I lost my job. I need a little bit of help here," or "This medical incident happened, and could you assist us?" And we get a response from our family or friends that typically is supportive and helps us find a way. A lot of youth, especially youth that experience homelessness, don't have that connection to family. So that's where we need to bring in community to support them. VICTORIA: Right. And do you find there are unique challenges to supporting youth experiencing homelessness in the Midwest in South Dakota where you are versus in more urban areas? JOE: Absolutely. Carl Siciliano is my TA advisor. He created the Ali Forney Center in New York, which is the largest housing support for homeless youth for...they specifically only target LGBTQ youth in the United States. And in talking to him and in looking at our demographics, it was very different. For them, people in larger cities will just seek out their services. They learn about it word of mouth. They find out that there's a shelter in place. Here, our homeless population is much more hidden. And typically, what happens here is youth will gather together. And it'll be six or eight of them who will become friendly, and they will try to support each other by one of them will get a hotel, and then six or eight of them will live together. Or they're doubled up in one person's apartment, six or eight people live in somebody else's apartment, which truly isn't housed because it's not their place. And they try to support each other. So they're very hidden in our communities. CHAD: It's unfortunate there's a lot of stuff happening in the U.S. and worldwide with legislation being passed now anti-transgender. I think South Dakota was the first state in the country to pass an anti-transgender bill this year. Are there particular challenges to doing the work that you do in today's climate? JOE: Accessing mental health services, we had to overcome that obstacle by forming relationships with counseling services so that we could make sure that any youth, whether they were insured or underinsured, or uninsured, could immediately access mental health. And that took quite a bit of work on our part in order to make that happen. It should be easy. It should be easy to access mental health. And that's probably one of the biggest challenges because I can stabilize anyone tomorrow with either a hotel, or a house, or an apartment. But if you don't have mental health to help with what got you there, you're still living in trauma. If you're living in trauma, how can you focus on things like going back to school or having a career or what even tomorrow means for you? Because you're living in trauma today. So, absolutely, to answer your question, mental health. CHAD: And is that a matter of providers not wanting to provide services or not being able to pay for it? JOE: Not being able to pay for it. There are things that you can access if you're uninsured or underinsured if you meet the guidelines to get into mental health access. The problem with that is if you need to help today, that's a process. We wanted to skip the process. We wanted to make sure that if you walked into our drop-in center today that this afternoon I can have you with a therapist of your choice. MID-ROLL AD: Now that you have funding, it's time to design, build, and ship the most impactful MVP that wows customers now, and can scale in the future. thoughtbot Liftoff brings you the most reliable cross-functional team of product experts to mitigate risk and set you up for long-term success. As your trusted, experienced technical partner, we'll help launch your new product and guide you into a future-forward business that takes advantage of today's new technologies and agile best practices. Make the right decisions for tomorrow today. Get in touch at thoughtbot.com/liftoff. CHAD: You have a website. You collect donations online. And we definitely want to link all of that stuff in the show notes. It will be there, and I hope people contribute. But when it comes to the tactical stuff on the product and business side, are there particular tools or resources you were able to draw upon to put together online donations, the website, that kind of thing? JOE: As far as platforms, is that what you're asking? CHAD: Yeah. JOE: There are some great platforms that have been built specifically for nonprofits in order to help get the word out and help fundraise. That for us hasn't been the primary. In this type of nonprofit, typically, most of our donations are not donations or grants. They're things that we...like, I just spent two years on a grant that is quite substantial. But it was two years of work, literally 40 hours a week for two years. So there are those tools, there's the GoFundMe, and there are all kinds of tools for sharing on social media in order to get people to donate. They're great, but you have to have a large circle in order to utilize those. And you have to have people that are willing to do that as well. So I don't think we have the tool that's the best tool yet socially. CHAD: What would something that was better look like for you? JOE: It's more getting corporations and businesses and private companies involved in what a lot of companies are already doing. They will seek from their employees giving initiatives. And they will seek information to what does the company want to support as a community? Because that's what their employees care about. I think those things have a more sustainable development and a more sustainable footprint for nonprofits that when organizations get involved that are private and then offer to their employees a way to donate, that works best. CHAD: Yeah. For thoughtbot, to honor Pride Month, we collected a series of donations that we were going to make. And there was team suggestion...because we have teams all over the place, we wanted to have a local impact. And then when it came to actually doing those donations, I think we had 10 to 20 organizations that we wanted to donate, not a huge amount of money to each one but hopefully, it makes a difference. And the way that we needed to do that a person at thoughtbot needed to go and either find the donate link, the place to do it, and some of them didn't even have it. And we wanted to, you know, maybe it's a place in Brazil or something, and we need to get them the money somehow, wiring it or something. And so that was a fair amount of manual work to figure that out and then to make the payments. JOE: And I think because it goes along with we're learning as organizations that we have to take care of the social and emotional part of employees just as well as we do the work environment. It's part of the work environment. So I think that that kind of goes back to HR, which is my background. HR should look at those things in advance and find local nonprofits to support local ideas and then maybe some national ones as well. We all know of The Trevor Project and some of the great broader campaigns that do a lot of really good work. And have that ready so that when somebody joins your company you can show them and say, "Hey, by the way, these are some local organizations that we can do a payroll deduction for if you like, or we can buy annual contributions," and let the employees see that the company cares about the local area and also cares about things on a national platform that impact employees. VICTORIA: I love that. I think that's a great way to involve corporations in giving back and connecting employees to their local communities and the local groups that need support. Is there anything else that you want to tell our listeners in order to support the LGBTQ+ Center or in general? JOE: The majority of our youth are LGBTQ+. And that's because statistically, across the United States, the majority of youth seeking housing services unaccompanied are LGBTQ+, up to 40%. But we don't turn away any youth. It doesn't matter how they identify. It doesn't matter what their circumstances are. The only thing that we ask is if you're telling us you're homeless, then we're going to assist in that. We do have age criteria of 16 to 24 because that matches the federal guidelines for the programming that we're in through federal dollars. So other than that, I mean, we still would help anyone of any age, but that's the big thing to know is that we help any youth however they identify. And what could listeners do? Obviously, on our website or look into your community as well and see what is a support in your area and find something that you can contribute to. VICTORIA: That sounds great. Thank you so much. Do you have any questions for me or Chad? JOE: I think that what you're doing is great. I like that you are thinking of nonprofits as a company as well because a lot of people view it differently when it's actually a company. You have to figure out a way to sustain funding and bring money in just like any other organization in order to do the work. CHAD: Yeah, I think that's a common misconception that people have. And I'm sure it's not the case with you and your organization. But I like to remind people that nonprofit really just means that it can't show a profit. So there are lots of nonprofits out there that just end up spending all of the money that they have. That is really also technically what it means sometimes. JOE: And you bring up a great point. There's an IRS website to look up any nonprofit organization, and you can look at how they spend their money. I do that all the time before I make a donation. Because we've all heard those stories of CEOs, who make 30 million a year or whatever crazy number. You can always look up any organization and see how they spend their money. CHAD: Yeah, that's a really good tip for people to do before you get involved with an organization with donations or your time and really making sure it matches your values and that kind of thing. VICTORIA: Great. All right. I think we're about at time. So with that, I will wrap us up and let everyone know you can subscribe to the show and find notes along with a complete transcript for this episode at giantrobots.fm. CHAD: If you have questions or comments, email us at hosts@giantrobots.fm. You can find me on Twitter at @cpytel. VICTORIA: And you can find me on Twitter @victori_ousg. This podcast is brought to you by thoughtbot and produced and edited by Mandy Moore. CHAD: Thanks for listening and see you next time. ANNOUNCER: This podcast was brought to you by thoughtbot. thoughtbot is your expert design and development partner. Let's make your product and team a success.Special Guest: Joe Barb.Sponsored By:thoughtbot: Now that you have funding, it’s time to design, build and ship the most impactful MVP that wows customers now and can scale in the future. thoughtbot Lift Off brings you the most reliable cross-functional team of product experts to mitigate risk and set you up for long-term success. As your trusted, experienced technical partner, we’ll help launch your new product and guide you into a future-forward business that takes advantage of today’s new technologies and agile best practices. Make the right decisions for tomorrow, today. Get in touch at: thoughtbot.com/liftoffSupport Giant Robots Smashing Into Other Giant Robots
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Sep 8, 2022 • 31min

439: LOANHOOD with Lucy Hall

Lucy Hall is the Co-Founder of LOANHOOD, an online fashion rental platform and community that allows users to loan inclusive, diverse, and creative styles for an affordable price. Chad talks with Lucy about being a peer-to-peer fashion rental app, building a community, and reducing the impacts of the fashion industry on the planet and people by helping to create a sustainable future. LOANHOOD Follow LOANHOOD on Twitter, Instagram, Facebook, TikTok, YouTube, or LinkedIn. Follow Lucy on LinkedIn. Follow thoughtbot on Twitter or LinkedIn. Become a Sponsor of Giant Robots! Transcript: CHAD: This is the Giant Robots Smashing Into Other Giant Robots Podcast, where we explore the design, development, and business of great products. I'm your host, Chad Pytel. And with me today is Lucy Hall, the Co-Founder of LOANHOOD, who are changing the face of fashion. Lucy, thank you so much for joining me. LUCY: Thank you so much for having me, Chad. CHAD: How are some of the ways that LOANHOOD is changing the face of fashion? LUCY: So we're starting off with a peer-to-peer fashion rental app, which we just launched ten days ago now. CHAD: Congratulations on the launch. LUCY: It's been a long time in the making. And, like I said, we're starting with a fashion rental app. But there are so many different ways that we want to change the face of fashion. It definitely needs a facelift. CHAD: What caused you to start with the rental platform? LUCY: It was something that we were really passionate about. So my co-founders and I actually worked in the fashion industry for the majority of our careers. So we could see first-hand how it was changing, how it's developing. And sustainability started coming into our lives, and we could see that things had to change. And we know that the fashion industry is quite archaic. Big fashion businesses are like these huge ships. It's so hard for them to change their course and to actually implement sustainability into their supply chains or their values. And we knew that we could do it quicker and better and faster than them. So we started testing the idea of circular fashion by doing clothes swaps which is a kind of an entry-level way to circulate fashion for free or relatively cheaply. And we started getting this amazing feedback from people like, "Oh, we would love to do this again. And have you thought about monetizing it?" And, of course, that was our...to get to scale, we knew that we had to monetize this sharing of clothes. And that's how our peer-to-peer fashion rental app grew and was born. CHAD: That's great. So you have two co-founders. LUCY: I do. CHAD: Jade and Jen. Were the three of you working together at the time? LUCY: Funny story, Jade and I are actually best friends. And Jade was my model back in the day. So Jade has been a fashion model for 12-plus years. And she was on Britain's Next Top Model. And I was a model agent. She came into my agency as one of the runner-uppers, and we forged a lifelong friendship from there. And we've both been passionate about fashion. And then, as I said, our career paths, we could see the detrimental effect of the planet. And Jade decided to go back to university and start studying. She did her master's in fashion futures at London College of Fashion. And that's where she started seeing sustainability. And the idea of a peer-to-peer rental came from that course. She was studying the future of fashion, and she knew that this was the only way we can move forward. And Jen was a friend of Jade and is a graphic designer by trade and is an amazing brand builder and amazing designer. So we were asking her for some advice. And she came on as a co-founder at the beginning because she just knew this was the right path for her. CHAD: You started with these swaps. Were you doing the swaps as friends because you felt it was the right thing to do? Or did you have an eye towards this could be something more? LUCY: Well, we knew from the beginning that we wanted to do something big. We knew we'd got to a certain point in our careers where we were like, right, let's use our skills to really make a change. But we were also working, and we all had jobs, so we were kind of doing it as a side hustle, just testing the idea and going, "Oh yeah, we'll do this." And then it started picking up, and we got a contract with a local council. And we were like, wow, people are really interested in this. Let's keep going, and then the pandemic hit. CHAD: How did the pandemic affect you? LUCY: [chuckles] Well, as you can imagine, people weren't really doing clothes swaps or renting or even thinking about those things at the beginning of the pandemic anyhow. So we kind of just put it on hold and did what everyone did in the pandemic, hunkered down. And we started learning as much as we could about the circular economy, about sharing economy, trust economy, marketing, product, really teaching ourselves from the bottom up what it takes to make a global brand. So we were quite lucky in the respect that we had that time away to really hone our skills and focus on what we wanted in the long term. So post-pandemic, when we came out of the lockdowns, although there were multiple back and forth, as you know, it was definitely a stop-start for us, but we knew that it actually...it just allowed us that time to really focus our minds on what we wanted and a long-term plan, not just like, oh, let's try this out. We know what we want for the next 5 to 10 years, basically. CHAD: At what point did you decide, okay, we have to make an app? LUCY: It was a difficult one because we thought Shopify, Sharetribe there are all these amazing platforms. You can just get a business at the click of your fingers. However, for peer-to-peer fashion rental, it's a much more complex model. Even Sharetribe, which is supposed to be for those kinds of models it's not as detailed as we needed it to be. So we tried to build a website from scratch. And, again, we just knew that we're very much focused on Gen Z. And when we were talking to our audience, we knew that they wanted an app. So we just scrapped it and said let's just go for it. But having no technical background was a real difficult decision for us because we had no funding. We'd all just left our jobs. The pandemic had happened, so we didn't have any savings really. So we had some money from the clothes swaps. And we did a rewards-based Crowdfunder, and we raised £14,000 from friends and family in our community that were buying free rentals for the future and just believed in the mission that we were on. And we were able to get that £14,000 and put it into the start of building an app. And as you're aware, apps cost a lot of money. CHAD: [laughs] LUCY: We didn't get that far. And we learned a lot of lessons with the build because we tried to project manage it ourselves. Having no technical background, that was tricky. And we offshored it to a team in India who were lovely and amazing but not as skilled as we needed them to be. Because we had no technical background, we really needed somebody to lead that for us. So we had a starting point, but we knew that we had to actually get a technical lead on board pretty soon. And we were lucky enough to find a partner in a company called ON, who are based in the UK. And with them on board, they led the tech from there on. CHAD: Continuing to work with that team in India, or did they actually provide the entire team at that point? LUCY: We switched to another offshore team because it costs so much money here in the UK. CHAD: So when was this all happening? LUCY: Last year, mainly. 2021. CHAD: To give folks an idea, you make the decision to start building an app. You start doing that in 2021. You just launched. But your business is more than just the app. Were you right up to the wire with the app being ready? LUCY: Like you said, we're building a community. And what we learned from the pandemic is that you can't rely on one part of your business to help you succeed. You need multiple things. And what we're passionate about more than anything is community. And what we found with the fashion industry is that it can be quite elitist. And if you want to work in the fashion industry, you have to move to London or New York or Paris, and you have to probably know somebody in the fashion industry, and we wanted to change that. We wanted you to be able to start your own fashion journey wherever you are based. And what we also saw was that all this money that people were spending on fashion was going to big fashion businesses and to probably one guy at the top of that chain, whereas, with peer-to-peer rental, you can actually circulate that money within communities. You're lifting communities up so they can create their own sustainable fashion future. So what was really important to us was to have community as one of our main pillars going forward. CHAD: And how have you gone about building that community? LUCY: Organically so far, which has been really nice. And again, the events that we do have been part of that. But to scale, we really need to start building out ambassador programs, referral systems that can help us hit those kinds of network effects. CHAD: So I know you're only in the UK. LUCY: Correct. CHAD: What are the limiting factors to expansion beyond the UK? LUCY: Money, obviously. CHAD: [laughs] Okay. LUCY: We’re on a funding journey at the moment, and that's a ride for sure. So we kind of use the Depop playbook. Do you know Depop? You're probably over 25, so that's probably why you don't know it. CHAD: [laughs] Yes. LUCY: A third of 16 to 25-year-olds are on Depop in the UK. It's the 10th most-searched-for resale platform in the U.S. And they started off in the UK, and they organically grew into the U.S., which is nuts. We probably won't do that, of course, but we plan to go to the U.S. potentially next. But it depends on investment, on what our audience is saying, where they're based. What we find with our audiences, the universities that we partner with we have a lot of international students. So they're taking that idea back to their hometowns, which is really interesting. But on a tech front, going into the U.S. is easier because it's an English-speaking country. Going into Europe is a bit more complex because you have lots of different languages, although you have one single currency, which is helpful. CHAD: Since your model is peer-to-peer, individuals are sending the rented item directly to the person who's renting it, right? LUCY: That's correct, yeah. CHAD: And so I suppose one potential barrier is you don't need to be able to receive centrally or to handle things in the United States. But you need enough people in the U.S. to make it worthwhile for individuals to be sending each other things to have enough rentals and activity. LUCY: Always, the problem with the marketplace is the cold start problem. There is a great book by Andrew Chen called The Cold Start Problem. And we really need to build both the supply side, which we call the loaner, and the demand side, which we call the borrower. So we have been working really hard in the UK to get as many of the supply side on board because we know the people that we want to be on the platform, so emerging designers, young makers, and creators. And because we have our fashion backgrounds, we can identify those people quite quickly. And we've done things that are totally not scalable, like messaging them on Instagram and scouting people in the streets. But as a small startup, you kind of have to do those scrappy things as well just to kind of build the supply side. CHAD: Right. And I think that's why so many marketplaces end up focusing on particular geographies even if they could expand because that focus helps you do those unscalable things that you need to do in the early days to bootstrap that community that you need for the marketplace. It hadn't occurred to me until you just said it that I've been thinking that this would totally be individuals, but for an emerging fashion designer to be on your community offering up their clothing for rental, that hadn't even occurred to me as a possibility. LUCY: Something that we're passionate about, especially post-pandemic, a lot of young people that are either at university and didn't get the real university experience had to make some extra money started these side hustles of teaching themselves to crochet or teaching themselves to knit. And now they have these amazing pieces, and they're open to renting them out as well as doing their retail side of it. And what we found from the resale people, so the Depopers or people on Vinted, was that they'd get this kind of seller's remorse. So they'd upload the item, take amazing pictures, and they'd sell it once. But with rental, you upload it, and you can rent it out over and over and over again. And you still get to keep it and wear it yourself, so a bit of a no-brainer. CHAD: Yeah. So you went on the journey of creating the app, creating the community. You've just launched. So are you actively fundraising? LUCY: We are actively fundraising. We're just closing our pre-seed round. And we were very lucky to have an incredible lead investor come on board. He just got the idea instantly. What we found difficult is being female founders who don't have tech backgrounds; it's definitely a couple of negatives against us. [laughs] But we're going to use it to our advantage, and the people that are on the journey with us now 100% are behind us and believe in what we're doing. Because we're an impact business as well as we want to have profit alongside people and planet, that's what's important to us to make impact socially, environmentally, and through the industry. So the next step of our fundraising journey will be a crowdfund, an equity-based crowdfund. So we did the rewards-based crowdfunder last year. This year, it's going to be equity-based because we really believe that we're building this platform for our community, our audience. So they should be able to invest in us and come on that journey with us. And hopefully, the business grows to huge proportions, and that they can get some money back out of that later in their lives. CHAD: Are you going to be using a platform to do that? LUCY: We are undecided, although I'm leaning over to between one and another. There are only two platforms really in the UK, so Seedrs and Crowdcube. And I've spoken to some other founders that have done both platforms. And I've spoken to both the companies. I've looked at articles trying to find which one's the best fit for us. One interesting thing that we had with the Crowdfunder was we were deciding between Kickstarter and Crowdfunder UK. And Kickstarter is very much more focused on men, more sports, definitely a male demographic, so that's why we went with Crowdfunder. With Seedrs and Crowdcube, they don't have that; it's a very equal split. So it's just on the feedback that we've had from other people that have used those platforms. So I'm leaning towards one, but I won't say yet because I haven't fully decided. CHAD: So you're only allowed to do that with people in the UK? LUCY: I think it can be global, actually. CHAD: Are you planning on having it be global? LUCY: We have friends and family all across the world. I spoke to somebody today in Lithuania. I spoke to somebody the other day in Australia. I speak to people in the U.S. all the time that are like, "When are you coming to us?" [chuckles] CHAD: Yeah, that'll be interesting; the fact that you're able to do the equity crowdfund anywhere, but people won't be able to actually use the product right away. You know, it's sort of a catch-22; you've got to have one before you can have the other. And so, hopefully, people go along on the journey. LUCY: Chicken and the egg. We need the money to build the tech, to build the audience. But we need the audience and the tech to show the investors that we've got engagement and traction. And yeah, there's always something. I think we're doing pretty good. MID-ROLL AD: As life moves online, brick-and-mortar businesses are having to adapt to survive. With over 18 years of experience building reliable web products and services, thoughtbot is the technology partner you can trust. We provide the technical expertise to enable your business to adapt and thrive in a changing environment. We start by understanding what’s important to your customers to help you transition to intuitive digital services your customers will trust. We take the time to understand what makes your business great and work fast yet thoroughly to build, test, and validate ideas, helping you discover new customers. Take your business online with design‑driven digital acceleration. Find out more at tbot.io/acceleration or click the link in the show notes for this episode. CHAD: You mentioned that your three female founders have faced some bias, it sounds like, especially in talking with potential investors and seeking to grow your community. How has that been for you? LUCY: You know, I don't want to put it down to being a female founder. I actually think the statistics tell us that, unfortunately. But I think what's the problem is that most of the people that I speak to in investment, either VCs or angels are guys, middle-aged guys between, say, late 30s to the 60s, and they are investing in businesses that they get. They don't generally get a peer-to-peer fashion rental app for Gen Z. They're like, "Oh, they're going to want to ship things to each other, and like, what about the packaging?" And they've never heard of Depop. It just got bought by Etsy for $1.62 billion. It's a huge industry, and rental is just an evolution of resale. And they're like, "Oh, okay, kind of get it," but they don't really. We have to hand-hold them a lot through the pitch deck and get them excited. But that's, the problem is that we don't have enough women in the investment space or ex-founders. I know in the U.S., it's a lot different. They have a lot more ex-founders investing, especially angel investors, which is great because they get the journey. Whereas if you have somebody with a financial services background, all they care about is the math of it. And it's like, you know what? Startups don't always just succeed on the math; it's the vision, it's the idea, it's the network effects, it's the audience. There are so many different things at play here. And if you've never started a business yourself, you just don't get that. CHAD: There's a lot that goes into creating a company. And it may not be the fact that your female founders directly contribute to it but in an environment where they're looking for a reason not to invest. LUCY: Exactly. CHAD: That bias can creep into all of the excuses or differences that someone might point to and say, "Oh, this isn't going to work," or "I don't get this." LUCY: 100%. If you've got a good business idea and you've got a strong pitch deck and a strong financial model, then that business will do well, for sure. However, there are so many other factors at play. And when there are so many great businesses competing against one another, they unbiasedly go with one over the other. CHAD: So you also mentioned you have another excuse that people might use is you just don't have a technical founder on the founding team. LUCY: That's definitely a struggle. We will be bringing in a CTO later in the year, which will be really exciting because it's definitely the missing piece to the puzzle. We have domain expertise in fashion. We have that side of it down. But yeah, the technical side of things, I think all the founders that I have spoken to that do have a CTO in the founding team or even have brought their technical team in-house just say it's a game changer. When somebody is invested in your company, and they're using the platform every single day, they can see the bugs. I mean, Chaz from Fat Llama, which is a great rental app, said that his developers would pull out a laptop in the pub and be like, "Oh, I just saw a bug. Let me quickly fix it." I mean, wow, that would be insane. Our developers finish at a certain time, and that's it; they're gone. So if we have a problem on an evening or even because they are in India they have a different time, we can't get hold of them. It's so frustrating. CHAD: So when you start to build a team, will you be doing it based in the UK? LUCY: Or based in Europe, at least. I think another thing to come out of the pandemic is this remote work, and I think that's great. I think there's so much talent across Europe, across the world. But for the timezone issue, I think Europe is definitely a better fit for us because we don't want to be having the same issues that we're having now with the time differences with India. But yeah, there's so much talent across the whole of Europe. CHAD: Yeah, that's what we do at thoughtbot. We are all throughout the Americas, all throughout Europe, Middle East, and Africa. We've built our team. But we're grouped in by timezone. So people work with clients and with each other. And there, it's based on the timezone that they're in. And so that does make a big difference around how communication can work and how a part of the team you're able to feel because you're online at the same time as each other. LUCY: Yeah. Definitely, that's a great show. CHAD: But I definitely recommend casting as wide as possible. It definitely allows you to hire the best person for the job. LUCY: Yeah, I think we need to find somebody that's passionate about the mission and who understands working with three co-founders that don't have a tech background that we probably do need a little bit more hand-holding than another founder would. We're learning so much as we go. Hopefully, we'll be coders one day. [laughter] CHAD: I actually don't think that. Some people might say, "Oh, you really should learn to code yourself." And I think that that does a disservice to what you are bringing to the table with your domain expertise and with your ability to really understand the industry and know what needs to happen from a business perspective. LUCY: Yeah, I would totally agree. You can't be an expert in every part of the field. You can't be an accountant; you can't be a CTO. You need to be good at exactly what you do. And I'm the CEO, so I have an overview of everything. And that's what I love is kind of have a little finger on each little project that's going on and really get an understanding of across the board. But you need those people that are drilling into, like, we have my co-founder, Jen, who's a graphic designer by trade, but she's our Chief Creative Officer. And she really drills down into the creative side of things. And she knows what she's talking about. And she is the expert in that, and that's so valuable. CHAD: And I think that that's the important thing to founders to do early on is to really understand what their product and business are. You don't necessarily need to learn how to code. But I do think it's a mistake when early founders start stepping away from the product too early. LUCY: Yeah, you need to be super close to the product. And you need good communication across all different divisions. So marketing and product have to talk to each other all the time, so we can tell our audience what's happening in the product, and then we can build the features that we need to grow from the marketing side of things. It's all about communication. And it's so hard as a startup because there are so many different things going on and so many people pulling you from left to right. There are metrics to hit; there are bills to pay, there's audience, the community to keep happy. And it's like, oh, you can't drop the ball on anything. You really have to just do as much as you can. But if you communicate to each of those stakeholders, we're doing our best. I mean, we had a mail-out the other day that said this is a business built by hands. It's built by people. I know we're a tech company, but there are real developers there hammering on their laptops. We're all here writing the copy and doing everything that we can to make this the most successful business so we can make real impact on the climate change and communities. CHAD: I want to talk about that impact, but before we do, I'm curious, so you're all in the same general London area? LUCY: No, we're not, actually. So Jade and Jen are based in London. And I actually moved out of London a couple of years ago, and I live in New York in the north of England. CHAD: Oh, okay. LUCY: See, definitely a different dynamic. And another reason why I'm passionate about bringing the fashion industry outside of London is because I travel up and down all the time, and I'm lucky it's like an hour 50 on the train. But that becomes expensive, and it's difficult to travel all the time. CHAD: So, are you meeting in person with each other? LUCY: We try. I just saw the girls last week. I'm seeing them again at the weekend. We speak every single day on Slack, WhatsApp. We have weekly calls, and we jump on pretty much video calls to each other every day. And that's, again, another thing from the pandemic that's been a game changer. Because when I actually left, it was just before the pandemic. We were like, oh my God, how is this going to work? But I knew that it was the right decision for me. And then the pandemic hit, and everyone was on video calls. And we were like, oh, this is so easy. This is great. [laughs] CHAD: Yeah, it really opened that up to everyone's expectations. LUCY: Yeah, and I think it's great. I think it's much more flexible. And we will get an office for sure. But I would love to have an office here and an office in London so we can have teams across the nation. Because I think we don't all have to go and live in a capital city to get the same out of the fashion industry. CHAD: Yeah. So let's talk about sustainability, the environment, and climate change. I am somewhat aware that an enormous amount of resources goes into creating new items of clothing. LUCY: It's crazy. So the fashion industry accounts for 10% of the global greenhouse gas emissions at the moment. And if nothing changes by 2050, it will use a quarter of the world's carbon budget. It is insane, and it affects not only the planet but people. The garment workers are paid nothing. They're treated badly. And this is all part of the supply chains of fashion businesses. And like I said, when I started in the fashion industry, e-commerce really was only just starting, and Jade, who is the model, was working for Asos, which is a big fashion brand and big fast fashion brand. So when she started working for them, she was shooting like 10-15 items, 20 items a day, and when she left, so five years later, they were shooting like 70 items per day. They were just churning out more and more fashion, more options. And you can imagine most of the clothes are made...well, we have this whole disconnect about clothes. So I actually had a restaurant for three years in between my fashion career. And that's where I found sustainability because you have that connection with food. And you know that eating organic or eating locally and seasonally is better for you and better for the planet. But nobody thinks that your clothes come from the ground. They're made from plants. Or if they're not made from plants, they're made from oil. It's nuts that people don't have as much education around it. And that's partly because the fashion industry doesn't want people to know, and it's a lot of smoke and mirrors. It's a very opaque industry. We went to one university, and they said that they thought all clothes were made from machines. They had no idea that there was cotton and linen. And so, like, wow, this is crazy. CHAD: So given that it's the magnitude of the size of the problem but also the industry, there are two ways of looking at that, I'm sure, one is the potential for your impact is huge. The other is how do you get started? How can we have an impact there? So how are you tackling that? LUCY: I get asked a lot by people, like, how can I start my sustainability journey? I feel so much pressure to do things. I should be vegan, or I'm not recycling enough. I got a plastic bag, oh, I feel terrible. And it's like we are all on a journey. And you just have to start one day at a time and just be more conscious. So whether that's instead of buying one dress for a wedding that you are probably just going to stick in your wardrobe, why don't you rent it? Try one of the platforms that are out there, and you can rent a really cool dress, and that's probably someone else is going to rent it, and someone else is going to rent it. And by prolonging the life of an item, you can save so much energy and water. And those small things that we can each do will make a huge impact globally. There's a lot of mindset shifting and behavioral change that needs to come with rental. As we saw with Airbnb when they started, people were like, "Oh God, I don't want someone sleeping in my bed," and now I Airbnb in my house all the time. And it's a great source of secondary income, especially for a startup founder [chuckles] but also giving people the opportunity to have these experiences in small communities, which I love. And that's what we want to see with fashion is that people will start being more conscious. And how LOANHOOD is different to other more traditional rental systems is it's much more affordable. And it's much more accessible because you can meet in person. So how we see it growing is these hyperlocal communities where you can meet people in person, a bit like Facebook Marketplace. They've done super well in more of the suburban areas. You can drop off your dress to somebody around the corner. So you're reducing the cost of delivery and reducing the emissions by meeting in person. So those hyperlocal communities will be really important in helping people adopt this behavior. CHAD: Are you worried from a business perspective that if it's just renting to someone around the corner that they might not want to do it through LOANHOOD? LUCY: I think people will still do it through the platform because of the added value that we give, you know, rental protection. I could go and borrow people's clothes like my friends in the area. I wouldn't do that. I might do it once or twice. I think if it's not somebody that you're really friendly with, then you would definitely do it through the platform. CHAD: Yeah. And by rental protection, you mean if something gets damaged or that kind of thing, it's protected. LUCY: We don't have full insurance yet because, again, the sharing economy is a new economy. And, of course, insurers are very old school. And it's hard for them to grasp the fact that there's a new industry here, but that is changing. And as soon as we have more data, we'll be able to get full insurance for these items. But right now, we do it in-house and protect items, minor damage, or repairs. And if it isn't returned or damaged beyond repair by the person that's renting it, then they have to cover the retail price of it. CHAD: Yeah, makes sense. What's beyond rental platform in terms of this is where you decided to start, but your goal is to change the face of fashion? What's beyond? LUCY: There are lots of different verticals that we can do within rental or in fashion. So we're really passionate about digital fashion. Jade, my business partner, is actually doing her Ph.D. in digital transformation in the metaverse. So how can we bring sustainability and ethical practices into the metaverse with fashion is something that we're really passionate about and something that we're exploring, renting different things so femtech, or skiwear, activewear, all those kind of things and then just creating a space for our community to grow creatively. So entrepreneurship is really important to us as well, and giving people the opportunity to be...especially Gen Z they have this way that's called pay to create. So they're passionate about making money out of things that they can do themselves, whether that's creating content, renting out the things they own, upcycling. We want to expand on that and give them the tools to actually create their own career paths. You don't have to go down the traditional university routes. We see a world where there's a LOANHOOD campus where you can come and learn how to be content creators or all sorts of different things. It's a really exciting time. And our 10-year plan keeps getting more bigger and bigger. And we're like, oh God, it's just exciting. CHAD: Yet do you worry about spreading yourself too thin and compromising on the early steps? LUCY: We always come back to the point of why we're doing this and who we're doing this for because what's the point? Otherwise, we're doing this to reduce impacts of the fashion industry on the planet and people. And we are doing this for our community and to give them the options and give them the power back. As we've seen with governments around the world, people in leadership roles are not doing enough, and we can't rely on them. So if we want to create our own sustainable future, we have to do it ourselves. And we want to give people the tools to do that. CHAD: Well, I wish you the best of luck in that. I'm very confident that you're going to have the impact you're looking for along the way, and I wish you the best in that. Thank you for stopping by and sharing with us. I really appreciate it. LUCY: Thank you so much for having me. It was great to chat too. CHAD: If folks want to find out more or get in touch with you or follow along, where are all the different places that they can do that? LUCY: Check out our website, loanhood.com. If you are a founder and you want to talk about funding or building a product, marketing, you can email me lucy (L-U-C-Y) at lucy@loanhood.com. And we are on Instagram and TikTok @loanhood. CHAD: Wonderful. You can subscribe to the show and find notes which include a link to everything that Lucy just mentioned along with a complete transcript for this episode at giantrobots.fm. If you have questions or comments, email us at hosts@giantrobots.fm. And you can find me on Twitter at @cpytel. This podcast is brought to you by thoughtbot and produced and edited by Mandy Moore. Thanks so much for listening, and I'll see you next time. ANNOUNCER: This podcast was brought to you by thoughtbot. thoughtbot is your expert design and development partner. Let's make your product and team a success.Sponsored By:thoughtbot: As life moves online, bricks-and-mortar businesses are having to adapt to survive. With over 18 years of experience building reliable web products and services, thoughtbot is the technology partner you can trust. We provide the technical expertise to enable your business to adapt and thrive in a changing environment. We start by understanding what’s important to your customers to help you transition to intuitive digital services your customers will trust. We take the time to understand what makes your business great and work fast yet thoroughly to build, test, and validate ideas, helping you discover new customers. Take your business online with design‑driven digital acceleration. 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Sep 1, 2022 • 25min

438: Bright Ventures with Lenore Champagne Beirne

Lenore Champagne Beirne is Founder and Managing Partner at Bright Ventures, a groundbreaking space for transformation in people, companies, and industries with coaching, capital, and community. Chad talks with Lenore about being at the intersection of all three of those services, providing support for diverse entrepreneurs, and staying intentional about the kind of company and culture they're creating. Bright Ventures Follow Bright Ventures on Twitter, Instagram, Medium, or LinkedIn. Follow Lenore on LinkedIn. Follow thoughtbot on Twitter or LinkedIn. Become a Sponsor of Giant Robots! Transcript: CHAD: This is the Giant Robots Smashing Into Other Giant Robots Podcast, where we explore the design, development, and business of great products. I'm your host, Chad Pytel. And with me today is Lenore Champagne Beirne, Founder and Managing Partner at Bright Ventures, a groundbreaking space for transformation in people, companies, and industries with coaching, capital, and community. Lenore, thank you so much for joining me. LENORE: Absolutely. Thanks for having me, Chad. CHAD: Bright Ventures, I love the three things: coaching, capital, and community. Would you say at the core you are a venture capital firm? Or is it really the intersection of all three of those services? LENORE: It is truly the intersection of all three of those services. In fact, I started Bright Ventures because of a gap that I saw in the capital markets. But the first thing that we came to market with was coaching. And we learned so much from coaching diverse entrepreneurs and investors, and operators that we saw ways to add value to those groups and ultimately built the accelerator and venture capital fund and a number of other programs. CHAD: Like most companies, I think what you have is relatively unique. Most companies are a coaching company or a venture capital fund. Do you get pushback, or are there concerns about doing too much? LENORE: We've heard that question, although I don't know that the same question would be posed, at least in the same way, to a man, especially if it were a White man. But that aside, the reason we get the question is because I personally have led the launch of each new phase of the company. And what has really given our investors and also our partners comfort is that as we've expanded, we've also massively expanded the leadership and the skill set of the Bright Ventures team. So I would say at our heart, we are a transformation company. We make inclusive innovation possible. We define that as building a future that works for all of us together. We make that possible. And we know that because that's a huge, gnarly, complex, nuanced issue, you have to have a multipronged solution. And so, for us, the combination of individual and systems transformation through coaching, community where we can practice and learn, and capital that actually shifts how businesses can operate is the right set of interventions. CHAD: So one of the things venture capitalists often give feedback to their clients about is either doing too much or mixing business models. So like, oh, you shouldn't do consulting because what you have is a product company. They are different revenue streams, and different ways of working, and different ways of generating money. How do you balance those different business models that are within your organization? LENORE: Well, I think, as I mentioned, the business models that we have inside of Bright Ventures are intended to solve the same really big problem in different ways through different angles. So what we have found is that there are a lot of early-stage ventures that would benefit from the kind of coaching that we offer. But coaching is typically a really high-dollar item, only available to kind of an exclusive few. And so, it became clear to us that building a community with more scalable programs could meet the need of the stakeholder that we're interested in. And that has driven, time and time again, the business models that drive and organize our work at Bright Ventures. CHAD: Yeah, I realize part of what's on my mind is say you're working with a founder and you invest in that founder or a founding team and a founding company, do they no longer become a coaching client that's actually paying you money for coaching? Or do they get it for free? LENORE: Mm-hmm. So founders in our venture portfolio have access to the full suite of our services. And obviously, it's in the Bright Ventures entities' best interest to see those companies win and to give them all the resources and support that they need. You're asking these questions about business models. One thing I should clarify is that we don't have just a single business operating entity at Bright Ventures. The venture fund entity is a traditional GP LP structure that exists to invest in, yes, maybe some of the companies that we serve through our services business, but also a broad swath of companies across the U.S. at early stage. There's then a pretty straightforward consulting firm that we have that also goes by the name Bright Ventures but is a different legal and operational entity. So there's no proprietary information shared across those lines that are different management teams. What unites the Bright Ventures entities is a commitment to inclusive innovation and a set of frameworks that we have seen now proven to drive inclusive outcomes as a competitive advantage in venture. CHAD: Oh, that's awesome clarification. One of the things that we've struggled with a little bit at thoughtbot is we do a lot at thoughtbot. It's probably one of the reasons why I'm asking these questions about balancing. And sometimes, I do think, oh, it could benefit us if they were separate entities. LENORE: How have you all thought about that so far? CHAD: For the most part, what we do is we run separate P&Ls for the different business lines or the different offerings, but it's all actually one entity as long as it doesn't cross country boundaries. We have a different entity for Europe. LENORE: Got it. I asked because I'm curious because, at some point in the next couple of years, we'll probably do one more entity. And we're talking internally now about the moment that that will be the right thing to do, not yet. But good to hear that you're thinking about that as well. CHAD: Yeah. What was the part of your journey where...you mentioned you started to see this need. How did that need or seeing that need jump from that to I'm starting out; this is a real thing? LENORE: It's blurry. The lines are blurry for me, particularly as the founder of Bright, because I have been working on effectively pulling the same threads as long as I can remember, even before Bright Ventures had a name and was an entity. And so, for as long as I can remember, I've been confounded, frustrated [laughs] by and working on the inequity of access to capital and to opportunity in entrepreneurship and in many other expressions of wealth creation. I've also, for as long as I can remember, thought a lot about how people think, and how they relate to themselves, and how they relate to other people. And truly, I can remember experimenting with these ideas when I was really young, maybe even less than ten years old. I then remember experimenting with them in college and trying to create a major for myself because I was trying to understand the intersections of these questions. Officially, it was in 2014 that I launched Bright Ventures as the strategic advisory firm that I mentioned we came to market with. And that was because I had just come off of a really important career experience. I was living and working in Haiti on a program funded by the U.S. government to invest in and then provide support for entrepreneur organizations so like small businesses, social enterprises in Haiti. And I loved that work. It was super challenging, really rewarding, really interesting. But it also opened up in me this question about what entrepreneurs actually needed for support and how to support other investors and seeing potential where I saw it but that the markets might be missing it. And so, in 2014, I had enough of an idea about some of what was missing to get started. And to the point of the line or, like, okay, I'm going do this now, that's when that happened. CHAD: I've had a whole bunch of guests on who talk about issues of inclusion, and particularly access or being excluded from funding and opportunity. And I'm curious, from your perspective, what kind of support do founders who are typically excluded or underrepresented most need, especially on day one? LENORE: Well, one thing that I have found really fascinating about support for diverse entrepreneurs is that we often, as a whole, I'm speaking like we in a very big sense, tend to assume that there is a homogenous set of supports that are required. And this gets to that question about business models and how we make sure that we actually have at Bright Ventures a diversity of ways to help people. What we've learned is that diverse entrepreneurs are not a particularly homogenous bunch. And there are a couple of things that seem to be consistent for certain groups that we have worked hard to build frameworks and models for. One of those things is mindset shift and personal leadership development. That was executive coaching for us. We developed a specialty in helping people who are systematically in out-of-power positions move into in-power positions, and that was through a series of coaching frameworks and leadership frameworks that we would deliver. We also learned that in order to do that durably and sustainably, you also had to go and coach and train the people who might be excluding those entrepreneurs. So we started to develop expertise in working directly with investors and helping them see the brilliance and maybe overlooked opportunity in diverse entrepreneurs. Those were two. We also have some skill-based programming where we help people inside large organizations and also brand new ones think about how to tactically build inclusion into the way that they run their day-to-day. And we finally, of course, have some capital programs where we invest directly in diverse entrepreneurs, which we know are vastly underrepresented in the capital markets. CHAD: You use the word tactical, which I think is a really interesting one because a lot of times, especially on the show, we might talk about strategic things, which is different than tactical. So what does tactical inclusion mean to you? LENORE: So it does start with the strategy. There has to be a business model that makes inclusion possible. Otherwise, we're kind of putting a Band-Aid on a really big open wound. But if there's a business model that makes it possible to take reasonable care of your employees and leave your customers better off than they were before they met you, then tactical inclusion is things like understanding how to delegate, how to give feedback, how to hold meetings in ways that actually bring out the best in your team, and how to collect product feedback that's truly representative of the full swath of people who not only use your product today but maybe are impacted by it throughout your value chain, or might use it tomorrow if you made some innovative choices in product design and development. And so we say tactical, and we highlight that because what we have found is that much of the conversation about inclusion and certainly about diversity lives at this very theoretical level. It ends up being like an ideology, an aspiration, and we don't think that's sufficient. We think you have to actually make it how you behave. And so that tends to be where we focus both in our training and in our evaluation of inclusion in other companies. CHAD: One of the problems that we sometimes see, and we see it in our clients, too, is not everybody responds to training in the same way, particularly if it's like, watch this video. Sometimes there will be not very much participation in that at all. Or even if you're just watching it, maybe you're not giving it your full attention. What does the training that you give actually look like? LENORE: What you just said is exactly why we looked for other things to name what we do because training gets such a bad rap. CHAD: [laughs] Yeah. LENORE: But what we learned about training is, I mean, this seems so obvious, Chad, but it has to actually be a skill that the person will obviously benefit from implementing immediately. So the first thing is like, do you need to and want to and recognize the need to learn this? We only go in with training when we can see that there's general consensus that it'll provide real value, business value, personal value, cultural value in the company. The second thing is that we recognize that people's attention spans are shorter on average. And so what we do with training is make it highly experiential. We'll introduce a concept and then show you a way to practice it right away, as in, within the same 20-minute span. We also then give folks an opportunity to practice live and get feedback. And we only apply training to real-life decisions that managers or leaders are thinking about right in that moment. So for us, again, you asked about this word tactical. It really comes down to how deeply we can tie the training to the person's motivation and their ability to apply it. Mid-Roll Ad: Are your engineers spending too much time on DevOps and maintenance issues when you need them on new features? We know maintaining your own servers can be costly and that it’s easy for spending creep to sneak in when your team isn’t looking. By delegating server management, maintenance, and security to thoughtbot and our network of service partners, you can get 24x7 support from our team of experts, all for less than the cost of one in-house engineer. Save time and money with our DevOps and Maintenance service. Find out more at: tbot.io/devops CHAD: Another pressure I see in the startup world, in general, is this idea of we don't have time to stop. We've got to go. We've got to do this. We've got to do that. And taking the time to actually be really intentional about the kind of company and the kind of culture you're creating when you may be so focused on the business you're creating or the product you're creating sometimes goes by the wayside. Do you spend time trying to fix that problem? Or do you seek out people who are ready for what you have? LENORE: We do an assessment in the beginning, at Bright Ventures, we called it culture audit, to determine the readiness of a culture for the depth of work that we can bring. And we have different ways of engaging depending on where the company is today. We also ask companies to self-identify. Like, how deep are you really interested in going? What kind of outcomes are important to you? And so there's a bit of we've built our frameworks in a modular way so that we can mix and match them to the environment, the strategy, the leadership, the goals of each of our clients. CHAD: I'm curious, from an investor standpoint then, what makes pre-seed, seed companies potential when you have your investor hat on the right kind of companies for Bright Ventures? LENORE: Yeah, we're really excited about companies that have an early signal of building inclusion into the fabric of the business model. And you can usually see that based on the way that the founder is building a team. It's not always...sometimes it's so few people that it's just not enough people to really assess diversity, as is sometimes the case. But you can tell how a founder thinks about divergent opinions, about different perspectives, and about the pipeline of people that they're seeking out to build a company with. The other way that we look for inclusion in the pre-seed and seed stage is really in the business model. And again, the word tactical, like, is this product or service...who is it designed to serve? And how is it designed to leave them? Are the questions that we tend to ask. And what we have found is that if you invest for inclusion, 85% of the time, that is overlapped with investing in diverse founders, but it's not 100% of the time. And again, our lens on that is that inclusion is a behavior, not an identity. And so we're looking for any founder who's building inside of the paradigms I mentioned earlier, irrespective of demographics. And we particularly get excited; in the next ten years, we think there's a lot to be built in digital health and in FinTech, in the broadest sense, Web3 and Web2 FinTech for I think a lot of inclusive business models to emerge there. Also really excited about future of work as a place where I think inclusion will be a massive competitive advantage. CHAD: So many companies are starting remote or are fully remote. Is the training that you give or the advice you're providing in terms of tactical inclusion does it differ for in-person versus remote companies? LENORE: There's a consistent framework or set of questions that you can answer those questions in lots of ways. So if I ask the question like, how does your team get to know one another? The answer to that could be very different if your company sits together every day and actually you unwind on Fridays together. Versus if you're a fully remote company in multiple time zones, sometimes even multiple languages, the answer can be different, but we still know that the team feeling cohesive is a key ingredient for inclusion. And so we're looking for how your company does it and that your company does it, not that it does it in a certain way. So we try to help our clients see their companies as systems in the way that we do so that they can see how is the fact that your team feels cohesive related to the way your team generates new ideas or brings new products to market? And then, we trust management and leadership to design the right specific ways to have that expressed in that company. CHAD: What advice...someone who is just getting started and is just getting started out maybe has an idea, maybe it's a founding team, a team of co-founders. They're very early stage. Are there some things that you would recommend that they either do or avoid doing in order to lay a good groundwork for an inclusive team and company? LENORE: Yeah, absolutely. The building block, like the fundamental input for inclusion, is listening, and so we have done a ton of resources on how to practice listening, how to know if you are listening. But you can't build a system that dynamically includes other groups without really understanding those groups. Listening is really important. Another thing is I find that it helps people build more inclusively when they go through the exercise of seeking out opinions that really differ from their own. And beyond, I think what people typically mean when they say playing devil's advocate, really trying to understand like, why does that work? So one of the things that founders who have built inclusively have really interrogated is who their target market is. And I have found that it's really useful to go through the exercise of making it incredibly narrow, like very exclusive, so you understand your assumptions around who your target market is. And then asking yourself, what does that group, that very narrowly defined group, have in common with other groups that I've crossed off the list? Looking through the lens of what unites diverse cohorts of people tends to net new insights about how to build an inclusive company. CHAD: That's really interesting. Can you give an example? LENORE: Let's say there's a haircare company, and the founder of a haircare company really wants to build and sell shampoo for people with blue hair. Exciting, great. This founder has quit their job to build this blue haircare shampoo company. When we meet that founder, we ask them to, again, narrowly define a target market, people with blue hair, and then go through the inclusion assumption exercise of saying, well, what is it about those people with blue hair that's going to make them come and buy your product time and time and time and time again? And what is so motivating about this problem that you are willing to quit your job to build this company? What we have often found is that the founder gets to the place of saying, "Oh, it's actually not that it's blue hair. It's that the person is really proud of the color of their hair. It's a pride in hair color that has me buy this particular shampoo. And it is the sense of community and affinity with other people who have made non-traditional hair choices." Cool. That's a way bigger target market than just people with blue hair. How do we build that company? And so that's the pivot from we want a narrowly defined target market because it shows you what you already know. And then challenge your assumptions by digging even deeper and seeing how actually people with blue hair and people with orange hair might have something really interesting in common that we may have overlooked historically and might have left a lot of value on the table. CHAD: I think that's a great example. It's also an example for me of the kind of benefit that having someone external can bring to you, whether it be a coach or a mentor and even someone like yourself who will be brought in to explicitly do it. Sometimes, especially founders, have a hard time really thinking critically about what it is they're trying to build. And having an outside perspective, in my experience, can be really helpful. LENORE: Yeah, I if I could give one gift to every founder, it would be to have a coach. I think so many founders are brilliant at their business. And it is so helpful to have an external perspective because we all have blind spots. And having a person looking for your blind spots, supporting you in seeing them, and then practicing living in them, so they're no longer blind spots is, I think, a really transformative experience personally and professionally. CHAD: You've been growing Bright for several years now. As you look ahead into the future for yourself and for the company, what are some of the things that you're excited about? LENORE: I am so incredibly proud of the team that has been building Bright with me. And we have some additions to that team coming that I'm over the moon about, so I'm really excited about that. And by extension, we're growing the Bright Ventures community. So we used to do almost exclusively in-person work in New York City, where I live. But like many groups, through the pandemic, we started to experiment with digital formats for delivering some of our frameworks, and programs, and insights. And we found some things that really resonate. So we're now expanding the Bright Ventures community to allow many, many, many more people, even globally, to build an inclusive economy with us. The community has well-being events, which is a critical part of building inclusively. If we're not well, it's hard to include others. It also will have skill-based trainings like some of the ones we described. And we think a huge opportunity is to help people build connections across networks that they wouldn't necessarily have access to otherwise, so that I'm really proud of, really looking forward to. And then finally, always excited to see the portfolio founders that we back grow and fully express their ideas and bring their, in some cases, finally first bring their companies to market publicly. CHAD: Is that community something that people listening might be able to sign up for now? LENORE: Absolutely. I would say if you're even inclusion curious, like, you just want to understand what inclusion actually means and why it's not a boring thing that you have to sit through a mandated training on, or why even if you're already in the streets marching you should get involved in understanding how inclusion shows up in tech, we would love to have you. And it's a low or even no commitment experience. Drop in, see what resonates, provide us some feedback. We'd love to have folks participate. CHAD: Yeah, we'll link it in the show notes. But can you tell people where folks go to sign up? LENORE: Yeah, we'll link a waitlist. We're inviting people in in segments to make sure that everyone has a really good experience. So we will provide that waitlist link. I actually don't know the URL. CHAD: [laughs] That's fair enough. Fair enough. Well, on that note, if folks want to get in touch with you, or follow along, or find out more about Bright, where are all the different places that they can do that? LENORE: The best place is LinkedIn. My name Lenore Champagne Beirne is really easy to find. I'm the only one. And I'd love to have you all connect there. You can also submit...if you have a startup idea or an existing company that you're interested in bringing into Bright Venture's view, please feel free to submit that on our website, which is www.brightventures.io. And you could technically find me on Twitter, but I won't really be there. [laughs] So I hesitate to suggest it as a place to communicate with me. CHAD: We're going to link all of that in the show notes as well, along with a complete transcript for this episode. You can find all of that at giantrobots.fm. If you have questions or comments, email us at hosts@giantrobots.fm. And you can technically find me on Twitter as well at @cpytel. This podcast is brought to you by thoughtbot and produced and edited by Mandy Moore. Thanks so much for listening. Lenore, thank you so much for joining me. I really appreciate it. LENORE: So great to be here. Thanks again, Chad, for the questions. CHAD: And see you next time. ANNOUNCER: This podcast was brought to you by thoughtbot. thoughtbot is your expert design and development partner. Let's make your product and team a success.Special Guest: Lenore Champagne Beirne.Sponsored By:thoughtbot: Are your engineers spending too much time on DevOps and maintenance issues when you need them on new features? We know maintaining your own servers can be costly and that it’s easy for spending creep to sneak in when your team isn’t looking. By delegating server management, maintenance, and security to thoughtbot and our network of service partners, you can get 24x7 support from our team of experts, all for less than the cost of one in-house engineer. Save time and money with our DevOps and Maintenance service. Find out more at: tbot.io/devopsSupport Giant Robots Smashing Into Other Giant Robots
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Aug 25, 2022 • 31min

437: Hello Prenup with Sarabeth Jaffe

Sarabeth Jaffe is CTO and Co-Founder at HelloPrenup, the digital prenup platform designed to get couples on the same page. Chad talks with Sarabeth about dogfooding her own product, completely starting over from a technical perspective using Bubble, a low-code/no-code platform, and appearing on the ABC hit series Shark Tank. Hello Prenup Follow Hello Prenup on Twitter, Instagram, YouTube, Pinterest, or LinkedIn. Follow Sarabeth on Twitter or LinkedIn. Follow thoughtbot on Twitter or LinkedIn. Become a Sponsor of Giant Robots! Transcript: CHAD: This is the Giant Robots Smashing Into Other Giant Robots Podcast, where we explore the design, development, and business of great products. I'm your host, Chad Pytel. And with me today is Sarabeth Jaffe, CTO, and Co-Founder at HelloPrenup, the digital prenup platform designed to get couples on the same page. Sarabeth, thank you so much for joining me. SARABETH: Thank you so much for having me. CHAD: I can't say that I was aware of your...or that I wanted to think about prenups and seeking out a product around prenups. But it's super interesting to me. And I'm sure that that's part of both the challenge and opportunity with HelloPrenup. So, tell us a little bit about the product. SARABETH: So, as you mentioned, HelloPrenup is really the first of its kind. It's a digital platform that allows couples to create a prenuptial agreement that they're both happy with completely online and for a fraction of the cost of going to an attorney. So why is that interesting for folks these days? Really it's because couples are talking about their finances a lot more before they go into marriage. People are getting married later in life, so they have more assets to protect, or in many couples' cases, they have a lot of existing student loans or other liabilities that they can actually protect their partner from. So I think a lot of couples are becoming more open to prenuptial agreements as a way to kind of start off their marriage with a clean slate. And I can actually speak to our customers because I actually built HelloPrenup after I got engaged. And I was looking into getting a prenup. My fiancé and I we've been together for over seven years; we've known each other for over ten years. And we've always been really transparent about everything and especially our finances. And I love being financially savvy, looking at my investment portfolio, and being really frugal and everything. So to me, getting a prenup was always just the smart move. Being kind of a realistic person whose parents are actually divorced now, I view marriage as a partnership that, if it's working, when it's working, that's amazing. But if things don't work out, I think there should be a different path that you're able to take seamlessly. So when we did get engaged, I started looking into how to get a prenup, and it was a really confusing process. If you want to get a prenup without using HelloPrenup, you have to contact a divorce attorney before you're even married, which kind of starts the precedent of your marital journey off kind of a little weird. And also, hiring a divorce attorney for your prenup can cost a lot of money. The average cost is like $300 an hour. So it kind of depends on how complex your prenup is. But if you're planning your wedding, buying an engagement ring, maybe trying to buy a house soon, you're going to put a prenup on the back burner because of the costs, even though it's a really important financial planning tool. So that's why I came up with the idea. I'm a software engineer. This is something that I think I could build is a platform for couples who want to get a prenup done really conveniently and for a fraction of the cost. So I started working on HelloPrenup on my own in February of 2021, so a little bit over a year ago. And of course, I quickly found out that I don't know all the laws required, [chuckles] and I don't know how to write a good prenup contract. So I need either a legal advisor or an attorney to really help me figure these things out, especially because the law per state actually is different. CHAD: Just so I understand the timeline, did you start it before you got married? Or did you end up doing a prenup through an attorney for yourself? SARABETH: Ah, yes. So actually, we're getting married this Saturday. CHAD: Wow. Okay. Congratulations. SARABETH: Thank you so much. And we are HelloPrenup users. CHAD: Okay, wow. SARABETH: So we did our prenup with our platform. CHAD: So you managed to get the product done before you got married so that you could use it? SARABETH: Yes, yes. I wasn't going to get married without the prenup and going through an attorney. [laughs] I gotta...what is the expression? Like, reap what you sow or something like that. CHAD: Yeah, or eat your own dog food is another one. SARABETH: Yes. Dogfooding our own product has been amazingly beneficial for our team. So that's kind of where I left off in our story so far. I needed to find an attorney. CHAD: I'm curious, you know, I'm a software developer too. I think we all have ideas. How did it become just from an idea to a thing you were really going to do? Where was that sort of switch? When did that switch get flipped? SARABETH: When I came up with the idea for a digital prenup platform, I was actually unemployed. So this was kind of in the middle of the pandemic. I was previously working at a really awesome startup based in Seattle, Washington. But unfortunately, I was actually going through a lot of depression, and I felt really disconnected from my work. So I ended up quitting that job in November. So I took about three months off to recenter myself and figure out what I wanted to do next. So when I thought of the idea for a prenup platform, I had the mental capacity to dig into the problem. And when I figured that it would probably be a profitable business, that's when I started to work on it full time. And I didn't have another job, so I was able to jump into it. CHAD: Okay, so you then needed to find an attorney. You realized that was something you lacked. SARABETH: Yeah, so I started doing some Googling while I was deciding whether this was something I definitely wanted to commit to, to see if there were competitor platforms. And I actually found HelloPrenup at that time. Of course, I wasn't involved with it. And so my co-founder now her name is Julia Rodgers Esquire. So she is a divorce attorney based out of Massachusetts. She actually had been building this product, which was completely aligned with my envisioning of what I was going to build. But of course, she had the legal background of it. So I found her platform, and I noticed when I tried to sign up for the platform that the system was under maintenance. So I was like, huh, maybe they need technical help. So I actually ended up cold emailing her to see whether she needed any software help with the hopes that we could team up. And the next day, we just hopped on a Zoom. It's interesting talking to someone who you've never met before about possibly teaming up on something or potentially being a competitor to them. I made it very clear that I would much rather team up with her rather than try to figure this out on my own. CHAD: That sort of sounds like a threat. [laughter] SARABETH: Oh my God. CHAD: I'd much rather team up with you than have to do this on my own. [laughs] SARABETH: Well, I really respected what she had built at that point. So she had put a lot of time into actually writing a lot of content and blogs around prenuptial agreements. So she had a really good base for the business. But it was really the software that she was running into issues with. So she had been struggling and working with overseas developers. So as an attorney, she didn't have a lot of experience project managing a software project like that. And especially with contract developers, you can't say, "I want this to be built in a sustainable, scalable fashion." So there were a lot of bugs with the platform. The way I saw it was like, hey, she kind of has this MVP. And she's an attorney, so I think we would make an amazing team. I was also really excited at the prospect of being able to work with another woman entrepreneur. And we hit it off really quickly on our Zoom call. And yeah, so we've been working together since about March of 2021. CHAD: Did you end up keeping what she already had from a technical perspective, or did you start over? SARABETH: We completely started over. I tried to salvage the codebase that they had used. It was like Angular, which I actually despise Angular framework in general. I tried my best to clean it up, but they had no tests. They had a bunch of copy and pasted code. It was just kind of a mess. So that's when I really decided that Bubble would be a great option for us. CHAD: Well, for those who don't know, Bubble is like a low-code/no-code platform. SARABETH: Yes. So it's called Bubble.io. It is, as Chad just said, you know, it's a low-code platform which allows you to actually build full-stack web applications. So unlike other website builders like Squarespace or Wix, you actually have a database or a back-end component to your application. And of course, for the majority of applications, that's really a requirement to build something actually useful for people. So I'd been playing around with Bubble.io before we scrapped the codebase. And it was a good starting point because I'm still currently the only full-time developer on our team. And because we are using a low-code platform, we're able to move a lot faster with a lot of our feature development because there are a lot of things that had been done for us. So there are a lot of drag and drop features that we can leverage via different plugins. CHAD: It's an interesting choice to me, not because I don't think it makes sense, but I think a lot of developers...you are a developer; you know how to code. SARABETH: [chuckles] CHAD: And I think a lot of developers, when faced with that choice, can't resist writing custom software. SARABETH: Yeah. [chuckles] You know, I've always been torn between the development and the product world. And for a while, that was really a struggle for me deciding whether I wanted to be a product manager or a software engineer. So I settled on being a product-driven software engineer. So to me, the use case of like, I could write the traditional code, but it'll be a lot slower, or I could build the product a lot faster by using this tooling. That's where I land most of the time, like, the more time-efficient way to do things. CHAD: From deciding to work together and starting to work together to okay, I'm going to rewrite this in Bubble; what point were you back online with the new version? How long did that take? SARABETH: Yeah, so that took us about three months to get it relaunched, and so I was pretty happy with that. I mean, of course, there's still a ton of work that we're doing to build out the product, but to really get it back up and running and also in a more scalable way so that we actually can provide prenups across multiple different states now. So it's a lot more flexible in the way that it was built. So it took about three months to get it relaunched. CHAD: So at what point then did you go on Shark Tank? [laughs] SARABETH: So [chuckles] there were a lot of variables in play. And so, I was really thankful that we chose to use Bubble because the speed at which I needed to develop this was even more reduced. So we started talking to producers pretty quickly after we decided to team up together. It's a really unusual entrepreneur journey, I would say. I knew that it would make a good story because prenups are kind of taboo, as you mentioned. Television loves something a little spicy, a little bit dramatic. So we started talking to producers, I want to say, in June or July, maybe even in May. And at that point, we hadn't relaunched the product. So we were really just pitching the idea. And we were pitching ourselves as founders to the producers and the exciting concept of how will the American public perceive a product that is a little bit taboo talking about prenuptial agreements before you get married? If you're familiar with Shark Tank, you probably see that they have a lot of wedding-related companies that go on. But we were kind of flipping the script on that. So while I was rewriting the entire software, we were also going through the auditioning process of Shark Tank. CHAD: I can imagine that's pretty intense. SARABETH: Yes. CHAD: I think the closest thing I can think of is when you enter into an accelerator or something like that. You might be in it for three months. You're going to have demo day at the end. But with that, you're presenting to a group of people. It's not broadcast on national television. SARABETH: Yes. [laughs] CHAD: It's probably a little bit of a different thing, and there are no producers involved, that kind of thing. SARABETH: Yeah, yeah, exactly. By the time we had gotten on the set of Shark Tank to pitch our products, we'd only really been relaunched for about a month and a half. [laughs] So we were flying...I'm so bad at expressions. CHAD: [laughs] SARABETH: We were pitching... CHAD: By the seat of your pants. SARABETH: Yes, that one. Thank you so much. [laughter] So we were really pitching the potential of our product. And we were just so ecstatic to be there. Mid-Roll Ad: When starting a new project, we understand that you want to make the right choices in technology, features, and investment but that you don’t have all year to do extended research. In just a few weeks, thoughtbot’s Discovery Sprints deliver a user-centered product journey, a clickable prototype or Proof of Concept, and key market insights from focused user research. We’ll help you to identify the primary user flow, decide which framework should be used to bring it to life, and set a firm estimate on future development efforts. Maximize impact and minimize risk with a validated roadmap for your new product. Get started at: tbot.io/sprint CHAD: When you went on Shark Tank, how much of what you said and those kinds of things was all you, or how much is it put together for the show? SARABETH: Really, the only thing that is heavily vetted by producers is your pitch. So when you walk into the tank, and you give your 30-second to 2-minute spiel that's a bit more theatrical, you practice that over and over and over again. And it was really a fascinating experience. Because as a fellow software engineer, you know we're kind of more chill people, [laughs] more realistic. But they kept saying, "Bring more energy to it. Do big movements, maybe even do a dance or something." [laughter] I'm kind of living this double life where I'm writing software, and then I'm -- CHAD: In between rehearsals, you're opening your laptop and making another thing happen on the app, I'm sure. SARABETH: Exactly. It's like, oh, okay, we have pitch practice tonight, and now I'm going to work on this core feature. Without it, we literally don't have a product. So the producers are very involved in your initial pitch. But then when you jump into the Q&A, when the Sharks start asking you questions, that's all you. CHAD: That's really cool. So are you happy that you went on Shark Tank? SARABETH: Yes, I'm so happy that we went on. I've always been a Shark Tank fan. I think it's been on for over ten years. Shark Tank has been something that's kind of kept me interested in being an entrepreneur. When I started learning how to code, I knew that I always wanted to start a business. And just seeing the number of ideas and the variety of businesses that people are able to build and putting that on a show is just a fascinating concept. So I was really happy to go on the show. And, of course, the impact on our business has been tremendous. Really, it changed the trajectory of our business. We gain most of our customers through organic search. So most of our customers come in through Google saying like, how do I get an online prenup? By getting on national television, we are really thankful that news stations were now interested in talking to us. So by linking to our website, that helped boost our search engine optimization rankings. And so now we're actually a profitable business due to Shark Tank. CHAD: That's awesome. So is the tech team still just you? SARABETH: The tech team is me. And I have started working with another Bubble developer on a contract basis. But calling out to any software engineers or low-code developers, if you're interested in joining a legal tech company that's growing a lot, feel free to reach out to me. So I really do need to be hiring another developer. At this point, I am really the main developer working on things for a variety of reasons. The first reason is that Bubble, while it is very quick to develop a product on your own from a technical perspective, it is lacking in features when it comes to collaboration with other developers. So with traditional code, you'll do code reviews on GitHub, and you'll just do like a diff. But the branching and the version control is definitely a little bit lacking. So I'm trying to wait out the Bubble team. They have some stuff coming down the pipeline that will make it easier to do collaboration. But for that reason, it is a little bit easier as an entrepreneur using a low-code platform to be the sole developer because you kind of know exactly how everything works. And then also, developers are really expensive. So we are actually a completely self-funded company at this point. So we're bootstrapped. We haven't actually accepted any investment at this point. We're a really conservative team. If we hire a developer, we want to make sure that we're able to provide them with a competitive salary and competitive package. And we're able to do that now. It's just a matter of finding the right person, which is actually a really interesting space because low-code developers are still on the up and up right now. CHAD: I know you can't see the future. But do you foresee a point where either Bubble doesn't take you where you want to go, or you need to start augmenting it in some way? SARABETH: I would like to push Bubble as far as I can. I think now that Bubble is getting a lot more recognition...and they just got another round of funding that was pretty substantial. I think that they're going to be improving a lot of things, especially when it comes to, like I mentioned, collaborating with other developers on the platform and performance. A lot of pushback that people give with low-code platforms is like, oh, the page won't load as quickly as if I wrote it with pure React or something like that. So I want to try and stay on the platform as long as possible. If we really continue to grow, I would be willing to move back to traditional code. And we'd actually be set up for success in that way because we would have a fully functioning product, and half of development is figuring out what feature to build next. So we'd kind of say, all right, here's how it works. And then, while we're kind of maintaining our Bubble application, we can have a development team build it within our own platform. Does that make sense? CHAD: It does. And I think with Bubble, it doesn't need to be all or nothing, right? SARABETH: Mm-hmm. CHAD: You can use APIs. Or you can basically extend it with custom code if you really needed to using webhooks and that kind of thing, right? SARABETH: Exactly. And that's the way that we've done it. So actually, the contract generation is written in Node.js JavaScript. And the reason I did that is because it's easier to process data in a sequential order with traditional code versus Bubble. And you can also hook into other APIs, like for us, we do a conversion of the HTML of the contract into a Word doc. So we're able to call into a conversion API and then save it on AWS with traditional code, and you can do all that with Bubble. But it's a little bit more straightforward when you know what you're doing with just like JavaScript; you know a few lines here and there. Does that make sense? CHAD: It does, yeah. I'll be super interested to see how far you're able to push it and what those things you need to do outside of Bubble are. SARABETH: Yeah, I'm really excited to try to push Bubble as an option for entrepreneurs. We were actually the first low-code platform to be shown on Shark Tank. So every Bubble developer on Twitter was really excited about it. CHAD: [laughs] SARABETH: So I think it's a really interesting spot to be in right now. CHAD: Yeah, from a technology perspective, I think that that's one thing we've talked about. And you addressed the other thing that sometimes people say is a promise. Like, it is a commercial platform. It's not an open-source platform, and you're building entirely on top of it. And so that presents a certain amount of risk that like, they might go out of business. You know, they're a VC-backed company, and maybe they'll go out of business. And then where would you be? The fact that they've just raised a significant additional round of funding mitigates that somewhat, but it's still a concern, right? SARABETH: Yeah, it's definitely a concern. And it's something that, as a software engineer, it's terrifying to know that you're relying on someone else for your livelihood and now the livelihood of multiple people on our team. So it is really scary. You cannot export your code from Bubble. But I believe they have said that if for some reason they go out of business, they will allow you to do that. I'm sure whatever code you export from it is not going to be very pretty to look at. So it probably makes sense to write it from scratch. But I think at this point, I'm really happy with where we're at. I like remaining a really lean team. And using different tools in simple ways and trying to keep our product as simple as possible has really helped us grow. CHAD: What's next for HelloPrenup? Where are you setting your sights on? What's keeping you up at night now? SARABETH: Ooh, so many things. We do have an exciting investor coming on. I can't say exactly who, but they were really involved in building one of the largest legal tech platforms out there today. So we're really excited to be partnering with them and be building out our network across all 50 states. Right now, we're actually in, I believe, 32 states. You can use our platform to create your prenuptial agreement. And so, we're excited to be starting to onboard attorneys to the platform. So that's one of the things. Another thing that's on our radar is keeping up with, you know, it's hard to say the trends of what's going on with Web3. But we do have some things that are related to Web3 that we'll be tackling in the next probably a year or a couple of years when it comes to financial data. Yeah, so those things are kind of on our radar of our product. And then, on the near term, we are doing a lot of work to try and normalize the entire conversation around prenuptial agreements. We partnered with The Knot, which is one of the largest online wedding registry websites. And we've been writing a lot of blogs on their website that talk about the educational side of prenups. And we're actually going to be launching gift cards. CHAD: [chuckles] SARABETH: So you can list a prenuptial agreement on your wedding registry, and people can help support it. So there are a lot of initiatives that we're going to be doing on the product development side and then also kind of on the marketing education side of the business. As we start to grow, I'm trying to pull my attention away from those things. But sometimes, it's really hard because some parts of the business that aren't technical are fun to get involved in. And I'm sure you run into that or when you were scaling thoughtbot getting distracted by other parts of the business because they were just interesting. But there's a lot going on right now. CHAD: That's exciting. You mentioned earlier that you hadn't taken investors yet. And so is it about that scale that's causing you to take one on now, or what's going on there? SARABETH: So we're profitable. We don't need an investor, which is we're so thankful for that. So it's really a strategic partnership for us. CHAD: Well, that's really cool. I'm excited to hear everything you have going on. And I really wish you luck in everything that you're doing. SARABETH: Thank you so much. CHAD: So if folks want to find out more about HelloPrenup, follow along with you, get in touch with you; where are all the best places for them to do that? SARABETH: You can check us out on helloprenup.com. And we're on Twitter, Instagram, LinkedIn. Just tweet at us @HelloPrenup, and one of us will respond. It'll probably be myself or Julia. So you're able to get into contact with us if you have any questions. And of course, if you are a developer who is looking to join a really fun, women-led legal tech company, hit me up. CHAD: Awesome. You can subscribe to the show and find notes with links for everything that Sarabeth just mentioned, along with a complete transcript for this episode at giantrobots.fm. If you have questions or comments for me, email us at hosts@giantrobots.fm. And you can find me on Twitter at @cpytel. This podcast is brought to you by thoughtbot and produced and edited by Mandy Moore. Thank you so much for joining me, Sarabeth. I really appreciate it. SARABETH: Thank you so much. CHAD: And thank you for listening. See you next time. ANNOUNCER: This podcast was brought to you by thoughtbot. thoughtbot is your expert design and development partner. Let's make your product and team a success.Special Guest: Sarabeth Jaffe.Sponsored By:thoughtbot: When starting a new project, we understand that you want to make the right choices in technology, features, and investment, but that you don’t have all year to do extended research. In just a few weeks, thoughtbot’s Discovery Sprints deliver a user-centered product journey, a clickable prototype or Proof of Concept, and key market insights from focused user research. We’ll help you to identify the primary user flow, decide which framework should be used to bring it to life, and set a firm estimate on future development efforts. Maximize impact and minimize risk with a validated roadmap for your new product. Get started at: tbot.io/sprintSupport Giant Robots Smashing Into Other Giant Robots
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Aug 18, 2022 • 25min

436: Welcoming our new co-host Victoria Guido

Victoria Guido is the new Associate Director of Business Development and DevOps Strategy at thoughtbot, and is joining Chad as co-host of the show! Chad talks with Victoria about getting involved in DevOps work, transitioning to agile, moving away from her old community which was based on geography, and tips for people onboarding into a new role. Follow Victoria on Twitter or LinkedIn. Follow thoughtbot on Twitter or LinkedIn. Become a Sponsor of Giant Robots! Transcript: CHAD: This is the Giant Robots Smashing Into Other Giant Robots Podcast, where we explore the design, development, and business of great products. I'm your host, Chad Pytel. And with me today is Victoria Guido, the new Associate Director of Business Development and DevOps Strategy at thoughtbot, and wait for it, the new co-host of this very podcast with me. Victoria, thank you for joining me on the show for this episode, for joining me at thoughtbot, and now for joining me as the co-host of the show. VICTORIA: You're welcome. Thank you for having me. CHAD: You do all of those things, right? [laughs] VICTORIA: Yes, yes. CHAD: So I'm hoping that we can introduce folks to you. I'm excited to have you on the show and for the audience to get to know you. Let's start with your role at thoughtbot. I think maybe you have the esteem of having the longest title at thoughtbot right now. [chuckles] VICTORIA: Yes, I love it, Associate Director of Business Development and DevOps Strategy. So I'm not only doing business development but also planning our DevOps services and how we do that at thoughtbot. CHAD: And you're on the Mission Control team, which for folks who follow along or want to go back and listen, we had Joe, who is the CTO of thoughtbot and the interim Managing Director of the Mission Control team, which is our new DevOps team and Site Reliability Engineering team, that's Episode 403. So I will link that in the show notes, but it's at giantrobots.fm/403 as well. So, how did you get involved in DevOps work? VICTORIA: Right. So I first went to my first DevOps meetup in 2017 when I was living in Washington, D.C. I had been working in IT and operations for about 5 or 10 years at that point. And I went to a DevOps meetup and met some really nice guys, and they were very...what I liked about it was that it was both the technology side and about culture. And it was about how do we break down silos between different groups, and then bring in the automation and start to do next level type of operations? So that's how I started to get involved. And I started attending the meetups regularly and then became an organizer for the meetup and for the conference series. And that's when I became like the biggest DevOps person in D.C. probably. [laughs] CHAD: Did you end up moving from the general IT work that you were doing into more DevOps focus work along that way? VICTORIA: Yeah, at that time, that was when as a federal contractor, you know, agile had been around for quite a while. And I had been through several agile transformations with large program teams. And now DevOps was becoming more of a thing. And the project that I was on at the time was managing a large set of federal websites and was managing the build pipeline and process for how they got their code into the public's view and how they managed the servers and all the other back-end services that supported those applications. So DevOps was both top of mind for the government. [laughs] They were trying to now be able to deploy as frequently as they were able to build new features. And it was part of the work that I was performing as well. CHAD: You mentioned you were doing government work at the time. What was that like? What kind of work was it? VICTORIA: Yeah, actually, my first job after college, my first full-time job, was at Citizenship and Immigration Services. And it was about a 200-person program. Some of the applications were actually written in Siebel. And so we had just a variety of different applications from Siebel to Java. And they had just transitioned to agile. And so that was taking a team that was managing Oracle releases and bringing them into a kanban style workflow and figuring out how do we be agile when we're in maintenance mode, and bring the team along with me? And I worked my way up from a process engineer to project management and did a little bit of testing and a little bit of development in between. So it was interesting because it was a major transformational shift for that agency and still getting steeped in ITIL processes and how to do unit testing, acceptance testing, and all of those other kinds of critical processes for building applications. It was good. CHAD: What does transitioning to agile mean when you talk about groups that size? You're talking about unit tests and that kind of thing, which can be part of agile, but I assume isn't the only aspect of it. VICTORIA: Yeah, I think for that group, it was about changing the way we planned and managed work and figuring out what processes could we automate. So is there testing that we could automate or test data creation we could automate? And I think there are some concepts from agile that helped our planning, for example, making a physical board to manage which environments has which versions of Oracle in it. Those types of concepts of just kind of stepping away from your computer and getting together with the group every day to talk about what issues they're running into that's kind of what it was. But there was still, of course, documentation requirements, big documentation requirements, and everything like that. So it was an interesting sort of half transition or tailored approach to doing agile with that type of team. CHAD: And then from there, you moved into ongoing sort of consulting companies that worked with government. VICTORIA: Yes, I worked for two pseudo-government financial organizations, Pension Benefit Guaranty Corporation and Fannie Mae, so my next two roles as a project manager and system engineer. So at Pension Benefit Guaranty Corporation, I got exposed to more system engineering and security engineering, working with their mobile device management policy, and actually designing the mobile device management to match DISA STIG. Sorry, I'm doing a lot of acronyms out here. [laughter] You can stop me if I use too many. But that was really interesting and also upgrading their system, they were using to manage change for the organization so their ITIL services management tool. Going through the process of upgrading that project and coordinating across all the teams who delivered software at the agency was fascinating. I went on to Fannie Mae, where I started to really build knowledge bases and start to build out actually using SharePoint at the time. [laughs] But figuring out ways to share knowledge across large teams and other large production support services teams, and how to get them collaborating so they could improve themselves and do continuous improvement, and learn what other groups are doing. CHAD: That's one area where I honestly don't have a ton of experience. Most of my professional experience has been at thoughtbot or other smaller organizations. How do you manage that, or what are the big differences between large organizations like that and something at the thoughtbot size or smaller? VICTORIA: The biggest difference between a large organization like that and a small one like thoughtbot would be I think of how change gets generated and started. In a small organization with a culture like thoughtbot, change can come from anywhere and very quickly have permeated the entire organization. With a larger organization, you can have leaders try to force change from the top down. And you'll see individuals some will be 100% on board. Others will figure out how to qualify what they're already doing to fit that change. And some others will just be full-on resistance and just kind of be waiting for the next leader to come in so they can switch into whatever they were doing before. And there is also that organic change that comes from individuals and then pushes up to the rest of the organization. But I think it's much harder, and you have to have a lot of will and a lot of support from leadership that they're accepting of those types of ideas. CHAD: I think it's the nature of groups and companies to want to grow. Do you think that there's any way to preserve that smaller culture as an organization grows? VICTORIA: I think so. I think it's possible if you integrate it into part of your core values, and that becomes a part of how you interview, and how you do performance reviews, and how you build your culture as a company. I think you can build it on those tenets. I think in some organizations, there's usually some form of acquisition where you acquired a team from a contracting company, or you acquired a team of federal employees from another agency when you restructured. So it makes it a little bit more challenging to really integrate that part of your culture into every step, but it is possible. And you also have to accept that not everyone might be on board all the time. CHAD: Well, I think that that is probably the biggest challenge is even in a larger organization, if you foster a culture where change can happen from anywhere, it's not necessarily top down. Transferring that knowledge or that practice throughout the whole organization is really difficult. Like if it's thousands or tens of thousands of people, adopting a change seems really difficult to me. So even if things are really organic coming from all levels of the company, you could end up in a scenario where everything is being done differently, everywhere. VICTORIA: Yeah, and I think, too, when you're in a larger organization, there's more context for every unit. And so you can think this is a change we're going to do. This is going to be great. But then, once you actually see the way that people work, that change might not actually help them that much. And so I think that if people have autonomy to be able to make changes that make sense for them, that's more likely to be effective than if we tried to push change from the top down necessarily. And being in my position as a contractor, I really don't have authority to make a lot of changes. CHAD: [chuckles] Right. VICTORIA: So either I have someone backing me up, or I really get to know the individuals that I'm working with. And I can demonstrate and show them that there's a better way of doing it and do it in a way that gives it to them as an option so they can choose to adopt it. And that's usually the only option I have to give anyway, [laughs] so that's been effective because people do want to be better at their jobs or be more efficient. But a lot of times, I think the changes aren't really addressing their problem, and so it can be easy to push it aside. Mid-Roll Ad: Are you an entrepreneur or start-up founder looking to gain confidence in the way forward for your idea? At thoughtbot, we know you’re tight on time and investment, which is why we’ve created targeted 1-hour remote workshops to help you develop a concrete plan for your product’s next steps. Over four interactive sessions, we work with you on research, product design sprint, critical path, and presentation prep so that you and your team are better equipped with the skills and knowledge for success. Find out how we can help you move the needle at: tbot.io/entrepreneurs CHAD: So you mentioned you got involved in DevOps DC and then as an organizer. I know you also started to work with Women Who Code. Why did you get involved in the organization of DevOps DC and that kind of thing? Was there a business or a personal reason to do it? VICTORIA: It was both. It made sense from a networking perspective, both in potential customers or clients and in recruiting. But also, I think it made sense. For me personally, the people who were showing up regularly were my kind of people, you know, [laughs] people who cared about blameless post mortems or feeling open or making me feel welcome when I came to the meetup. That was a big reason why I got involved. And it just made sense for me, too, because I was coming from an operations background. I'm like, oh, DevOps, this is the way that we're supposed to be doing things. [laughs] CHAD: So you were really involved in the D.C. community and had been there for a while. But you recently moved to California. VICTORIA: Yes, yeah. I've been in San Diego for almost two years, about a year and a half at this point. Yeah, big moves. CHAD: What was it like to move away from your old community, which was so based on geography? VICTORIA: Yeah, it was sad, but it was interesting how it worked out with the pandemic because when we found out we were going to move, was when everything shut down, and we went slowly remote anyways. And so I continued running DevOps DC remotely and some Women Who Code events for about a year afterwards. And then, when I decided it was time to really shift away and actually be more present in the San Diego community, especially when the other meetups started going back to in-person meetups, that was actually really hard to say goodbye and to say that I wasn't going to be organizing anymore. And I really miss all my past organizers and people who would come to the events. CHAD: Has it been difficult to form a new community locally given the pandemic? VICTORIA: Yeah, I've looked at quite a few meetups. There are a number of good meetups here in San Diego, and LA has a great scene as well. But yeah, it's been hard for myself to just get out of the house and to find similar groups that have those same interests. That's been a challenge, but I think it's coming along, and we'll get there. CHAD: And along the way, you joined thoughtbot. I'm curious, what were the things, in particular, that attracted you to the role or to thoughtbot? What were you looking for personally? VICTORIA: Personally, I knew that business development was an area that fit my skill sets really well, and the things I like to do like going out, and networking, and talking to people. And this role, in particular with the DevOps strategy in there, really excited me because I could use all of these hours and hours I've spent in meetups and conferences to good use to help develop services within thoughtbot that are really tailored to our specific user groups and needs. And to work with highly skilled, highly regarded engineers and developers on developing these products I thought was really exciting. And then thoughtbot as a company, in particular, I found the interview process to be really well thought out with, for example, I knew that it was going to be a long interview process. So there is a compensation that you can receive just for interviewing. And I thought that was something that was really nice [laughs] and also just showed that approach of being aware of the candidate's experience and wanting to have that be a good experience and a worthwhile endeavor. So that was part of why I liked thoughtbot. Open source was a big consideration for me. I wanted to work somewhere where they were passionate about giving back to the open-source community, and all that together brought me here and made the most sense. CHAD: Cool. Do you have any tips for people onboarding into a new role? Or maybe even if it's not tips, was there something that you did intentionally when day one or day minus one you're thinking about, okay, tomorrow I'm getting started? How did you approach that? VICTORIA: One of the biggest advice I give to people who are starting a new role is to schedule one on ones with members of your team and get to know them as individuals, especially in remote environment since you don't necessarily have a chance to go out for coffee, [chuckles] just to have a quick one on one and get to know them a little bit more in your role and figure out where you can start to add value. I think that's a great way to start. And then to just develop your list of ideas for where you think you can add value, some outstanding questions for where you need to understand more. And I think the other advice would be to engage in the social channels. I think my first day, I posted a picture of my dog on the dogs' channel. [laughter] And just like, let your personality show a little bit. And don't be afraid to post in a large channel, especially if you know the culture of the company is open to that kind of collaboration. And then people start to see your face and get to know you a little bit more, and you feel more connected to your company. CHAD: Were you nervous when you joined on your first day? VICTORIA: Yeah, a little nervous. And I'm also aware of just having been a federal contractor that some people might hear that and have an impression of my style or the way I like to work. And so I'm a little aware of like, oh, I definitely don't want to wear a blazer. I don't want to look too corporate. [laughter] CHAD: That's funny. Yeah, one time, we were meeting in sales meetings with clients, and we wanted to establish that we were not a typical consulting company. And so intentionally going to a sales meeting wearing a t-shirt or something like that was a statement, like an intentional choice we were making to subtly communicate what kind of company we are. So that resonates with me. VICTORIA: Right. [laughs] CHAD: So now that you've been here for...oh, geez, how long has it been? [chuckles] VICTORIA: It's almost a month. CHAD: Almost a month. Was there anything that surprised you? VICTORIA: There have been a few small things that I'm probably way too happy about. One is just the actual page count in contracts is just way lower than what I've had to work with in the past, [laughter] which is very exciting for me. I was really happy to see...I went to go add a custom Slack emoji, and there were already like 2,000-plus Slack emojis. So that was really exciting for me. [laughs] Surprising...the part that's interesting is, in some cases, as a consulting company, it is the same problems that we're trying to solve for. So, in that case, it's almost expected, but it's interesting. So to see some things like what thoughtbot has, a playbook in GitHub, and anyone can edit it. And that was something I was really trying to work on at my last position. And you're 5 or 10 years down the road where you've solved some of the issues where you have a nice editor so that people can go in and edit pages without using Markdown or pull requests. But it's still difficult. So it's interesting to see that some challenges have progressed a little and have still some different issues. CHAD: Yeah, it's always interesting to get a new person's perspective with fresh eyes. I've been doing this for a long time, and joining a new company remotely is different. Back when you were joining a Boston team or a San Francisco team, you could go into the office. And your first day, you'd be sitting right next to somebody and going to lunch with them. And that kind of thing is clearly very different now than it was then. VICTORIA: Right. And I did get to see everyone at Summit for one night. So that's exciting. CHAD: Yeah, that was exciting. So we happened to...I think the week before you started, or maybe two weeks before you started, we were having our company-wide in-person get-together in the United Kingdom. And you happened to be going to Germany for a wedding, right? VICTORIA: Mm-hmm. CHAD: So we tacked on to that trip and stole you for a day, and we were able to see each other in person. That was exciting. VICTORIA: It was really cool. Although I had a lot of FOMO once, I saw the next day was like D&D and a bunch of games and hanging out. I was like, wow, I'd really like to stay longer. [laughs] CHAD: Yeah, yeah. Well, we'll do it again next year. [laughs] VICTORIA: Yeah, that's true. CHAD: Mission control is the one team at thoughtbot that works on clients that is cross time zone, so most of the teams overlap with clients 100% with time zone. So it'll be people in the Americas work with clients in the Americas. But the Mission Control so that we could provide a wide swath of time zone coverage for that infrastructure work, for that support that we do, crosses the teams. So one person on your team is in Nigeria, and you're all the way in San Diego. What's that like? How do you manage that? VICTORIA: Yes, well, everyone on the team makes sure to update their availability in their calendars so that we aren't accidentally scheduling meetings really late in the day for folks who are on that UK time zone. It's been all right, though. I'm used to asynchronous communication, and so is the team. So I think that we're really good at being able to use Jira and Confluence and Slack to communicate. And we are open with each other on where we're flexible if we need to make meetings a little bit later. And everyone's been really supportive of not trying to have meetings too early with me, which I appreciate, [laughter] 8:00 o'clock is totally fine, though. It's actually been good. I'm used to the asynchronous communication. I actually would even be open to more meetings that are done just over Slack and just when people wake up. CHAD: I think there are different philosophies here. But I'm very much in the camp of assuming we want to work a sustainable pace, which we do, then you can't build a culture around synchronous meetings where everyone needs to be on the meeting together because it's basically impossible. Those two things are at odds. Someone will be outside of their regular work hours, and that's really hard to continue on sustainably. So I'm very much in the camp of having a culture of asynchronous communication. And that doesn't mean that you never talk. [laughs] It doesn't mean that you don't work with each other. But maybe those times should be focused on what can't be replicated asynchronously, which is sometimes the social connections, the cultural connections of the team. VICTORIA: Yeah, and I think we get a kick out of saying like, "Good morning, Victoria, and good evening, Olamide." [laughs] CHAD: Cool. Well, I'm sure folks will get to know you more over the course of the next episodes. I really appreciate you joining the show. If folks want to follow along with you or get in touch with you, where are the best places for them to do that? VICTORIA: I'm more active on Twitter, and so you can follow me there. And I tend to like and retweet a bunch of DevOps-related events and Women Who Code events. And I'm also on LinkedIn. CHAD: So what's that Twitter handle? VICTORIA: It's @victori_ousg. CHAD: Okay. We'll include a link to that in the show notes. You can subscribe to the show and find notes along with an entire transcript for this episode at giantrobots.fm. If you have questions or comments, email us at hosts@giantrobots.fm. And I'm so excited it's not just going to be me on that email list anymore. So definitely send an email. And you can find me on Twitter at @cpytel. This podcast is brought to you by thoughtbot and produced and edited by Mandy Moore. Thanks so much for listening. Victoria, thank you again. VICTORIA: Thank you CHAD: And see you next time. ANNOUNCER: This podcast was brought to you by thoughtbot. thoughtbot is your expert design and development partner. Let's make your product and team a success.Sponsored By:thoughtbot: Are you an entrepreneur or start-up founder looking to gain confidence in the way forward for your idea? At thoughtbot, we know you’re tight on time and investment, which is why we’ve created targeted 1-hour remote workshops to help you develop a concrete plan for your product’s next steps. Over four interactive sessions, we work with you on research, product design sprint, critical path, and presentation prep so that you and your team are better equipped with the skills and knowledge for success. Find out how we can help you move the needle at: tbot.io/entrepreneursSupport Giant Robots Smashing Into Other Giant Robots
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Aug 11, 2022 • 35min

435: Numerated with Adam Kenney

Adam Kenney is Chief Product Officer at Numerated, which helps banks and credit unions transform how they lend to businesses. Chad talks with Adam about what institutional banks and credit unions are like as a market and customers and what sales cycles look like, going from 17 to more than 130 customers quickly, and the scaling challenges they faced, and how the pandemic affected them as a company. Numerated Follow Numerated on Twitter, YouTube, or LinkedIn. Follow Adam on Twitter or LinkedIn. Follow thoughtbot on Twitter or LinkedIn. Become a Sponsor of Giant Robots! Transcript: CHAD: This is the Giant Robots Smashing Into Other Giant Robots Podcast, where we explore the design, development, and business of great products. I'm your host, Chad Pytel, and with me, today is Adam Kenney, Chief Product Officer at Numerated, which helps banks and credit unions transform how they lend to businesses. Adam, thanks so much for joining me. ADAM: Thank you, Chad. Thanks for having me. CHAD: Let's dive into Numerated a little bit more. How do you help banks and credit unions lend to businesses? ADAM: I think we're in the middle of what is a pretty meaningful transformation in terms of how businesses are expecting to get access to credit. Really what they want is something that is fast, easy, convenient, largely driven off of the change that has happened in the retail space over the last 10 to 15 years. And in many ways, business lending is still catching up to that, and so our focus is doing that. It's helping the banks and credit unions really change how they interact with their business customers. We use a combination of data and great experiences to make that process as seamless as possible. We've been noted to, using the combination of data and technology, help banks increase the number of loans that they can do with their existing staff by as much as fourfold. We are also noted for inventing what we like to refer to as the three-minute business loan. It's one of the things we were written up on in the Wall Street Journal back in our days in Eastern Labs, where we've been able to get businesses from the point of application all the way to a funded loan in less than three minutes. And that's a process that historically has taken as long as three weeks. And so really excited by the ways that we're able to really help change how banks themselves can look at their operations. But more than anything, it's how banks are able to rethink and change how they interact with businesses and help the businesses in your communities grow and get access to the credit that they need. CHAD: So from a digital product perspective, there's a piece of a product there that banks are actually taking on and white-labeling that provides a lending experience for their clients, right? ADAM: That's correct. I mean, we're a cloud-based SaaS system. But you're right; they branded as their own. And so if you're going to Eastern Bank's website and clicking through and ultimately going through the application process with us, it's going to look and feel like it's just Eastern's website. And all of the interactions that you have with Eastern or any of our customers are going to feel that way as well. So yes, it is a white-label solution that we sell to the banks, and they provide to their customers. CHAD: The actual banking industry is not one that I've had a lot of experience in. And so I'm curious what institutional banks, credit unions, that kind of thing what they're like as a market or as customers and what the sales cycle looks like and those kinds of things. ADAM: It's about as varied as an industry can get, I'll tell you that. [laughs] You have to remember that banks and credit unions can be as small as having a few hundred million dollars in assets, maybe as small as 100 million. And in some of our customers' cases, they're de novo banks, and they're just getting started. And they range up to multiple billions of dollars in assets. And so, these are organizations that scale dramatically. Each of them have their own problems. They're also going to be made up of very different tech-minded individuals. You're going to have some smaller institutions that are basically managing a book of business that's been a book of business for close to a century and are interested in how technology can make them more efficient. But they are not the technologists that you and I would be used to working with on a day-to-day basis. And then, of course, you have people like ourselves who are really trying to, from inside the bank, change what banking is to their customers. And so, it's a very diverse industry in terms of what they're looking to accomplish. We've even come up with recently this framework around how we think about and really talk to our customers about how they transform and the levels of transformation that they can go through. And for us, it's essentially a four-level transformation starting with very small and pointed technology innovations that allow them to drive innovation in very fragmented bits and pieces, for lack of a better term, up to and including they're going to transform everything or become a digital bank. And you can imagine there are lots of stops along the way in terms of where a bank is and where they want to end up as part of their strategy. CHAD: From a product perspective and managing change, do you get a lot of custom features from individual, either clients or potential clients? And how do you manage that if you do? ADAM: The way I think about it is that we certainly get a lot of requests from our customers, and every customer likes to think that they are different and unique. In reality, there's a strong theme to almost all of the requests that we get. And personally, I think that's part of what our job is as a product leader is to really understand how to create themes out of the individual requests and provide a platform back to the market that addresses as many of those in a more holistic way and drives value across not just the individual asks but across all of the customers. And so yeah, there's some uniqueness. And certainly, we need to provide a platform that allows for that. So as an example, every bank has a slightly different view into how they want their credit policy to work and be implemented, but the framework around how you make credit decisions, how I get data into the platform. How do I create a credit matrix? And how do I then decide the exact offer terms to drive out of that? Like, that's a standard capability. And so we're innovating on that based on the individual features, but it's really not with an eye towards providing a specific custom feature to individual customers. It's more providing a flexible platform that allows them to configure the nuance but in a general theme that's going to help them be a better business. CHAD: So in the U.S., we had a specific program launched, PPP loans, in the pandemic to help support businesses. And I know thoughtbot we participated in that and went through that process. I don't think our bank was using Numerated. But I know that the bank really maybe...because they weren't using Numerated, [laughs] they needed to bring together an entirely new application interface very, very quickly in order to be able to take our application to that. And I think that Numerated was right there at the start of that. ADAM: Yes. CHAD: Talk about something custom maybe quickly. ADAM: [laughs] CHAD: What did pulling that together look like? ADAM: So maybe to take a step back if I could first and just paint a picture for you because you're right, it was kind of a unique and incredible period of time. We were fortunate in our line of work because we are all about helping banks transform how they lend to businesses. We had the base platform already built and established that allowed businesses to apply for loans on our platform. Even before the pandemic, we were one of the leading technology platforms for processing SBA loans. So we were uniquely positioned for the opportunity as it results to PPP. At the start of the pandemic, we had approximately 17 customers using our platform. Fast forward six months later, we had 135. And so, to your point around there were a large number of institutions looking for a new application solution overnight, I think that shows you how aggressively banks needed a solution. And there was an opportunity for us to offer our platform to be that. I think the other thing to recognize as part of the backdrop anyway is this was a crazy time if you think back to where we were in the pandemic. No one knew what life was going to look like in a week. And most businesses, especially smaller ones, didn't know if they were going to have a business. And so for us, that also provided the opportunity and maybe a little bit of the confidence in saying, "You know, we have nothing to lose. We're well-positioned. And what else are we going to do? Because it's not like people are making other loans for the next couple of months. Let's just go own this". And so I think it was the combination of us making that recognition, having a really good base platform that had familiarity with the SBA, had familiarity with business lending, and with a team that then could really acutely focus on solving this one problem for as many customers as possible. And by the way, have the emotional impact of not only helping banks but knowing that we're basically helping hundreds of thousands of businesses stay afloat through probably the craziest time in our country's history. And so that's really what got us going. And then there was a ton of work to your point around customization around building out the platform. But the one thing we've tried to do from the beginning is hold true to some of the foundational vision that I mentioned earlier. Like, we don't want to be in the business of custom software. That's not a winning proposition for us or our customers. And so, as much as it was maybe hard at times, throughout PPP, we were always thinking about okay, so we have to make these changes to support this crazy never-before-seen lending program. But how can we do it in a way that's going to set us up to serve the businesses in a year or two when this whole pandemic thing is over? Because PPP is not going to last forever, but our customers are. The businesses are still going to need credit. So whatever we're doing as much as possible, let's be building a foundation that gets us well beyond PPP. And so we were using it as really a catalyst to build a bigger business even while we were helping customers through the pandemic. CHAD: One of the things that I really appreciated, and I have an outside perspective on it, but I really...and people can always do better. ADAM: Yes. [laughs] CHAD: But I thought it was one of the rare circumstances where everyone realized the urgency of the situation: government, banks, everybody. And there was a real willingness to realize, well, we've got to do something. If we try to figure it out all right now, it's going to take too long. So let's just do something, and we'll work out the details later. And so I think there was a willingness, and from a product perspective, my guess would be that allowed you to work iteratively too. ADAM: It did. It was [laughs], I think in some ways a blessing and a curse. CHAD: [laughs] ADAM: Because I can tell you that the number of times my team would get a set of new capabilities, which listen, were great for the customers. It made everything better for the businesses that needed help, so I would never want it any other way. But the number of times that those new capabilities were announced by the SBA on a Friday night and were expected to be live on Monday morning, let's just say it was more frequent than I would ever like to relive. [laughs] And I can remember, especially going into the second round of PPP, it just so happened that all that was happening between Thanksgiving and Christmas in a year where all families wanted to do was spend time with each other after a crazy year had gone by. But we didn't get that luxury, unfortunately. We had a job to do, and that was to make sure that we were ready for the next round. And so it did come with a lot of cost in terms of we had to work really hard to make it happen. But to your point, it allowed us to iterate. And I give the government credit, too, particularly the SBA. They could have, for example, just launched the program and then launched more money into it and stood still, but they didn't do that. To your comment, they had to get live as quick as possible. And so that first round of PPP, there were more technology hiccups. The SBA had some volume constraints. They couldn't really handle the performance. We ended up having to govern our application submissions because otherwise, the SBA couldn't handle it. There were other challenges in terms of how we were validating data. But that got better month by month. And certainly, by the time we got to the forgiveness part of the process and then the next round of PPP the following winter, they actually invested in completely ripping out their legacy API and providing us in the tech community a modern RESTful interface that was much easier, much more performant. And so, even though the volume got even crazier as we went through the program, it actually became easier for us to deliver. The first round, we were literally working around the clock because the SBA was having issues. We couldn't get enough documents through DocuSign and whatever else. We did, I want to say, close to 3 times the volume in the next round a year later but at about 15% of the energy because we had just improved that much in less than a year. And it wasn't just Numerated; it was Numerated working with our partners in government and elsewhere to just get the process that much smoother for our customers. CHAD: Were there things that you needed to do at Numerated? I mean, to go from 17 customers to more than 130 that quickly, I assume that there were some scaling challenges for you along the way. ADAM: There was. And I will say this: we were blessed to have a really good technical infrastructure in place that allowed us to scale on the infrastructure side without a ton of problems. We were able to essentially stand up new environments in our infrastructure relatively quickly and easily and even handle the peak volume of PPP, which was exponentially higher than anything we had ever done on the platform. That was not a problem for us. Where we had to scale is in two areas, one from a technical standpoint was how we were interacting with our technical partners. I mentioned already the need to govern how we were submitting applications to the SBA. We worked very closely with DocuSign to essentially put rate caps on how many documents we were generating at any given time and essentially spread the volume because none of us had dealt with that or dealt with that kind of volume before. And that's where we had technical challenges were in the interfaces and working with partners to make sure everything lined up well. So that was one area, got through it pretty well. And ultimately, like I said, for the second round, we were smooth sailing. The other area to your point around standing up all the banks was how we implemented the customers. Our typical implementation cycles going into the pandemic were multiple months. We had to stand up all over the PPP banks in less than two weeks. And so that took a combination of...I'll call it technical delivery. So we essentially created a cookie-cutter deployment and then used a deployment strategy to push that to all of the new customers all at once that we didn't have before. And we were able to create that relatively quickly. The other was we had to take a much harder stance with our customers than we had ever done around look; everyone's getting the same thing. It's government-mandated anyway, but it's going to be exactly the same. And other than the white-labeling that we, of course, gave everybody, you might want slightly different process around the workflow, around the approval. You're going to have to take the same thing that everybody else is because we just don't have time to configure the nuance across 100 banks. And so luckily, to your earlier comment around, everybody just realized we were in this unique time, we do what we have to do, and we got through it. Our banks were very willing to do that. But that was the other change we had to do to really see this scale through. Mid-Roll Ad: Now that you have funding, it’s time to design, build and ship the most impactful MVP that wows customers now and can scale in the future. thoughtbot Lift Off brings you the most reliable cross-functional team of product experts to mitigate risk and set you up for long-term success. As your trusted, experienced technical partner, we’ll help launch your new product and guide you into a future-forward business that takes advantage of today’s new technologies and agile best practices. Make the right decisions for tomorrow, today. Get in touch at: thoughtbot.com/liftoff CHAD: If you're comfortable talking about architecture a little bit, do you have a shared sort of platform that everyone is on? Or, for each of the customers you have, do they have their own instance? ADAM: So we've made the decision, mostly because of our regulated industry; we felt like it was safer, so each customer gets their own database. We do keep everyone's data completely isolated to protect their information and give them the utmost confidence that it is protected. But we have a shared application layer. And so, our web servers are shared multi-tenant instances. And so it's essentially a combined environment where we're both sharing some resources but then also deploying individual databases and then the configuration because outside of PPP, it is unique bank by bank. And so, the configuration gets deployed within each bank's individual environment. CHAD: Cool. I've worked on systems like that before, and they can certainly present...especially when you need to scale them quickly, and you've got a lot of new customers being added. You better hope that it's been automated. [laughs] ADAM: Yes. And luckily, we had a good amount of automation in place during PPP or even going into it, I should say, but of course, PPP stretched that. And so we've just continued to get better and better as a couple of years have gone by. CHAD: So the second PPP came through. It's in the forgiveness period now, so that's winding down. So Numerated were at that point you alluded to earlier, which is when you were doing PPP, you realized it's not going to be around forever. Let's lay the groundwork now to help customers in the future. We're sort of at that point now, right? ADAM: Yes. CHAD: So what does that look like for you? ADAM: So it's essentially expanding the portfolio of loans that our customers can leverage our platform to execute. And maybe to say that better, if you look back prior to PPP, we got our start with small small business lending. And what I mean by that is loans under $250,000 that can be highly automated. That's where Numerated got its start working with Eastern first 15 customers, saw the value in getting extreme efficiency and delivering essentially capital to their businesses in a number of days instead of weeks. That's what we were great at, very similar to what PPP was, by the way, which was getting money to people in a number of hours in some cases. But we knew that that was never the vision for what we wanted to be or what our banks needed in the business banking segment. Ultimately, they want that same level of use efficiency experience for all of their business loans. But in order to support that, there are a number of capabilities that we needed to build into our platform to handle that. Underwriting gets increasingly complicated when you are underwriting loans at 500,000, a million, or $5 million. The businesses get more complicated. The collateral gets more complicated. The entire process just becomes more sophisticated. But that's what banks want, and by the way, that's what businesses want. They don't want to have a great experience when they're a little bit smaller, and they've taken out a $100,000 loan and then have the experience be crap two years later when they come back, and they've taken out a million-dollar loan. And so, that has always been our vision. We've had the fortune of being able to do really well on PPP and essentially just accelerate that vision. And so that's what we're working on right now is really building a loan origination system that allows our customers to transform how they lend to businesses in entirety. We have been building out all of the sophistication I mentioned around underwriting. We have recently acquired a company called Fincura based out of the Boston area. They automate spreading. If you're not familiar with what spreading is, it basically takes either paper or PDF versions of a bank's financial statements, and it turns them into really critical financial ratios that help banks understand the creditworthiness and the risk associated with the business. So you can imagine what that is. It's taking OCR, technology, AI, and basically taking what were PDFs and converting them into scores that can then be used to automate and drive efficiency in the credit decision, again, all part of being able to then really transform how banks are doing all of their business lending. But that's what we're working on now, converting all of the PPP customers to use the non-PPP, for lack of a better phrase, parts of the platform and really helping them change how their businesses look at them in terms of the opportunity to access credit. CHAD: So I think it's probably worth noting you made the decision to join Numerated right before the pandemic hit. ADAM: That's correct. CHAD: And so you joined when? ADAM: My last day at my previous company happened to be the day we closed the office due to the pandemic. I had obviously made the decision prior to that. But then, my first day on the job at Numerated was the second day of PPP. So essentially, you know, call it a week after everybody had gone home for what became the better part of the next year to two years. CHAD: So I assume making a decision to join a new company, you're going to be the chief product officer. You've had a lot of conversations about what the vision is and what you're going to do. And you're going into a business where hey, there are 17 customers, and we're going to scale. But you probably didn't guess what was going to happen ended up happening. ADAM: No. [laughs] CHAD: So I imagine like part of your vision for what you were going to do both as a company and as an individual must have gotten put on hold. ADAM: It's funny, yes and no. So I will say no to your lead in there. There were certainly times before I started where I was calling Dan our founder and CEO. And I was probing him and pushing him like, is this still a thing? [laughs] Are we really going to go do this? Not realizing what PPP was and really what it was going to mean for our business. So there was that period of time where I wasn't sure. I knew it was going to be different, but I didn't know what that meant yet. Once I understood what was happening and what we were doing, I actually never felt like it was putting anything on hold. And I can come back to the fact that it put some elements of our business on hold. But for me and why I joined and the vision I had, I was coming to help the team really expand what the platform could do for banks and their business customers and to accelerate the number of ways we could help. I have prior experience working at Capital One and Pegasystems with a lot of the systems and the processes that we were helping to reinvent at Numerated. And so, my vision was always to come and build off of those past experiences and accelerate what we were doing in this specific small business segment. PPP, in a lot of ways, just accelerated that. It took what would have probably been three to five years’ worth of market adoption in terms of understanding what digital transformation was going to look like, getting customers fully comfortable with a more digital experience, getting comfortable with a more data-driven approach to decision-making. And the pandemic forced all of that to happen in weeks. CHAD: Well, people couldn't even go into the bank to turn in their paperwork. It had to be done remotely. The staff wasn't there either. ADAM: And the staff no longer could look at paper financial statements because they couldn't get paper financial statements. And so everything changed overnight. One of our customers has told us at multiple customer events since he's like, "You guys, you let the rabbit out of the hat, and it's not going back." It just changed overnight what was happening in the industry. And then, for us, it gave us all of this extra opportunity to invest and invest more in what we wanted to go do. Our team, when I joined, was about 40 to 45 people. Our team now is 145 people. And our engineering team went from a little over 20 to just under 60. So we have exponentially changed the rate in which we're innovating and going after things. And so, for me, it's just accelerated and made things more exciting. The one other comment I'll make in terms of putting things on hold it did put some elements of the business on hold because every one of our customers stopped thinking about what I'll call traditional business lending and focused 100% for the better part of 18 months on getting through the pandemic. And even once PPP was done, there was another six to nine months where banks were trying to figure out, are we really out of the pandemic? Are we ready to start lending the way we used to? Do we need to rethink risk? Because these businesses are all different now than they were two years ago. The things that made a business risky two years ago are different now. And so there was also a little bit of a hangover as our customers internalized within their own walls what it meant to get back into lending. And so, it did put some elements of that on hold. We were fortunate, though, that we grew so much through PPP. And we actually kept adding what I'll call core customers, not just PPP customers, during that period that our growth actually accelerated. And it's been really good for us. CHAD: That's great. You mentioned the team growth that you've had. Different companies are organized in different ways. As Chief Product Officer, where do you sit within the organization and relative to the engineering team? ADAM: So at Numerated, my responsibility includes all of the product management as well as the engineering organization. So I'm responsible with my teams for everything from initial product strategy, the product design. I have all of the UX and design team as well as then all of the execution, the delivery of the platform as well. CHAD: So does that mean that there's VP of engineering in your organization or some sort of person like that that's working closely with you? ADAM: Sort of. So I have...basically, it divides more at the director level. So I have a couple of VPs that work for me that have a combination of product and engineering, both experience, expertise, and responsibility. But then their teams have product managers, and then we have directors of engineering that then manage their individuals from teams. I also have a group of former bankers. They're product managers but act as consultants to those organizations. And that's where we get all of our industry expertise. They've worked with the SBA. They've worked in credit offices, and they really help to influence the product roadmap across those teams as well. CHAD: So the entire engineering structure also being under the chief Product Officer, I would say that and correct me if I'm wrong, I think that's probably not how the majority of companies organize it. Do you agree with that? ADAM: I have seen both, but I would agree that it is not the majority. CHAD: I would say if there is a majority, and I agree, I've seen both too, but you might have a CTO and then VP of engineering. And so, the engineering organization goes all the way up to the C-level. And then there's a Chief Product Officer. And here's the product management and product underneath them. Was this an intentional choice from the beginning as you scaled out the team for you to have it all live under you? ADAM: It was intentional. I will give my personal view on it. I think that as we continue to evolve as technology companies, one of the hardest things for us to achieve is alignment around vision and purpose. And that drives a level of focus that I think maximizes the ability to move the business forward. And based on that premise, the places where I've seen things work the best is when there is a focal point across product and engineering within specialization underneath. Because it drives, I think, the best alignment across the organization. I will acknowledge, however, that finding leaders that can actually operate effectively in that combined role is extremely difficult because you need people that have a high degree of engineering experience so that they actually know how to build for quality, build for scale, even for things that don't immediately impact the bottom line while having enough business acumen to understand the demands of the business and how to balance those priorities against what we need to grow the business at the same time. And so, it does create a little bit of a snowflake challenge. I cannot find or replace those roles as we grow and scale nearly as quickly as I can in a divided organization. But I have found that it does help me drive clarity of priorities and purpose and ultimately focus in the organization versus the places I've worked where that hasn't been the case. CHAD: So I guess given that, then I assume you're hiring. [laughs] ADAM: We are always hiring. [laughs] We are definitely in growth mode. And we are looking for great people that can help us to build a platform and really transform how our customers are thinking about how they lend to their businesses. CHAD: Well, I agree. I think there are different structures then that can achieve it. And also, a lot of it comes down to the people but that alignment and that understanding of design, and product, and development or engineering. And ideally, people and all of those skill sets and all those teams who get it and can balance those different priorities with the business is really important, and that alignment of vision. And so there are probably different structures to get it, but that's what you're aiming for. And I think that the structure that you've set up is one which is very helpful to getting that alignment. ADAM: Agreed. Agreed. I think that while we're on the topic of the team and the culture we're trying to build out, I'll maybe use that as a way to share a few more things that we're really driving towards. You can imagine a company that has scaled the way we have and continues to grow. That presents some other organizational challenges as well. One of my firm beliefs is the fastest way to scale is to create really strong, empowered, decentralized teams. That, again, gets back to the whole vision and focus thing. They have to be rowing in the same direction. But they have to be really independent in the day-to-day. And so we've really spent a lot of time over the last, I would say, year and a half shifting to that kind of a model to where each of the teams is really embracing what their individual accountabilities are. They are really focused on how they're delivering success for the business and are able to make a lot of the day-to-day decisions. But then it falls to management, leadership, myself to make sure that when they make those decisions, they understand the context in which we're trying to drive the business so that we can do as much as we can as fast as we can but in a way that's high quality and delivers value. CHAD: Awesome. Well, I sincerely wish you all the best in that. I really appreciate you stopping by and sharing. Thank you. ADAM: Yeah, my pleasure. I appreciate the time, and good to get to know you a little bit, Chad. CHAD: If folks want to find out more, maybe apply, follow along with you; where are all the places that they can do that? ADAM: Yeah, sure. So numerated.com is where they can go and learn more about the business, and they can learn more about where we're hiring. People should check me out on LinkedIn. That's probably where I'm the most active these days. And feel free to message me as well. I'll also give you my email address if anybody wants to reach out. It's pretty simple. It's adam@numerated.com. Whether it's opinions, thoughts, or reactions to anything that I've shared today, or you just want to build a relationship, I'd love to hear from people and get to know you a little bit better. CHAD: Wonderful. You can find links to all those things, probably not Adam’s email address, in the show notes. ADAM: [laughs] CHAD: We want to protect him from those spam crawlers. But you can subscribe to the show and find notes along with a complete transcript for the episode at giantrobots.fm. If you have questions or comments, email us at hosts@giantrobots.fm. And you can find me on Twitter at @cpytel. This podcast is brought to you by thoughtbot and produced and edited by Mandy Moore. Thanks so much for listening, and see you next time. ANNOUNCER: This podcast was brought to you by thoughtbot. thoughtbot is your expert design and development partner. Let's make your product and team a success.Special Guest: Adam Kenney.Sponsored By:thoughtbot: Now that you have funding, it’s time to design, build and ship the most impactful MVP that wows customers now and can scale in the future. thoughtbot Lift Off brings you the most reliable cross-functional team of product experts to mitigate risk and set you up for long-term success. As your trusted, experienced technical partner, we’ll help launch your new product and guide you into a future-forward business that takes advantage of today’s new technologies and agile best practices. Make the right decisions for tomorrow, today. Get in touch at: thoughtbot.com/liftoffSupport Giant Robots Smashing Into Other Giant Robots
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Aug 4, 2022 • 30min

434: SOS with Susanna Twarog

Susanna Twarog is Co-Founder and Co-CEO of SOS, which is transforming wellness on the go through a network of smart vending machines that deliver just-in-time necessities where and when you need the most. Chad talks with Susanna about wellness on the go, the unique business that they're building and what SOS can offer brands, and the biggest hurdles to overcome to get 10,000 machines up and running. SOS Follow SOS on TikTok, YouTube, Instagram or LinkedIn. Follow Susanna on LinkedIn. Follow thoughtbot on Twitter or LinkedIn. Become a Sponsor of Giant Robots! Transcript: CHAD: This is the Giant Robots Smashing Into Other Giant Robots Podcast, where we explore the design, development, and business of great products. I'm your host, Chad Pytel. And with me today is Susanna Twarog, Co-Founder and Co-CEO of SOS, which is transforming wellness on the go through a network of smart vending machines that deliver just-in-time necessities where and when you need the most. Susanna, thank you for joining me. SUSANNA: Thank you, Chad. It's great to be here. CHAD: So, what makes the vending machines from SOS smart? SUSANNA: So what makes our vending machines smart? Well, I think smart and vending are typically not words that go together. And I think when we founded the company, the machines that we were looking at were outdated and old and out of stock. And to be honest, first and foremost, payment methods that are accepted by most vending machines are completely not in line with the modern consumer. So we were looking at vending machines that take quarters and cash. And as two working women on the trading floor, nobody has quarters or coins or even cash anymore. So first and foremost, we are a cashless, modern vending machine that accepts contactless and modern forms of payment. CHAD: Let's level-set a little bit about wellness on the go, what that means. What I hear when I look at...which I took a look at the product on the website, which I encourage people to do, and it's worldofsos.com. I think it gives a much better sense of this. But correct me if I'm wrong that what we're talking about here is the vending machines that might typically be in a men's or women's restroom. Is that right? SUSANNA: Absolutely. So the problem that we are in a mission to solve is to transform outdated, completely broken, ugly hardware that's existed to distribute wellness essentials like menstrual care and other wellness products in public spaces. So those old machines that look like steel box drops [chuckles] that is the business or the distribution channel that we're looking to disrupt. And so, by introducing beautiful design-first tech-enabled hardware into this space, we're completely transforming a distribution channel that has not worked or served anyone for decades at this point. CHAD: I don't even use those vending machines. But it seems to me like they're often broken, dirty, not even stocked. Is there market reasons why that's the case? SUSANNA: So, to be quite honest, I think Robina and I, when we founded the company, started to explore why hasn't this problem been solved? And the fact of the matter is the built world, and a lot of commercial real estate is designed and developed by a group of people who don't necessarily menstruate or need these products that are everyday health and wellness essentials for actually what is over half of the world's population. But the folks who design and plan these spaces are not necessarily coming at the design with a perspective of these needs. And so, honestly, Robina and I set out on a mission to say when we think about inclusive space and the world that we want to live in, we want to live in a world where not just among certain people but all people have access to health and wellness products that they need when they're not at home. So you may have everything that you need and want from the brands that you love and the ingredients that you trust in your own cabinet. But when you're on the go, and you're at work or you're traveling or entertaining, or spending time in other physical spaces that aren't your home, typically, those products aren't available, and they're very hard to access. So it's a major area for us to innovate and introduce a world that we want to live in where you can access the products you need from brands you already know and love or want to discover and try. CHAD: So building really any hardware, and I have a lot of guests who have done hardware in the past, can be a challenge, especially starting out. What you talk about in the startup industry is often like starting out small, figuring out the minimum viable product, bringing that to market to early customers, and then learning and refining. And that can be difficult to do when you're shipping something physical. So how did you approach that? SUSANNA: Robina and I approached this with a lot of intention and a lot of thought. We came from finance, business development, and sales backgrounds. Neither of us are engineers. So when we decided that we were going to found SOS and started to literally sketch out renderings for the type of hardware and design that we wanted to see in the world, initially, we were faced by a lot of people telling us to white-label products that already existed. You know, maybe don't invest in proprietary hardware or designing it yourselves. Try something that already exists. See if there's a product-market fit. And ultimately, we actually invested in and began to work with an industrial design firm from the beginning. We have seven global design patents on the hardware because we knew that without an elevated design-first piece of hardware, the network would not be well-received, would not be able to grow and exist in the places we knew it needed to be, so to be in grade A commercial real estate where hundreds of millions of dollars are spent on designing and innovating into the built world to make these spaces cutting edge and tech-enabled. And yet, if we didn't do the same with our hardware, this would just be another vending machine that got relegated to the basement or the back room, and that is not the company that we set out to build. We want to be a piece of integrated, exciting, engaging hardware and tech-enabled experience in these spaces. And so, to do that, we had to forge the path of bringing in and working with and basically investing our own money into designing a proprietary piece of hardware that could deliver the experience we knew was so integral to driving value for the company. CHAD: I assume that wasn't easy or cheap. Did you fundraise at that point to do it? Or when you say your own money, were you literally the two of you investing yourselves? SUSANNA: Absolutely. A big point of pride for me and Robina is that from the moment we founded the company through, to be quite honest, I would say the first 18 months of work, we invested our own personal savings. And this wasn't trust fund money that we'd inherited. This was truly just personal savings as young women in finance that we'd put aside, and it was the most money that either of us had ever spent on anything, was investing in ourselves and our own company. So we started...our first investments were in legal work and doing the patent search, and generating ultimately what has now been granted as seven patents for the company. So patent work was the first money we spent, and then also engaging with an industrial design firm to get our concept into CAD rendering and identify the first contract manufacturer that we worked with on the prototype. So we were able to get pretty far prior to fundraising with our own investment. And trust me, it was a big commitment from both of us. And I think the fact that as co-founders being totally in lockstep with taking some of the biggest financial risks that either of us had ever taken and doing it together, and really having equal passion and commitment and belief in what we were going to build was an exceptional part of our founding story. CHAD: I imagine you were probably a little nervous, the two of you. [chuckles] SUSANNA: You know, it felt just like we had to do it. And I think it's kind of like lightning struck in the sense that we had this moment. And from literally the moment that we stepped aside and started to map out the business, there hasn't really been a pause or self-doubt in the sense that we've really known we're going to take this as far as we possibly can. So scary, yes, but it felt like we had the conviction from the very beginning, which I know is rare and not everyone's founding story. But for us, it really was 100% the right thing to do at the time, which was we're going to make this happen. CHAD: So where did you and Robina meet? SUSANNA: So we met as colleagues first and foremost. So we were two, I would say at the time, young women working in finance, and she was my counterpart. So she had a role in London, and I was in Boston. And we worked on our basically sales and business development pipelines together as colleagues first. And ultimately, Robina relocated back to the U.S, and we became friends on the same trading floor. So really, it was a friendship that grew out of a business relationship. CHAD: Do you remember when and where this idea first came from? SUSANNA: Sure do. [chuckles] It's very close to my heart. I was in the middle of a workday faced with a frustration and inconvenient situation where I couldn't find products that I needed when I needed them at work. And it was interrupting my day for the millionth time. And you know those moments when you have a friend, and you choose the person that you run to when you are, I guess, pissed off for lack of a better word? [laughs] And we just took that moment of me saying, "This is insane. How am I dealing with this? I can't get a tampon when I need one." And our eyes lit up. And we said, "Ah, well, this is a common problem for a very important segment of the world. And we need to do something about it." CHAD: Now, it's a big leap to go from that frustration to founding a company together and actually working on it. So, how did that happen? SUSANNA: So we had that moment, and we stepped aside and said, "This is completely insane. I'm too valuable to be wasting my time worrying about this on a daily basis." And the other fun part of our relationship is that we're also two young women with disposable income. We love products; we love travel, we love entertainment. We like to have fun. We work hard; we play hard. I'm taking those two perspectives, which is like this frustration and universal need combined with consumerism. And this desire to make money, spend money is like combining the two and saying we have an opportunity to capitalize on this need and this consumer at the same time to deliver on a mission and drive value and consumer value for brands at the same time. And that really, I would say, sparked a tremendous amount of excitement and interest from Robina and myself. How incredible to have an opportunity to build a company that is really driving good, and changing the world, and elevating access to these essential products while also tapping into this consumer interest of ours in products, and brands, and emerging indie brands, and digital content, and tech. And combining them all into one company and doing so with a lot of, I would say, excitement, and optimism, and win-win-win. Making the world a better place fulfilling a passion and interest of ours at the same time and driving value, and building a company. CHAD: How far along were you in the idea stages, the legwork stages, before you both quit and started working on it full time? SUSANNA: Took the leap. Yeah, that was a really critical decision and part of our journey. We were very intentional about taking the business as far as we could while protecting our personal financial interests in the sense that, you know, retaining benefits, positioning ourselves so that the company would have the most ability to succeed. And so we actually got through to basically 2020 when we were launching our first machines before we quit and ultimately joined our Techstars Boston 2020 program. So we were, I would say, nights and weekends absolutely killing ourselves with work. We were able to raise our seed round, our pre-seed round technically, while still employed at the bank. And I would encourage others who are thinking about starting companies to maybe...in some cases; I'd say do what we did. And in other cases, I'd say it might kill you. CHAD: [laughs] SUSANNA: But I feel like whether we liked it or not, it put us in a position where we had achieved a tremendous amount of traction. We had our prototypes built and ready to be installed. And they were literally going into some of the most prestigious physical, commercial real estate locations in Boston as we were quitting. So I would say we were taking quite a bit of risk still. But we'd done everything we could to protect the company and make sure that we could get SOS where it needed to be before joining and coming on full-time. CHAD: How did you find those first places where the machines were going to be installed? SUSANNA: From the beginning, it was one of the areas of the company that we invested the most of our time in, which was that we had extensive contacts and relationships in financial services; that was our background. We had to start from scratch networking, and telling our story, and telling our vision with commercial real estate partners. So pre-product, first slide decks, first cold calls, and warm introductions all really focused on commercial real estate. So we gave ourselves a crash course in real estate owner-managers, who the national players were, and started to network a ton, which was just LinkedIn, asking for introductions, having some meetings that were successes, having others that weren't. But really, I think Robina and I had a and have a very, I guess, strong sense of salesmanship, I would say. That's a strength of ours. And so we were able to really get people excited and to believe in us and not to say sell smoke and mirrors, but we were waiting on a physical product prototype to arrive. And we were able to get believers and commitments before we actually had the product ready to demo in the market. Mid-Roll Ad: As life moves online, bricks-and-mortar businesses are having to adapt to survive. With over 18 years of experience building reliable web products and services, thoughtbot is the technology partner you can trust. We provide the technical expertise to enable your business to adapt and thrive in a changing environment. We start by understanding what’s important to your customers to help you transition to intuitive digital services your customers will trust. We take the time to understand what makes your business great and work fast yet thoroughly to build, test, and validate ideas, helping you discover new customers. Take your business online with design‑driven digital acceleration. Find out more at: url tbot.io/acceleration or click the link in the show notes for this episode. CHAD: So you already said at the beginning of the show your product is targeted or primarily for people who menstruate, and not a lot of property, commercial real estate developers, that kind of thing, are those people. So was that a struggle early on to get people excited or to find the right people? SUSANNA: It will always be a struggle, or maybe not always, but it continues to be a struggle. I do also want to make sure I share what we have built. And we have a mission to elevate access to menstrual care products, but our product is for everyone. So our actual physical network and machines we actually carry wellness essentials for everyone. So by solving this mission-based problem of access to menstrual care, we're actually building a product that serves everyone. We have products that everybody uses and needs every day. And what we see in the marketplace is that SOS really is for everyone. But to your point, I think a lot of conversations, particularly early days and even now, still is a lot of educating and educating decision-makers about the need for this amenity in inclusive space and diversity and inclusion goals. And how can you expect or corporations expect to deliver on these important metrics that their leadership teams are being asked when these essential everyday products aren't even available in their space? So there is a huge education. There are some uncomfortable conversations. Robina and I have gotten very, very good at having these direct conversations with a lot of people who maybe aren't comfortable talking about the products, but it's an important conversation that needs to happen. And if we don't have the conversation, then we're never going to get anywhere, and we're not going to be making progress. So our goal is to try to make the conversation exciting and engaging and show these leaders or decision-makers that there is a lot of brand equity that can go alongside thinking about the people in their space, what they need, and what can make their experience in physical spaces better. So that's kind of like leading leadership to a place where being part of what we're building is exciting. And it's an exciting opportunity to deliver an experience that's been long overlooked and is in need of a refresh. And so I think when we find folks who get that and are comfortable and excited to be part of the story, then that's usually where we find our best fit. CHAD: So you're now a little ways on from that period of time. So what stage would you say you're at from a company and a product perspective and a market perspective? SUSANNA: We closed our seed round fall of 2021. And that put us in a position, and that capital has taken us to a place where we're a team of 12, and that's across sort of all categories, which is sales, product, marketing, operations. And we're operating in three markets so New York, Boston, and South Florida. We are going to be doubling our network from just over 40 machines to over 100 by the end of summer. And then we'll be looking to get to closer to between 300 and 400 by the end of 2023. So we are in a phase where our prototypes went from three machines in Boston to, like I mentioned, over 40 machines on walls now across corporate locations, transit, retail, sports, and entertainment. And we are and have been investing in and developing and evolving our tech stack and our product. So we've made some changes to our hardware since our prototypes, of course, and then invested quite a bit in our tech stack on the product side. So we will continue to bring in new best-in-class software partners where appropriate and then also invest in-house in continuing to evolve our product and features that we release to the network. CHAD: Do you have a sense of, you know, currently the biggest number you mentioned is the 300 to 400 machine target. I imagine that the total possible number of machines that you could have, even just with moderate growth, is actually huge. SUSANNA: Absolutely huge. So when we talk about our five year-projection, the number that we use is like 10,000 machines. So really, we want SOS to be ubiquitous. We want SOS to be everywhere you go, and so it's a brand that you associate and you trust to deliver just-in-time necessities from brands you love when you're not at home. So that would be across, you know, as people return to offices being an enterprise amenity and being in all leading real estate locations across the categories that I mentioned and really having a connected network. So I would say, in general, vending is usually associated with white-label machines or mom-and-pop operations with snack machines, and that is really not the goal. We want to deliver an elevated experience as a brand and as a company across all of these locations so that you recognize the SOS machine. You know the experience that you're going to get. You know the perks of interacting and engaging with us as a brand and that there's a real trust and brand awareness that comes with the network as it grows. CHAD: I totally get that you're trying to do something different in this space. But what are the numbers of those traditional vending machine suppliers like? Is there a big player in this space, or is it a lot of local companies white-labeling? SUSANNA: It's a lot of local companies. And I think probably a good opportunity for me to highlight probably the biggest component of our business has to do with the media network that we're driving. So our machines are 32-inch touch screens serving interactive digital media when not being used as a point of sale. So, in addition to obviously having contact with cashless payment for the actual transactions and retail at the machines, we are serving direct campaigns and programmatic advertising across the network. And in terms of the value and the drivers behind what we're building, experiential marketing which can be a combination of digital media and physical retail distribution and sampling. And we have abilities to deliver value to brands looking for both. And in some cases, brands are looking to execute both at the same time. Others will be just looking at SOS as a unique way to drive impressions and brand awareness in spaces, and locations, and audiences that they haven't had access to in the past in this way. CHAD: What might that look like? That might be a company like an exercise equipment company or something wanting to spread awareness but not necessarily having a product to offer in the vending machine. SUSANNA: Exactly. It could be fitness, financial services, direct-to-consumer brands where the consumer matches the audience that we're reaching, but the product doesn't belong in the machine at the distribution point. So the digital media and impressions that we can drive in addition to the product type, which is we have touch screens. So we have first-party data collection opportunities, interactive campaigns, and surveys that run on our screens that are different than, for instance, a billboard that you drive by because this is a physical, interactive network. And with Instagram and Facebook advertising and first-party data being a very hot topic right now, having opt-in first-party data collection mechanisms for brands to offer sampling in a new channel is very valuable right now to a lot of the executives and CPG brands that we're talking to. CHAD: I assume that from a business perspective, that is pretty attractive to you because the business of physical goods looks like one thing, but the business of advertising is a completely different model. And the combination of those two could be pretty attractive. SUSANNA: Exactly. It's really unique about the business that we're building and what SOS can offer brands. So in order to, for instance, stand up a sampling campaign with SOS versus potentially having a street marketing team sampling, the cost and the data that we're able to collect by sampling through our network is much more valuable than potentially hiring folks to stand around and pass out product. CHAD: Yeah, there might even be some brands that aren't necessarily comfortable doing it depending on what it is, a street campaign, or consumers that might not be comfortable taking something from somebody on the street that in the privacy of a restaurant might go over a little better. SUSANNA: Absolutely. I think there's discretion in this automated retail experience for actual interaction with the physical product. And our machines and the network are, in some cases, in restrooms. In other cases, we're actually public access, and we're in amenity spaces. So these machines and the distribution channel is available in a whole host of appropriate locations and spaces. CHAD: Cool. So what's your biggest hurdle to getting to 10,000 machines? SUSANNA: Well, right now, we have a ton of demand, and the hardware is capital intensive. I'm sure there'll be people listening to this who are scared of hardware. And I would say, in general, that is certainly an obstacle to growing a hardware business. CHAD: Putting a machine in a new location is not immediately profitable. There's an expense to creating that machine and then a timeline for it to pay itself back. SUSANNA: I would say certainly. At a high level, SOS is a B2B2C business. So it’s a B2B sales lifecycle for you're building relationships selling into institutions in commercial real estate and corporations. That is the first I would say challenge, and funding the hardware and lead times with supply chain and hardware right now. It's a very hot topic, certainly hasn't been easy. So the lead times on the hardware and then funding the hardware, so exactly if it's going to be a three or four-month potential lead time on hardware and orders. Funding that order before machines are on walls and revenue can be generated on media, and our product sales or amenity fees kick in. The timing of all of that makes, I would say, our business but hardware businesses in general potentially either less attractive to investors who are looking at SaaS companies all day long and have a very different profile in terms of the company. But we're excited to be in a position where we have a very, very hot pipeline, a lot of inbound interest. I would say we're getting inbounds from best-in-class partners that we could only dream of doing business with. And they're reaching out to us to bring in the amenity. So it's an exciting position as a founder to be in to be opening your inbox and having multiple grade A inbounds a day. That's fantastic. And moving towards a place where we're happy to report that we have signed and committed machine financing in place for this next period of growth. So that opens up a lot of doors. And in terms of our journey, initially investing our own cash into getting the prototypes ready for installation in 2020 to being in a position now where we have our first machine financing vehicle in place to actually protect our equity as we grow the network, which is what we're looking to do for the remainder of this year and next. I don't know if I answered that accurately. [chuckles] But the challenges of running and operating and funding a hardware capex–intensive business is probably the biggest. CHAD: Is there a point in time where it really is that or something close to that that's holding you back, and you end up just doing this huge financing round or something in order to completely blow out the scale? SUSANNA: I think we have, and we're very keenly aware of first-mover advantage in the sense that we have, and COVID and other global macro-economic barriers have basically made it hard for a lot of companies to grow really fast right now in certain industries. So we do have a first-mover advantage right now. And I think we want to look at the next; I would say year to year and a half to get the company to a network size where we're operating profitably and then go to our Series A and really crank on the growth and get the network humming and growing really rapidly after our Series A. CHAD: So your goal would be to be operating profitably before getting to that next phase of growth. SUSANNA: We expect to right now based on what we're seeing. So the business and our performance indicates that with this equity, this next...we're basically entering a bridge round, but with this machine financing and a bridge round, we should be in good shape to do so. CHAD: Yeah, I think there are lots of different ways of doing things. But that seems to be what investors are wanting to see today. But also, I think not only is it from the market, but I think they're a little bit more...not to dwell on specific examples that I don't know too much about, but like, for example, scaling Blue Apron and a lot of the other meal box companies they were doing that when they weren't profitable. So they had never really shown that they could actually be profitable, but there were real costs to scale as well like you have. SUSANNA: I think for many reasons, it makes sense for us, I think, to get the business to profitability. And a lot of it is selfish, you know, thinking about the company and our current equity stakeholders. But we don't want to be in a position where we dilute ourselves out of the business effectively with growth capital when we haven't proven or made the company profitable. So, anyway, that's our goal. And I think we're feeling pretty optimistic about it right now despite the fact that I know the market and the world feels like it's falling apart [chuckles] for a million different reasons. But we actually, surprisingly and shockingly, feel pretty optimistic right now. CHAD: Well, I really wish you the best with that, and I look forward to following along and seeing all the good news along the way. If folks want to find out more about SOS or get in touch with you, where are the best places for them to do that? SUSANNA: So definitely, I think you mentioned our website, that's worldofsos.com. And you can feel free to email us at hello@worldofsos.com. CHAD: Awesome. Thanks so much for stopping by and sharing your story and your wisdom with us. I really appreciate it. SUSANNA: Great. Thank you so much for having me. CHAD: You can subscribe to the show and find notes along with a complete transcript for this episode at giantrobots.fm. If you have questions or comments, email us at hosts@giantrobots.fm. And you can find me on Twitter at @cpytel. This podcast is brought to you by thoughtbot and produced and edited by Mandy Moore. Thanks so much for listening, and see you next time. ANNOUNCER: This podcast was brought to you by thoughtbot. thoughtbot is your expert design and development partner. Let's make your product and team a success.Special Guest: Susanna Twarog.Sponsored By:thoughtbot: As life moves online, bricks-and-mortar businesses are having to adapt to survive. With over 18 years of experience building reliable web products and services, thoughtbot is the technology partner you can trust. We provide the technical expertise to enable your business to adapt and thrive in a changing environment. We start by understanding what’s important to your customers to help you transition to intuitive digital services your customers will trust. We take the time to understand what makes your business great and work fast yet thoroughly to build, test, and validate ideas, helping you discover new customers. Take your business online with design‑driven digital acceleration. Find out more at: url tbot.io/acceleration or click the link in the show notes for this episode.Support Giant Robots Smashing Into Other Giant Robots

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