Giant Robots Smashing Into Other Giant Robots

Joseph Mocanu is Co-founder and Managing Director of Verge HealthTech Fund, which invests globally in seed-stage healthcare technology startups relevant to emerging Asia that focus on disease prevention and management, digital therapies, and health system efficiency. Chad talks with Joseph about the healthcare landscape in different places of the world, funding criteria for companies, and how the pandemic has changed prospects for the fund and the market in general. Verge HealthTech Fund Follow Verge HealthTech Fund on LinkedIn. Follow Joseph 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 Joseph Mocanu, Co-founder and Managing Director of Verge HealthTech Fund, which invests globally in seed-stage healthcare technology startups relevant to emerging Asia that focus on disease prevention and management, digital therapies, and health system efficiency. Joseph, thank you for joining me. JOSEPH: Thanks so much, Chad, for having me. CHAD: So you have been focused on emerging Asia healthtech for a little while both at Verge HealthTech Fund, and prior to that, how did you get involved in this space? JOSEPH: I wish I had a really cool, deliberate story that made it sound like it was a smooth transition from point A to point B. But I simply have to owe it to an opportunity to transfer to the region through my old employer which is Oliver Wyman, a global management consultancy. So I joined this consultancy in 2011 after doing my Ph.D. and MBA really to understand how to be a better investor, which, again, sounds a little bit backwards. But I had worked at a hedge fund in China just after my MBA, and I learned that they use management consulting techniques to add value to their portfolio companies. And I thought that's a great skill to learn. And it'd be great to even learn it in English and doing it in healthcare 100% of the time. So I had joined Oliver Wyman in 2011 in Toronto office back home, where I spent a lot of my life. And they asked me one day if I wanted to transfer to the Singapore office to help start healthcare over there. And when I went to Singapore, of course, it's this futuristic city, really well planned. It's got a lot of fine names and a reputation globally of being a modern cosmopolitan place to do business. Some people refer to it as Asia-lite. But the surrounding areas have a lot of issues when it comes to their health systems. I knew this from an academic perspective, having studied about the region before moving to Singapore but seeing it firsthand was a completely different experience. At the time, I was working for primarily pharmaceutical clients, helping them with market access and other commercially relevant activities. And they were faced with a fundamental challenge of trying to sell their product, which was usually placed in the premium category to markets that had difficulty affording this. And not only did it have difficulty affording this, it had difficulty in delivering it as well as in using the product appropriately, making sure it gets to the patients when it's needed at the right time, at the right dose. And so they were looking for partners. They were looking for partners on the ground that could assist with this delivery education, the technology, and the financing around it as well. Now, there was a real shortage of said partners on the ground. At the same time, there were also insurance companies that wanted to expand their business. They also realized that the policies tended to be a bit simple, and they tended to resemble one another across competitors. And also, to manage increasing claims, they had a tendency to increase the premium that they charged. This was not possible to do indefinitely. And at some point, they needed to actually manage the medical conditions, which you're probably seeing more and more of in the U.S. and in Western markets, less so of in this part of the world. And then lastly, you had conglomerates and investors who said, "Hey, we hear healthcare is going to be a pretty hot field. How do we get started? How do we invest?" And all of this basically set me on a mission of target hunting. And during the course of this, well, I met a lot of interesting companies, a lot of them really, really early in their journey and really too small for any of my clients to find a meaningful way to engage with them. And unfortunately, they couldn't get to the point where they are relevant and large enough to engage with without a lot of capital. This is where, you know, you'd have a nice investment ecosystem coming in to fill in the gaps. This, unfortunately, did not really exist at the time. And I had the hubris of thinking that I could do something about it by being an angel investor and starting to support these founders directly, which, thankfully, seemed to work to a certain degree. It worked to the point where one day, I woke up, and I realized I had 13 angel investments, 9 of which were in healthcare technology, and not a lot of money left in my bank account to do other things with. CHAD: Uh-oh. [laughs] JOSEPH: Yeah. And at the same time, I also realized that the work that those founders are doing is a whole lot more impactful than me sitting up until 3:00 o'clock in the morning every night writing PowerPoint slides or begging analysts to write the PowerPoint slides that would more or less sit and collect dust on my clients' shelves for various reasons. So I came to the realization that I need to do this full time. I didn't have, you know, $10 million in my pocket as reference to spending all my money on angel investments. So I realized that I have to use other people's money, and the way to do that is to join a fund. Now, the problem with that idea is that there weren't any funds that were doing this, like really, really early investing in healthtech companies in the region that was really geared to helping solve some of these really big access challenges. So then I realized I had to start a VC fund that did this and only this. So that's really kind of a long-winded introduction as to how I got started with this. CHAD: Yeah, I want to come back to the process of actually starting a VC fund in a bit. But I'm curious, were the companies that you were doing angel investment in and now doing seed-stage investment in do they tend to be local companies, or do they tend to be international companies that are planning to solve a problem locally? JOSEPH: It's funny you ask that. At the beginning, they were local. Well, actually, if I really were to take a step back, the very first angel investment I made was for a mentee, and she was based in Toronto. But I'd say that the first true angel investment I made, you know, it was in Singapore, first and foremost, because I was there. And then I started branching out. I started making investments in the Philippines. I started looking at companies in Taiwan and other parts. And actually, that opened my eyes to the fact that there may be other companies around the world that are trying to solve a problem that may not necessarily be in my own backyard. So I started to, you know, cheekily, I sent my wife to tech conferences around the world. And she herself is an entrepreneur from the tech industry; hardware was her specialty. And we started identifying companies from all over the world. And the second angel investment where I was the very first investor was actually from a company in South Africa with similar challenges. So the things that we saw as major health system deficiencies or maybe shortages in infrastructure and human capital were very much true not just in Southeast Asia but in a lot of parts of the world. And we noticed that while there were different reasons for why they ended up in that position, the outcome was similar. CHAD: I'm not sure that everyone listening has a good sense of what the healthcare landscape actually looks like in these different places of the world. So let's take insurance, for example; what is the insurance landscape, generally speaking, in Southeast Asian countries? JOSEPH: So, in Southeast Asia, we do have insurers. I mean, private insurance is certainly there. But it's just not -- CHAD: Do most companies have public insurance, too, like universal healthcare? JOSEPH: That depends on which country you're in. Now, the one interesting thing about our entire region is that they've all committed to universal healthcare coverage. I would say that the implementation thereof has been heterogeneous; let's put it that way. Out of Southeast Asian countries that are not Singapore, I'd say that Thailand probably has the strongest public healthcare system. And in fact, they even do health technology assessments, which is really looking at the true cost-effectiveness of a new intervention versus what's currently done in practice to make decisions as to whether they're going to pay for it. And they cover a pretty high percentage of their population with this. And then there are other places where the financing mechanisms are in place, but you don't necessarily have the doctors or the hospitals where they need to be to address the needs of the population. Still, we are dealing with places that are not fully urbanized. And in fact, a good deal of the population is still working on the pharm, basically. One of the other complexities of our region is that just between the Philippines and Indonesia, which together has a combined population of 380 million at least, maybe it's 390 now, you've got 25,000 islands, and not all of those islands tend to hold major tier-one cities, even though they can hold a lot of people. And if there is one thing about healthcare that seems to be a universal truth is that highly skilled workers like to live in the rich cities. CHAD: And so what I'm hearing is that on an individual island, if there's not a major city there, the access to the actual healthcare might be really limited. JOSEPH: That is exactly it. CHAD: In these economies in these countries, it's typical to have private insurance layered on top. But the pharmas probably aren't doing that, right? JOSEPH: Oh, no, no, unfortunately not. There are some pilots of trying to do co-ops or collective insurance or micro-insurance policies. But again, when you look at the amount of premium that they could pay in, the kind of coverage they get is pretty basic. CHAD: So, how does that landscape influence the solutions that startups are creating? JOSEPH: Well, first and foremost, you've got to try to get some sort of mechanism by which you can seek care without having to travel too much. And I think that concept is extremely familiar to all of us thanks to the global pandemic that I hope we're coming out of right now, although there's always a new strain surprising us. The idea of basic telemedicine is one that can have a great deal of impact in these populations. But even before that, just understanding the importance of healthcare, like, what the concept of healthcare is, what the concept of the modern medical system is, is something that a fair number of people never really had awareness of. And I'll call out an example country, and I try not to call out too many examples. But Indonesia did a really good job of educating people about the concept of healthcare when they promoted their universal healthcare coverage. Even if they didn't have the ability to deliver it as well as they wanted to or as widespread as they wanted to, at least they got people paying attention to this concept called health. So awareness is really the first step. The second challenge is all right, so you know health exists. When do you know when you need it? Where are you going to find a doctor? How do you know if a doctor is even good? And how do you know that the products that you're going to get are appropriate? So there are so many challenges that you have to face when you are in a lack of access situation. CHAD: I assume you're getting pitched on a lot of ideas coming to your fund, a lot of startups. Correct me if that's wrong. [laughs] JOSEPH: No, no, that's absolutely true. So one of the blessings and curses of being one of the very few super early-stage healthtech venture funds out there is that there aren't many of us out there. And when we started...let's just put it this way, if I could find a fund that was doing what I wanted to do, I would have sent my CV in, and I couldn't. And starting a fund was basically the last thing I wanted to do, having never worked at a VC before or ever raised money in my life before. So I still think that we are the only truly global impact-oriented seed - I hate the term pre-seed, but I'll use it because of the audience's familiarity with it- investment fund out there right now for healthtech. So by virtue of that, we do see a lot of companies. CHAD: So what are some of the criteria? JOSEPH: So I'd say some of the criteria that we look for is number one, are you solving a real problem? And we define a real problem by the breadth of the problem, like, how many people are suffering from it or how systemic is this problem if it's an infrastructural one? And depth being how severe is this problem: is it life or death, or is it a minor inconvenience? So first and foremost, it's got to be solving a real problem. Second, it's really around the team. You need a lot of clinical, technical, and commercial experience in order to pull off a healthtech startup successfully. And even before that, we want to understand why are you doing this? Because this is not easy. I'd say on a scale of 1 to 10, doing a startup is like an eight, and then doing a healthtech startup is like an 11. It's slow; it's technical, it's regulated, it's super risky. And health systems are very pathway-dependent in the intent to not have many things in common with one another. So it is really, really hard. So we want to know the motivation. Are you going to stick through the thick and thin, or are you doing this healthtech startup because you think healthtech is cool or hot this particular period in the market cycle? So that's another criterion. Another criterion is, well, what's your edge? I mean, okay, you can have a great team, and I think that is definitely a prerequisite. You can solve a problem. But do you have something that could make sure that you are going to be competitive and remain competitive? CHAD: Given the barriers to market entry that you just outlined, do most of the companies that you're investing in have any sort of traction already in the market, or where are they in the product development or business development cycle? JOSEPH: I'm going to give the ultimate cop-out answer of it depends. CHAD: [laughs] Yeah. JOSEPH: But I will qualify that by saying it depends on whether it's hardware or software, and it depends whether it's regulated or non-regulated. So if you are a software company that's unregulated so, what does this mean? It could be like a marketplace. It could be health education. It could be some telemedicine in a loosely regulated market. We'd really like to see user traction. We'd really like to see revenue even. However, if you're a device company and you need to get FDA before you can earn a single dollar, we're okay with it being a science experiment or a prototype on the table as long as the science part of it has been de-risked. So if we know that the fundamental scientific principles are sound, then we're willing to take the productization and regulatory risk because we've been through this journey ourselves. CHAD: And also, you said a team is really important, so if it's a team that has never gone through that before, that's less attractive than a team that has done it before, I assume. JOSEPH: Yeah, absolutely. However, one of the challenges is that outside of the U.S., certain European markets in Israel, it's really difficult to find a team that's gone through the entire medical device development process before. So you are going to rely heavily on your professional service providers, consultants, advisors, other investors who've done this before. And as long as you have at least a path to getting to a point where you can unlock and utilize that expertise, that's okay. But if you don't, then that's a really, really big risk. Mid-Roll Ad I wanted to tell you all about something I've been working on quietly for the past year or so, and that's AgencyU. AgencyU is a membership-based program where I work one-on-one with a small group of agency founders and leaders toward their business goals. We do one-on-one coaching sessions and also monthly group meetings. We start with goal setting, advice, and problem-solving based on my experiences over the last 18 years of running thoughtbot. As we progress as a group, we all get to know each other more. And many of the AgencyU members are now working on client projects together and even referring work to each other. Whether you're struggling to grow an agency, taking it to the next level and having growing pains, or a solo founder who just needs someone to talk to, in my 18 years of leading and growing thoughtbot, I've seen and learned from a lot of different situations, and I'd be happy to work with you. Learn more and sign up today at thoughtbot.com/agencyu. That's A-G-E-N-C-Y, the letter U. CHAD: Earlier, you said FDA. FDA is a United States thing. Do most countries in Southeast Asia have a local regulatory agency like the FDA that things need to be approved through? JOSEPH: Yep, every single one. The question is, what's the process to go through that? Generally speaking, the FDA, as well as the European equivalent, which is the CE Mark, are used as predicates in order to kind of shortcut the process, make it go a little bit faster. Because then you don't have to create a bunch of new work or get the local regulator to really try to do things that they're unfamiliar with. CHAD: You said it's fairly rare for teams to have concrete experience doing that in the local market. Does that mean that most of these markets have been served by, I don't know, large companies previously? JOSEPH: Yeah, and still are. A fair number of emerging markets don't even have the manufacturing capability to even do local production, so they require a lot of importation. I'd say that this is a different case when it comes to generic pharmaceuticals and maybe vaccines and some consumables. But complex devices and biologics are generally manufactured in more developed markets or larger economies. CHAD: Yeah. Well, you mentioned the pandemic, and I'm curious how the pandemic has changed either your prospects for the fund but also the market in general. JOSEPH: I would say, again, it's both a blessing and a curse. So during the start of the pandemic, there was a great deal of societal and economic uncertainty around where are we going to be as a species in six months? And I remember early 2020; it was kind of these Hollywood movies that would paint this kind of semi-apocalyptic picture of where we're going to end up. And as a consequence, people really puckered up and stopped investing in things. I would say that the other side of it is now much of the world understands what it's like to not have access to quality healthcare or even access to healthcare. You see people not going to the hospital for things that they ought to and then suffering the consequences at home, like, let's say, not going for that heart checkup, and then you having a heart attack at home and passing when you otherwise wouldn't have. Or even cancer patients having to delay their therapy because the hospital is just too full. So this concept of telemedicine which has always been resisted by both the payers and providers for being infeasible, or inaccurate, or impossible to fund properly, suddenly had to be done. And the concept of telemedicine is fairly old. I mean, how else would you treat your astronauts in space in the '60s if they got sick? So this is something that NASA thought of and invented and implemented, you know, decades and decades ago. And finally, this came forward. And I was pleasantly surprised to see...and again, I'll quote the U.S. here where The Center for Medicare & Medicaid Services or CMS actually reimbursed a bunch of remote procedure codes, which is pretty amazing. And I think that was opening Pandora's Box. There's no going back from that. So I think telemedicine is absolutely here to stay. And the real challenge now is really how to make it more user-friendly, how to improve it, how to improve the decisions that come from it. I really don't think it's going back. And as a consequence of this, it's really benefited a lot of our startups that were trying to build this remote-connected future anyway. CHAD: Has there also been an influx of those kinds of startups? JOSEPH: Absolutely. I would say that there has been a veritable Cambrian explosion of startups where everyone and their uncle is starting a healthtech startup as well as a healthtech fund. I see a lot of new funds coming up promising to invest in this space. So I think it's good in that there's going to be a lot of really new ideas, and hopefully, it's going to improve the standard of care for everyone around the world. But at the same time, it is creating a lot of noise, and it's becoming increasingly difficult to filter through that. CHAD: Do the solutions tend to be local? I guess the nature of my question was, you know, like messaging apps. [laughs] Different countries have different popular messaging apps. What do you see as the penetration of different telemedicine solutions in the different countries? Do you think it's going to be, oh, you know, this is popular in this country? Or do you think it's possible for one company to come in and really have a significant impact in the market across multiple markets? JOSEPH: Yeah, I think it's eventually going to be the latter. So at the start, you do see that you have your national champions. And like instant messaging apps, it's kind of like a 90-10 rule where the number 1 player takes 90% of the market, number 2 takes most of what's left, and then number 3 player caters to some niche or another. And I see two competing forces here; one is, yes, there may be a big player like Babylon or Crew who comes in and rolls up everything backed by heaps of capital. But the other thing could also be that all the health systems start saying, "You know what? Why are we working with an external company? Why don't we just develop all these capabilities ourselves and then keep the patient captive?" And you are starting to see middleware providers who are basically providing that telemedicine layer, white-labeling it, or giving API access to the providers themselves, the legacy providers themselves, and then allowing them to do that. And I actually saw this statistic...I don't know how accurate it was, but I saw a chart in the U.S. that white-labeled or internal telemedicine consults exceeded the number of Teladoc consultations, which is the largest platform in the U.S., at some point last year. CHAD: I'm wondering, do you know if Teladoc uses Twilio? JOSEPH: I really should know the answer to that question, but unfortunately, I do not. CHAD: Because my sense is the real winner in this game might be companies like Twilio because I think everyone is using them. [laughs] JOSEPH: That makes a ton of sense. So when we do look at some investments, we actually want to invest in middleware because why duke it out to be the platform when you're the utility provider? CHAD: So let's turn our attention to the actual creation of the fund. And I know you just opened your second fund last month, right? JOSEPH: Actually, this month. I mean, last month was the paperwork, but it takes time for stuff to get approved. CHAD: Yeah, fair enough. So you already said actually starting a fund was, I think you said, the last thing on earth that you wanted to do. Why was that the last thing you wanted to do? JOSEPH: Frankly, it was a whole lot more uncertainty than I was prepared to handle at the time. And I was either blessed or cursed with this momentary clarity of purpose where I knew with all my being that this is what I wanted to do with myself for, if not the rest of my life, a very long time. And the only alternative, or rather the only choice to pursue this at the time, was really starting a fund. So that's what I had to do, right? CHAD: And how large was the first fund? JOSEPH: It was pretty small; it was $7.6 million, which in local currency equates to a nice number of just above 10 million sings. CHAD: And where did you...I'm going to ask where that ended up coming from. But in terms of the mechanics of actually starting a fund, what did that look like? JOSEPH: Well, it depends on each market. But typically, what happens is you need to first have permission from the regulator in order to actually start and run a fund. So in Singapore, you need to apply for a venture capital fund management license from the Monetary Authority of Singapore. That's what had to be done first, and we got that approved in a pretty good time, actually. I think we might have captured a lull period because now, with all the funds coming out, I've heard the queue is months long in some cases. And then came the business of incorporating the fund itself and then starting to draft all the legal paperwork, the conditions, the private memorandum or prospectus, depending on which geography and how regulated you are, that you show around to investors once they've expressed interest in learning substantially more details about your fund beyond what a simple PowerPoint deck or a casual coffee conversation can yield. And then you start collecting commitments, and then you start collecting the money. And at some point, you have enough money to say, all right, we'll do a close or first close, and that then gives you permission to start deploying that money into investments. And some funds they'll only do one close, some funds will do a first close, and then a final close when they get the rest of the money in or some money committed and then calling the rest of it to come in. Or some will do multiple closes just so that they have the ability to keep deploying continuously while they're doing this fundraising process. And in our case, we were doing rolling closes. So we would close every few months, and we'd continue to deploy. And by the time we finished fundraising, we actually already had nine companies out of the 15 that we have in our portfolio done. So it really depends on all sorts of different factors, which we probably don't have that much time to get into. And I risk perhaps putting my foot in my mouth and misspeaking if I give too many examples. CHAD: [laughs] When it comes to starting a fund, how cookie-cutter is it? Or do you find yourself having to create everything from scratch, all the legal documents, whatever platform you might be...or access you might be giving to the people who are contributing to the fund? JOSEPH: I'd say, again, it depends where you are. I think in the U.S. and especially with the advent of great service providers platforms like AngelList and Assure, it is super cookie-cutter. In our part of the world, I still think it's somewhat cookie-cutter, but we got a little too cute. CHAD: [chuckles] JOSEPH: We thought, okay, it's our first time doing a fund. I've been an LP in other funds. What did I wish I had as an LP? And as a consequence, we introduced some hurdle rates of tiered carry, and even zero carry if we don't hit a certain return. And all that really did was just create more questions from the investors. So we should have probably done it as cookie-cutter as possible in hindsight. CHAD: So I often hear from founders who talk about how it's important to have a VC fund behind you that you agree with, and want to work with, and are excited about, and that can be value additive. Do you need, as someone raising a fund, do you need to consider things like that or other things when it comes to the people you're taking money from the fund? JOSEPH: Absolutely. Maybe knock on wood here, but our relative inexperience when starting a fund probably selected out all the folks who might not have gotten along with us anyway. And the fact that we're pretty straightforward and direct with what we want to do in our objectives probably helped with that selection process as well on the positive side. But I absolutely, absolutely can recommend having that alignment of values and mission with those who are on the journey with you for a good decade. It's like getting married, right? CHAD: Yeah. Well, so when you're planning a fund and thinking about time horizons, is a decade what you're thinking about? JOSEPH: Yeah, all things considered. So our fund lifetime was eight years from final close. But still, it takes time to raise the fund and plan the fund, and you have people that are on board even before the fund begins. So it is a decade-long relationship, at least. And then some of the larger funds because they want to have a longer investment period, will push that out even further where they're going to be a 10-year fund from final close. And if you have enough of your portfolio that hasn't exited yet but still has some value to be uncovered, you may ask your investors to extend the fund life even further. So this is a supremely long relationship that you have. And aside from evergreen funds that don't have a fund lifetime, I think this is about as long as it gets, although I have seen some people float the idea of a 20-year fund or a 50-year fund, but that's really not widely practiced. I think five years is the fastest I've seen, and ten seems to be the average. CHAD: Where did that first fund come from? How did you drum up the interest and decide who would be a part of it? JOSEPH: It's really the folks who have known me the longest or worked with me. So you know how they say when you're raising money for a startup, you get it from the three F's, Friends, Family, and Fools? For funds and for first-time fund managers, I think it's a pretty analogous group of people, although I don't think we have any fools. CHAD: [laughs] JOSEPH: And, unfortunately, don't have family either. So it's really all friends, old co-workers, old clients, and then the people that they introduced us to. There were some serendipitous moments where people liked what I said at a conference, or we asked a tough question. And people asked, "Well, how can you ask such a tough question?" Then they got to know us and then decide to invest from there. But majority of it was just introductions, warm introductions. We never did any cold emails. CHAD: Have there been any exits in the first fund? JOSEPH: Not just yet. We do come in as either the first or second investor in these companies. So there is quite a long journey that we expect before we, you know, see some exits. There may be some this year. But if I look back at my angel investments, there was only real serious talk of an exit at the six-year mark for one of the companies that's doing really well. And even that exit turned out to be just another, you know, the investor changed their mind, and instead of buying the company, they decided to just invest more money into it. So this is a long journey. CHAD: Yeah, definitely. Did that make putting together the second fund any harder, or is that what everyone expects? JOSEPH: I am cautiously optimistic because we're still so early in our journey that the only folks we've really spoken with are the ones who invested in our first fund or passed on our first fund because they don't back first-time fund managers. They come to expect that your second fund is built on the momentum of the first fund. And it's really your third fund that's built on the exit and actual realized track record of your first fund. CHAD: That makes sense. What do you think is next for Verge HealthTech? JOSEPH: Well, first things first, we got to get started with the second fund and see if we can build something to scale. I mean, the first fund was an experiment. It was a small fund, you know. Could we build the world's seed-stage global impact healthtech fund on basically a shoestring? And the second fund is now let's take everything that we wish we had for the first fund and scale it up so bigger initial ticket sizes because we want to own more, the ability to follow on properly, the ability to do more deals, which requires a much bigger team which we now have. As well as to go back and support the winners of our first fund as well as some of the companies that maybe we made a mistake on and passed but still have a strong enough relationship to revisit and get them on the next round or the round after that, or just new companies that the market has moved. You know, the area that we might have been really interested in at the seed stage is now a pre-A stage or an A stage. So that's really what we want to do with the second one. And it would be amazing to see where this goes. I'm thrilled that we actually have, well, I think, one of the best healthtech investment teams in the world; maybe I'm slightly biased with this. CHAD: [laughs] JOSEPH: And I'm excited to see what we can do together. CHAD: That's great. Well, I wish you the best. And I really appreciate you for stopping by and sharing with us. If folks want to follow along with you or get in touch with you, where are the best places for them to do that? JOSEPH: Probably LinkedIn is the best way to do it. Also, I have a blog on Medium, which I'm sure can be linked in the show notes. I've been really bad...I've been traveling intensely in the past half-year. But I promise my next blog post will be interesting. CHAD: [laughs] JOSEPH: Because I just got back from Rwanda and Saudi Arabia, which are two very, very different countries, however, with a great emphasis on improving healthcare, especially on the digital side. CHAD: Well, that's exciting. So folks definitely can find the links for that in the notes, which you can find the notes; you can subscribe to the show and a full transcript of 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 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: Joseph Mocanu.Sponsored By:AgencyU: AgencyU is a membership-based program where Chad Pytel works one on one with a small group of Agency founders and leaders toward their business goals. You'll do one-on-one coaching sessions and also monthly group meetings. You'll start with goal setting, advice, and problem solving based on Chad's experiences over the last 18 years of running thoughtbot. As you progress as a group, you all get to know each other more and many of the AgencyU members are now working on client projects together and referring work to each other. Whether you’re struggling to grow your agency, taking it to the next level and having growing pains, or a solo founder who just needs someone to talk to, in his 18 years of leading and growing thoughtbot, Chad has seen and learned from a lot of different situations, and would be happy to work with you too. Learn more and sign up at thoughtbot.com/agencyuSupport Giant Robots Smashing Into Other Giant Robots

Carlos F. Gaitan Ospina is the Founder and CEO of Benchmark Labs, which provides IoT-based weather forecasting solutions for the agriculture, energy, and insurance sectors worldwide using proprietary machine-learning software. Chad talks with Carlos about creating the company, the hardware they're producing and what it is doing, and where the machine learning comes into play. Benchmark Labs Follow Benchmark Labs on Twitter, Instagram, or LinkedIn. Follow Carlos 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 Carlos Gaitan, the Founder and CEO of Benchmark Labs, which provides IoT-based weather forecasting solutions for the agriculture, energy, and insurance sectors worldwide using proprietary machine-learning software. Carlos, thank you very much for joining me. CARLOS: Thank you for the invitation, Chad. It's a pleasure to join you here. CHAD: You work in a variety of different industries with weather forecasting solutions using machine learning. I'm really curious, at a high level, how did you get to where you created Benchmark Labs today? CARLOS: Oh, thank you, Chad. That's a great question. I think that in many ways, it's a combination of life experiences and lots of user feedback. As a background, my mum worked for 28 years in the National Federation of Coffee Growers in my native Columbia. And we experience basically the effects of weather, La Niña, El Niño, local conditions, pests on the coffee growers. I remember growing up looking at the price in The New York Stock Exchange if the pound of coffee was going to be more than $1 or not [laughs] and so on. So, you know, we had a very severe drought in Colombia, and Colombia was heavily dependent in hydropower at that time. And I remember that we even had to study with candlelight and move to a spring savings time for the first time in the country. The country is in the equator, so you can imagine moving the clock was unheard of. So since then, I was always passionate about hydrology, the water cycle, why this happened, how weather can affect the economy at that level that people have to change their working habits. I did civil engineering hydrology, then studied these new applications of machine learning technologies, hydroinformatics, did my studies there in Columbia, my bachelor's, my master's. Then I was fortunate to go to The University of British Columbia to study my Ph.D. in Atmospheric Sciences. And then, after I finished, I moved to The United States to work at the Geophysical Fluid Dynamics Laboratory in Princeton with close collaboration with the NOAA, the USGS. And that gave that perspective also of understanding how weather climate models were done at the Department of Commerce level but also to understand the users on how they interact with weather data or climate data and what were the needs that they were expecting from the National Weather Service and the Department of Commerce and NOAA that not necessarily were fulfilled with the current information. So then I moved to the private sector, joined a hardware company, and met my co-founder of Benchmark Labs there then moved to California to work on consultancy of climate change assessments. But since the time at the Department of Commerce, it became very clear that what farmers and what users wanted was weather information that was more actionable, that was tailored to their specific location, especially for specialty crops. Think about wineries, or coffee growers, orchids, stone fruits; they depend heavily on weather, and the information from the National Weather Services was just too coarse for them. And sometimes, there are huge errors in terms of temperatures that were recorded from their farm versus what the National Weather Service was doing. And that's why we decided to create Benchmark Labs to basically solve that problem, correct those errors, and give the information that the users needed when they needed it. CHAD: Did you ever just consider becoming a TV weather person? CARLOS: [laughs] CHAD: It seems it may be easier. CARLOS: [laughs] Nah. That's a very good point. CHAD: [laughs] CARLOS: And I have great respect with my colleagues that went into forecast meteorology and TV persons. I remember some of my lab mates practicing in front of a green screen when we were doing the Ph.D. CHAD: [laughs] CARLOS: That was an interesting scenario. [laughs] However, growing up in Colombia, the weather forecasts were not very, let's say, accurate to a certain extent, and we did the opposite than the weatherman suggested. CHAD: [laughs] CARLOS: So I guess that steered me towards following that path. [laughs] CHAD: So it totally resonates with me this idea that, you know, especially for...I've been on the West Coast before where you go over a hill and the weather it's like 20 degrees hotter and sunny and on one side of the hill, it was cold and foggy. We went on a great company trip many years ago to visit some Napa vineyards, and I was surprised by that. So I can imagine how that local information just doesn't match the global information that farmers might be getting. So what is the hardware that you're actually producing, and what is it doing? What does it look like? CARLOS: [laughs] Great question. So I will go back to your story about Napa and Sonoma, and the reality is that's exactly a problem that growers face; national weather agencies give averages over a big region. They divide the world in boxes, and everybody inside of a box receives exactly the same forecast. And if you are especially in the coast or you're in specialty agriculture, you understand that weather changes with elevation. Depending on which side of the mountain you are, you could receive all the rain or no rain at all. If you are near the shores, you could also get more wind, different types of clouds, all of those situations affect the conditions at the farm. And going back to the situation of Napa and Sonoma, Burgundy or the Mediterranean Basin, they all believe in the value of what they call the terroir, that is what makes also unique their products. They're indigenous, and they understand at a very fundamental point how the local conditions from the soil, from the vegetation, makes their farm unique. So what we do is we use IoT sensors, basically hardware sensors that monitor environmental variables. We refer to them in the atmospheric science world as weather stations. I had a talk with some users when I said the term weather station. They imagined a big construction or a building with a TV station on a radar or something. But in this case, there are IoT devices that are totally portable, the size of a Wi-Fi modem in some cases. And we use those sensors as ground truth that will basically tell us the local conditions. We use the information from the National Weather Services and the information from those IoT sensors and correct the forecast as they come. CHAD: And is that where the machine learning comes in because it's actually correcting the forecast being received? CARLOS: Exactly, our machine learning aspect of it is fully operational, non-linear correction of weather data as it comes in from the National Weather Services to correct it to the conditions that are experienced at the farm level, at the sensor level. And a farm could be also an agricultural farm, or it could be a solar farm, a wind farm. Or, as we talk with some users in ski resorts that actually they consider as snow farmers, it's also affected by microclimates. So at the end, it is about providing value to all these areas affected by microclimates that are not being resolved correctly by the current generation of forecast from the National Weather Services. CHAD: Are most customers able to get the coverage that they need with one weather station, or are they deploying multiple ones? CARLOS: So that's a great question, and the answer probably is it depends. Our customers, original customers, have thousands of stations over multiple fields under management. For specialty crops, it's common to have multiple IoT sensors in one acre. For other scenarios, they might have only one station or one sensor every 10 acres or so on, so it depends on the condition. It depends on how technologically inclined are the users if they already invested in these IoT sensors or if they are looking into buying IoT sensors and then scaling up the number of sensors in their farms. CHAD: How do all the sensors report their data back? CARLOS: That is a very interesting question because they are, let's say, tens of hardware manufacturers globally. We also created kind of a Rosetta Stone that puts all the sensors to communicate to our back-end systems. We integrate different languages of each hardware manufacturer. It has its own ways of naming the variables. So we do the translation in our end. We receive the data via an API. These IoT devices are Internet of Things in many ways because they transmit data via Wi-Fi, satellite internet, you know, cellular. CHAD: Cell, yeah. So different manufacturers might have different ways of actual communication, not just the protocol, but one box might be using Wi-Fi, and another one might be using a satellite. CARLOS: Exactly. And sometimes, many manufacturers give you the options of connecting even using Wi-Fi or Bluetooth for IoT sensors that are near, let's say, a farm that has internet connectivity. If they are on the field farther away, they might need to get access to a data plan from a cellular carrier, 3G usually or 5G. In some areas, there is limited coverage so far. And if it's a very remote area, there are options to get satellite coverage. CHAD: Now, I'm asking somewhat naive questions based on my understanding. And so if I start butting up against proprietary information, just tell me, "No." That's totally fine. CARLOS: [laughs] CHAD: So when we're thinking about the amount of data coming in from all of these different weather stations that your customers have, is it a lot of data? Is it a lot of data points? CARLOS: [laughs] It's a great question. So in many ways, yeah, each weather station communicates at different frequency. Sometimes what we are offering now is hourly transmission rates, but we also have access to government stations that sometimes only refresh once per day. So yes, it's a lot of data coming in, most of the data from the weather stations. Fortunately, it can be transmitted as a txt file, or it's only for one location. So the files are not big, but they are many per day. And so, we have probably done millions of operations already to assimilate data and provide the forecast. While on the other hand, The National Weather Service provides one forecast for the globe, let's say every...some models are every hour, other models are every six hours, and so on. So that is more, let's say, a bigger data set because it's a global data set that then you have to query to extract the information locally that is relevant for your servers, for your users. CHAD: Yeah. And I think it's neat how this is all happening centrally from all the data coming in, right? CARLOS: Yeah, exactly. We get data coming in for each specific location. We do the corrections, and we provide the forecasts. So there are lots of operations involved in the data handling activities, pre-processing, post-processing, but it's very rewarding at the end to provide the forecasts that are tailored to specific locations. And we had seen users that they basically told us, "Okay, we are using provider B or C; can you beat them? Show us that you can beat them, and the contract will be yours." So we showed them, and then they are like, "Yeah, that's fantastic. This is exactly what we have been looking for, information that is more accurate for our farms," so yeah. CHAD: Now, does your system correct itself based on what actually happened in an area after the modified forecast goes out? CARLOS: That's not a very relevant question because some of the models are static. I used my experience when I did an internship in Environment Canada, and I found that they were adjusting their models, let's say four times per, at least the operational models they had, four times per year. They kind of tweaked them to the local, let's say, spring, summer, fall, winter conditions. In our case, we make our models to correct themselves as more data comes in so they can adjust to weather events and have short-term memory, let's say, of what they will wait heavily on and forget the distant past. CHAD: I mean, it seems obvious, not necessarily easy but obvious, that you've made a prediction about what the weather is going to be, and you have all the data coming in from the stations to confirm whether your prediction was correct or not. So I'm sure it's not easy to adjust the model based on that. CARLOS: [laughs] CHAD: That seems obvious to me. CARLOS: Yeah, it's just a different approach in many ways. As you said, it's obvious because the users usually care about a specific location, at least our users. We understand that for national security or aviation, they require a model that provides coverage over a wider area, like sometimes continents. But for agricultural users, they care about their farms, and the farms will not move in space. So -- CHAD: Well, technically, they are moving in space; it's just the weather goes along with it. CARLOS: [laughs] So yeah, I guess that it's just a different way of tackling the problem. We focus on doing these forecasts to each specific location instead of having a forecast done for the whole globe that could be used in many different locations or for many different industries, but it's not necessarily tailored to any industry-specific or location-specific. CHAD: Yeah, that's great. Mid-Roll Ad I wanted to tell you all about something I've been working on quietly for the past year or so, and that's AgencyU. AgencyU is a membership-based program where I work one-on-one with a small group of agency founders and leaders toward their business goals. We do one-on-one coaching sessions and also monthly group meetings. We start with goal setting, advice, and problem-solving based on my experiences over the last 18 years of running thoughtbot. As we progress as a group, we all get to know each other more. And many of the AgencyU members are now working on client projects together and even referring work to each other. Whether you're struggling to grow an agency, taking it to the next level and having growing pains, or a solo founder who just needs someone to talk to, in my 18 years of leading and growing thoughtbot, I've seen and learned from a lot of different situations, and I'd be happy to work with you. Learn more and sign up today at thoughtbot.com/agencyu. That's A-G-E-N-C-Y, the letter U. CHAD: So have you managed to bring it full circle now, and are there coffee growers in Colombia that are using your solution? CARLOS: [laughs] I hope so. We have talked with coffee growers for sure. They care about temperature gradients. And I really think that going to Colombia as we scale will make the whole platform easier to use. I think that we can go full circle soon, sooner rather than later, into Colombia. We got support from the World Trade Center here in San Diego to do commercialization assistance to translate our solution from English to other languages. So we will be tackling Spanish, French, Italian in the very near future because it's important to offer the forecast also in a way that they could interact natively without having to have the limitation of using an English language platform into their day-to-day life. But yeah, full circle probably we’ll be going full circle soon. CHAD: So language is one barrier to scaling and to adoption. Are there other ones that are typical barriers of adoption for your customers? CARLOS: We are very competitive here in the North American market, the European markets. Our prices are in dollars. But that by itself is a problem for emerging economies; for example, you know, $100 here is not the same thing as $100 in other countries. We have to take into consideration exchange rates or the amount of disposable income that they will have for their operations. CHAD: And I'm not super educated about it, but I know that there are certain industries in agriculture where the growers are particularly pressed for margins, and coffee is one of them, right? CARLOS: Exactly. So, fortunately, in many ways, for the bigger crops, specialty crops they are traded, and the prices are linked to U.S. dollars so that can be translated, our services can be absorbed, let's say. For the smaller crops that are not traded or that just stay locally, the price is not linked to the U.S. exchange; then it's definitely a bigger barrier for them. But hopefully, we will get to a point if we have a sufficiently large adoption in North America and the developed world; these technologies could be subsidized or made more accessible in other economies. CHAD: What are some of the concerns that growers have? Take the specialty crops, for example, is it a matter of are they doing this because they want to make the best product possible, or is it because they want to prevent crop loss? CARLOS: It is both, actually. The uses of weather information in agriculture varies, as you said. There are many different applications; one is to get more actionable alerts. For example, we saw what happened in Burgundy last year where a substantial part of their region lost their crops, close to 80% maybe. I don't remember the number, but it was definitely substantial. And so, having more accurate forecasts and alerts gives them an opportunity to adapt better, to get cover, protect their fields to a certain extent. Weather information affects also pests and disease models, so application of fertilizer with spraying is also affected by local conditions. In many ways, for the operations that are very, let's say, sophisticated, some of them even link the sugar content on the fruit to weather conditions. And understanding how these weather conditions affect sugars could tell them when is the optimal time for them to, let's say, harvest? And the difference in the sugar content might determine the difference between higher margins or so-so margins [laughs] for their yield. So yeah, it's a combination of quality of the product. It's a combination of preventing loss of the product. And it's also labor scheduling and activities, for example, that are regulated by OSHA that prevent farm operations to maybe don't, let's say if they are like temperatures above 95 Fahrenheit or 100 Fahrenheit. So having that extra information in alerts will also help them with farm management operations. CHAD: So can you give me a sense of the stage you're at or the scale you're at now with the business and where you see your next stages of growth being? CARLOS: Thank you. Yeah, great. So we are fortunate to have scaled this solution beyond California. We are now a global platform. We are providing forecast to Spain. Recently, we got contacted by some growers in South America, so we are testing for avocado growers in Brazil and Colombia, for example. So I'm not serving yet coffee growers in Colombia, but the avocado growers in Colombia, it seems that they got a hold on what we do, [laughs] so it is getting there. And now we have the resources, the ability to go global and offer this anywhere in the world that is connected with an IoT device. So it's fully operational. And we are now in the midst of fundraising to scale the team, provide the customer success operations, and to support growers in different geographies, to support growers of different crops. And I think that if we are going to be successful globally, it starts with customer support, customer success, and understanding your users' needs, so they don't feel that, again, they will receive a one size fits all vanilla-like solution and that we really care about why specialty crops are special. CHAD: So when you were just starting out, who was the first team member that you added to the team? CARLOS: Oh, it was great. So in many ways, I thank the Economic Development Council of San Diego for funding a set of interns in data science, weather analytics, and business development. So our first hires, in many ways, were supported thanks to the Economic Development Council. We were the two founders, and then we got support in business development to understand which, for example, specialty crops really care about weather. Then some data science interns, data scientists that helped us with grants that we did for the National Science Foundation, and NASA that we got...we supported one of the grants. During COVID times, we participated in a very interesting opportunity to know the effect of COVID on forest fires, for example, and that was in collaboration with NASA. So first hires were interns, entry-level positions in data science, in back-end engineering, and then front-end business development. Now we are very excited to be expanding the team. We recently hired a Chief Product Officer with ten years of experience in Bloomberg, experience with visualizations, and talking to customers and users. So I think that for us, it's very important to, again, I reiterate, to have the ability to provide a great user experience, to provide meaningful information for specialty crops so they feel that they are special. CHAD: You mentioned that you got some business development help using those grants. But right now, is the actual sales work being done by the founding team? CARLOS: Yeah, at the beginning, as a founding team in a small startup, you have to wear multiple hats. So yeah, it's very common, and in many ways, I appreciate that we didn't rush to hire in terms of sales too early because it's important that the founding team understands the user perspectives, their needs, what they call the pain points to understand how to steer product into that direction. And then sales will follow once you have a solution that is highly needed, that users really like and that it can be shown that it can be scaled globally. So we are working on scaling, on accuracy of the forecasts. And yeah, next hires will be to get somebody that will help us in sales and can bring us to the next level. CHAD: What does the sales cycle look like for the kinds of customers you have now? Do they tend to be smaller, or do they tend to be larger enterprise customers? CARLOS: So, in the beginning, we worked with smaller enterprises to understand how to use the data, for example, connect the data from one or five sensors transmitted online. So dealing with smaller enterprises, farmers was optimal at that point as a company. And now, we are focusing more on businesses, farm managers, or management companies that have hundreds, sometimes thousands of sensors on their management. So we deal with more like business to business instead of going direct to grower at this stage because, as we were mentioning earlier, we're a small company, and going direct to grower requires lots of support and dedication in terms of dedicated agents and sales teams. CHAD: Do those companies tend to have long sales cycles? CARLOS: The bigger ones, yes. If you are talking about publicly traded companies, they will want to start with pilots then validate them. And you can move at different timescales with them that are not necessarily aligned with the startups at this stage. But there are some farm managers that have a way higher frequency of decision making. So their sale cycle could be one month, two months instead of having to build a relationship for years. CHAD: You mentioned the pilots, and you mentioned earlier telling the story about a customer that said, you know, "If you can provide us with better data," but I think companies as they scale or as they talk to potential customers, you also don't want to take on too much work that you should be charging for to be able to do that pilot. How do you strike that balance? CARLOS: It's a fascinating question. And I think that from a founding member perspective, let's say, it goes as a function of the stage of the company and what other, not necessarily monetary, benefits you can get from these pilots. We have been even recommended to not have unpaid pilots anymore, for example. I think that it's important at the beginning to get access to the information that you need to validate the technology with users that really care about what you're building. And sometimes, there are different ways that these pilots can be structured in a way that the final user might give you a reference or might spend time with you doing the quality control, quality check, saying what kind of features they like, so that's also very important as a young startup. As you grow, probably once you have that validation, there is no need necessarily to take into endeavors that will lead to unpaid pilots that you don’t know if there's a clear end to that. And you can move to a more structured pilot program that has clear deliverables, and at the end of window, a decision will be made depending on the set of topics that were agreed between the companies. CHAD: You might even be able to get away without pilots if you can make a strong case by showing other case studies that are relevant to that potential customer or where you explain, oh, you know, these people had a similar situation to you and here's how it's solved, and here's the success that they had. CARLOS: Totally. You nailed it. It's in many ways to sometimes build credibility, find analogues in the sector, or a use case that can be comparable to the pain point that another user might have. And it could be, let's start with the avocado growers in Brazil, and they have probably the same pain points that they have with avocado growers in Colombia. Once we have that sorted out, then we probably can go and talk with avocado growers here in California or Mexico, Central America and tell them, "Hey, this is the value that we've unlocked in Brazil. Do you have a similar problem?" CHAD: What I have found is that this is one of the important reasons why you have to have a good product which is part of what you've been saying all along, you know, you really wanted to focus on making sure the product was working and that it was good. Because when you do, then you can also use referrals, you know, not referrals, but like, hey, you want to talk to this avocado grower, and they'll be happy to talk with another potential customer because they're excited about what you've done for them and been able to do with them. CARLOS: Totally, totally. And agriculture is always open to new technologies, but they are traditional in many ways. And it's a small circle, and I think that it is very important to build products right and really care about what you're doing and your end-users. Build together. Don't come necessarily with assumptions saying, "Hey, here agricultural grower A, I have a solution that will change your life," without knowing necessarily where are they coming from and their life experiences, and how they interact with products before. So yeah, I totally see the benefit of referrals. Word of mouth is very big, going to conferences with agricultural growers. There are big networking events that could help us more than just going and doing a Google ad campaign, for example, at this stage. CHAD: I think that's probably an important lesson that not only applies in agriculture but in a lot of industries. And I really appreciate you stopping by to share with us. And I really wish you the best of luck as you progress in your journey at Benchmark. CARLOS: Oh, thank you very much. I really appreciate it, and I hope that we can continue the conversation here. Just count with us anytime that you need to talk about weather, agriculture, IoT sensors. Happy to help the audience too, and always discuss what's out there to help the Giant Robots community. [laughs] CHAD: Carlos, if people want to get in touch with you or find out more about the company, where are the best places for them to do that? CARLOS: Go to benchmarklabs.com and then fill out a form there. And we will definitely be in touch with all of you. I will personally answer all the queries. I'm very, very happy to share our technology, share what we are building. And we are so excited because by having this technology, you can help save water, energy, and even pesticide use, and that's a huge contribution to the environment as we move forward. So yeah, thank you very much again for the invitation, and I'm here; count with me as a future resource. CHAD: Wonderful. And you can subscribe to the show and find notes and links along with an entire 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 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: Carlos F. Gaitan Ospina.Sponsored By:AgencyU: AgencyU is a membership-based program where Chad Pytel works one on one with a small group of Agency founders and leaders toward their business goals. You'll do one-on-one coaching sessions and also monthly group meetings. You'll start with goal setting, advice, and problem solving based on Chad's experiences over the last 18 years of running thoughtbot. As you progress as a group, you all get to know each other more and many of the AgencyU members are now working on client projects together and referring work to each other. Whether you’re struggling to grow your agency, taking it to the next level and having growing pains, or a solo founder who just needs someone to talk to, in his 18 years of leading and growing thoughtbot, Chad has seen and learned from a lot of different situations, and would be happy to work with you too. Learn more and sign up at thoughtbot.com/agencyuSupport Giant Robots Smashing Into Other Giant Robots

Dize Hacioglu is the CTO of Chicago’s mRelief, which offers an easy-to-use platform that helps families connect to SNAP food benefits. Since it was founded in 2014, the non-profit mRelief has helped 2.8 million Americans unlock $1 billion in food stamp benefits. Chad talks with Dize about how the platform helps people navigate the often complicated food stamp benefits system, what her role as CTO looks like as a CTO who codes, and how she hopes to help facilitate the growth of the mRelief program and team. mRelief Follow mRelief on Twitter, Facebook, Instagram, or LinkedIn. Follow Dize 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 Dize Hacioglu, the CTO of mRelief, an easy-to-use platform that helps families connect to the Supplemental Nutrition Assistance Program. Since it was founded in 2014, the non-profit mRelief has helped 2.8 million Americans unlock $1 billion in food stamp benefits. Dize, thanks for joining me. DIZE: Yeah, thank you so much for having me. CHAD: And thank you for all of your work at mRelief. It's a big help to everybody. DIZE: It's my pleasure, and it's really an honor to be able to do the work that we do. CHAD: Speaking of that work, tell me a little bit more about what the platform actually does for people. DIZE: So mRelief is an easy to use platform that's accessible over text messaging or web that helps folks find out if they qualify for SNAP, formerly known as food stamps, and helps them apply in certain states or connect with community-based organizations who can help them apply if they'd like further assistance. CHAD: So it's a pretty focused product, right? [laughs] DIZE: Mm-hmm. CHAD: But I'm sure that there's a lot going behind the scenes in order to make that pretty focused product happen. Is that right? DIZE: Yeah, that's right. That's right. Yes, there are a lot of moving parts. CHAD: [laughs] So what's involved in figuring out whether someone is eligible or not? DIZE: So there are actually a few patterns that we've discovered as we've been expanding our work from just one state where we were just in California for a while and then expanding it nationwide. We found that eligibility typically falls into a couple of different buckets. So we've been able to turn that into code that helps guide people through the typical questions of eligibility and takes them through the flow based on their state's eligibility of requirements. CHAD: I guess my next question was going to be without mRelief; how difficult is this for folks? DIZE: So I think most folks typically apply hoping that they're eligible, and they'll only really find out after the application process has been complete. They may have wasted time at the office, time filling out the application, time waiting for a phone call from the office only to find out that they are not eligible. CHAD: So you mentioned you started just in California, and you've been expanding from there. You mentioned there are patterns that you found. How different are things state to state? And what does your growth trajectory look like throughout the United States? DIZE: The biggest differences between states are income limits, the threshold that a family has to fall under in terms of monthly gross income to be able to qualify. So that has been a big data collection research project that we've done to be able to expand to all 50 states. And from their past eligibility, applications also differ from state to state. There's no one platform where you can fill out the same questions that are asked. CHAD: I was just doing an onboarding call with some folks who are joining the thoughtbot team. And on the call, there was one person in the United States, three people who live in different countries in Africa; I think one other person in Europe. And sometimes, when I'm doing the onboarding calls with them, I have to explain how disjointed things are in the United States and which things are state by state because it surprises people. Well, one, it surprises people who aren't in the United States that we don't have certain standard benefits like sick time in the United States. And then it also surprises people how much is actually determined by the state that you live in, even with...because SNAP is a national program, right? DIZE: Correct. Yeah, it's federally funded. CHAD: Right. So even with a federally-funded program, it still comes down to certain things being different in certain states, which is often really daunting and surprising to people. DIZE: Yes, totally, totally. And it also gets even more complicated in some states like California and maybe even Texas, where it's county-administered, so each county has a different process. Sometimes they have different applications even between counties in the same state. CHAD: So is there a reason for this other than making it hard for people to get the benefit? [laughter] That might be a political question. I just totally exposed my -- [laughter] DIZE: I think that's a very valid question because I think we've seen instead of cutting benefits completely, administratives put up to dissuade people or make it more burdensome for people to access benefits as a way of keeping them from benefits nationwide, not just like any specific state. So I think that's a very valid question. CHAD: But it's possible that there are other reasons, right? So, for example, like, oh, it's administered locally, or income levels are different in different places, and so it needs to be...I was just curious whether there were other reasons. DIZE: Yeah, I'm actually not sure about the reasoning. CHAD: Yeah, fair enough. Fair enough. DIZE: [chuckles] CHAD: So you joined in 2017. DIZE: Yes, I did. CHAD: And Emily started in 2014. DIZE: That's right. CHAD: So what were things like when you joined? DIZE: Well, I joined a team of two, and the two folks that were already on the team were the co-founders, Rose Afriyie and Genevieve Nielsen, and I was also joined by another co-worker who was hired at the same time as me. And we were only doing work in California, helping folks find out if they're eligible, helping them apply for CalFresh, which is the name for SNAP in California, and helping them through the post-application process like interviewing, collecting documents, getting a Lift ride to the office to get their card. So we were really focused on the end-to-end process in one specific, again, county because it's county-administered in California. CHAD: So in just one county. DIZE: Yeah, in San Francisco. CHAD: And was there a tech platform at the time? DIZE: Yes, we had our screener, and we had our simplified application. CHAD: Had the founders created that? DIZE: Yes. CHAD: Okay. And how did they focus on...they're not in California, they're in Chicago, right? DIZE: Yeah, we're based in Chicago. CHAD: So why California and why that particular county? Do you know? DIZE: I think it was an amalgamation of things (I don't know if I used that word right.), but they attended Y Combinator early on in the development of mRelief. So through that, they were able to get connections to the San Francisco Human Services Agency, who was our first big contract and allowed us to really develop the end-to-end process. CHAD: So you joined as the third/fourth person on the team? DIZE: Yes. CHAD: And it may be obvious, but I'm going to ask the question anyway. What drew you to joining? DIZE: I've always loved coding. For a long time, I felt at a loss how to combine my love of coding and wanting to pursue coding as a career with my desire to try to make a positive social impact in the world. And I don't think back in 2017; I was really aware of the civic tech space. In perusing job descriptions nationwide, I stumbled across mRelief on Idealist, and it sounded like the perfect match. And I remember feeling like this is my dream job. I can't believe I get to do this work and code at the same time. CHAD: [laughs] So you joined as a software developer at the time. Did you have aspirations to be CTO when you joined? DIZE: No. [laughs] No, I remember looking at Genevieve, our former CTO and co-founder, and thinking I have no idea how she does her job and never thinking that I would find myself in this position. And it's been a massive learning experience and also a growth opportunity for me. CHAD: What are some of the things that you needed to grow into or to learn in order to get to that point? DIZE: I feel like most of the learning happened after. The biggest thing that I learned to prepare me to go into the CTO role was basically a very comprehensive understanding of our codebase. I think most of the skills or what I need to succeed in this role came after. CHAD: Well, actually, let me ask a related but different question. CTO actually differs in different organizations. So, what does your role as CTO actually look like? DIZE: It definitely does. And I think my role has even changed a bit in the year and a half or a year and three months that I've been in this role based on the growing team that we have at mRelief. But my day-to-day basically looks like working with our product team to plan for new features. I like to code, so I try to do some coding at least every day and also general oversight and, I guess, strategic thinking. CHAD: One way in that description that stands out to me, you know, some other CTO might describe their role as very much not working on the code, very much not even really working with the team or product, and more focused on the executive level of the company or the needs of fundraising or something like that. So it sounds like you're very much still product-focused and oriented towards working on the product. DIZE: Yeah, I think that's driven by a selfish desire to keep coding. [laughter] CHAD: You're talking to someone who is in the exact same spot. There are times where I feel guilty about that. DIZE: Yeah. [laughs] CHAD: Here's my justification, [laughter], and I'll be curious in terms of your justification. I've done this for 19 years now. And I'm pretty confident that I would have burned out a long time ago if I didn't spend time coding. It's part of what I find rejuvenating and what I love to do. It doesn't mean that I can always afford to work on something for four hours straight, but it's part of what has made me be able to enjoy this work for so long. DIZE: Yeah, I completely relate to that. If I wasn't coding, I don't know how long I could sustain myself [laughs] with so much responsibility. How do you find that balance? CHAD: Well, I think part of it is freeing yourself up to not feel guilty so being really clear with others. Like, if someone asks for something from me, being like, yep, totally, I can do that. I can get it done by this day and pretty aggressively planning out my work or time, blocking my calendar and making it clear when I'm going to be able to have that thing for them. And if that timeline doesn't work, then they can tell me that, and I can adjust. But that goes a long way towards when I am having a coding session that lasts half a day or something like that; I cannot worry or feel guilty that someone's waiting on me for something or that it's not what I should be spending time on. DIZE: Yeah, that makes a lot of sense. CHAD: What about you? Have you found things that work for you? DIZE: I have been trying different things. I've been doing a lot of YouTube deep dives on productivity blogs, just different ways of thinking about prioritizing work and making sure that things get done. But I really like your point about allowing yourself not to feel guilty. And I do like to remind myself that I don't want to take the fun out of my job. I want that for other folks on the team, and I also want that for myself. CHAD: The other thing that is on my mind when I'm doing something is there's this stereotype of the CTO who codes and makes a mess of things that the other people have to clean up. DIZE: [laughs] Oh no. I didn't know about that. CHAD: You know what I'm talking about? DIZE: No. [laughs] CHAD: Oh, no, no? It's like, oh, the CTO made commits at 9:00 p.m. last night. I guess I have to...and the build is broken. DIZE: Oh no. CHAD: I guess I have to...[laughs] so, does that describe you or no? [laughs] DIZE: Oh my gosh. I'm definitely seeing myself in that description a little bit. [laughs] CHAD: Oh no. [laughs] DIZE: Literally, I was up last night pushing code to production, but I think it's okay. [laughter] I mean, I hope that that's not me. [laughs] CHAD: I try to avoid that because, you know, I want to feel like my work is useful and valued and not creating more work for other people. DIZE: Yeah, definitely. I agree. [laughter] CHAD: Tell me more about the tech stack for mRelief. DIZE: So we use React and Rails. We're hosted on Heroku. Yeah, very basic. CHAD: I heard that you use some thoughtbot stuff, so I assumed that it was Rails. DIZE: [laughs] Yes. Yeah. CHAD: That's great to hear. DIZE: Yeah, I was messing with Paperclip this morning, actually. [laughs] CHAD: Oh, well, Paperclip is deprecated. I'm sorry to tell you. [laughs] DIZE: I know. [laughter] I had to fork it this morning to make a change. CHAD: I still stand by that decision. I think it's important as sort of a community contributor that we signal overall direction and coalesce behind what's built into Rails once it was there. DIZE: Okay, that makes a lot of sense. CHAD: But yeah, was Rails in use when you joined? DIZE: Yeah, we're using the same stack. CHAD: How much has it grown over time, the codebase? DIZE: I don't really know. CHAD: That's interesting that you don't know. [laughs] DIZE: When you say grown, like, I guess how is that measured? CHAD: Oh yeah. I mean, is it more complex now than it was when you joined? DIZE: Yes, definitely. Yeah, we've added new products that had never existed, and the fact that we've expanded to more states and our screener is nationwide that's added a lot of complexity. CHAD: So, do you have ways that you manage that complexity, either in the code or in the business? DIZE: What would that look like? [laughter] How would you manage that complexity? CHAD: Well, I think it's a little dependent on where the complexity is coming from. So, for example, the screener is nationwide, you said, and so does the screener change based on where you're located once you start to fill it out? DIZE: Yes, yes. The first question we ask is zip code. CHAD: And then how does all of that branching work in the state-specific logic work? Is it all one big jumble of if statements and code, or is it factored out in some way to help keep that as clean as possible? And if the answer is it's all one big jumble of if statements, that's totally fine. [laughs] DIZE: I was actually going to say both. [laughs] Because I think because of the patterns that we were able to establish, and the eligibility logic between all states, there's definitely some if branching, but there are enough shared concepts that we can keep it all in one to two files that are not too long. Mid-Roll Ad I wanted to tell you all about something I've been working on quietly for the past year or so, and that's AgencyU. AgencyU is a membership-based program where I work one-on-one with a small group of agency founders and leaders toward their business goals. We do one-on-one coaching sessions and also monthly group meetings. We start with goal setting, advice, and problem-solving based on my experiences over the last 18 years of running thoughtbot. As we progress as a group, we all get to know each other more. And many of the AgencyU members are now working on client projects together and even referring work to each other. Whether you're struggling to grow an agency, taking it to the next level and having growing pains, or a solo founder who just needs someone to talk to, in my 18 years of leading and growing thoughtbot, I've seen and learned from a lot of different situations, and I'd be happy to work with you. Learn more and sign up today at thoughtbot.com/agencyu. That's A-G-E-N-C-Y, the letter U. CHAD: So you mentioned the team has grown quite a bit. It seems like the development and design team is quite a bit bigger than two people now. How big is it? DIZE: Well, the product team itself is eight people now, I think. And the team, the whole mRelief team, we just had two new folks start today, so I think we're at 20. CHAD: What does your onboarding process for bringing new team members on look like from a technical perspective? DIZE: So the first two weeks, folks are typically in a bunch of onboarding meetings just getting acquainted with the history of mRelief, our current processes, and stuff like that. But for our tech team, we like to jump in with them as soon as possible, get them set up obviously locally and have them contributing with some kind of low-hanging fruit tickets at first so that they have some code pushed up in the first week or two. CHAD: Are you facilitating that through pairing with someone existing on the team, or are folks doing that independently? DIZE: Depending on the complexity of the ticket, sometimes we pair. Mostly it's independent work. CHAD: Some companies and some teams have the goal of like, oh, you know, first commit to production on your first day. Do you have anything like that either with the code or with the processes like benchmarks that you use of, like we really want this to happen but on the first day or in the first week? DIZE: No, we don't have anything like that. CHAD: At the size, you're at now, some companies start to break into sub-teams or squads or focus areas. Are you starting to do anything like that? DIZE: I've thought about it here and there. But I think we all like sharing responsibility for all of the different products and getting our hands into all the different ways that we connect with users. So we haven't formalized anything like that. CHAD: So that means you have one backlog of everything that's slated to be worked on. DIZE: Yeah, that's right. CHAD: Is that overwhelming sometimes? DIZE: Yes. [laughter] Yeah. I don't know about your experience with backlogs, but I assume that they're always overwhelming. CHAD: Yeah, that's a really good way of putting it. I think that not having it requires very aggressive management that a lot of teams are not willing to do. And then when you have a team of 10 or 12 people all working across multiple apps or all on the same app doing a lot of different stuff, that's overwhelming on the other side of just the amount of stuff that's happening every day can sometimes be overwhelming. And people start to sort of step on each other. Oh, you know, we've got these two pull requests, and every time I go to make a change, something has merged into main that now my branch is behind. And if you're waiting for CI to pass and your CI is too long, something new has been merged in by the time your CI run finishes. Those are some of the challenges that I hear people facing. DIZE: Interesting. What are those aggressive management things that you were speaking of to avoid backlogs? CHAD: I think it basically means saying no to things. So I think when we talk about a backlog being overwhelming, one of the worst things that comes to mind mostly, and let me know if this is part of the problem you're feeling or not, but it's really long. And somewhere in there, there's like the bug that was created two years ago by someone that has never been addressed, or maybe it has been, and the ticket was never moved forward. And so you end up with 500-600 things and a long list that becomes then very difficult to ever really prioritize because it's not possible to prioritize that many issues. Does that resonate with you at all? DIZE: That does resonate. I was scrolling through our backlog today, and I was like, when is this going to end? [laughter] I guess I hope that was normal. [laughs] CHAD: It is normal, or I should say I think it's common. DIZE: Common, okay. [laughs] CHAD: I think it is a problem a lot of companies face. And like I was saying, I think one of the only solutions to that is basically, well, so either someone or a team that is very comfortable saying, "We don't need a ticket for that because we're just not going to get to it," or being able to delete something that you've not...or move it out that this was created two years ago. It's just not doing us any value to have it hanging around anymore. DIZE: Yeah, that makes a lot of sense. That's helpful. CHAD: And some companies do it by policy basically. They have a philosophy or a policy that says, "This needs to be a thing that comes up." They have a product manager who's paying attention to what's going on and is like, okay, this is the third time that this has come up. Now we'll create a ticket for it because we're actually going to do it. And you only create tickets for things that are for the next four weeks, for the next six weeks, and that you use something else other than tickets. So one thing that I've found really works well for me, and I like this idea of the difference between a discussion or an idea and the work to be done is; for example, we often use Trello for project management and a Kanban board of the work that's actually happening in the backlog. But anything that's not a concrete item that we're going to actually prioritize and do is better off in a messaging system like Basecamp or another tool where it's more of like a discussion about what we might do, and we post designs and those kinds of things. And it's not until it's actually okay; we plan to do this three weeks from now that it gets a ticket created. And if you're really aggressive about that, that works pretty well. But you really need to stay on top of it. And if someone creates a ticket for something, and then it turns out that you're not going to do it in a reasonable timeframe, it moves out and becomes a discussion. DIZE: Oh, I really like that. That's a really great process. I feel like I'm using this as a [laughter] mentorship session. So thank you for that guidance. CHAD: My pleasure. It's funny that we've hit upon this because I think it is a common problem. And then the other thing is like, okay, great, Chad, that's wonderful. I have 600 things in the backlog; how can you...I don't have a great answer for that [laughs] other than basically one of the things that I've done and seen other teams do is...so what project management tool are you using now? DIZE: We're using Asana. CHAD: Asana. It's basically creating another project and taking everything that's not going to be done in the next two or three weeks and moving it to another project and then saying, okay, what our process from now is going to be is we have a biweekly planning meeting, or we have a weekly planning session. And what we're doing as part of that is taking things from the project where we moved everything to, and we're only moving the things over that we're actually prioritizing and going to do in the next X number of weeks. DIZE: Cool. That makes a lot of sense. Thank you. CHAD: I hope that's helpful. [laughs] DIZE: That is helpful. No, yeah, thank you so much. I'm still new, and I have so much to learn. [laughs] So this has been really, really informative. CHAD: So actually, this leads me to something I was wondering about based on this conversation and just in general, is as CTO, who are you actually leading? And is there a separate product manager or a team that actually doesn't report to you? DIZE: No. I basically lead the product team. We do have a product designer who takes on more of the management of the design part of the product team, but I don't think we've grown big enough to silo like that yet. CHAD: And I don't recommend it. I think it's great when you have an integrated design and development team working together. At a certain size, yeah, you need to create divisions, and you need to, you know, that kind of thing. But it's better when design and development work really closely together to create something great, in my opinion. DIZE: Yeah. I've also found that to be effective. CHAD: You have people on your team with different levels of experience. How, as a leader, do you attempt to...I think you're a great example of someone who joined at the level of software developer and grew in their career to be CTO. Like, how do you help others do that? DIZE: I think the biggest part of that is assessing how they see their career growing. I don't know if everybody wants to be a CTO, wants to be a manager, or just wants to continue to be an individual contributor at a higher level. So just trying to work with them to figure that out for themselves and then providing opportunities to gain that experience like leading a project, or taking on management responsibilities, providing more ownership, and leaving them to their own devices as much as they are comfortable. CHAD: The fact that mRelief is a non-profit, how much does that factor into your day-to-day or your ability to build a team and hire or anything like that? Is that something that you feel on a regular basis? DIZE: The biggest way that I feel it is hiring. I don't know if you're also experiencing this, but it's like, it's been a very competitive market, especially recently. And I know it's always been, but recently, I feel like it's turned up a lot. Trying to align compensation to the market has been a particular challenge. CHAD: Where does the funding for mRelief come from? DIZE: So we're funded in a couple of different ways, a couple of different streams. We are funded through grants, individual donations, and government contracts. CHAD: Hiring, especially in a world where you're competing to hire against companies that don't need to be sustainable or profitable, like, they've gotten millions of dollars, and they can just spend it, that is tough. And thoughtbot has existed in that environment forever basically because we're a consulting company which started from scratch without any investors or anything like that. And so we focused on being the kind of place that people want to work, having good benefits. We're not going to be able to compete against companies on compensation directly. And so we focus more on paying people fairly and what we can afford but being the kind of place that people actually want to work. DIZE: What have you found to be the most, I guess, successful exploration of that? CHAD: Well, it's evolved over time. There were a lot of things that we could put out there in terms of what it was like to work at thoughtbot versus what it was like to work at the typical startup company that made us special, and it wasn't anything radical. It was just like, you're going to work sustainably, and we're not going to approach deadlines in the same way. You're going to have agency over your work. You're going to work with a really great, smart team of people who are all sort of like...the analogy I use is like a professional sports team. They make it look easy. And it's not super stressful all the time because you don't need stress in order to do great things; you need people who are given the space to do great work. And I'll be honest; actually, we're one of the best places you can work if you want to do Rails work. Now, a lot of that stuff has evolved. I think startup culture is different than it was 15 years ago. And there are more companies where you can work in Rails that aren't as bad as they quite honestly used to be. We used to be able to point to companies and be like, you don't want to work there. And there are less companies that we can do that to now. DIZE: Oh wow. Okay, so folks have started to kind of simmer down on expectations and just the hassle of startup culture? CHAD: I think so. And then you have examples if you want to stay working in Ruby, then you have companies like GitHub and that sort of thing where they hire remotely. They've addressed a lot of the problems that they had in their culture. No company is perfect, but I think they've made it seemingly from the outside. And from the number of thoughtbot people that we've had join GitHub, they seem to have addressed some of those issues. We've needed to, in some ways, double down on some of them, like in terms of really recognizing we can have a culture where you can actually have an impact on who we are and what we do in a way that you can't in a big company. DIZE: Oh, yeah, yeah. That resonates for sure. CHAD: Is that part of what you've done? Obviously, you have a mission-driven impact-oriented thing which I think probably draws people who want to do that, right? DIZE: Yeah. And I think what we can offer that feels more unique is shared leadership. So like you said, having a lot of sway and impact on the way that the organization is run day-to-day because we really believe in distributing those responsibilities. CHAD: What's next for you and the mRelief team? DIZE: Well, we have some goals this year that mean expanding to a couple of more states. So we have our simplified application and also our assistance platform and about 12 partners, ten states, or something like that. And we want to expand to eight more states by June of 2023. So that's going to be a lot of our focus this next year. CHAD: So you talked about how hiring has been a challenge. So I presume that means you're trying to hire some new people to be able to accomplish these goals. DIZE: [laughs] Yes. Right now, we're looking for a full-stack dev experienced in React and Rails at least a year or two to help us with that expansion. CHAD: Oh, that's another thing that has helped us hire is having an apprentice program where the majority...we don't take people who are brand new and teach them. But it's sort of like one level up, taking intermediate people who wouldn't be able to bill at the level us and our clients need them to and getting them to that level in a three to a six-month timeframe where we don't bill their time. They're paired with mentors. They work one on one with a mentor, and it's a rotation program. So they rotate the mentors. That has been really helpful for us. DIZE: That's amazing. I would love to do something like that, and I would love to also even train folks from the ground up. I feel like that's like a pipe dream just based on capacity. But I think there are so many folks whose voices don't get to be in product development, and I'd love to foster that. CHAD: Do you think you have the space to be able to do that, or do you think that what you're saying about it's hard for your team to have the bandwidth to train those folks? DIZE: I think it's a problem of bandwidth, at least right now. Hopefully, it'll change. CHAD: That's one of the reasons why we don't work with people in the beginning stages but rather someone who can be an effective pair for a Rails developer. That's a good point because they can learn a lot, but they're an effective pair. They're not slowing anybody down, and we can teach them primarily through pairing. Whereas if someone doesn't even know HTML, that is an issue that we haven't been able to...we can train, but it's hard to balance that and have enough bandwidth to teach people that. DIZE: Yeah, that's brilliant. That makes a lot of sense. What kind of credentials do those folks usually have? Are they out of a bootcamp or self-taught? CHAD: Some of them are out of bootcamp, and we could take more out of bootcamp. Out of bootcamp is actually a very fine stage. The problem is that there just aren't a lot of opportunities like this. And so, for example, for our last quarter's apprenticeship, we had four apprentice positions, two designers and two developers. We got 1,033 applications. DIZE: Oh my God. Oh my God. Wow. CHAD: And we screen all of them, and we respond to everybody but as a result of that, what it means is the more experienced people are likely to take up and get the spot over someone with no experience at all, which I don't love, but it's difficult to not have that happen. DIZE: Got it. Very, very competitive. Wow. CHAD: Right. Right. Our people operations person likes to point out that it's more competitive than Harvard. DIZE: Oh my God. [laughs] What does that make the acceptance rate? CHAD: I don't know. [laughs] Four out of 1033; I don't know. DIZE: Dang. [laughs] CHAD: It's low. In order to balance that a little bit and to strike a balance and find the people who I like to call the top candidates, like, they're not the most qualified, but they're the top. And I'm still working on this term but basically focusing on things that aren't just what they can do for code or their coding experience. Like, the things that are important for consulting are like, do you have experience talking with people? Have you been a teacher? Have you been in retail? Even being in retail is a little bit of a plus over someone else necessarily who's just been a coder forever. DIZE: Yeah, yeah, some kind of diverse working background. CHAD: And at least I think it's really important that someone with a really strong background that lends themselves to being a good consultant is able to get an interview even if they don't have a lot of actual work experience. I think that that's really important, at least giving them the shot even if, after interviewing them, we think that we need to move forward this other candidate. I think it's really important that the initial screening not completely screen out people just based on, for example, years of experience. We don't look at degrees at all. That's not even a factor in normal thoughtbot hiring. It's not something that we look at. DIZE: Oh, good. That is such a cool program. I wish more places did that. [laughs] CHAD: Oh, me too. It would make our job easier because we wouldn't need to reject so many people. We could refer them to these other places. DIZE: [laughs] Oh my gosh. Yeah. CHAD: We're actually changing the program for 2022 because we know that there are tons of people, not a lot of opportunity. It used to be that we would do interviews, and then we'd be forced to say, "We're not taking you now, but we are moving forward in the process with these ten people and whittling it down to the 2." What we're doing now is we actually continue the interview process with everyone who passes the things that we're looking for. So we can get to the end of the process, and even if we only have two slots, we've identified the five people who would have been able to do it. And then what we do is we say, "We think you're a great fit. There are just not enough slots right now. So can we reconsider you or schedule you for a future slot?" That's what we're trying to do. DIZE: Interesting. Has it been helpful? CHAD: We're only in the second quarter of doing that. So we're still a little early with that change. But I can already anticipate the problem, which is there are too many people we would take. DIZE: Ooh, yeah. [laughs] CHAD: And so I carried forward 15 People from the last session, from the last quarter. And that 15 is more than...[laughs] and unless we're willing to then turn off applications so new people can't apply, we still get, you know, so the last quarter was 970 applications about. DIZE: Oh wow. CHAD: This quarter was 1,033. So one of the factors that has really helped with our hiring is we decided to go fully remote at the beginning of 2021, and that has really helped us expand to being able to hire a little bit more competitively by not competing against everyone in the places where we had offices previously. DIZE: That makes sense. CHAD: But I noticed that you're still a Chicago-based team, right? DIZE: We're still Chicago-based, but we're remote now, fully remote. Our headquarters are here. We do have a lot of team members here. We also have folks throughout the States. CHAD: On the development team too? DIZE: Yes, on the development team. CHAD: Oh, okay, great. So when did that...did that change with the pandemic, or did you have it before? DIZE: It changed with the pandemic. So before, we weren't remote at all; we were always in person. CHAD: Has that been a big change, or an easy change, or a hard change for your team? DIZE: I think a pretty easy change. I think we're all...well, I don't want to speak for everybody, but it seems like it went quite smoothly. We do offer a monthly stipend for Deskpass in case anyone wants a physical workspace and may sometimes meet up to co-work for a sense of community and camaraderie. But other than that, folks seem to really enjoy it. CHAD: Yeah, I think for us, it was also not a difficult transition when it came down to a lot of the work and that kind of thing. I think the biggest challenge for us has been we're bigger, and so there were people...and we very much we are local teams working with local clients. And so, there was a segment of the thoughtbot team that never opted in to a fully remote company. And so they've understood the transition, but they didn't necessarily choose it for themselves. And so they have their choice of...like you said, it's a competitive market. It is important for teams to be clear about who they are and how they work. And if someone at the end of that says, "You know what? I understand, and that's not for me," I think that's okay. DIZE: Yeah, definitely, like self-selection. [laughs] CHAD: Yeah. Well, thank you so much for stopping by and talking with me. I really appreciate it. DIZE: Yeah, thank you for having me. It was so lovely to chat. And thank you for all the great advice. CHAD: I wish you and the mRelief team all the best and keep in touch. DIZE: Thank you, you too. CHAD: Oh, wait, if people want to find out more, we got to say the website. [laughs] And if they want to get in touch with you, where are the best places for them to do that? DIZE: So our website is mRelief, so M as in mom, relief as in sigh of relief, mrelief.com. We're on some socials. Our name differs [laughs] based on the social, but we're on Twitter and, Instagram, TikTok soon. [laughs] CHAD: Oh, wow. DIZE: [laughs] Yeah, that's it. CHAD: And that's where people can find the job posting as well? DIZE: Yeah, on our website. CHAD: Awesome. Well, thank you again. DIZE: Yeah, thank you. CHAD: You can subscribe to the show and find notes for this episode along with an entire transcript of 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 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: Dize Hacioglu.Sponsored By:AgencyU: AgencyU is a membership-based program where Chad Pytel works one on one with a small group of Agency founders and leaders toward their business goals. You'll do one-on-one coaching sessions and also monthly group meetings. You'll start with goal setting, advice, and problem solving based on Chad's experiences over the last 18 years of running thoughtbot. As you progress as a group, you all get to know each other more and many of the AgencyU members are now working on client projects together and referring work to each other. Whether you’re struggling to grow your agency, taking it to the next level and having growing pains, or a solo founder who just needs someone to talk to, in his 18 years of leading and growing thoughtbot, Chad has seen and learned from a lot of different situations, and would be happy to work with you too. Learn more and sign up at thoughtbot.com/agencyuSupport Giant Robots Smashing Into Other Giant Robots

Michael Benezra is the Executive Director and Co-Founder of the GK Fund: a nonprofit social impact fund to support BIPOC-owned companies in Greater Boston. Michael also serves as the COO of Colette Phillips Communications, helping to lead the All Inclusive Boston tourism campaign, among other projects. Chad talks with Michael about being a BIPOC ally, disparities amongst the VC world, and how the GK Fund looks for the same things in BIPOC-owned companies that they look for in other companies because the innovation is there; it's just that the opportunity isn't. The GK Fund Follow The GK Fund on Twitter or LinkedIn. Colette Phillips Communications All Inclusive Boston Black Owned Bos. Follow Michael 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 Michael Benezra, Executive Director and Co-founder of the GK Fund, a non-profit social impact fund to support BIPOC-owned companies in Greater Boston. Michael is also the COO of Colette Phillips Communications, helping to lead the All Inclusive Boston Tourism Campaign, among other projects. Michael, thank you for joining me. MICHAEL: Thanks for having me. CHAD: I'm curious about the GK Fund. When did you start the Fund? MICHAEL: So, at the time, I was working for the Israeli Foreign Ministry, and I was working with venture capital firms, private equity firms. And I was representing over 200 Israeli companies in New England, most of them startups. And my wife is Black; my family is Black. I've been close to that community for a long time. And especially in the venture capital world, I started to see some real disparities amongst other disparities in general everyday life, but it was particularly bad in the VC world. And so Colette being a mentor and a friend of mine, Colette Phillips, I approached her, and I said, "Hey, what do you think about starting this fund, this non-profit fund?" And her and Andre Porter, who is our other co-founder who used to be the head of the state's business development agency in Massachusetts, we all decided to band together and start this non-profit. Now, we started the non-profit in December of 2019, so the pandemic hit right as we were creating this organization. And we had a decision to make, do we put this on hold, or do we move forward and accelerate? And we decided to just move forward. CHAD: Well, I'm glad you did. I'm glad you made that decision. Hopefully, you feel the same way. [laughs] MICHAEL: Yeah, I do. CHAD: You're absolutely right. There's a big need here. And I actually have had over the last two months or so a few different guests that are creating VC funds or funds of certain kind that address underrepresented communities, Black, another one was veterans. And there's such a big need. How did you decide what you were going to focus on or focus down into so, for example, focusing on Boston? MICHAEL: For Boston specifically, it had to do mostly with proximity. So I went to Harvard here for grad school. I worked for Governor Patrick. And so, for me, it was natural to stay local, especially during COVID. In my experience, there were a lot of BIPOC, particularly Black-owned startups, that were on paper akin to a lot of other startups in the Israeli world, which were very developed or also in the United States. I'll give you an example; there was a company that I worked with that had a $100 million valuation but had no products, no physical products. They had no revenue, but they had innovation. Now, you and I being very honest, do you think a Black-owned company could get away with that? CHAD: Yeah, no. MICHAEL: There is no way. I knew that; the other entrepreneurs that I've talked to know that. That is a terrible double standard that needs to be fixed. So we look for the same things in BIPOC companies that we look for in other companies because, for the most part, the innovation is there; it's just that the opportunity isn't. CHAD: Yeah. To dig into that a little bit more, I think one might say, well, if they had a founding team that had a proven track record, then maybe. And that's where you get to the fact that it's systemic, too, because if the headwinds are there where they can never get that experience, to begin with, they never get that opportunity, to begin with, then they're not going to have a founding team that has a track record that will be invested in based on just the team. MICHAEL: That is 100% accurate, but it's actually even worse. So we do not ask our founders in the application process for their educational background. But all six of the companies that got grants from us last November they all have their bachelor's, four out of six have masters or higher. And so the cream definitely rose to the top. We had a store owner she owns an online boutique who got an engineering degree from Purdue. And we also have an entrepreneur who was an attorney at State Street, a corporate attorney, and now he's created this startup. And so, in some cases, like in most other areas, these individuals are overqualified. CHAD: So, what is the funding model for GK on both sides of the equation? Where is the money coming from, and then how are you funding the companies? MICHAEL: So we raise money organically like any other non-profit does. So we apply for grants. We take corporate donations. We take individual contributions online. Most of our money so far has come in through corporate contributions. So PNC Bank has been with us since the beginning. They made a very large commitment to supporting racial equity, and they've really stuck to it. The Bar Foundation has been exceptional. And then we've also had a group of individual donors who were actually White women who have started their own non-profit now, and they've also banded together to give us money that we need to re-grant to the companies. We have over 100,000 from the State of Massachusetts to operate a grant program. So money is coming through a number of different avenues. We've issued six micro-grants so far at $10,000 each. We did that in November. We plan to do ten more in the next month. I said in the Boston Business Journal article you can give us money, but you can't park it with us like you could with a donor-advised fund and watch it accumulate interest for 15 years. We're going to take it, and we're going to give it to the people that need it the most. CHAD: And are they grants then? You're using the word grants, so I assume that they are. So you're not doing this in exchange for equity in the companies? MICHAEL: No, no equity in the companies, no convertible notes, just a straight capital grant directly to the company. So I send a message over to our fiscal sponsors at Philanthropy Massachusetts. They send the check directly over to the company. After that, we have the company fill out a survey letting us know what they plan to use it for, but we're not overly prescriptive. And that's actually the way that philanthropy is heading right now is, putting fewer restrictions and barriers in the way. And that's another thing I'll talk about as well is making it easier for companies to gain access. CHAD: So, did you ever consider more of a traditional VC fund model with this? MICHAEL: Yeah, originally, I did. Before the pandemic, actually, I did. So the original purpose or impetus of the fund was to take companies that were coming out of accelerator programs that were underfunded. You have some great accelerators, but you have companies leaving with a business plan and $2,000. In some cases, there are companies that have been through three accelerator programs. They're not getting as much out of it as they should. I wanted us to intervene, find the companies that have the most potential, and make investments. But after COVID hit, it was a crisis. And so, we needed to shift our focus to philanthropy. CHAD: The nice thing about that is then you can do those grants with basically no strings attached for the companies. Whereas if you were taking money from people who expect to get a return on that investment, you wouldn't be able to do that. MICHAEL: That's exactly right. There are organizations out there that say that they're making an impact when in reality they're just making, you know, loans which is not a not a bad thing. But they're issuing loans, or they're taking equity in the companies, that's fine, but it's not what we're doing. CHAD: What are your plans for, like, upcoming? Are you going to be continuing with micro-grants, or do you have bigger plans? MICHAEL: We have bigger plans. So I can't say too much right now because we have an announcement coming up. But I will say issues like legal services have come up. There's a constant need for attorneys for any company, whether it's contracts, or locking down real estate, or copyright and trademark, or IP. We are working with a very large prestigious law firm that's really making a generous commitment to our companies. And this would involve us even adding free legal services for an entire year to our grantees. So that's one thing that we're planning to do. And then the other is, and this another function of the fund, is we speak with organizations like Lyft who's donated like $5,000 in ride credits that we're giving to our grantees or Wix, which has given us like 75% off of websites. We work with partners who can also give us other services that we can provide to these companies to try to get them closer to where there's a gap. Giving them capital is not enough. The disparities are too significant. We also partnered with Berkshire Bank, so I can make direct referrals for loans if they need them. But the idea is to really narrow that gap and give these companies the same opportunities that their White counterparts have. CHAD: That's great. So you, as someone who's White doing this work, how do you find yourself in the community? How do you be an effective ally and advocate? MICHAEL: For me personally, my connection personally through my wife and also through my family and my boss. Colette is a pioneer. She's a Black woman in Boston who moved here not knowing anybody. And 30 years later, she's on The Power of 50 and 100 influential lists, but she did that through hard work. And she's worked much harder, I think, than she would have had to if she weren't a woman from Antigua who came here on her own. But ultimately, as an ally, it's my role; it's our role to step in between situations where there's inequity. So if there is a company, one of our companies, for instance, who's having a problem locking down real estate, (I think I use this in the article.), and they're saying, "Well, the real estate agent is telling us they can eliminate our lease at any time they prefer which I know is basically legal." I'll call them up and say, "Look, I'm with the fund. We're backing this company; we support them. What's the situation?" And unfortunately, most of the time, the outcome actually changes. So it's a matter of almost you got to be proactive, and you got to be intentional. You have to use your privilege in the best way that you can. So I think that's how you do it. And then, when it's time to shed a light on these companies, you take a step back, so it's not my role to go out there and promote myself. If anyone asks me, I'm always promoting the companies. So the best thing we can do is be advocates. You can be out front, but at the end of the day, it's about uplifting them, these companies in this case. CHAD: Yeah, that's great. Speaking of that, I was going to ask you, what are some of the companies that you have given the micro-grants to, and do you know how they use them? MICHAEL: Yeah, so we gave our grants to six companies. One is called MustWatch, and MustWatch is founded by Che, and Che, his family, is from Haiti. They are an app. You can actually find them on the App Store. But what they do is they allow you to log in, select which movies and television shows that you watch, and share them with your friends. And it sounds like a very simple concept, but there is actually nothing on the market that allows you to do this. And the idea is that you're collecting data while you're doing this as MustWatch. So at the end of the day, if you have a sample of like 20,000 users on the platform, you gain a lot of valuable insight and data. And that data can be useful for Nielsen or the television networks or movie production studios. I encourage people to sign up for MustWatch because if you spend as much time as I do looking for good movies, you're probably miserable. CHAD: [laughs] MICHAEL: [laughs] I spend so much time doing that. We also have a few online retailers. So we have B. Royal Boutique and So Zen Spa, both of them have doubled their revenue during COVID. They originally had stores. They pivoted during COVID, went online, and really were excellent when it comes to branding and marketing on social media and on other digital platforms. So they've been very successful. We have a company called Black Owned Bos., which is pretty well known here in Boston. They basically focus on organizing and running pop-up shops. And Jae'da, who's the head of the company, is just, I mean, she's a business mastermind. She's brilliant, always finding new ways to innovate. And then we have Our Village, which is focused on community development and housing. And finally, sySTEMic flow, which is a company that helps school districts, educators support Black women in STEM and STEAM fields. So we looked for companies that could pivot, basically. CHAD: And you mean in the face of the pandemic. MICHAEL: In the face of the pandemic, we looked for companies that had success and had a plan and also knew their audience. The main things that we look for…and I should say this too; our application process takes an average of seven minutes. And the way that I did that was I evaluated over 20 accelerator applications. I did a comparative analysis and identified the questions that were either irrelevant or unhelpful for us. And that gave us a very short application for our companies but one that's really efficient. And basically, what we're looking for is companies that have a good business model, have a very specific customer base and target market, and have a strong founder, and also has been undersupported. There are companies that we've identified for our next cohort that by this point in their development would have been venture funded in my experience, at least, had they not been people of color. Mid-Roll Ad I wanted to tell you all about something I've been working on quietly for the past year or so, and that's AgencyU. AgencyU is a membership-based program where I work one-on-one with a small group of agency founders and leaders toward their business goals. We do one-on-one coaching sessions and also monthly group meetings. We start with goal setting, advice, and problem-solving based on my experiences over the last 18 years of running thoughtbot. As we progress as a group, we all get to know each other more. And many of the AgencyU members are now working on client projects together and even referring work to each other. Whether you're struggling to grow an agency, taking it to the next level and having growing pains, or a solo founder who just needs someone to talk to, in my 18 years of leading and growing thoughtbot, I've seen and learned from a lot of different situations, and I'd be happy to work with you. Learn more and sign up today at thoughtbot.com/agencyu. That's A-G-E-N-C-Y, the letter U. CHAD: What has been the most surprising use of one of the grants? MICHAEL: So B. Royal used the grant money to lock down a store in Assembly Square in Somerville. We kind of anticipated they might do that. So Zen Spa they improved their website. MustWatch actually really surprised us. So they went out and got a valuation of their company and then basically worked with a crowdfunding platform called Netcapital to raise more capital. They had a very specific plan, and they had disclosed that plan to us. I just didn't anticipate they would act so quickly on it. And based on the fact that we had given them a grant and all this mentoring and support, their valuation actually went up. CHAD: That's a really smart use of the funds to propel that into a larger fundraise. That's really smart. MICHAEL: I agree. CHAD: So you do this in addition to a day job. [laughs] MICHAEL: I mean, they're both day jobs; it's just, yeah. CHAD: So you mentioned Colette Phillips, the person, [laughs] how about Colette Phillips Communications? So The All Inclusive Campaign it really is historic. The genesis of the campaign is that back in 2020, Colette and I applied for an RFP from the City of Boston; it was for a tourism recovery campaign. All of the major cities in the country got this grant money through regional tourism agencies, you know, like they're a special interest niche. And they went to the Feds, and they're like, "Look, we're suffering, travel is suffering, we need a grant," so all these grants went out. The City of Boston actually said, "Look, we want to focus on diverse tourism." So that was perfect for us. We applied, we got the grant. And we brought on Proverb, which is an incredible digital marketing agency and creative design agency, and the Greater Boston Convention & Visitors Bureau. It was the largest contract ever to go to a minority-owned company by the City of Boston, ever, and it was about 1.5 million. CHAD: Which in and of itself for what the City of Boston probably spends on things [laughs] is a little ridiculous that that's the biggest one, but … get beyond that, I guess. MICHAEL: It's insane. It's very upsetting. And it was a long time overdue. In this case, that contract or that RFP was really only supposed to last like one quarter. So all these regional tourism agencies they get their influx of money, a million dollars or a few 100,000. And then from there, they do the campaign, they move on. We are now three mayor's into this. We are four million dollars into this. We submitted the campaign to the city 60 days after they contracted with us; 84% of the contractors on the project are minority-owned companies. And in that 60 days before delivering the campaign, we actually never met in person. So we did this whole campaign virtually from the start. We came in under budget. We came in ahead of time. This is what happens sometimes when you let minority-owned companies take the lead. CHAD: Yeah, that's great. How do you do a campaign like this? I mean, this is why they came to you, the experts, but I think it's important that this message seem authentic and not pandering. MICHAEL: Yeah, Colette is a visionary. She's been talking about diversity and inclusion for like 20 years. There's an article that came out, I think, in 1992 where she was talking about the importance of diversity in the business community. And now it's like microfilm; you can't even find it digitally online. CHAD: [laughs] MICHAEL: She's years ahead of her time. And she's constantly innovating, and All Inclusive was her idea, and she branded it. I think it was a long time coming, basically. This is a culmination of a message and campaign that she's been running her whole life. CHAD: Yeah, I think that that's very powerful. And I think it comes across in the campaign. It seems authentic. I think it would be easy for it to not seem that way. And so yeah, it comes from that place of this was already a thing. It was already brewing. It wasn't just -- MICHAEL: Do you want to hear a story? CHAD: Yeah, I'd love it. MICHAEL: So, most of the media coverage for this campaign was exceptionally positive. There are a few reasons for that. We included all small, locally-owned businesses in the campaign. So you won't find celebrities, no athletes, or anything like that; we may do that later. We also invested...we took 200,000 of the contract, which this was not even supposed to be in there. We actually did ad buys with 19 different local newspapers. In some cases, these newspapers would have actually closed down if we had not done that, and that was just a byproduct of something we felt was important. But amidst all of that, she got invited to do an interview on Bloomberg on the local Bloomberg station. She's on the phone, and some guy who was on the other line, and I won't go into it too much, said, "You know, as a White man, I'm really offended. I don't feel represented in this campaign." [laughs] And she's like, "I've had enough of this," hangs up the phone. [laughs] And this is another part of allyship I think is...naturally, you know, I said, "Look, I'm taking care of this." I wrote a letter to Bloomberg. I said, "This is unacceptable. You need to take him to task." I don't know if he still works there anymore. But that's kind of the role. You have a Black woman who's a pioneer. She just released a campaign. The first thing you should be saying to her is "Congratulations," instead of saying that, all you can tell her is about how being a White man is like, I don't know, a disadvantage? Which is crazy. There are tons of White people in the campaign. I'm White; I'm in the campaign. CHAD: It's so foolish. I don't even want to have to explain it, but the campaign is literally called All Inclusive. MICHAEL: [laughs] Exactly, exactly. It covers everybody, I mean, literally. And it's like, I don't know what you want from us. CHAD: Yeah. And it's not even...like you go to the site it talks about here's what you can do with families. Here's what you can do with kids, kid-friendly activities. MICHAEL: This campaign was also research-based. So we spent 100,000 on research with this incredible company called Heart + Mind. They did a lot of research, and they did a lot of surveying. And the words that came back when describing Boston were unwelcoming, masculine; I think Tom Brady, Ben Affleck, crime, you know, just this kind of machismo unwelcoming environment. And it kind of confirmed some of the assumptions we had, but it was really surprising to see it in the data. So we said, "All right, this is what we're working with. We have to come up with a narrative that counters that because Boston is a majority-minority city, 23 neighborhoods, 60% of the population speaks two languages or more. That ethos is really not accurate. So hopefully, we're doing a good job. CHAD: So if folks want to help, we already said GK Fund is a non-profit. It's coming up to tax season [laughs], so at the very least, even if you don't...hopefully, you care about the cause, but if you just want that tax write-off, I suppose that's another reason to donate. MICHAEL: Absolutely. CHAD: So where can folks do that if they want to learn more and donate? MICHAEL: Visit www.thegkfund.org. CHAD: And are you looking for help in other ways beyond monetary? How can people get involved? MICHAEL: Absolutely. So we're looking for mentors so individuals who feel like they have experience or skills to lend to these companies, and we'll try to deploy these individuals in the best way possible. Obviously, we're looking for partnerships. So if you have a company that you feel has something to contribute or is willing to make a contribution, not monetarily but either with your products or with a discount, we also want to give that benefit to the companies as well. And there are a number of different ways. CHAD: That's great. And if folks want to follow along with you or get in touch directly with you, how can they do that? MICHAEL: You can feel free to follow me on Twitter. It's just @MichaelBenezra, all one word on Twitter. I got a lot of positive messages after the Boston Business Journal article came out and in LinkedIn as well. CHAD: Great. And you can subscribe to the show and find notes and a full transcript for this episode at giantrobots.fm. If you have questions or comments, email us at hosts@giantrobots.fm. You can find me on Twitter @cpytel. This podcast is brought to you by thoughtbot and produced and edited by Mandy Moore. Michael, thanks so much for joining me. I really appreciate it. MICHAEL: Yeah, thank you for having me. 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: Michael Benezra.Sponsored By:AgencyU: AgencyU is a membership-based program where Chad Pytel works one on one with a small group of Agency founders and leaders toward their business goals. You'll do one-on-one coaching sessions and also monthly group meetings. You'll start with goal setting, advice, and problem solving based on Chad's experiences over the last 18 years of running thoughtbot. As you progress as a group, you all get to know each other more and many of the AgencyU members are now working on client projects together and referring work to each other. Whether you’re struggling to grow your agency, taking it to the next level and having growing pains, or a solo founder who just needs someone to talk to, in his 18 years of leading and growing thoughtbot, Chad has seen and learned from a lot of different situations, and would be happy to work with you too. Learn more and sign up at thoughtbot.com/agencyuSupport Giant Robots Smashing Into Other Giant Robots

Christopher Nguyen is the CEO of Aitomatic, which provides knowledge-first AI for industrial automation. Chad talks with Christopher about why having a physical sciences background matters for this work, if we have artificial intelligence, why we still need people, and working in knowledge-first AI instead of knowledge-second, knowledge-third, or no knowledge at all. Data reflects the world. Aitomatic Follow Aitomatic on Twitter or LinkedIn. Follow Christopher 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 Christopher Nguyen, CEO of Aitomatic, which provides knowledge-first AI for industrial automation. Christopher, thanks for joining me. CHRISTOPHER: Thank you. CHAD: So I was prepping for this interview, and I noticed something that jumped out at me that we have in common, and that is your first computer was the TI-99C/4A. CHRISTOPHER: No kidding. CHAD: And that was also my first computer. CHRISTOPHER: Oh, okay. CHAD: [laughs] CHRISTOPHER: You got no storage, correct? CHAD: No storage; everything was off of the solid-state disks. And I remember I was a little late to it. My parents actually got it for me. I think I was 9 or 10. And my parents got it for me at a garage sale. And so all I had was the manual and the basic manual that came with it. And because it had no storage, I needed to type in the programs that were in the back of that book from scratch, and there was no way to save them. So you would type them in -- [laughs] CHRISTOPHER: Oh my God. Every single day the same code over and over again. And hopefully, you don't turn it off. CHAD: [laughs] Exactly. There definitely were times where it would just be on in my room because I didn't want to lose what I had spent all day typing in. CHRISTOPHER: Yeah, yeah, I remember my proudest moment was my sister walked into the living room...and there was no monitor, and you connected it directly to the TV. CHAD: To the TV, yeah. CHRISTOPHER: And younger people may not even know the term character graphics, which is you pick in your book the character space, and then you put them together into a graphic image. And I painstakingly, on graph paper, created a car and converted it to hex and then poked it into these characters and put them together. And my sister walked in like, "Oh my God, you made a car." [laughter] CHAD: That was a good time. It was difficult back then. I feel like I learned a lot in an environment where I see people learning. Today it's a lot more of a complicated environment. They're much higher up the stack than we were back then. And, I don't know, I feel like I actually sort of had it easy. CHRISTOPHER: Well, in many ways, that very abstraction to...you see jobs like to talk about higher software abstraction to make you more productive. I think it's absolutely that powerful. And Marc Andreessen, my friend, likes to talk about how software is eating the world. But it turns out there's one perspective where people have gone up the stack a little too far, too fast, and too much. We're still physical in the industry that I work in. You know, our previous company was acquired by Panasonic. And I've been working on industrial AI for the last four and a half years. And it's very hard for us to find people with the right physics or electro engineering background and the right science understanding to help automate and build some of these systems because everybody's in software now. CHAD: Why does physical sciences background matter for this work? CHRISTOPHER: Let me give you a couple of examples. One example is one of our customers is a very large global conglomerate doing marine navigation and marine sensors. And one of the products they do is fish finding so that amateurs like you and me would go hold one of these systems and shoot it down straight to the ocean. A sonar beam goes down, kind of like submarines. But hopefully, an image would come back. And so to build a system to convert all of that into something other than jumbled what they call echograms, maybe convert to a fish image, you have to build a lot of machine intelligence, AI, machine learning, and so on. But just to understand the data and make the right decisions about how to do that, you need to understand the physics of sound wave echoes in the ocean. If you can't do that and you got to work with another engineer to tell you how to do that, it really slows things down a lot. So knowing the equation but also having a physical intuition for how it all works can make or break the success of an engineer working on something like that. Another example is we worked on avionics. Don't blame me for this, but if you have had poor experience with Wi-Fi on a plane, we may be involved in one way or another, Panasonic Avionics. CHAD: [laughs] CHRISTOPHER: But the antenna array that sits on top of the plane to receive satellite signal and sends out a signal, so you can expect there's some kind of optimization involved. It's not just line of sight. If there's a cloud coming nearby, then there's some distortion, and there's some optimization needed to take place. Again, an understanding of...at least if you remember, if not an expert in college physics, about antenna radiation pattern and so on, which help tremendously a data scientist or an engineer working on that problem whereas somebody who's a pure computer scientist would struggle a lot and probably give up with that problem. CHAD: Yeah, this may be a little bit of a facetious question or leading question; I'm not sure which, but if we have artificial intelligence, why do we need people to do this stuff? CHRISTOPHER: [laughs] Well, I have a broader, you know, I've thought about that a lot. And I'll answer it in the broad sense, but I think you can specialize it. The problem with machine learning, at least today and I really think for a very long time for the rest of the century at least, is that it is trained on data. And data is past examples. And when I say past, I include the present. In other words, whatever it is that our algorithms learn, they learn the world as it is. Now, we're always trying to change the world in some way. We're always trying to change the world to what we wish it to be, not what it is. And so it's the humans that express that aspiration. I want my machine to behave better in some way. Or I want my algorithms not to have this built-in bias when it makes a decision that affects someone's life. If it's pure machine learning and data, it will indeed reflect all the decisions that have ever been made, and it'll have all those built-in biases. So there's a big topic there to unpack and who's responsible for doing what. But I think coming back to your question, we'll always need humans to express what it is that is the world that you want in the next minute, the next day, the next week, or the next 50 years. CHAD: So let's talk more about the ethics or the biases that can be baked into AI. How do you prevent that at Aitomatic? CHRISTOPHER: As I said, this is a big topic. But let me begin by saying that actually, most of us don't know what we mean when we say bias, or to put it more broadly, we don't agree on the meaning. The word bias in colloquial conversation always comes with a negative connotation on the one hand. On the other hand, in machine learning, bias is inherent. You cannot have machine work without bias. So clearly, those two words must mean something slightly different even though they reflect the same thing, the same underlying physics, if you will. So first, before people get into what they think is a very well-informed debate, they must first agree on a framework for terms that they're using. Now, of course, I can accommodate and say, okay, I think I know what you mean by that term. And so, let's take the colloquial meaning of bias. And when we say bias, we usually mean some built-in prejudice, it may be implicit, or it may be explicit that causes a human or machine to make a decision that discriminates against someone. And here's the thing, we've got to think about intent versus impact. Is it okay for the effect to be quote, unquote, "biased" if I didn't intend it, or it doesn't matter what my intent was, and it's only the impact that matters? That's another dimension that people have to agree or even agree to disagree on before they start going into these circular arguments. But let's focus on, for now, let's say it's the impact that matters. It doesn't matter what the intent is, particularly because machines, as of present, there is no intent. So, for example, when the Uber vehicle a number of years ago hit and killed a bicyclist, there was no traceable intent, certainly not in the system design to cause that to happen. But yet it happened, and the person did die. So coming back to your question, I know that I've neglected the question because I'm unpacking a lot of things that otherwise an answer would make no sense, or it would not have the sense meant. So coming back, how do we prevent bias as an effect from happening in our system? And an answer that I would propose is to stop thinking about it in terms of point answers; in other words, it's not that...people say...well, myself I even said earlier it's in the data. Well, if it's in the data, does that absolve the people who build the algorithms? And if it's in the algorithms, does that absolve the people who use it? I had a conversation with some friends from Europe, and they said, "In America, you guys are so obsessed with blaming the user." Guns don't kill people; people kill people. But I think to answer your question in a very thoughtful manner; we must first accept the responsibility throughout the entire chain and agree on what it is the outcome that we want to have, at least effect. And then the responsibility falls on all chains, all parts of the chain. And one day, it may be, hey, you got to tune the algorithm a certain way. Another day may be, hey, collect this kind of data. And another day, it might be make sure that when you finally help with the decision, that you tweak it a certain way to affect the outcome that you want. I think what I've described is the most intellectually honest statement. And somebody listening to this is going to have a perspective that disagrees vehemently with one of the things I just said because they don't want that responsibility. CHAD: I like it, though, because it recognizes that we're creating it. It may be a tool, and tools can be used for anything. But as the creators of that tool, we do have responsibility for...well, I think we have responsibility for what that is going to do, and if not us, then who? CHRISTOPHER: That's right. Yeah. But if you follow the debate, you will find that there are absolutists who say, "That's not my problem. That's the user, or the decision-maker, or the data provider. But my algorithms I have to optimize in this way, and it's going to output exactly what the data told it to. The rest is your problem." CHAD: So it strikes me in hearing you describe what's involved, especially at the state that machine learning is at now; it probably varies or what you are going to do specifically varies based on what you're trying to achieve. And maybe even the industry that it's in like avionics and what you need to do there may be different than energy. CHRISTOPHER: Yep, or more broadly, physical industries versus the plane falls out of the air, or a car hits somebody, somebody actually dies. If you get a particular algorithm wrong at Google, maybe you click on the wrong ad. So I really advocate thinking about the impact and not just the basic algorithms. CHAD: Yeah, so tell me more about the actual product or services that Aitomatic provides and also who the customers are. CHRISTOPHER: I think what we discussed is quite relevant to that. I think it does lead in a very real perspective directly into that. We do what's called knowledge-first AI. And that knowledge-first as opposed to knowledge-second and knowledge-third or no knowledge at all, there are very strong schools of thought that say, "With sufficient data, we can create AI to do everything." Data is reflecting the world. As I mentioned, it's in the past as it is, not as what we want it to be. When you apply it to some of the concrete things that we do, let's take a use case like predictive maintenance of equipment, you want to be able to save cost and even to save lives. You want to replace things, service things before they actually fail. Failure is very costly. It's far more costly than the equipment itself. Today, the state of the art is preventive maintenance, not predictive. Preventive means, let’s just every six months, every one year replace all the lights because it's too costly to replace them one by one when they fail. Lots of industries today still do what's called reactive maintenance, you know, fix it when it fails. So predictive maintenance is the state of the art. The challenge is how do you get data and train enough machine intelligence to essentially predict? And the prediction precisely means the following: can you tell me with some probability that this compressor for this HVAC system, this air conditioning system may fail within the next month? And it turns out machine learning cannot do that. CHAD: Oh, that's the twist. CHRISTOPHER: Exactly. [laughter] And I know a lot of people listening are going to sit up and say, "Christopher doesn't know what the hell he's talking about." CHAD: [laughs] CHRISTOPHER: But I really know. I really know what the hell I'm talking about because we've been part of an industrial giant. I'll tell you what machine learning can do and what it cannot do. What it can do is with the data that's available...the main punch line, the main reason here is that there are not enough past examples of actual failures of certain types. There's a lot of data. We're swimming in data, but we're not actually swimming in cleanly recorded failures that are well classified. And machine learning is about learning from past examples, except today, algorithms need a lot of past examples, tens of thousands, hundreds of thousands, or even millions of past examples, in order for it to discover those repeating patterns. So we have a lot of data at places like Panasonic, Samsung, Intel, GE, all the physical industries, but these are just sensor data that's recording mostly normal operation. When a failure happens, that tends to be rare. Hopefully, failures are rare, and then they're very specific. So it turns out that what's called the labeled data is insufficient for machine learning. So what machine learning can do is do what's called anomaly detection. And that is look at all the normal patterns, and then when something abnormal appears on the horizon to say, "Hey, something is weird. I haven't seen this before." But it cannot identify what it is, which is only half of predictive maintenance because you have to identify what the problem is so you can replace that compressor or that filter. And it turns out humans are very good. Human experts are very good at that second part. The first improvement might be to say let's get machine learning to detect anomalies and then let's get human experts to actually do fault prediction. And after you do this for a while, which is what we did at Panasonic in the last three, four years across the global AI units, we said, "Well, wait a minute. Why are we making these very expensive?" Human experts do this if we can somehow codify their domain expertise. And so that's what Aitomatic is. We have developed a bunch of techniques, algorithms, and systems that run as SaaS software to help people codify their domain expertise, combine it with machine learning, and then deploy the whole thing as a system. CHAD: The codified expertise, there's a word for that, right? CHRISTOPHER: Probably you're referring to expert systems. CHAD: Yes. Yes. CHRISTOPHER: Yeah. Expert systems is one way to codify domain expertise. At the very basic level, you and I wrote actual BASIC programs before. You can think of that as codifying your human knowledge. You're telling the computer exactly what to do. So expert systems of the past is one way to do so. But what I'm referring to is a more evolved and more advanced perspective on that, which is how do you codify it in such a way that you can seamlessly combine with machine learning? Expert systems and machine learning act like two islands that don't meet. But how do you do it in such a way that you can codify human knowledge and then benefit as more data comes in, absolutely move into this idea of asymptotically this world where data tells you everything? Which it never will. And so the way we do that, the naive way, as I mentioned, is simply to just write it down as a bunch of rules. And the problem is rules conflict with each other. We, humans, work on heuristics. Whatever it is you tell me to do, you could be an expert, and you start teaching me, and you say, "Okay, so here are the rules." And then once I learn the rules, you say, "Well, and there are some exceptions." [laughs] And then, can you tell me all the exceptions? No, you can't. You have to use judgment. Okay, well, what is that? So the way we codify it is you can think of that evolution. I'll give you one concrete example from the machine learning perspective so people that are machine learning experts can see how we do things that are different. There's something in the machine learning process called the loss function. Have you heard of that term? CHAD: No. Yeah. CHRISTOPHER: So it's very simple. Training, which I'm sure everybody has heard, is really about how do I tweak the parameters inside the algorithm so that eventually, it gives the correct answer? So this process is repeated millions of times or hundreds of thousands of times. But let's say the first time, it gives you a random answer, but you know what the right answer should be. These are training examples. So you compute an error. If you output a five and the answer is actually six, so I say, "Oh, you're off by one, positive one," and so on. So there's a loss function, and in this case, it's simply the subtraction of one. And then that signal, that number one, is somehow fed back into the training system that says, "Well, you were close, but you're off by one." And the next time, maybe you're off by 0.5, next time maybe you're off by -2, and so on and so forth. That value is computable, what's called a loss function. That's machine learning because you have all these examples. Well, human knowledge can be applied as a loss function too. A simple example is that you don't have all the data examples, but you have a physical equation. If you throw a ball in the air, it follows a parabolic pattern, and we can model that exactly, an elliptic equation. That is a way to produce the correct answer, but there's no resistance there. And so, we can apply that function back as a loss function to encode that human knowledge. Of course, things are not always as simple as a parabolic equation. But a human expert can say, "The temperature on this can never exceed 23. If it exceeds 23, life is going to end as we know it because you're going to have a disaster." You can put into the loss function an equation that says if your predictor is greater than 23, give it a very high loss. Give it a very strong signal that this cannot be. And so your machine learning function being trained can get that signal coming back and adjust the parameters appropriately. So that's just one example of how we codify human knowledge in a way that is more than just expert systems. CHAD: That's really cool. Now, is there a way, once you have the system up and running and it is making decisions, to then feedback into that cycle and improve the model itself? CHRISTOPHER: Oh, absolutely, yeah. I think there's a parallel to what I say during training to also while it's in production, both in real-time, meaning one example at a time, as well as in batch after you've done a bunch of these. In fact, the first successful predictive maintenance system we deployed when we were part of Panasonic employs a human being that they feedback at. So our system would try to learn as much as it can and then try to predict the probability of failure of some piece of equipment. And the human being at the other end would say, "Okay, yeah, that looks reasonable." But a lot of times, they would say, "Clearly wrong. Look at this sensor over here. The pressure is high, and you didn't take that into account." So that's a process that we use both to certainly improve the output itself but also the feedback to improve our predictive AI. Mid-Roll Ad I wanted to tell you all about something I've been working on quietly for the past year or so, and that's AgencyU. AgencyU is a membership-based program where I work one-on-one with a small group of agency founders and leaders toward their business goals. We do one-on-one coaching sessions and also monthly group meetings. We start with goal setting, advice, and problem-solving based on my experiences over the last 18 years of running thoughtbot. As we progress as a group, we all get to know each other more. And many of the AgencyU members are now working on client projects together and even referring work to each other. Whether you're struggling to grow an agency, taking it to the next level and having growing pains, or a solo founder who just needs someone to talk to, in my 18 years of leading and growing thoughtbot, I've seen and learned from a lot of different situations, and I'd be happy to work with you. Learn more and sign up today at thoughtbot.com/agencyu. That's A-G-E-N-C-Y, the letter U. CHAD: So on the customer side, whether you can share specific customers or not, what kinds of companies are your customers? CHRISTOPHER: So I've mentioned in passing a number, so Panasonic is one of our customers. When I say Panasonic, Panasonic is a global giant, so it's run as individual companies. So, for example, avionics automotive coaching, how a fish gets from the ocean to your table, Panasonic has a big market share in making sure that everywhere in the chain that fish is refrigerated. So it's called the cold supply chain or cold chain. Supermarkets their refrigeration systems keep our food fresh, and if that goes down in an unplanned manner, then they lose entire days or weeks of sales. I mentioned the example of Furuno, F-U-R-U-N-O. If you go to some marina, say Half Moon Bay, California, you would see on the masts most of the navigation equipment is a Furuno, the white and blue logo. So we help them with those systems and fish finding systems. As well as off the coast of Japan, there's a practice called fixed-net fishing. What that is is miles and miles of netting. And large schools of fish would swim from different gates, A into B. And once they get to B, it's set in such a way that they cannot go back to A. But it's very large that they feel like they're swimming in the ocean still and eventually to trap C. And so Furuno is working on techniques to both detect what kind of fish is flowing through as well as actually count or estimate the number so the fishermen can determine exactly when to go and collect their catch. So I can go on. There are lots of these really interesting physics-related and physical use cases. CHAD: So is Aitomatic actually spun off from Panasonic? CHRISTOPHER: Spin-off, I think legally speaking, that is not the correct term because we're independent. Panasonic does not own shares. But in terms of our working relationship as customer and vendor, it's as good as it ever was. CHAD: What went into that decision-making process to do that? CHRISTOPHER: To do the so-called spin-off? CHAD: Yeah. CHRISTOPHER: Lots of things. CHAD: I'm sure it was a complicated decision. [laughs] CHRISTOPHER: Like we used to say at Google, to decide where to put a data center, lots of things have to intersect just the right way, including the alignment of the stars. In our case, it's a number of things. Number one, the business model just, as I said, at a very high level, it makes a lot of sense for us to be an independent company otherwise inside a...if we're a small unit inside a parent company, the business incentives are very different from if you're a startup, that's one. And the change is positive for both sides. Number two, in terms of venture capital, as you know, today, once you're an independent company, you can access a very large amount of scale in such a way that even a global giant doesn't have the same model to fund. Number three, certainly, the scope of the business we want to be able to apply...everything that I talk to you here is actually an open-source project. We have something called human-first AI rather than just knowledge-first, and so being able to put it out into the open-source and being able to have other people contribute to it is much easier as an independent startup than if it's a business unit. And then finally, of course, aspirations, myself and the rest of the team, we can move a lot faster. People are more passionate about the ownership of what they do. It's a much better setup as an independent company. CHAD: Were there things from Panasonic, either in culture or the way that the business works, that even though you had the opportunity to be independent, you said, "Hey, that was pretty good. Let's keep that going"? CHRISTOPHER: Well, I can comment on the culture of Panasonic itself. It's something that I was surprised by. This is 100 years old. The anniversary was in 2018. I gave a talk in Tokyo. So a 100-year old conglomerate. Japan might seem very stodgy, and, sorry to say, in many ways, it is. But I was very impressed. And I say this as a headline in cocktail conversation. I say the culture of engineering at Panasonic is far more like the Google that I knew than it is different; in other words, very little empire-building. People are very engineering-driven. There are a lot of cordial discussions and so on when people go into a meeting. I was very impressed by this. The Japanese engineers in Panasonic were always really well prepared. By the time they got to the meeting, even though they are in this context our customers, they will come with a slide deck like 30 slides talking through the entire use case. And they thought about this, they thought about that. And so I'm sitting there just absorbing it, just learning the whole thing. I really enjoyed that part of being part of Panasonic. And many of those folks are now lifelong friends of mine. CHAD: And so that's something that you've tried to maintain, that engineering-focused culture and great place. CHRISTOPHER: Well, when we were acquired by Panasonic, both Tsuga-san, the CEO, and Miyabe-san, the CTO, said the following, he said, "We want you to infect Panasonic, not the other way around." [laughs] From their perspective, we had this Silicon Valley setup. And they want this innovation, a fresh startup, not just the algorithms but also the culture. And they were true to their word. We kept an office, our own unit, kept their office in Downtown Mountain View. And folks were sent in to pick up our ways and means. What I enjoyed, the part that I just shared with you, is what I didn't expect to learn but what I did learn in retrospect. CHAD: As you set out on everything you want to achieve, what are you worried about? What do you think the biggest hurdles are going to be that you need to overcome to make a successful business, successful product? CHRISTOPHER: Well, I've done this multiple times. So people like to say, "You've seen this movie before," but of course, every movie is told differently, and the scenes are different, the actors are different, and so on. Of course, the times are different. So concretely, our immediate next hurdle you have to have proof points along the way. So we've got good revenues already. As a startup less than one-year-old, we have unusually good revenues but mainly because of our deep relationships in this particular industry. The next concrete proof point is a series of things, metrics that says we have a good product-market fit. And, of course, product-market fit means more than just a great product idea. It's a great product idea that is executed in a way that the market wants it in the next quarter, not ten years from now. So product-market fit is that iteration, and we're quite fortunate to have already customers what we call design partners that we work with. So hearing from that diverse set is pretty good confidence that if they want it, then other people will want it as well. And then after that, certainly after in timing but in the doing now, is scaling our sales efforts, our sales volume beyond just the founder-led volume that we currently have, so building the sales team and so on. But these are things that I will say are generally understood. But it does have to still be; you just got to sweat it. You got to do it. It doesn't happen automatically. I think the much bigger challenge that I see, and maybe it's an opportunity depending on how you think about it, is I'll call it a cultural barrier. Silicon Valley, in particular, the academic side of us...and you may know I used to be a professor, so when I say academic, I'm talking about myself as well. So any criticism is self-directed. CHAD: [laughs] CHRISTOPHER: We tend to be purists. The purism of today, if I can use that term, is data. And so, whenever I talk about knowledge-first AI, it offends the sensibilities of some people. They say, "You mean you're going back to expert systems. You mean you are not going to be extolling the virtues of machine learning and so on." And I have to explain data is nice if you have it, but 90% of the world doesn't have the data. And you do need to come up with these new techniques to combine human knowledge with machine learning. We look forward to being the Vanguard of that revolution, if you will, that say maybe it's a step backward. I think of it as a step forward of really harmoniously combining human knowledge and machine data to build what we call AI systems, these powerful systems that we're purporting to build. And that's almost directly at odds with the school of thought where people say, "Eventually, we'll have all the data." [laughs] And maybe, as you stated at the beginning, we don't need humans anymore. I will fight that battle. CHAD: The customers that you talked about, a lot of them seem to be pretty big enterprises. So as you talk about scaling sales beyond the founder-led sales that you're doing now, are you continuing to sell to enterprises? Or do you ultimately envision the product being accessible to any company? CHRISTOPHER: Well, I would say both. But I say that in a very careful sense because it's very important building businesses with a focus. And so let me break down what I mean by both, not just from some ambitious thing, you know, A and B. We will focus on enterprise as a matter of business. And the reason for that is A, that's where the money is but B, but more importantly, it's also where the readiness is. We've gone through...it's amazing. It's been a decade since that first New York Times, what I call the cats’ paper about the Google Brain Project. We've gone through a decade of the hype and everything, but this vast physical industry, the industrial of the world, is ready. When I say ready, it means that people are now sophisticated. They don't look at it with wide eyes and say, "Please sprinkle a little bit of AI on my system." So they have teams, and they can benefit from what we do at the scale of what I've just described. But the reason I say both is because, quite happily, it is an open-source project. Our roadmap is designed with our design partners, but once it's out there, the system can be contributed to by others. The nature of open source is such that people tend to use it more than contribute. That's fine. So I think a lot of the smaller companies and smaller teams, once they overcome this cultural barrier of applying knowledge as opposed to pure data, I think they can really take advantage of our technology. CHAD: I'm glad you segued there because I was going to bring us there, too, which is that that open source that you've made available was it ever a question whether you could build a business where you were also open-sourcing the software behind it? CHRISTOPHER: It was absolutely a question 10 years ago. The industry has evolved. And now you and I talked about the TI-99/4A. I was already writing what's called public domain software before the term open source. Ten years ago, CIOs would say, "Why would I do away with the relationship with a big company like a Microsoft or an Oracle in favor of this unreliable, unknown open source?" It turns out, as we now look back, it was nothing to do with the business model; it was the immaturity of open source. Today, it is the opposite. Today, people don't worry about the lock-in with a vendor whose source code that they don't have. But I think equally important, source code is no longer a competitive advantage. Let me say that again. Source code is no longer that intellectual property. CIOs today want to be able to have the peace of mind that if some company locks them out or the company becomes defunct, that the engineers still have access to that source code so that they can build it. But that is not the real value. Amazon, Microsoft Azure, and GCP, Google have proven that people are very willing to pay for some experts to run operationally these systems so that they can concentrate on what they do best. So every day today, you know, every month, we're sending checks to AWS. They're running something that my team can easily run but probably at a much higher cost. But even at cost parity, I would like my team members to be focused on knowledge-first AI rather than the running of an email system or the running of some compute. So likewise, the value that our customers get from us is not the source code. But they're very willing for us to run this big industrial AI system so that they can focus on the actual work of codifying their expert knowledge. And by the way, I probably gave too long an answer to that. Another way is simply to look at the public market; there are very well rewarded companies that are entirely open source. CHAD: Yeah. Well, thank you. That was great. Thank you for stopping by and sharing with me. I really appreciate it. If folks want to find out more about Aitomatic or get in touch with you or follow along, where are all the places that they can do that? CHRISTOPHER: I think the website, aitomatic.com And it's just like automatic, except that it starts with A-I-. So I think the website is a great place to start to contact us. CHAD: Wonderful. Thank you again. CHRISTOPHER: Awesome. Thank you. CHAD: You can subscribe to the show and find notes 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 @cpytel. This podcast is brought to you by thoughtbot and produced and edited by Mandy Moore. 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: Christopher Nguyen .Sponsored By:AgencyU: AgencyU is a membership-based program where Chad Pytel works one on one with a small group of Agency founders and leaders toward their business goals. You'll do one-on-one coaching sessions and also monthly group meetings. You'll start with goal setting, advice, and problem solving based on Chad's experiences over the last 18 years of running thoughtbot. As you progress as a group, you all get to know each other more and many of the AgencyU members are now working on client projects together and referring work to each other. Whether you’re struggling to grow your agency, taking it to the next level and having growing pains, or a solo founder who just needs someone to talk to, in his 18 years of leading and growing thoughtbot, Chad has seen and learned from a lot of different situations, and would be happy to work with you too. Learn more and sign up at thoughtbot.com/agencyuSupport Giant Robots Smashing Into Other Giant Robots

Alan Cowen, Executive Director of The Hume Initiative and CEO of Hume AI, discusses building empathic abilities into applications and the need for clear ethical guidelines in AI. They explore challenges in training AI models, making them accessible, and developing guidelines for empathic AI. They also share their aspirations for their product and the importance of algorithms enhancing well-being.

James Oliver Jr. is the Founder and CEO of The ParentPreneur Foundation, which empowers Black ParentPreneurs so they can leave a legacy for their beautiful Black children. Chad talks with James about inspiring, encouraging, and supporting ParentPreneurs to lobby to try to close wealth inequality gaps, shoot their shot and send cold emails, and engage in a community that supports one another. Parents Making Profits The ParentPreneur Foundation Follow The ParentPreneur Foundation on Twitter, LinkedIn, or Instagram. Follow James 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 James Oliver Jr., Founder, and CEO of the ParentPreneur Foundation, which empowers Black ParentPreneurs so they can leave a legacy for their beautiful Black children. James, thanks for joining me. JAMES: I'm super excited to be here. Thanks so much for having me. CHAD: So I just said, in a nutshell, the tagline for ParentPreneur Foundation. I know it's a community that brings people together, Black ParentPreneurs together. How did you get started and see the need for this, and how did you actually then make it happen? JAMES: Oh boy, that's a great question with a semi-long answer, so just hang in with me, but I think it's a really compelling story. So back in 2013, (I'm from Brooklyn, New York) at the time, I was living in Northeast Wisconsin. It started in 2011. I was trying to build a startup called WeMontage, which was the world's only website to let you turn your digital images into removable photo wallpaper. CHAD: If you haven't seen it, by the way, you should look at it. That description that you gave, even though it describes it perfectly, I didn't realize until I went to the website and looked at the pictures exactly what it is and how remarkable of a product it is. JAMES: Well, I'm delighted that you say that. Thank you so much. And that's part of the reason why [laughter] it failed. I mean, it's still around. And I know we have a bunch of designers in the community. So look, the website still works. The underlying collage editing software is still brilliant, but the UI UX needs a lot of love. It's a bit of a zombie with about $10,000-$15,000 of technical debt floating around over there. [laughs] But the product still works. And we still print, ship them sometimes. And we have tons of repeat customers. It's just one of those things. You build a great product, and they will always come. But the product is still brilliant still today. So back then, I was a non-technical founder. I was out of money. I cleaned out my savings and living in the middle of nowhere. There wasn't exactly a bastion of technology startups or diversity, even for that matter. And I was fortunate to get into Gener8tor's...I think we were the second cohort. Back then, it was super early. We went to Madison. And right now, Gener8tor is killing it. But I was out of money. I was thankful to get into their Madison cohort, which was a two-hour drive away. My ex-wife now was pregnant with our twins. The kids were supposed to be born end of March. Gener8tor ended early April. So I was like, okay, this timing works out brilliantly. But a day or two before the program started, I had to deliver, and we had to deliver the twins prematurely. Otherwise, my son would have died. CHAD: Wow. JAMES: His blood just started to circulate backwards. It was crazy. So we had to take them out. They weighed two pounds apiece. Every time I tell this story, it gives me agita, man. The accelerator was a two-hour drive each way back and forth to the NICU, waking up at 2:00 a.m. every morning because I couldn't sleep. I cried every day. I had a really talented developer on my team, but he had his personal demons. So he was really unreliable. But he was a brilliant guy. He was so smart, really talented. But anyway, I got through the accelerator. Right before I was going on stage for demo day, I got a call from this angel that we pitched. We were raising $250,000 at the time, which really, in retrospect, was not nearly enough money. But I got a call. He said, "Hey, we're going to fill your round." I don't know. What does that mean? I don't take anything for granted. [laughs] What do you mean? "We're going to give you $250,000." And then I just dropped to my knees. I thanked God. And I cried because I had sacrificed so much to get to that point. Thankfully, my daughter came home after six weeks, and my son came home after ten weeks. The kids are doing fine. They drive me crazy, but they're beautiful. CHAD: [laughs] How old are they now? JAMES: They just turned 9 in January. So after I launched WeMontage, I hired just a really remarkable technical co-founder and just a great guy. We still have a wonderful relationship. We got in there, and when I started out, I was like, well, I'm going to start a blog. I started a blog, and I was like, one of these days, I'm going to use the content from this blog to write a book. CHAD: Before you move on, so in those early days, you had just gotten into the accelerator. You had this thing you needed to deal with with your family and delivering the twins. And did you ever consider dropping out of the accelerator at that point? JAMES: I wasn't going to go, but I knew with that decision, WeMontage never would have come to light because I just didn't have the resources to make it happen. But as a family, we decided that I need to go do that and crush that, and so I made that choice. We raised money. In retrospect, we raised just enough money to fail because, look, the software was cute. We were running around pitching angels. It was cute to show look at what we can do, look at what we could do. When we turned the thing on, it was so unsustainable. It was a black box. And I was on the phone literally with customers holding their hand to get them to place an order, and that was clearly unsustainable. So we made the decision that we need to fix this thing. We need to pull it apart, make it modular, stabilize the code, build on it. And by the time we got done with that, we only had a couple of months' cash left. And I remember...man, if anybody has never told you this to your face, I promise you it's a hard thing to hear. They were like, "We're not going to throw good money after bad." I'm like, well, damn. Like, thanks. We have our first Today Show appearance coming up here next month. So thank you for that. Thanks. [laughs] Man. CHAD: So you actually did go on the Today Show. JAMES: Yeah, we got featured three times on the Today Show. I mean, on my own without a publicist, I got Today Show three times, Good Morning America, Money Magazine, DIY, Martha Stewart, on and on. CHAD: I'm curious, after making an appearance like that, do your sales go up? JAMES: They do. They did with the Today Show. So it was funny, like that first appearance, they didn't even put the graphic on the bottom with the name of the business. When Mario mentioned it, he said, "wemontage.com." Man, our freaking website went crazy. It crashed the website. [laughs] But we were kind of already prepared for it to crash. We had a little splash screen up and information. We got it back up in; I don't know, it was less than an hour. But I spent literally all day getting back to those people. We gave them a coupon code. And we did about $15,000 that month from that one segment, which was great. That was our best month to date. I mean, all total, I've probably done $75,000 to $80,000 in sales from the three times we appeared on The Today Show. CHAD: That's great. We've had clients, or I've known people who have done appearances like that, and it seems a little bit hit or miss. Sometimes it won't even result in a blip, and other times it's huge. And I'm not sure what the trend is when it matters and when it doesn't. JAMES: This is the point: we all love these vanity things. We want to get exposure, exposure. So I have a really great relationship with Seth Godin, and he's a big supporter of the work I'm doing at ParentPreneur Foundation. He gives us scholarships to his marketing seminar, and he comes to visit with us sometime. The last time he talked about...he said, "Stop trying to do things to get attention. Spend your time getting your customers to tell their friends about your business." And that's a whole fact. We love the vanity, but at the end of the day, PR does not necessarily equal cash flow. I had some hits. I got on Good Morning America, and that was not nearly as good as the Today Show. But that was by virtue of the last-minute change that they made in terms of how they were producing the segment. When they introduced my product, they had the camera on somebody else's product. They had people calling me about somebody else's stuff which is like, are you serious? But what are you going to do? You can't control that. So yeah, those things are good. I will say that having that stuff on the landing page is good for credibility. People feel more comfortable, especially if they can see it. So that stuff matters to a point, but I wouldn't be spending a lot of time. I certainly would not be wasting a penny on a PR professional if I was a founder. I just wouldn't do it. All that stuff I rattled off I did on my own. CHAD: Awesome. So you started to build a blog. [laughs] JAMES: Yes. So the intention of that was to use that content to write a book to inspire ParentPreneurs around the world because it's hard being a parent and entrepreneur, especially if you're like early-stage scraping to get some revenue. You can't even talk about product-market fit yet. Can we make some money? [laughs] Can we make a buck? CHAD: So I've done a few things in my life. Writing books is one of them, and I can't say that it's easy. I don't know how you found it. I was doing it with a traditional publisher the first few times around, and it was pretty difficult. How did you find it? JAMES: So I self-published that book. And because of the way I approached it, I already had a bunch of content on my blog. It's funny; I was actually out of town. I was in Midland, Texas, because I got flown out there. I was on CNBC's version of Shark Tank, West Texas Investors Club, horrible experience, by the way. I swear if I ever go on another one of those shows, I'm going to bring the drama. CHAD: [laughs] JAMES: Piece of advice, for any of you guys listening, if you go on Shark Tank or any of those shows, do not leave it up to the creative people to tell a story about you. This is just me; I'm a little crazy, crazy like a fox. But you give them the story. So this is me and you talking, just the two of us. [laughs] If I go on Shark Tank or something like that, I'm not taking those people's money. They're going to be like, "Oh, well, you're just here clearly for the exposure." I'm like, well, so are you. You're doing it too. Why should I give you 20% equity in my company for $200,000 or whatever it is? How much time are you actually going to spend helping me build my company? And by the way, the people who came before you from an investment standpoint already took a ton of risk off the table. So why should you get that money? And how many companies are in your portfolio? 50? So, okay, so are you really going to be helping me or nah? Nah? Right. No, I'm good. CHAD: That'll definitely air. The producers will love that drama. JAMES: That will air, right? See what I'm saying? And the people watching will be like, "Hell yeah, you tell them. Let me Google that real quick." [laughter] CHAD: That's funny. JAMES: But that's just me. But I have no intention of going back on any of those shows again because, at the end of the day, it was a bad experience for me. I only got about $6,000 in sales, but that's because nobody was watching that show. It was canceled. But at the end of the day, if you have a customer acquisition problem which is what we had at WeMontage, those things don't solve your problems. They just don't. Not necessarily. They could; you could get lucky. But it's probably not going to solve your problem. CHAD: So I'm curious. So you wrote the book, and you focused on the concept of ParentPreneurs, Black ParentPreneurs specifically. JAMES: No, actually, so the book was just for everybody who's a ParentPreneur. So the book's called The More You Hustle, The Luckier You Get: You CAN Be a Successful ParentPreneur. So Mario Armstrong, who's my guy from the Today Show, wrote the foreword to my book. We're really good friends. And it's on Amazon. Some people have regarded it as the realest book of entrepreneurship they've ever read. It's unlike anything you ever read. It's the story of my journey, some of those things I just told you, and the up and down the back and forth. It will make you laugh, make you cry, make you wonder. You put it down, come back to it. There are some hard questions that I ask myself, and people read the book. It's a superfast read too. CHAD: Awesome. At what point did you decide to focus on empowering Black ParentPreneurs? JAMES: So that's a great question. So after I wrote the book, I had this idea. I said one day I'm going to sell WeMontage. And maybe it will happen. I don't know; if God can intervene, something could happen. Who knows? [laughter] It's just not likely at this point, and that's okay. But I was like, I'm going to sell this business. I'm going to take a million dollars of my own money and start a foundation for parents who are entrepreneurs because it's really freaking hard. It's so hard. Unless you've been there, you have no idea how hard that is. It's really hard. So then, in early 2020, the whole world falls apart with George Floyd, Ahmaud Arbery, Breonna Taylor. I had my own Karen experience here in my backyard. I live in a really nice neighborhood in the suburbs of Atlanta. And I had to call the police on her. After the second experience, I filed a trespass warrant. Then I started looking at all the Federal Reserve wealth inequality data. And I was like, I'm starting this foundation for Black ParentPreneurs because we need the help the most. We have got to try to close this wealth inequality gap. It's a big problem. I'm doing that. So now to answer your question, prior to that decision, so when I was going to Gener8tor, I met David Cohen and Brad Feld. They just popped up on a Google Meet to meet us. And these guys are co-founders of Techstars, which is one of the preeminent global startup accelerators. And I just stayed in touch with them through their blogs. I didn't want anything from them. I remember I got an email from Brad a couple years back. And he's a voracious reader. He's a prolific writer. He sent me an email out of the blue. He said, "I just read your book. I effing loved it." [chuckles] He said, "I got to feature it on my blog." I was like, wow, okay, dope. So he did that. And we sold some books, which was great. But so I reached out to Brad and David. I was like, "Hey, guys, I'm thinking about starting this foundation for ParentPreneurs in general." And they were like, "Yeah, I'm game. We can go back and forth with you about it," and which is amazing at that level those guys would be willing to do that. I appreciated that. And they were both like, "Eh, foundations are hard. It's a constant fundraising grind, blah, blah, blah." And, look, they're not wrong. [laughs] They're not wrong. But here's the thing, though. For me, telling me something is hard doesn't land with me because I've had to scrap and scrape for every single blade of grass on the field of life. And quite frankly, it's hard being Black sometimes. If I had $1 every time somebody told me that WeMontage would have been successful if I had a white face out there instead of me type thing, it is very frustrating. So then I got an email from Brad Feld out the blue after George Floyd, which was just a subject that said, "Hey, you're game for a 30-minute Zoom?" There was nothing in the body of the email. And I'm just like, yeah, I could as well want to talk to Brad. He's top of the food chain. He's not just a VC and co-founder of Techstars with a portfolio valuation north of $200 billion. He's also a Limited Partner. LPs are the people who write the checks to the VCs who write the checks to people like me and you guys listening who are entrepreneurs. So I'm like, hell yeah, I want to talk to you for 30 minutes, Brad Feld. Who doesn't? I just didn't know what it was about. So he said, "I just want to know what two things you're working on addressing racial injustice, inequality I can put my time on or attention on." I'm like, Oh, hell yeah. Chad, I'm like, he has no idea what I just decided. So we get on to Zoom. And I say, "You know, Brad, you remember that foundation thing I was telling you about?" He was like, "Yeah." I said, "Well, now that's just what Black ParentPreneurs is." He goes, "I'm so glad you did that." And this is the part that knocks me out of my chair every time I say it. He goes, "What would a 12-month operating plan look like? I can throw it up in a Google Doc, and I'll co-create it with you." [laughs] CHAD: That's great. I mean, it is unfortunate that George Floyd being murdered and these other things have instigated people to want to make change and to get involved in ways that they haven't been able to before. That's super unfortunate, but something's got to wake people up. JAMES: Well, that will come up because he was like, "Look, I'm this rich, middle-aged white dude. I've been doing things to support Black entrepreneurs in the past," but he's like, "I got to do more. So I'm reaching out to my friends, and I consider you a friend." I was like, wow, like, I knew you liked me a little bit, but I didn't know you liked me like that. CHAD: [laughs] JAMES: But he is a friend. I have his phone number. I can call him. He's a friend. Him and David these guys are friends. So I got the 12-month operating plan right back to him. He said, "This is great. What would a six-month plan look like?" I got to write back. And he's like, "Assume three things, one of which is a $50 000 seed grant from my foundation to start the ParentPreneur Foundation." So Brad has given now, I don't know, north of $125,000. He got us into the Techstars Foundation, which has been phenomenal. My relationship with David has blossomed. I went on the Techstars Give First Podcast with David, and David's a friend as well. I just love those guys and how they move, and they've been super helpful. And so our foundation, at the heart of what we do, you mentioned this at the top, is we have a community of now almost 1,800 Black ParentPreneurs hosted on Mighty Networks, which is phenomenal because it's not on Facebook. That's the thing I love the most about it. [laughter] CHAD: I actually have some questions about Mighty Networks on my list. So we don't need to take a tangent in there right now. We can come back to it. I want to ask you about Mighty Networks. JAMES: Love it. Love it. Love Gina Bianchini. She's the CEO. I actually had her on my LinkedIn live show a couple of months ago. CHAD: Well, let's do it now then, actually. So as someone who has built software before to put together a company, did you ever consider that for this? And why not? And why use Mighty Networks? JAMES: To build a community platform? CHAD: [laughs] It's a very loaded question, James. JAMES: Yeah, why would I do that? Listen, by the time I got done with my prototype with that; these guys would be like two versions past where they are today, which would be infinitely better than my little stinky MVP, right? CHAD: Yeah. JAMES: And these people live, eat, and breathe community. Is Mighty Networks perfect? No, of course not. But they're constantly making improvements. I think I told you at the top I'm actually about to launch a new podcast. I just signed a national podcast distribution deal. So we're launching a podcast on the HubSpot Podcast Network. You guys have heard of HubSpot, right? CHAD: I have, yes. JAMES: So it's for ParentPreneurs in general, kind of like my book, to empower ParentPreneurs to be the best parent entrepreneur they can possibly be because being a ParentPreneur is hard. And we came upon this opportunity. I saw an article; maybe LinkedIn, I don't remember, talking about HubSpot launched a new podcast network last year. And I told you I got all these PR opportunities. And I got that because I'm not shy about shooting my shot. A lot of people are too scared to shoot their shot, or they don't know what to do, how to do it. But cold emails I'm really good at sending cold emails. So I sent a cold email to the CMO of HubSpot. He was mentioned in the article. I went on LinkedIn. I scraped his email address using my favorite email scraping tool, GetEmail.io. It works on LinkedIn. You get their email address. I sent him an awesome email. Of course, he didn't follow up right away; well, not, of course, sometimes they do. He didn't follow up right away. I sent a follow-up email. And when I send follow-up emails, I like to give some kind of update. So in my follow-up email, I wasn't just like, "Hey, did you get my email? Please respond." It wasn't that. It was like some other update. I can't remember what it was, but it was an update following up about my email. He got back, copied somebody on the team. They got back, copied somebody else. They were like, "Do you have a clip or an excerpt of an interview?" And it just so happened we did because we knew we needed to get ready. So we did an interview with Neil Sales-Griffin, who's the Techstar Chicago Managing Director, and so we sent them an excerpt. They were like, "This is great. Do you have a whole episode?" So we edited that thing down right here that day. It was a Friday, sent it to them. They were like, "Thanks for sending. We'll get back to you by Monday with the decision because, by the way, we have this new program, this emerging podcast voices program. There'll be six to eight podcasts in this program. And we'll listen to this and consider it." So they got back to us Sunday night at 11:00 o'clock. "This is amazing. You guys are pros." I'm like, that's not me. That's really Mario. I have no idea what I'm doing at all. CHAD: [laughs] JAMES: But thanks, Mario. "And you guys are stars. You can't teach stars." But I'm like, hey, all right. I've never done a podcast. But hey, glad somebody other than my mama likes me. This is awesome. And they were like, "We want to invite you to be one of the companies in this new cohort with a new podcast," and just a swoop in at the last minute like that all because I shot my shot. So if anybody's out there listening, don't be afraid to shoot your shot, man. It's a mindset. You got to know what to do, how to move. But you've got to first have the mindset like, yo, I am going to shoot my shot. CHAD: I think as long as you...and you already said this, but you're making it real. Like, when you're following up, you're not just saying, "Hey, did you get my email?" You're finding ways to make it real and authentic. You got to show that you're real and not some bot. JAMES: Yeah. So I will say in terms of the cold emails, I send them all the time. Cold emails is how I ended up collaborating with Nasdaq Entrepreneurial Center. We're big partners with them. We're part of this grant project with them with this major Wall Street Bank Foundation they're about to be announcing this year any day now. We got a grant tackling the problem of Black or Brown founders, underestimated founders not getting access to early-stage venture and angel funding. So we're part of that with my foundation all because I sent a cold email to some guy at Nasdaq. I don't even remember who it was, Western president. Sent him an email, he copied the executive director from Nasdaq Entrepreneurial Center. The rest is history. My last round of grants, they co-sponsored the last round of grants. They put in some money. Great relationship with Nasdaq. They got 30 of my people from our community featured in the Nasdaq Tower in Times Square, let that sink in, all because of a cold email. So if you're going to send a cold email, just a couple of tips off the top of my head. You need to have a compelling subject line. Keep the emojis to a minimum. [laughter] If you can use the person's name in the subject, I think that increases your open rate by like 20%. The email's got to be right to the point. Hey, my name is James Oliver, CEO of ParentPreneur Foundation. Put a link to the ParentPreneur Foundation in that instance. We got funded by Brad Feld, co-founder of Techstars, and put a link to Brad Feld's article. Establish credibility right away and get to the freaking point. Like, what do you want? Make an ask. What do you want? Get right to it. That's it. CHAD: And then when you don't hear back, and you should follow up? JAMES: Oh yeah. You absolutely got to follow up. I'll follow up a couple of times. I know Mario is like, "I just keep following up till they tell me to stop." [laughter] He's gangsta like that. I'll follow up three or four times. But after that, I know when people are pestering me. At that point, you're pestering. I'm not interested. If I was interested, I would have responded, so knock it off. But I also respect the hustle when people are coming to me with something that's legit. And I will respond because I am them sometimes too. I'm like, "Hey, thanks for reaching out. I really appreciate it. I'm just not interested," or "I'm not interested now. Ping me back in six months." CHAD: As someone who gets cold emails, I do the same thing when it's a legitimate...and you can tell. You can tell the ones where they're just blanket sending the same thing to a bunch of people. And you can tell when it's someone legitimately sending you a cold email. JAMES: Because if you mention something about what they do specifically and how that's relevant to your email or your ask, that increases your chances of getting a response. Hell, I sent a cold email to Mark Cuban, bro. CHAD: Awesome. JAMES: He said yes. I interviewed him on my blog. I don't write on my blog anymore. But he got right back to me, and I interviewed him on my blog. He was great. CHAD: So I don't know if everyone does this. Like you said, even if it's not a fit for me or I can't do it right now or whatever, if it's a legitimate thing, I will almost always actually respond to it eventually. Mid-roll Ad I wanted to tell you all about something I've been working on quietly for the past year or so, and that's AgencyU. AgencyU is a membership-based program where I work one-on-one with a small group of agency founders and leaders toward their business goals. We do one-on-one coaching sessions and also monthly group meetings. We start with goal setting, advice, and problem-solving based on my experiences over the last 18 years of running thoughtbot. As we progress as a group, we all get to know each other more. And many of the AgencyU members are now working on client projects together and even referring work to each other. Whether you're struggling to grow an agency, taking it to the next level and having growing pains, or a solo founder who just needs someone to talk to, in my 18 years of leading and growing thoughtbot, I've seen and learned from a lot of different situations, and I'd be happy to work with you. Learn more and sign up today at thoughtbot.com/agencyu. That's A-G-E-N-C-Y, the letter U. JAMES: So, if I may, I just want to talk a little bit about the impact in the ParentPreneur Foundation. CHAD: Yes. JAMES: Because we have 1,800 people now. This current round of grants makes $95,000 in the last 19 months since we launched. We do micro-grants of $1,000 apiece. I think I just tweeted this morning that it just seems like people look down their nose at a $1,000 grant. And I'm like; clearly, these people are not or never have been a super hustling, early-stage entrepreneur and definitely not one of those with kids. So $95,000, again, keep in mind, I don't know anything about a foundation, a non-profit. I've never done it before. I've never started a community, but I don't care; it doesn't matter. [laughs] You know what I'm saying? In this instance, there's a tremendous founder-market fit because I am them. And that shines through brilliantly in all the things that we do. And the thing that I'm most thankful for that we've done in the community is we've paid for 320 mental therapy sessions for our community members. And that's important because historically, mental health is stigmatized in the Black community. And there's this belief of epigenetics, which is basically you can pass trauma down through your DNA to your descendants. And if that's true, Black folks got a lot of trauma, and we need to get it worked out. And when we do it in our community, people jump right on it. So I'm so proud of those guys that they take it very seriously. And that's really legacy, and that's impact because we're creating a legacy of mental wealth for the people in our community that influences how they show up for themselves, for their businesses, for their partners and spouse, for their children, all of which impacts how their children show up in the world. So it matters a lot. CHAD: I think the therapy sessions are a great example of when you have an authentic, unique community, something is going to come out of that which is so specific to that community. The impact of that is huge but also, where did that idea come from? Was that you? You said, "Hey, this is a need we have to do this"? JAMES: Yes. CHAD: Did it come from the community itself? JAMES: No. And see, this is why I'm talking about the founder-market fit. I don't know all the things that my people need, which is why a lot of times I ask them, "What do you want? What do you need?" But a lot of things I already know they need before they even need them because I've been where a lot of those guys are, and some of them ain't been there yet. I already know what you're going to be looking at in six months, bro. You need to pay attention a little bit. So right from the beginning, we use betterhelp.com. We created a BetterHelp account. And it's so easy. We use Typeform. Typeform is another partner of ours. They've given us lots of free codes, and VideoAsk is a new Typeform company. We use that for our application process, which is just brilliant. I keep getting compliments about how amazingly seamless and elegant our application process is for the grants using VideoAsk. But we use Typeform and first come, first serve. It fills up, and then I just get the email addresses, and I just drop them right into Betterhelp's account. And they reach out to people in the community, and they get them set up. It's so easy. CHAD: That's great. What happens in the community? Is part of the value of the community just support from each other? JAMES: Well, that's a big part of it. So that's a great question. So one of the things in the Seth Godin marketing seminar is he talks about tension and why it's important in marketing and how it drives change and drives people to action. And the assignment around tension I couldn't think of like what the tension was for the ParentPreneur Foundation. But when he came to meet with us, and we were talking about it, he said, "If I'm on an airplane and we're sky jumping, and they're like, 'Well let's jump out,' and it's a perfectly good airplane," the tension for him is what if the parachute doesn't open? And the answer is like, "Well, don't worry. We have a backup chute for you." Okay, banzai, let's go. [laughs] But for the ParentPreneur Foundation, the tension is what if we fail on this rocky road? What if we fail in our journey to leave a legacy for our beautiful, Black children? He said, "It doesn't matter because we have each other's backs on this rocky road." So I'm like, yes, that's exactly right. We have each other's backs. And I'm telling you, man, I see it. A lot of stuff is taking place; I have no idea. But I hear about it from time to time, just organically. People are collaborating. It's just amazing, man. It's just great. So yeah, I know it's lonely being an entrepreneur, a lot of different challenges, unique challenges of being a Black entrepreneur. And it's just great to have a safe space for that. We do a lot of different things. We paid for virtual assistants. We paid for when kids were being virtual schooled. We paid for some virtual tutors for some of the children. Social capital is another thing that I talk about a lot. We pay for people to improve their LinkedIn profiles and understand how to move properly on LinkedIn and build and increase their social capital, which to me is as problematic as a dearth of financial capital because, without social capital, you can't even imagine what's possible. And it was Albert Einstein who said that imagination is more important than knowledge. And it's just so true. So we're doing all the things. CHAD: So, do you have a sense of what the split is between moms and dads in the community? JAMES: Yeah, just off the top of my head, I think it's around 75-25 moms and dads, and that's interesting. Women like to build community, men we don't. We're like the king of the jungle. We're all okay by ourselves. [laughs] We don't want to build community. But, man, women love to build community, and they hold down our community in a big way, and I'm just so thankful for them. CHAD: So you started in 2020. One thing that I've seen, and I think it makes your timing good, is that a lot of people either had change forced on them because of the pandemic, and they lost their jobs. Or they felt like they needed to make a change. And a lot of people faced with that decided to do something on their own and make something happen. So there has been a surge in entrepreneurship from my... And another thing there's been a surge in is people going to coding bootcamps feeling like yeah, I lost my job, or I no longer want to do this job that I can no longer do remotely. I want to make a change in my life and learn to code. Does that resonate with you as something you've seen in terms of people who have never been entrepreneurs before who had it forced on them or making a conscious choice to do it, joining the community? JAMES: Yeah, absolutely. To a certain extent, at the beginning of COVID, when everybody was freaking out, because I understand that within every crisis exists an opportunity, I was looking for that opportunity. I was like, all right, where's the opportunity here? I was asking the questions. And then, I had a chance coffee meeting with some acquaintances and told them my intention of starting the foundation one of these days. And they were like, well, what are you waiting for? Why don't you do it now? And I thought that was like the answer to my question. And I was like, oh damn, like, yeah, what am I waiting for? Let's do it now. So yeah, a lot of people are moving towards entrepreneurship. I think a quick Google search will bear that out. I don't know to what extent, but I know it's a lot. The application for new businesses are increasing over the last few years. So yeah, I get it. People kind of hate their corporate jobs. They hate going to the office. I get it. My goal in life is to never have to wear a suit and tie again. [laughs] CHAD: Even when you go on Good Morning America. JAMES: I might wear a suit, but I'm not wearing a tie. Knock it off. [laughs] CHAD: Well, I'm sure everything you mentioned that you've been fundraising all this stuff costs money. Does the majority of your funding come from bigger donors? I know that you have a link to donate, and I encourage people to do that. But how much time do you have to spend fundraising? What is the donor mix? And how can people help? JAMES: It's just weird. We get in our own heads. I used to say, man, I kind of suck at fundraising, but I don't. We raised almost $300,000 since I started this thing with no experience. That's not somebody who sucks at fundraising, right? CHAD: Yeah. JAMES: But in my mind, we should have a million dollars in the bank so I can hire an executive director, and we can ramp up the programs that we know, or I can scale this thing up and do some other things. I have some other things I want to do. I want to do a startup studio. I'm trying to partner with Techstars right now. With Techstars, I'm already talking to the right people. I want to do a pre-accelerator program with them for Black ParentPreneurs and putting like $20,000 in people's pockets. That's going to cost money. We need a sponsor for that. But to answer your question, you can visit parentpreneurfoundation.org click donate. And $25 a month it all helps. It all adds up. We have things that we have to do to keep the platforms going and tools and resources that we use to keep it all going. The big chunks have come from people like Brad Feld and David Cohen. And Fred Wilson even donated $10,000 one-time but yeah, we need more. I'm just biding my time. And the work we're doing matters so much. It's making a big impact. We are literally helping people raise money and get their businesses off the ground. And one woman who just went through the Techstars Founder Catalyst Program with JPMorgan Chase here in Atlanta she went because I introduced them on my show. And she got in, and she just raised $250,000. And then she just told me she got a commitment for another half a million dollars. And this other woman she got a $250,000 grant from Wells Fargo because of our relationship with Nasdaq. And another guy got a term sheet for half a million dollars because of the introductions we're making. So we're literally out here building capacity for the members of our community in so many ways. I'm thankful. I'm honored. I'm humbled to be in this position to do this work. But this is purpose work for me. This is my purpose, and I'm thankful to have found it. It's like Mark Twain says, "The two most important days in your life are the day you are born and the day you figure out why." I encourage people to go figure out why. CHAD: And if you are Black ParentPreneur hearing what we're talking about and saying, "Yeah, now I know about this. This is for me." You also go to parentpreneurfoundation.org and sign up there. JAMES: Yes, sir. Click the join community button. Absolutely. CHAD: Well, James, thanks for stopping by and sharing with me and all the listeners. I really appreciate it, and I wish you and everything that you're doing all the best. JAMES: Yes. And, Chad, thanks for reaching out, man. Look at you; you're on your hustle. It wasn't you that reached out to me. There was somebody else. CHAD: It was, yeah. Another member of my team. JAMES: How'd you find me, man? CHAD: I think she's very good at LinkedIn, and you're good at LinkedIn and so -- JAMES: [laughter] Well, I got a big [inaudible 36:11] show them the receipts, man. Show them the impact because that's what you got to do. CHAD: Are there other places where if folks want to get in touch with you or follow along with you? Where are the other places they can do that? JAMES: Yeah, they can do that on IG. We're parentpreneurfoundation on IG. I'm not super active there, but we're there. You can follow me on Twitter. I talk a lot on Twitter. I don't think anybody's listening, but I talk a lot on Twitter. CHAD: [laughs] JAMES: That thing doesn't come on until you actually earn those blue checkmark thingies, I swear. Because I will say something I think is really profound, and it's crickets. And I see somebody with a blue checkmark say the exact same thing, and I'm like, okay, I see how it is, but whatevs. [laughs] So I'm on Twitter @jamesoliverjr, jamesoliver-J-R. Follow me on Twitter. That'd be awesome. Shoot me a tweet. Tell me you heard about us, heard about me on The Giant Robots Show here. I would love to connect, engage, and build and learn with your audience. So thanks. CHAD: Awesome. And for all of you listeners, you can subscribe to the show and find notes for this episode along with an entire transcript of the episode at giantrobots.fm. If you have questions or comments for me, email me at hosts@giantrobots.fm. And you can find me on Twitter @cpytel. This podcast is brought to you by thoughtbot and produced and edited by Mandy Moore. 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: James Oliver Jr..Sponsored By:AgencyU: AgencyU is a membership-based program where Chad Pytel works one on one with a small group of Agency founders and leaders toward their business goals. You'll do one-on-one coaching sessions and also monthly group meetings. You'll start with goal setting, advice, and problem solving based on Chad's experiences over the last 18 years of running thoughtbot. As you progress as a group, you all get to know each other more and many of the AgencyU members are now working on client projects together and referring work to each other. Whether you’re struggling to grow your agency, taking it to the next level and having growing pains, or a solo founder who just needs someone to talk to, in his 18 years of leading and growing thoughtbot, Chad has seen and learned from a lot of different situations, and would be happy to work with you too. Learn more and sign up at thoughtbot.com/agencyuSupport Giant Robots Smashing Into Other Giant Robots

JT Lidell is the Founder of Promenade, which seamlessly matches and connects military veterans to the resources, people, and organizations that matter to them. Chad talks with JT about being a mission-driven, bootstrapped organization, the problems that he's encountered and hopes that Promenade solves, and aggregating people, tools, resources, and funding to make it happen. Promenade Follow JT 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 JT Liddell, the Founder of Promenade, which seamlessly matches and connects military veterans to the resources, people, and organizations that matter to them. JT, thank you so much for joining me. JT: No, thank you for having me. Excited to talk to you about what we're building over here and having this conversation. So thank you so much for having me on today. CHAD: I love mission-driven organizations, and Promenade falls right into that. How did it come about for you? JT: Yeah, this has been...the inception of it really truly began many, many years ago when I first joined the military straight out of high school. So I went to The Naval Academy, actually, started there then went to the army. Fast forward 7, 8, 9, 10 years, and as I was getting out of the military and trying to join the civilian workforce, the civilian world, that's where a lot of the problems and challenges that I'm trying to solve through Promenade started. And then, working in the technology space in corporate America really allowed me to identify some of the solutions and tools that I'm working with now. But to answer your original question, the beginning of Promenade or the inception of Promenade really began with my entry into the military. CHAD: What were some of the problems that you encountered and that you hope that Promenade solves? JT: Back in 2000...I left the military officially in 2010 but went straight into defense contracting work from there and worked there for a few years. And it was, as I was leaving, I went literally from Afghanistan, and 30 days later, I was sitting in an MBA classroom. And leaving Afghanistan, I thought there was literally no problem, no challenge...after going through three deployments to Afghanistan and being deployed to other parts of the world, I was like, there's nothing that I'm going to come against that I won't be able to tackle. That was the furthest from the truth. So there are a number of issues when it came to relationships, when it came to navigating the workforce, when it came to just understanding how drastically different the civilian world was from being in the military and the defense industry. So those problems are umbrellas, and there are many, many things underneath those that I came up against. CHAD: What are some of the ways that, you know, I speak as someone not having served in the military. What are some of the big ways in which civilian employment is different? JT: It wasn't even necessarily...well, obviously, there are huge differences obviously from the military and civilian employment. But it was really even like, how do you get entry into the civilian workforce just from the very beginning? So, how do you craft a resume? It seems like a minor thing at this point in my life, but it's a huge one. When you leave the military, you have these 9, 10, 11-page resumes. And that's what you're supposed to do. You're supposed to put literally every single piece of experience that you have on this resume. But when you come to the civilian world, you have to somehow condense all of that down to one page, and there's a science to doing that, and that was one of the first huge hurdles. Because a resume is just your ticket into the door, it's a ticket to that interview. That's just literally the first step. And that was something that I didn't realize was something I was going to have to hone my skill at. CHAD: Do you think that a lot of companies overlook the value of military service? JT: Yeah, that's a tough one to answer. So it's hard to say overlook when as a military veteran just taking myself, for instance, you know, in a lot of ways, I was not communicating effectively what my experience was in relation to the value I could provide to that organization. So as a recruiter or a headhunter, whoever is doing that initial review, they're simply looking...for a large part, they don't have experience in the military. So they don't understand the jargon and what some of these different jobs really mean with the impact they had on their organization. So there's still a lot of meat in the middle here. So that individual needs to do a better job of communicating the exact value through a corporate sense how that value could contribute to corporate America or whatever type of organization they're trying to join. And organizations need to do a much better job of understanding that there's this untapped value in the military community and teaching and training their organizations or whoever is doing the intake process to look for the value that the military community can bring. So I don't think it's a one-sided thing. I think both sides need to come together and do a better job. CHAD: So I said in the intro that Promenade matches and connects veterans to the resources, people, and organizations that matter to them. What exactly does that look like in terms of the product today and what you're doing? JT: Yeah, absolutely. So this really began as a grassroots operation through my own ecosystem. Many, many years ago, when I was first getting in the military, and I was starting to get traction and understanding how to navigate the civilian world, I started to reach back. People would reach out to me, and I would reach back. And they would ask me, "How did you get here? How did you do that?" And I would just help people, review their resumes for them, get them connected to different jobs and career pathways. And then I started to do that a little bit more officially, if you will. And then, I realized this is not just a problem within my own ecosystem; this is a problem across the military community. So as I was working in technology, as I mentioned before, I started to identify tools, one of them being artificial intelligence, that could help me scale the work that I was doing. So the pathway that I started to set out on was how do I take this grassroots work that I'm doing, and then how do I scale that work to millions of people rather than just dozens of people? So that's the journey that I'm on right now. I don't know if that answered your question or not. CHAD: So if someone is listening and they're a veteran, what is the product going to offer them now? JT: So they'll come on, and they'll onboard to the platform. So essentially, we're just taking the process that we've been doing offline, and we're bringing it online. So they'll come on. They'll fill out some demographic information. They'll answer a few questions about where they are in their current post-military journey. They could even be thinking about getting out. The product will still help them as they're on their way out, thinking about getting out. They could have been out for a month, a year, an entire decade doesn't really matter. We'll help assess where they are in their post-military journey. After they go through that intake process, we'll give them the option to talk to one of our coaches, which can make this experience a little bit more personalized. And that's one of the huge things that I learned as I've been building Promenade is when I first started tackling this, thinking about tackling this issue through technology, I was like, okay, this technology these tools that I've identified and I've researched these are going to be the things that solve this problem. That's what's going to do this. No, that's what's going to fix this. [chuckles] And what I quickly realized is you can't remove that human component from this process. There are just things that technology doesn't understand about the military experience. So having a coach, having an individual or human to talk to at the very beginning of this process, or whatever that individual needs is extremely crucial and hugely beneficial to this process. So we put that coach in front of them. That's completely optional because we do want to allow this to be self-service and self-guided. So if they choose to get in front of that coach, they'll be able to talk one on one and augment this process. If they don't, they'll go straight to our dashboard. And what the dashboard will do is it's going to help that individual identify different areas within their post-military journey where they can improve and get better. And, Chad, we haven't talked about this, but we've got this social impact-driven product that we're building. But the lens that we're really thinking about this is through a healthcare lens. So what that means is there's this term called social determinants of health. And what that means is...the very simple version is a super simple concept. Every part of your life impacts your overall health. The health care system, like when you go to the hospital, only impacts 20%-30% of your overall health. The things that truly impact your health are things like, do you have a job? Have you talked to a therapist in the last six months? Do you have food, you know, the right type of food? Do you have access to the right type of food? Not just food. Are you ordering Burger King every day, McDonald's every day? But are you eating healthy food? And do you have consistent access? Those are the things that affect your overall health. So we look at all of these different factors about the veteran and how they're going through their post-military journey. And we give them a score on all these different verticals. So essentially, through that score, we're helping them identify what those gaps are, and then we're pushing them resources to help fill those gaps. So they'll get a couple of things through our platform. They'll get that dashboard and that score and personally recommended or personalized recommended resources to them, and that's where the artificial intelligence component comes into it. And then they'll have sort of a search field where they can just go and keyword for things just like they would go into Google and search for something. And then the third component to this is the community that we're building, and that won't be rolled out initially. But once we've got critical mass, we've got a community that we're building where they'll get connected to people within our community, maybe people with the same skills and interest, people that they were deployed with, people that they were stationed with, or people that they just came across. And we've got a method to do that. But that's really what it's about is bringing this community together, helping them assess where they are in their post-military journey, and then putting the right resources in front of them at the right time based on who they are. So that's the experience they'll get, to answer your question. CHAD: Awesome. Who pays for Promenade? JT: So it's going to be twofold. So there'll be a freemium model for the military veteran, so all those things that I just mentioned, minus one or two. They'll get free access to the platform. So they'll be able to log on. They'll be able to see where they're at in their journey. And they'll be able to navigate the platform and get those personalized recommendations. On the organizational side, they will also pay to access the platform. And then there's some other work...back when I mentioned a couple of minutes ago that organizations need to do a better job of understanding the military community, we help organizations better understand the military community, attract and retain military veteran talent if that's something that they're in the business of doing. So there are multiple ways to do it. CHAD: And organizations would pay for that. JT: That's right. Absolutely. Yeah. CHAD: Is that a significant or a fundamental part of the business model? JT: Which part? CHAD: The organizations paying. JT: Yeah, it is. So it depends on which part of interacting with the organization that we're talking about. So there are two ways we can do that. There's A, giving them access to the platform so just, for example, on the jobs portion, careers portion, recruiters. We'd give them access to the platform to get access to the talent. But on the let's help this organization think about how they're even reaching out to the veteran community, how they're recruiting them, the process that veterans are going through in order to apply to these organizations, once veterans are in these organizations, how are they supporting the veteran community? And maybe even after they've left, depending on which organization you're talking about, how are you supporting that veteran community once they've left so they can be...you want them to be ambassadors for your organization. How are you supporting the veteran community even after they've left? So that's two completely different ways that we can interact with the organization. The fundamental one would be those organizations getting access to our platform and interacting with the veteran community. That for sure would be fundamental to what we're building. CHAD: So who's funding Promenade right now? JT: [laughs] Yeah, that's a great question. So this is definitely up until maybe a year or so ago; it's definitely been bootstrap built for sure completely out of my pocket. But thanks to some of the visibility we were able to get, in the work we were able to do, organizations were able to get in touch. We've gotten a couple of grants, one huge one from Google for Startups last year. That was $100,000 from Google for Startups. That's been obviously huge for the work and the momentum. And what I always tell people is, you know, Chad, you've been doing this a while. [laughs] You know that $100,000 can get run through pretty quickly in the tech startup space. That was huge, and I don't want to downplay that by any means. But that wasn't even the biggest impact to what we're doing. It's just the visibility that it created for our organization. We've had just the veterans that we work with; we've had so many reach out just because they heard about us but organizations as well that have reached out to us. They want to work with us. They want to support us. That was huge. But to answer your question, it's a combination of grant money, cash awards from different organizations, and bootstrapping it from me JT here. CHAD: Well, thanks for doing that [laughs] and bringing this really important service to life. What are some of the barriers to achieving the success that you want to achieve with Promenade? JT: What we're doing is essentially we're aggregating information. We're aggregating people. We're aggregating tools and resources. We're bringing all this together. I didn't think it would be easy by any means. But it's definitely much harder than I imagined it would be when I set out in this journey a couple of years ago. One of the hardest things about this is you've got all of these different areas that you're trying to assess veterans and getting these tools and resources and organizations in front of them. How do you consistently and with quality put those organizations and tools and resources in front of the veteran? I want all of them to have the same experience. I want them to have an amazing experience. I want them to get connected quickly and with quality to the people and organizations and tools that they need to get connected to. So how do you make that experience consistent and standard across the board? And how do you control as much as possible the quality of that interaction? Building these partnerships has been challenging. It's been difficult. But every time, I get frustrated...just like, every startup goes through those barriers. You get frustrated. I just think back to those moments where I was down on my post-military journey. And I'm like, I never want another veteran to have to go through that. That's what keeps me pushing when those barriers do hit. And I'm like, this is going to be hard. How do I keep that organization, or how do I ensure that organization is doing A, B, and C? How do I ensure I'm keeping this veteran pushing forward and motivated when they get frustrated? Those are some of the barriers. But as I said before, I just look back on when I was going through my journey. And I don't want any veteran to have to go through that experience. So that's what keeps me going. Mid-Roll Ad I wanted to tell you all about something I've been working on quietly for the past year or so, and that's AgencyU. AgencyU is a membership-based program where I work one-on-one with a small group of agency founders and leaders toward their business goals. We do one-on-one coaching sessions and also monthly group meetings. We start with goal setting, advice, and problem-solving based on my experiences over the last 18 years of running thoughtbot. As we progress as a group, we all get to know each other more. And many of the AgencyU members are now working on client projects together and even referring work to each other. Whether you're struggling to grow an agency, taking it to the next level and having growing pains, or a solo founder who just needs someone to talk to, in my 18 years of leading and growing thoughtbot, I've seen and learned from a lot of different situations, and I'd be happy to work with you. Learn more and sign up today at thoughtbot.com/agencyu. That's A-G-E-N-C-Y, the letter U. CHAD: So you officially started Promenade in May of 2020. Is that right? JT: I came up with the idea actually in 2017 sort of the framework for what I'm doing now. And I'm in Atlanta, Georgia, and I don't know how much you know about the tech startup space in Atlanta, Georgia, but it's booming right now for sure. That'd be an understatement. And I have a few different people around me, a number of people around me in my ecosystem that are in the tech startup space. And I watched them going through their own personal journeys and finding success. And I was like, number one, I have all these people around me that are doing it, non-technical founders, technical founders, first-time founders. There's no reason I can't also do this. And then number two, I was like, if I looked on my phone seven years from now and I saw a Promenade built by somebody else, I'd be super pissed. [laughter] I'm going to be so pissed. I remember this quite clearly December 2019; I was like, you have to do something; if you don't, you're going to regret it. So December 2019, I went, and I signed up for this organization here in Atlanta called ATDC. I signed up for my first intro to customer discovery class. And from there, I've been pushing ever since. I think I incorporated the organization around May or March or something like that officially. But the idea, inception in its current form probably 2017 and then really began building in January 2020. CHAD: So, how do you think the pandemic has impacted the ability to start Promenade? JT: Yeah, a number of different ways. But I would say net-net actually in a positive way in not like the actual of what the pandemic means but the environment. It showed me clear as day that there's a huge net need for digital services when it comes to the military veteran community. Because a large resource for the veteran community is Department of Veteran Affairs, you know, doing amazing work doing great work. But just like many other government organizations, many aspects of it were shut down during the pandemic. So let's just talk about mental wellness because that's something that is highly visible in the veteran community as being an issue. The suicide rate increased exponentially during the pandemic within the veteran community. That's because people are isolated. They're already going through issues; maybe people are getting out of the military during the pandemic. It just showed me that there's a huge increased need for digitally online for this veteran community, resources for the veteran community, and just giving them an ecosystem to interact in. And it just pushed me even harder to build what I was building. So the pandemic was obviously a very terrible thing, but in terms of Promenade and the work that I was doing, it just made me go even harder for sure. CHAD: So right now, is it just you? JT: Yeah, so it's me. I've got one personal assistant, and I've got several designers and developers that I work with. CHAD: On a contract basis? JT: Yes, all contractors. But in terms of people who are hands-on building this thing, I probably couldn't even count the number, as I'm sure you know when it comes to developers and designers trying to build these solutions. But in terms of being officially a part of Promenade, it's still just me going at this thing right now. CHAD: And while you're doing this, you have another full-time job, right? JT: I do. I do. CHAD: I think that's a scenario that a lot of people find themselves in is wanting to do something new but not necessarily being able to, you know, you're bootstrapping something on the side. How do you make it work? And what would need to happen for you to take the leap to be able to just work on Promenade? JT: How do I make it work? A lot of Red Bull, a lot of energy drinks, [chuckles] and a lot of late nights. But again, as I mentioned before, that's something I would put in as time as a barrier when it comes to building this thing. I just take it back to the many conversations I have with veterans as they've been going through their own personal journeys. That just keeps me going. As far as what would it take for me to move away to work on Promenade full time, the only true thing I think it would take would really be line of sight and visibility on being able to drive this thing forward in a sustainable manner, just having a line of sight on that, on this thing. Okay, I've got the traction. I can see it. It's tangible. I just need to do A, B, and C to keep pushing this thing forward. I know that's sort of vague, but that's really what it would take. CHAD: Do you think you're going to have to take funding from somewhere, or do you think you can continue to bootstrap and operate on the grants and awards? JT: It depends. That's a good question. That's something I've gone back and forth with. Working in the tech startup space, that's something that's discussed a lot is angel investors and VCs, and you need to do this to attract funders and things like that. That's something that's discussed a lot in this space. But it's something that I've gone back and forth with. It really comes down to what I want this thing to be at the end of the day. This thing could be huge. There's a huge gap in the military veteran space in a multitude of ways. This thing could be a unicorn if that's the direction I really wanted to take it. And I think if I go down that pathway, it's for sure going to take funding from outside sources. But if I want to keep this thing more small scale or maybe even local to that Atlanta, Georgia region where I live and only focus on that one region, that's something I could probably bootstrap until I've got the revenue necessary to work on it full time and just keep it at more of a local level. But I think based on the impact that I'm trying to have throughout the entire veteran community and not just on veterans themselves but the organizations which could help...we've got this concept called train the trainer in the military, which is the experience I had as well. But essentially, it's I can do all the work and have all the impact. But it would be 10X more impactful if I'm working with Fortune 500 companies that are doing the same thing that I'm doing, impact in the veteran community in the same way that I am. So I think that's the direction I'll probably end up going, and that's why I'll have to go look for funding from other sources to build this thing the way I want to build it. So we'll see. We'll see. CHAD: The problem with funding, obviously, is that if it comes from traditional investment sources, then they expect a return, and you have to be able to show that. It might be made up, but you have to have a story that demonstrates that there's a return. And you alluded to one angle at the beginning when you talked about healthcare. Do you see that as a potential angle in terms of what the business model might be and what industry you might actually be part of? JT: That's a great question. So I know that if I go full-fledged down the healthcare route, social determinants of health, tracking health outcomes for the veteran community, then most definitely, this would be something where I would need outside funding, traditional funding to build this thing. And I think that's where when it comes to like, okay, I set out on this journey to impact the veteran community, and I want to have the most impact possible. That's going to be the route I'm going to have to go down. But quite candidly, I do not have at this point enough expertise around the healthcare space to say, okay, let's go down that pathway. Right now, part of the journey that I'm on outside of just trying to build this thing and get this thing launched over the next month, or two is how do I get myself more integrated into the healthcare world to better understand how what I'm building overlaps or integrates into what's going on around social determinants of health in the healthcare space? And how do I insert myself into that? That's something I'm currently assessing. CHAD: Well, and the interesting thing, too, for me is the thought that I wonder if that actually is something that is top of mind for the users, the veterans, or whether they're just thinking I need a job, [chuckles] and they're not necessarily thinking about their health top of mind. I mean, what do you think? JT: They're not today. Absolutely not. Today when they reach out to me, they're like...and it's funny because that just opens another can of worms. But it just opens up this whole nother aspect of what I'm doing. So when they come to me, they're like, "I need a job." They're like, "I'm about to lose my car. I need help with my car payment," or "I'm going to be homeless soon." That's how people reach out to me. But, Chad, that's not truly the issue. As you can imagine, if you're at the point to where you're about to be homeless, there's all this other stuff going on within your life. That's truly the work that we do. It's like people come to me...I have people reach out to me literally every single day. "I need help with this. I need help with that." And I'm like, okay, I have a conversation with them. And then we realize there's like 9, 10, 11 other things going on. So to answer your question, they're not thinking about this healthcare issue. And from a user standpoint, that's not even how I want to approach this, like telling them, "Oh, I'm going to be here to improve your health outcomes." I wouldn't have that conversation with them. My conversation with them would still be around these different pillars. But on the organizational side, that's where I would communicate to them and say, "I've got these group of individuals who are coming to me and saying, 'I need this assistance.'" And what we're doing at the end of the day is improving their health outcomes. And what that means is, healthcare payer, they're not touching your healthcare system, which means you're saving tons of money. And that's the part that I'm currently unpacking to say, okay, not to the user that we're doing this work and healthcare but to these organizations. And there are examples of this already out there. So, how do I do that but stay true to the work that I'm doing with the military veteran? Because one of the things that I know that's not going to change for what I'm building is the focus on the user. There are 40,000 veteran service organizations alone. There's $250 billion that gets poured into the veteran community through the Department of Veteran Affairs. So there's no shortage of organizations working on the veteran community, with the veteran community, and there's no shortage of money out there when it comes to helping bolster the veteran community or improve outcomes within the veteran community. The true challenge that I see or the true issue that I see is there's a lack of focus on the actual veteran themselves and what they're going through. There are no tools out there for them to tap into and go on this journey. That's what I'm laser-focused on is how do I create an amazing experience for the military veteran themselves, not the organizations that are out there doing some of this work, if that makes sense. CHAD: It totally does. And I think it really makes sense for you. I think it's a problem that a lot of startups face is that there's this draw, maybe because of your business model or because of the environment that you have this other piece, but what you really need to do is focus on creating value for your users. And in an ideal world, those two things become aligned over time. You mentioned...a little while ago, you said something over the next few months, we got to get this launched. So there's a sign-up on the website now to become part of the community. But are you not fully launched yet? JT: No. So what we've got right now is a landing page which essentially is building a list for individuals. Once I launch, I reach out and say, "Hey, we're live." What's not publicly facing right now is that user experience that I described. That's what's being built. But let me take a step back because we're still doing that grassroots work to where we're working with veterans one on one. So that's still something that we're heavily doing. But again, the idea here is to how do I replicate this work that we're doing to millions of people? That's what we're going to roll out here. CHAD: I know timelines can be tricky. [laughs] What is your working timeline for doing that? JT: As far as launching it? CHAD: Mm-hmm. JT: [laughs] When people ask me, you know, one or two months. It's funny; when I first started this back when I was doing the customer discovery, I was getting all this great information and learning more intimately about what the veterans community is going through. I've got my own experience. I've got the experience of people within my ecosystem. But I was just astounded by all the myriad of issues that were going on. And I was like, oh man, I'm going to have something built and ready to go in like three months. And this is like January 2020, February 2020. I was like, I'm going to have something by Veterans Day this year. It's going to be like everyone's going to know about it. Obviously, that didn't happen because the realities [laughs] of building a tech startup set in really quickly. But we're fairly close. I'm aiming for no later than two or three months, but I hate to put the actual time on it just yet. CHAD: And I think as a founder, you need to give yourself...pressure is good. But you also need to give yourself permission to not ship until you're ready and proud of what you've done. Now the trick is most people wait too long. [laughs] So the trick is actually forcing yourself to launch something that you're probably not unhappy with but actually is sufficient. JT: Yeah, that's right. That's right. I don't want to wait until it's, quote, unquote, "perfect." But I do want to ensure that the individuals that do come to the front door in the very beginning they're going to get a great experience. And if they don't, then there's that feedback loop that helps us get better because that's what it's about. Whether you're a young tech startup or you're Facebook or whoever, there needs to be that feedback loop built-in in the right way. So that's what we're doing. We're trying to ensure that, okay, we've got the foundation of this thing built correctly. And then we've got these feedback loops at all the right points to make this thing even better going forward. And then separately, as every founder is going through, how do you continue to build this thing or fund this thing, rather, to keep it going forward? And that's through bootstrapping. That's through the revenue model that we've got going. And that's through some of these partnerships that we're trying to put wet ink on right now as well. So a lot of things going on. CHAD: So if someone's listening to this and they're in a position where they say, "I care a lot about this. I want to help. I'm a founder or a leader at a company. And I want to work with Promenade." How do they get in touch with you? Where are the best places for them to do that? JT: Yeah, they can reach out to me at jt@promenade.ai. That's the quickest and easiest way. We've got our Instagram page up and our LinkedIn page up. You can reach out on there. But the quickest way if you're like, I want to contribute, our organization we've been thinking about how do we work with the veteran community more closely? How do we recruit them? I've got veterans in my family that are going through some of the same challenges. I want to get them in touch with you. The quickest way is just email jt@promenade.ai. CHAD: Awesome. And good luck in this final stretch towards launch. And I wish you all the best. JT: I appreciate it. CHAD: And maybe you can come back on the show a few months post-launch and debrief. [laughs] JT: Yeah. I would love to. I would love to. I'm sure I'll have plenty of lessons learned. [laughs] CHAD: Yeah, exactly. Again, that was promenade.ai for the website. And you can subscribe to this show and find notes for this episode along with a complete transcript at giantrobots.fm. If you have questions or comments, email us at hosts@giantrobots.fm. You can find me on Twitter @cpytel. Thank you, JT, for stopping by. If other folks want to follow along with you, where can they do that? JT: Instagram, we're at promenade.ai, and LinkedIn, you can find us the same way. CHAD: Awesome. This podcast is brought to you by thoughtbot and produced and edited by Mandy Moore. 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: JT Liddell.Support Giant Robots Smashing Into Other Giant Robots

Sam Zimmerman is CEO and Co-founder of Sagewell Financial. Sagewell is building a banking platform for the needs of folks who are trying to retire and live off their savings and income as intelligently and as well as possible. Chad talks with Sam about deciding what their first product should be and what they would be bringing to market, finding the right partners, and minimizing risk to make a business and a product that works. Sagewell Financial Follow Sam 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 Sam Zimmerman, CEO and Co-founder of Sagewell Financial. Sam, thanks for joining me. SAM: Thanks so much for having me, Chad. CHAD: I've been following along with Sagewell Financial for a little while now, given our cross-histories and the fact that we worked with a few companies that you've worked at in the past. So I'm aware of what Sagewell Financial is, but I'm not sure that all of our audience is. So I think a good place to start would be by giving folks a little bit of an intro into what Sagewell Financial is, and then we'll touch on the founding story and go from there. SAM: Awesome. So, in a sentence, Sagewell is building the digital banking that our parents deserve. To expand on that even more, America's retirees are a really interesting and important and powerful demo in American culture at large. There are 56 million Americans on a fixed income. And last year in venture capital, nearly $100 billion went to fund financial technology companies rewriting all of finance. And of that 100 billion or a little under, less than a fraction of a percent went to America's seniors. And so we are trying to build banking from the ground up for the needs of folks who are living on a fixed income who are in their golden years and aren't thinking about that new job or making new money. We're building a bank for folks who are trying to retire and live off their savings and their income as intelligently and as well as possible. And that looks really different than the bank that a millennial or a Gen Z user might have. CHAD: So that's really interesting. Right or wrong, what are the reasons that this historically hasn't been a target demographic for investment? SAM: So the prevailing assumption among venture capitalists was (We're changing that and hopefully changing that quite quickly.) was that retirees aren't open to changing. Beyond that, they're also not technically sophisticated. These folks don't know how to use a phone or aren't open to a bank that might not have any physical branch. They are set in their ways. They're not going to move branch, or they're barely going to watch a new TV show. A lot of folks who are trying to talk...imagining a grandma or a grandpa was really what the venture capitalists are drawing on often when they're thinking about why a senior wouldn't expect to have a bank with all the new features that the millennial might. CHAD: Well, that one is certainly changing, especially as the venture capitalists get older themselves. They probably realize that that's an outdated notion in terms of the technical aptitude or familiarity of that audience, right? SAM: Exactly. And it's a fascinating moment. There are 10,000 boomers who turn 65 each day in America, about 4 million folks each year. And those folks were about 40 whenever the.com boom passed. They've been using email. They have XE and PayPal. And importantly, why we're building this company now is that COVID changed seniors' digital lives more than anyone else. ARP reports how 70% of all American retirees know how to use Zoom and video conferencing software nowadays. Across the stack of digital goods and services, seniors were actually the group that was most moved online. And so, from where we sit as entrepreneurs, we saw a massive market, an exogenous effect creating a disproportionate opportunity. And so we began designing and iterating on and understanding our user to build a product that met those needs with this massive and growing market. CHAD: Banking is a highly regulated complex space. And I imagine from day one you're looking at that and saying, "Well, we might want to do everything eventually, but doing everything is going to be difficult." So what was the process you and your co-founder and the team around you used to decide what the first product should be and what you were going to bring to market? SAM: Our founding team spent almost nine months in user interviews and user research across what one director of finance at Capital One called geriatric finance. We talked to hundreds of folks, and a lot of our assumptions about what the simplest or most low-trust or quickest to use service might be were actually totally turned on their head in a really interesting way. Another reason why venture capitalists aren't so confident you can reach this demo is a couple of companies have come before us, and a lot of them followed, in financial technology, a Mint-like model where you log in, and you share your various bank credentials. They pull your credit card transactions and bank transactions. And one of the really surprising things in our hours of user interviews was that that model was really unpalatable to this demo. They actually thought it was a lot higher trust to share bank credentials than it was to actually open an account. And so we began thinking, what's the highest engagement, most common accessible feature that our demo is familiar with? And that's already broadly online. And let's start there. And the original insight came with a woman she was from Pennsylvania, and we were talking. We built this kind of mint.com-type prototype to try to help imagine banking for her needs without this high trust checking account. And she was like, "Oh." She was aghast that we were even considering asking for her bank credentials. We heard that, and then we said, "All right, no worries, no need to do this product demo." And then she was like, "But I really love Chime, and I really love Chime's checking account." And we were like, "Wait, you have a digital bank account?" And she's like, "Yeah, I love Chime." And it was this moment where thinking about our user, what trust meant to them, what was familiar to them, and what being online meant to them opened the floodgates and helped us really understand this user and what that first product needed to be. And so our initial product is a checking account. It's got a variety of senior-specific features around and enabling it. And it's built incredibly excessively to be available to folks who use technology in all sorts of ways. But we started with the basics because that's what our members are most familiar to and most expect. CHAD: So you say in the fine print on the website that Sagewell is a financial technology company and not a bank, and your banking services are provided by a partner. What was involved in actually bringing that online, finding the right partner, implementing the features? What did that look like? SAM: Yeah, it is an incredible time to be building any sort of banking in America around the world. So to that point earlier, $100 billion was pumped into financial technology companies. And so as a result, there are so many companies and so much innovation happening in banking and fintech broadly. And so starting and figuring out what vendor to work with was actually what our strategy from a banking and regulatory perspective was. And in turn, what vendors and in-house technology we needed to build was one of the hardest initial challenges that I've ever had to face in building a company. It is still, despite what many...you'll see a lot of ads, you know, "Have a card online in minutes." It is still in today's day and age quite an achievement to build banking and get it online, and servicing your customers in a scalable and sustainable way. And so we spent a lot of time early on in the architecture and vendor selection process and product strategy process thinking about what vendors to go with; what we were going to build in-house. And before ultimately breaking ground about three months after we began, we set the product itself, which was going to be a checking account for retirees. CHAD: What were the factors that went into choosing the partner that you ultimately chose? SAM: Beyond your standard enterprise vendor selection, we wanted to make sure that it was secure, and we wanted a specific set of features. In our space, there are about six different companies that provide what's called Banking as a Service technology. And so that was one of our key vendors is the technology company that works with the bank to allow us to open checking accounts, fund accounts. And most of those companies have been around for only a few years. And so their products themselves are hardening and being built. And about $200 million I would say has been invested in those companies last year. And so we wanted one that was well-capitalized. We wanted one that had not had any IT security issues. We wanted the underlying bank to be aligned in our mission. Retirees have a variety of specific financial needs. A lot of our product development involves working very closely with the bank. And so, we needed to make sure that the bank itself that they worked with was on board. And lastly, we talked to other customers, and that was ultimately the most valuable thing in our experience and not just the customers that they refer you to but the customers who have left for one reason or another. Those were the major factors that we chose in our Banking as a Service provider. And then, beyond that, that's one piece of the puzzle. In our bank tech stack, we're looking at around 15 different partners across all parts of banking. And that's the largest and most important one. And those were the criteria we used to select. CHAD: I often say when I'm looking at building a product or service, and we look at those integration points with external vendors, it is one of the riskiest parts of building a product because you're not in control of it. So from a business perspective, it's risky. But also, from a technology perspective, that's where estimates can get out of whack. And things can work not like you're expecting or like the documentation said or just surprises crop up along the way. Or when something goes down, your product is broken. And your entire product [laughs] basically is built on those vendor relationships. So, how do you minimize that risk and work in that environment to make a business that works and a product that works? SAM: [chuckles] I suppose the answer is with a lot of prudence, thoughtfulness, and care at a high level. CHAD: [laughs] SAM: I was actually just talking with a CTO friend of mine just talking about how in a lot of startups, one of the skills that I most ask of engineers and engineering leaders early on is vendor selection and how I hadn't seen an interview process that really helped get at that. It's a core part of a lot of technologists' jobs and particularly a lot of engineering folks' jobs. The API docs looked good but did he test it or evaluate it? Was there a third-party tool you could have used instead of building in-house? Those are the sort of questions that a lot of times early-stage startups are answering all the time. And I had yet to see an interview that got at that. So it's a really shrewd point and one that I hope that as technologists and particularly early-stage startups become more about really going deep in one area and then leveraging third parties elsewhere, I hope that we start actually hiring and developing criteria to do that with the people that we assemble. I think the first part what I would say is we described a little bit about the risks. We went through a risk mitigation exercise, which smells very enterprise-y. It's kind of the sort of thing that you would expect exists in some massive waterfall with a Jira board mainframe computer but just listing like, here's this integration. If this were to happen, what would we do? If the API went down, what control do we have, or how could we minimize the impact on our customers? That exercise across some of our biggest integrations helped us select and take on the risks we wanted and avoid the ones we couldn't. So there was a lot of conversation about the sorts of failures we could put up with and how we could put up with them, and the sorts of failures we couldn't. And then really testing for the ones we couldn't to make sure that we were making as good a choice as possible. Despite that thoughtful answer, it was the best we could do. I would say that, particularly in a space that's as fast-moving as Banking as a Service, I would say that a lot of it is still that soft skill, that relational conversations with other teams and folks and whether you trust the team that you're trusting to execute and build what they said they're going to build and that hiring skill but also a good bit of luck as well. CHAD: So correct me if I'm wrong, but up until Sagewell, where you're CEO, you had been CTO of the other companies that you founded and worked at. Is that right? SAM: Yeah, that's correct. CHAD: So, what has the change to being CEO instead of CTO been like for you personally? And was that choice clear from the beginning with Sagewell? SAM: So far, it's been incredibly rewarding. I would say in between startups; I actually volunteered at an organization called PathCheck. And while my title was CTO, the scope of that included partnerships, vendor negotiations, CISO exercises, product. It was a pretty expansive CTO role. And I found myself really energized by the breadth and the ability to work with even more really talented, thoughtful experts in their own domain and empower them to do more. And so I knew in my next role, I wanted more of that breadth. There's an essay that classifies folks as foxes who can do a little bit of everything or hedgehogs who can do one thing really well. And I'm a super fox. [laughter] I love doing lots of things. And so CEO to me is just like an opportunity to...it's maximizing breadth and maximizing difference of experience. And I transitioned, I'd say, from a normal CTO role to a beefy CTO role to making CEO a pretty natural step from there. CHAD: And your co-founder is named Jeff Wright, and he's the COO. How did you meet him and get started with Sagewell? SAM: Jeff and I, it's been wonderful. I was trying to figure out how I was going to get engaged in pandemic work in April of 2020 after leaving my last startup while it was being sold to Capital One. And I was talking with a founder friend of mine, a guy named Ty Harris, who is the CEO of an Insurtech company called Openly. And he was previously the CTO at Liberty Mutual. And Ty and I had a couple of lunches and conversations, and I was talking to him about how it is getting involved in COVID stuff and how I was ultimately my species as an entrepreneur, and I was going to be building something again. And he connected me with Jeff, and Jeff and I touched base quickly in April. And it was a little bit like a frog in the pot sort of situation where it started like, yeah, maybe we could build a company. Let's riff on some ideas and see what's out there. And it was a really, really natural progression from August to a couple of evenings, maybe a Saturday call or two, to most evenings and definitely a Saturday to oh, man, when should we transition? CHAD: You were both working full time on other things at the time. You were working with PathCheck. SAM: Yep, exactly. And so he was the CPO at a company called Plymouth Rock, and I was working at PathCheck. And not to go into PathCheck's story too much, but PathCheck was largely deploying a research technology, the Google and Apple Exposure Notification protocol. And it became clear that most of the states that were going to do anything were already going to do it. And so, it was natural to start thinking about what was next in August and September. And so, as my species does, that then became the night and weekend project to figure out what's next. CHAD: So you mentioned that this is a space that is typically not strongly funded. So was that a challenge for you as you were getting started? How did you get that initial, you know, where did your initial funding come from? And I know you recently raised, at least it was announced, 5.3 million in January. So what was the transition from those early days? Where did the funding come from to ultimately getting the investment in this last round? SAM: Jeff and I worked in the fall of 2020, met our CTO, Chris Toomey, in November actually from connection through a friend. Early on, we were a team with a demo. We really knew that we cared about seniors, and our background is in financial services. We were trying to think of a new product for seniors and so a financial product for seniors. And so, around January, we sharpened our pencils on the user research side of things and the product side of things. And once we had a clearer sense of the product direction we wanted to take, ultimately building banking for retirees, we began the fundraising process. CHAD: So were you essentially self-funding at that point? SAM: Yep. So we were self-funding from January-ish till May. I find that skin in the game to be… I wish I was the sort of founder who could think about flawless ideas without a little pressure. But in my experience, it's actually been where unless I jump in, unless I can have a little bit of pressure, my ideas aren't often as refined as I'd like. And so Jeff joined it full-time in February. And then we fundraised through April, closing a 1 million pre-seed, which is pretty common in fintech. Most financial technology companies the banks won't talk to you until you have at least a million dollars in funding. And so we raised the money we needed from...and who did the money come from? It came from Point Judith Capital, who actually had invested in Ty, the guy who connected us, with his company Openly. So we had our initial conversation with David, who's been absolutely wonderful at Point Judith Capital. And also, Jeff and I knew that innovating for a vulnerable population, ultimately retirees, meant that we wanted to have folks from the beginning who represented the seniority and seriousness with which we are taking our work. And so the second investor who in between the two of them took most of that million was Crossbeam and Raj Date at Crossbeam, who's the former Deputy Director of the U.S. Consumer Protection Bureau. We really wanted folks around the table who knew what innovation looked like and fintech innovation like David, as well as folks who understood the world of government and finance like someone like Raj to innovate thoughtfully with this demo. CHAD: Was it difficult to get those funding rounds? SAM: The first one? Yeah, the first one was about two months. I thought it would have taken about a month. The second one the market is pretty crazy right now. And I would say between my first company and my second, it used to be that you'd set aside six months to fundraise, and so I'd prepared for a six-month fundraise. Started kind of in early October two weeks in, and they were like, "Wow, you've already been in the market for two weeks?" [laughter] And I was like, what? I was totally off base in terms of what was the new normal. Ultimately, that round came together in about a month and a half as well. And so we had a lot of interest. The second round that 5.3 million went from not a ton of interest to tons of interest and lots of folks around the table and having to push folks out or turn folks down pretty quickly. The first round, I would say for a pre-seed, one to two months given that the idea was hardening, sounds about right. The second one was about one to two months but was a little...a lot of people would get excited by the market; they'd get excited by the team. And then they'd say, "You can't get a senior to open up a bank account," and then they'd come back. And then we found one believer alongside David and Raj, who had been with us. And once we got the folks at 25Madison and Merrill, especially, the rest of the round came together really quickly. Mid-roll Ad I wanted to tell you all about something I've been working on quietly for the past year or so, and that's AgencyU. AgencyU is a membership-based program where I work one-on-one with a small group of agency founders and leaders toward their business goals. We do one-on-one coaching sessions and also monthly group meetings. We start with goal setting, advice, and problem-solving based on my experiences over the last 18 years of running thoughtbot. As we progress as a group, we all get to know each other more. And many of the AgencyU members are now working on client projects together and even referring work to each other. Whether you're struggling to grow an agency, taking it to the next level and having growing pains, or a solo founder who just needs someone to talk to, in my 18 years of leading and growing thoughtbot, I've seen and learned from a lot of different situations, and I'd be happy to work with you. Learn more and sign up today at thoughtbot.com/agencyu. That's A-G-E-N-C-Y, the letter U. CHAD: Given that you were able to put together a round quickly, how do you decide ultimately not to take even more money? What are the factors that go into deciding how much you're trying to fundraise and how big the round is going to be? And is there pressure as you're doing that to maybe go even bigger? SAM: Yeah, we had, I would say maybe seven and a half million dollars interested. And ever since we've closed, we've had multiple firms who are interested in a new round of capital. The market is really, really quite founder-friendly right now. I think ultimately, for any founder, what you're trying to do is create as much value with as little capital as possible. That's ultimately the game that you're trying to play now. For a little baby company, it's often really hard to figure out how much money or how much value you'll be able to create over what amount of time. There's so much to figure out. There are so many bets and learnings and risks that it's often very hard for a company to say, with $5 million, I'll create $20 million in value. So ultimately, if you're a founder, you're incented to give away as little of the company as possible and create as much value from that. And so when we were doing our modeling, we actually thought that it was somewhere closer to four of what we needed to create the amount of value needed to raise our A. And we ultimately bumped it up to 5.3. And there's a good bit of advice you hear a lot among founders that raising a bit more than you think is prudent, and anyone who has managed a budget knows how that can go. So we ultimately did go up to 5.3. But taking more would have meant that we were paying a premium where we could get that million dollars maybe in a year's time, and we'd be giving away a quarter-point or a half a point of the company for that million where we might be giving away 1% or 1.5% of the company now. So it's all about creating as much value with as little money as possible. And it's easy to get lost in the big rounds and the big numbers. But ultimately, it's pretty simple math. CHAD: And correct me if I'm wrong, and this is a question as much as a statement. So to reiterate, the rounds you're talking about are seed rounds. And so traditionally, what that means is that the majority of work that you have to do is just making the product. But in the space you're in, there is a point in time where you've made the product, and you've shown the traction, so what you have becomes more valuable. And so it might be that the next round, which is maybe a Series A, a significant portion of that capital would be spent on something else like marketing or sales teams and that kind of thing. And you're growing beyond just the product development at that point. Is that how you're thinking about this, or am I wrong? SAM: So it's funny that it's really changed the names. The round size what they mean has changed more in the last two years than ever before, and I would say that, particularly in fintech, because fintech has a number of unique challenges. So I would say that that $1 million round that we raised in May that was really about building a very basic product, a very truly minimally viable acceptable product. And then the seed round in fintechs is often about getting to product-market fit or just demonstrating you can reach your end consumer or target user. In fintech, it's often not quite as much tied to a certain amount of revenue at that stage. It's often about just demonstrating that you can get to that user, and that's because, in financial technology, the cost to acquire is often quite high. And so for a company that only has raised, say, a $5 million pre-seed because of the gravity, because it often costs hundreds sometimes thousands of dollars depending upon the market to acquire a specific user, the math is such that you're just not going to have that many users, and you're not going to be able to get to a certain amount revenue. And so often in fintechs, 1 million gets you...that pre-seed gets you that initial product. The seed is about demonstrating that you can scalably get to that end user. And then the series A is really about blowing that out and starting to exploit that marketing and acquisition machine that you've been building to start creating revenue. That's a little bit industry-specific. Other industries will have similar or different terms. And depending upon what sort of branding a firm might want for the round, you also might hear $100 million pre-seed. You hear those things as well. It's a crazy time to be building a company. CHAD: So you mentioned Chris Toomey, who's the CTO of Sagewell, and he was previously at thoughtbot. As a prior CTO, what were some of the things you looked at in terms of finding Chris and deciding he was the right one to join your team as CTO? I imagine your standards were pretty high. SAM: Yeah, and Chris met them quite happily. As a CTO transitioning to CEO, I think you have to understand your strengths and weaknesses as a CTO as well as the learning curve that you might have stepping into your new role as a CEO. And I would say that one of the fortunate things is that Jeff, my co-founder and COO, we actually have a pretty unique set of skills that can span a lot of different domains. And so I would say that looking at Jeff, Chris, and myself, we really had to make sure we had our bases covered to build the financial and technology product we needed. I would encourage folks building a company early on to really think about your strengths and weaknesses, your founding team's strengths and weaknesses. And as I was getting to know Chris, kind of the initial handshake agreement starting to build and prototype various solutions, I think that I was particularly impressed and looking for someone who was willing to have a deeply experimental and MVP mindset while managing the risks of working with a vulnerable population. And so over the course of December through March or April, in dealing with and spinning up a couple of different prototypes with radically different product strategies and end products, I was able to see how Chris was able to be mature and shrewd about where he could cut corners, where he couldn't cut corners and then execute accordingly. It's funny, Chris and I were talking at our one on one a week or two ago. As a CTO, I know a little more of what's possible. I know if I come in and say, "I want the Taj Mahal," I know you'll get walked back down. Chris and I over the past year...I often come to Chris, having already teared down my Taj Mahal. And I'm like, "Well, Chris, what I really need is one little specific problem." And Chris and I actually set a goal between us that I actually kind of come to him asking for the Taj Mahal next time [laughter] or not next time but sometime in the next year. Because I think one of the things I've had to check or do in CEO is let Chris do CTO's job and not internalize all the time his voice and concerns but actually put forth a vision and not be afraid about the fact that it isn't something that we can get to market in a week or that we can't ship in three or four weeks’ time, which is an interesting contract that I think we've developed and an interesting growth area. And it's my job to throw out bigger ideas, not to be the one who tears them down all the time, which is fun, and I enjoy doing that with Chris. CHAD: Yeah, that's an interesting perspective. And I often even working with clients and consulting want that because if you're only getting the small pieces all the time, you cannot be privy to the big picture of what we're aiming for. And that will often lead you to maybe not taking everything into account, either that's on the roadmap or down the road. Or realizing, oh, you're disappointed now, but that's because I didn't know that you wanted to do this. If I had known, then we could have done this in a different way or something like that. And so, getting a sense of that big picture is often important. SAM: Yeah. And it's a fun, I'd say...yeah, and growing with Chris and figuring out that he's the right person for the role as a CTO turned CEO means kicking off the ladder and actually just stepping into my role and letting him do his, which has been a fun contract to establish. CHAD: So, did you work with Chris as a contractor before committing to him as CTO? SAM: Yeah, we were in a consulting relationship. I think Chris was politely under billing. And the pretext is always that this was something that we were really aiming to build a company together, assuming everything worked out across Chris, Jeff, and I. And so, he did start in that capacity. And then I'm trying to remember the exact timelines. Sometimes the paperwork is well after the actual agreement whenever you're creating these companies. But in a few months’ time, definitely by July and probably by May, we were building the company and off to the races. CHAD: Now, is that a path that you would recommend to other founding teams looking for a CTO is to not commit early to really make sure that you work well with someone, maybe through a contracting relationship first? SAM: Yeah, I think ultimately, if you're going to be going on a journey, a decade long journey, a lifetime-long journey, through highs and lows, I think the best way for everyone to know what they're getting themselves into, the excitement, and the reward, and the aches, and the pains and the sleepy [inaudible 33:31] in the morning is by working together, and I don't think there's a shortcut. In this case, it depends a lot on the situation. It depends if folks are in a position where they cannot take pay. It depends on whether nights and weekends are free or they have flexibility in their other roles. But generally speaking, I think that ultimately, you're trusting, and your founding team is going to be taking so many risks together that you want to go in as eyes wide open as possible and have removed as much founding team risk, disagreements, misaligned working styles, misaligned visions, or preferences as possible. My coach used to say that that's the number one reason why companies at the seed stage fail is management teams and founding teams. And so as you're thinking about building your company, and I can't emphasize this enough, mitigating and removing founding team risk, however possible, with consulting being one of them and navigating a tough conversation or two being another, is absolutely core to removing as much risk as possible for your startup. CHAD: That's great advice. And just like you and Jeff had a time of working together before you actually started a company together, I think it's great advice to try to find ways to do that with other early members of the team too because it's a big commitment, and you want to make sure that you get it right. SAM: Exactly. CHAD: Well, you've reached sort of the pinnacle of having now someone on your team that used to work at thoughtbot. I think I'd be remiss if I didn't point out that we have another podcast at thoughtbot; it's called The Bike Shed. And Chris started as a host on that show while he was on thoughtbot, and he continues that to this day along with Steph Viccari, who's a team lead at thoughtbot. And so if people are interested in hearing about Chris' work now at Sagewell and following along with the team and the work that he's doing there as well as the work we do at thoughtbot, people can check that out at bikeshed.fm. Sagewell is not a client of thoughtbot. But you've worked with thoughtbot before as a client twice, right? SAM: Yeah, exactly, both at my first company Freebird, which was sold to Capital One, and at PathCheck, the non-profit I worked at. CHAD: So you specifically, I assume, then made an effort to recruit from thoughtbot when you started Sagewell. [laughs] SAM: I would say I know and love the way that thoughtbot approaches building software. And I know and love the people that I've worked with from thoughtbot. And I would say that it was as much a feature of being in the same communities as it was specifying a specific group. But you guys have created a great culture. [laughs] CHAD: I'm just kidding. I didn't actually think that that was the case, but I can guess a lot of the benefits of working with someone who's worked at thoughtbot before because of the level of experience and the level of skill and communication and everything that people at thoughtbot have. But I'm curious, what if I turn that around? Is there a downside to hiring someone who worked at thoughtbot previously to your team? SAM: So one of the things that I love about, particularly early on, we have a hire that we just made recently. She worked at a senior living facility for four or five years and then worked at Wells Fargo for four or five years. And before, we had a bunch of fears, and this new employee listed five or six totally different fears than we ever would have thought of. And so now we have way more fears. And part of that can be unnerving, and part of that can be challenging. And I would say that one of the challenges of working with a team that builds software in such a clear culture is that you might not get all the fears. You might not get certain sorts of diverse perspectives or headaches because of a particular way that product and engineering are conceived. And so one risk...it’s kind of the unknown-unknown sort of situation, but it's real in startups which is I think that making sure you have diverse perspectives across the domains where you need to be deeply an expert for folks who are very similar to you is a major risk. CHAD: That's great. Well, Sam, thanks for stopping by and sharing with us. I really wish you and Sagewell and the entire team all the best. SAM: Awesome. It was wonderful talking. CHAD: And if folks want to find out more about Sagewell Financial or follow along with you or get in touch with you, where are all the best places for them to do that? SAM: sagewellfinancial.com is our email. And if you or your parents are interested in what we're building as a customer or a member, you can sign up there. If you'd like to reach me, I'm mostly on Twitter following cute animals and occasionally a good tech post @Ferrum_of_omega. And if you'd like to contact our company, you can just go to /press and fill out the form there. CHAD: Awesome. And you can subscribe to the show and find notes for this episode along with a transcript of this episode and all past episodes of this season at giantrobots.fm. If you have questions or comments, email us at hosts@giantrobots.fm. And you can find me on Twitter @cpytel. This podcast is brought to you by thoughtbot and produced and edited by Mandy Moore. 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.Sponsored By:AgencyU: AgencyU is a membership-based program where Chad Pytel works one on one with a small group of Agency founders and leaders toward their business goals. You'll do one-on-one coaching sessions and also monthly group meetings. You'll start with goal setting, advice, and problem solving based on Chad's experiences over the last 18 years of running thoughtbot. As you progress as a group, you all get to know each other more and many of the AgencyU members are now working on client projects together and referring work to each other. Whether you’re struggling to grow your agency, taking it to the next level and having growing pains, or a solo founder who just needs someone to talk to, in his 18 years of leading and growing thoughtbot, Chad has seen and learned from a lot of different situations, and would be happy to work with you too. Learn more and sign up at thoughtbot.com/agencyuSupport Giant Robots Smashing Into Other Giant Robots

Brian Hollins is the Founder of the Takeoff Institute and Founding Managing Partner of Collide Capital. The Takeoff Institute is focused on equipping Black undergrads with the resources and mentorship they need to build a young professional career. Chad talks with Brian about providing students with necessary skills like etiquette and polish to break into Tesla and McKinsey-level companies and facilitating facetime, communication, and mentorship with other Black people within those companies who are at executive levels. The Takeoff Institute Follow Brian 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 Brian Hollins, Founder of the Takeoff Institute and Founding Managing Partner of Collide Capital. Brian, thanks for joining me. BRIAN: Chad, I'm pumped to do this. Thanks for having me. CHAD: So you are obviously the Founder of the Takeoff Institute. So let's start there. Why don't we give folks a brief overview of what the Takeoff Institute is, and then we'll dive right in? BRIAN: Absolutely. Happy Black History Month. Let's start there. I'm a Black undergraduate student in the past, and I'm building something for Black undergraduate students today. So Takeoff Institute is focused on equipping Black undergrads with the resources and mentorship they need to build a young professional career. I was lucky enough to go to Stanford for undergrad and almost get thrown over the wall, if you will, by mentors and people that could advise me as I broke into my young professional career. And I, unfortunately, noticed that that wasn't the same for a lot of other folks. I ran diversity recruiting at Goldman Sachs for a few years and just saw some of the mistakes and little things that people who don't have advisors, people who don't have mentors, people who don't have an older brother in private equity. I saw the mistakes they were making and knew I wanted to build something to help bridge that gap. So we focus on providing the types of things that I think you need to break into a Goldman Sachs or a Tesla or a Facebook or a McKinsey today that might not have been true five years ago. And unfortunately, I think a lot of career development offices and programs out there are helping students break into a job that doesn't exist anymore, and that's more focused on some of the skills that we've tried to tap into. CHAD: And what are those skills? BRIAN: I'll point to a few off the top of my head. One is just polish. If you've never had an internship, you don't know cadencing on scheduling or sending an email to a direct report or really focusing on your LinkedIn, and your resume, and your social media being clean and disciplined. And so we bring to light a lot of the things that I think employers are looking for today. I'll use a good example with our students. If you don't have 500 connections on LinkedIn, the number of connections you have shows. But if you have more than 500 connections, it just shows 500+. And as a recruiter, when you really think about it, at the top of the funnel, they use these little things to guide a lot of their decision-making. For better or worse, I'm not sure it's a great way to decide who should be a good candidate for your company. But when you get 5,000 applications, and you need to get it down to 100 in a couple of days, there are little things like sending your resume in a Word Doc instead of a PDF or having spelling errors in your application, or not filling out some of the boxes that matter. And so we really train them on that etiquette and polish. Another bucket that I think is super important we built a speaker series at the Takeoff Institute called You Can't Be What You Can't See. And I think for a lot of Black undergraduate students, you go through a Superday at some of these places. You might meet 10, 15 people. Most of the time, you're not going to meet anyone Black. And you're definitely not going to meet Black people that are at the executive level. And so we really pride ourselves on bringing in managing directors from banks, and founders and CEOs from growing companies, and leading venture capitalist investors and just help our students see that there are people out there doing what they did. There are people that come from their backgrounds that also weren't sure who they were going to be when they were a sophomore or a junior in college. And so, building confidence is another key pillar of the program that we really pride ourselves on. And we're very lucky we have students at Tesla, at Apple, at Facebook, at Goldman, at NBC Universal. These students have broken into really exciting roles. And as we think about building the full flywheel around Takeoff, now those students become advocates. Now those students become mentors and advisors. And we build proximity for our students to help them realize there are people that very recently went through a very similar program and are now doing the things that they aspire to do. CHAD: That's great. It sounds to me like it really is a combination of things that they might not have the opportunity to have done before or gain the experience and because they're marginalized, historically. And also just things that are good to have that, in general, aren't taught in school regardless of your opportunity. BRIAN: That's right. CHAD: And sometimes people who have more opportunity are getting that exposure in the jobs that they have along the way and that kind of thing. That makes it certainly easier for them to succeed later on, let alone what they look like when they show up to the interview. BRIAN: Yeah, I completely agree. And I think the anecdotal use there is most of the things that I'm teaching these kids you can find on Google. The problem is they don't know what to look for. And when we think about fast-tracking these students or getting them into these rooms quicker, getting them through those interviews more effectively, it's almost like bringing all of these resources right in front of their face and allowing them to soak and absorb them in a very efficient manner. So there's a guide somewhere on the internet of how to break into consulting, and there's a guide on how to crush a product interview. And there's a guide on how to build a perfect resume or a perfect LinkedIn. But we find that most of our students, one, don't know that they should be looking for that stuff, and two, don't know how to go get it all when it matters. And that's really what we focus on, bringing all that stuff in front of them at a more efficient clip and help them build that confidence so that when they do get in front of that interview, they're armed with all the things they need to succeed. CHAD: Well, I know you're already solving a big problem. But is there anything in particular that you do to then make sure that once these people are in the workforce, in the workplace, they're going to companies that are going to treat them right where they're not going to face bias as much as possible and those kinds of things? Or are you mostly focused on getting them ready right now? BRIAN: No, it's a great question. I'd put that in a 2.0 Takeoff University, Takeoff Institute, but it's absolutely critical. It's super important. And we have a long way to go. Chad, I don't want to pretend like the world is ten times better than it was five years ago. But the transparency through which some of this data is being recorded, the accountability that's being held in rooms that matter, so C-suite, executive suite, board meetings, it is changing. And I'm very excited about that because I think for the students that can, and this is in every student, and I don't want to pretend like it is, but for the students that can choose where they go, they're going to choose to go to those companies. They're going to choose to go to the companies where there is active, positive feedback from underrepresented people, so Black, Latin, female, people that don't look like the rich, white guy that runs the company. They're going to look for that feedback. And they're going to look for companies that very, very clearly advocate for supporting those types of communities. And, again, I think we're in the early innings of that. But I think that we're definitely on a path towards that being more and more important and that tailors who we partner with and who we spend time with. And if you look at a lot of our partners, they are people that care about that stuff, and they are people that are actively working on doing something about it, which we certainly appreciate. CHAD: So the core of the Takeoff Institute is the fellowship. Is that right? BRIAN: Yeah, that's right. CHAD: What exactly is that? BRIAN: The Takeoff Institute Summer Fellowship is an eight-week program, again, designed to advance and equip Black undergraduates with the resources and mentorship they need to launch a young professional career. So the first thing that I think about is what we had talked about earlier, just aggregation of resources. So we have a partnership with Wall Street Prep, and so our students have to do an Excel and PowerPoint tutorial within the first two weeks of the program. And that's in after hours, and they have to do it on their own. And we track their progress, and they have to submit it. Because I cannot think of a single role in a post-undergraduate career where it is not important to be literate in both of those platforms and also, maybe more importantly, where top performers are not very good in both of those platforms. So the first piece is resource aggregation. CHAD: And this is happening remotely? BRIAN: This is all remote. This is all remote. I started the Takeoff Institute in 2020. Chad, I hope there's a day where I say that none of it is remote, but it's the world we live in. CHAD: [laughs] BRIAN: And it's what allowed us to scale it the way we did. We had over 500 kids apply for our first fellowship two years ago. We took 50 and had a little over 600 apply for the second year and took 50 again last summer and have some really exciting things coming up for this summer. So we can talk about the goal and where we're headed later. But the second piece is the speaker series that I told you about. And so, bringing in folks during our weekly meetings and allowing them to ask questions and be vulnerable and share that experience. The third piece is mentorship. And so, I wanted to recreate the feeling of having a direct report. I think too many Black undergrads get to their first job without any real internship experience. And I think in an internship, one of the things you do is you make a bunch of dumb mistakes where your direct report tells you they were dumb because you're an intern. And you check that box, like, whoops, I did that I'm never going to do it again. And unfortunately, when you get to your first job, and that's some of the stuff you're doing early on, it just doesn't go well. It doesn't lead to you being ranked highly. It doesn't lead to you getting an offer a year later. It doesn't lead to you getting the advocacy and support of people internally to say that you're a top performer. So we almost try to recreate that direct report internship experience and allow them to make some of those mistakes. And so every student is paired up with a one on one advisor. And so, for folks that are listening, if you want to be an advisor, I'd call it anywhere from 25 to 50-year-olds with a desire to help undergraduate students succeed. We have a variety of different types of advisors. And again, it's really about challenging our students to make sure they send the email to check-in. They send the email to let them know that they need to meet. They send a calendar invite. And if it's in ET, they remember, oh wow, I need to send that in PT. So just giving them that experience. So resources, access to people that look like them in seats that matter, and mentorship and guidance are the three main pillars of the Takeoff Institute. CHAD: I love that idea of learning from experiencing failure. One of the things as someone speaking for myself coming from a place of opportunity and privilege and being a white male, I might approach certain circumstances where I'm just not as afraid of failure. I'm a big believer in learning through failure, and so because of that, I'm less afraid of that. Someone who hasn't had that opportunity and is underrepresented might be much more scared of what might happen if they fail, and that's just missing the opportunity to do that. BRIAN: I think you're absolutely right. And I want to, if you're open to it, have a little fun here. I'd love to flip that question on you and just think about what are some of the things that you would be sharing or guiding to underrepresented ecosystems to help them bridge that gap, to help them kind of get that confidence to know that they do have the right, they do have the skills; they do have the knowledge to break into those places? And it's about quieting that imposter syndrome and going after some of those opportunities. CHAD: Yeah, I've always believed it's really difficult to tell people not to feel something that they're feeling. [laughs] It's really hard to change someone's feelings. And so I would put it on the mentors that they need to work to create the environment where people understand that it's okay to make mistakes. That's certainly the experience that I had in my internship when I was just getting started out. I saw my manager making mistakes, and they owned up to them. And we talked about them. And we were doing a lot of the same work. We were working alongside of each other. And so that close working relationship is one thing. I don't know if you're aware, but at thoughtbot, we have an apprentice program where new people are paired with an experienced mentor, and it's almost entirely working together on work. So creating that opportunity. So assuming you have a mentor that's supportive and wants to work with you, great. And if not, I would say try to circumvent that as much as possible and get yourself working with them as much as possible so that you can get close to them and see them working, and see them failing, and really gain that first-hand experience, which in and of itself can be uncomfortable to force that. I totally recognize that. BRIAN: Totally. Part of the program is they do a research report with their mentor. And so it's sort of this guided I'm here to answer questions, but I am not here to do this for you. And I'm very intentional with our mentors about that. I think a lot of these students, especially the ones who have never had a direct report, they wait until they're told what to do. And they don't know how to turn on that proactive brain. And I think it's a super important muscle to flex, especially at that age. How do you teach a kid to do the thing that he thinks his boss is going to ask for as opposed to the thing that his boss asked for? CHAD: Well, this is sort of a pet peeve of mine because I think that, in some ways, there is a flaw in our educational system. It's centered around people telling people what to do. BRIAN: Do what you're told, yeah, absolutely. CHAD: Right. And so, I was very fortunate that I had some teachers that did more project-based learning and then chose to go to a college that was project-based. And the difference when you're in charge of something, and you're responsible, and people aren't telling you what to do, that really creates the environment where you can do that great work. BRIAN: Totally. What's pretty cool is we keep a repository of all their presentations. And so, a lot of them, after the program is over they'll actually share their presentation on their LinkedIn or through their socials. And just having a body of work that early in your career, mapping the Esports competitive landscape, or how to build a D2C skincare business for people of color. I mean, really cool projects that they're very proud of, that they worked hard on, and now that they can share. And, again, part of what we do is build that LinkedIn, build that thought leadership, help them become experts in their own craft because I think it builds that confidence that we just talked about missing for so many of them. And it's doing all these little things that really just unlock their inner self. I'm not giving them anything that they don't already have. I'm just unlocking it. Mid-roll Ad I wanted to tell you all about something I've been working on quietly for the past year or so, and that's AgencyU. AgencyU is a membership-based program where I work one-on-one with a small group of agency founders and leaders toward their business goals. We do one-on-one coaching sessions and also monthly group meetings. We start with goal setting, advice, and problem-solving based on my experiences over the last 18 years of running thoughtbot. As we progress as a group, we all get to know each other more. And many of the AgencyU members are now working on client projects together and even referring work to each other. Whether you're struggling to grow an agency, taking it to the next level and having growing pains, or a solo founder who just needs someone to talk to, in my 18 years of leading and growing thoughtbot, I've seen and learned from a lot of different situations, and I'd be happy to work with you. Learn more and sign up today at thoughtbot.com/agencyu. That's A-G-E-N-C-Y, the letter U. CHAD: Let's take a step back. And I'm curious what it takes to start something like Takeoff Institute. How difficult is it to set up a non-profit? From when you decided to do this, what steps did you take as a founder getting off the ground? BRIAN: I'll give you context of how I started it at first. I was a student at Harvard Business School. Nine months into my MBA program, the world blew up. And so what was a trip to Shenzhen or Tokyo turned into hanging out in my apartment. And I think similar to what you described around that participatory learning environment and how that helped you, HBS is known for what's called the case method. And the case method is a very, very powerful way to learn. It's, by far, in a way, my favorite way to learn. And I knew nothing about it before I got to HBS. And the repeat experience of being presented a problem and having to choose a side and then gathering information after the fact around whether that was not necessarily right or wrong but whether that was educated or insightful and then repeating that process over and over again. You just learn a ton about your biases and the types of things that you can and can't accomplish on your own without thinking of other parts of your brain or using other kinds of tools in your toolbox. And so I found myself really challenged after my first year of school, saying, I've never built anything, and I've never put my mind towards some of the problems that I think exist in the world. And I mentioned while I was at Goldman running diversity recruiting at Stanford for a couple of years, and I saw so many problems and flaws in that model. And then my youngest brother was a Marine. So he served in the military for four years and then took the GI Bill, and he's now a junior at Columbia University in New York. And I saw his journey very recently and a lot of the flaws in the system. And so I just knew that this problem wasn't going anywhere. And I knew that I really, really wanted to be a part of the solution. And I think unfortunately, our generation is taught that you're supposed to turn 50 and be rich before you start giving back and before you, whatever, consider building a non-profit, and I sort of call bullshit on that, to be honest. I think I will never be more proximate to the problems I'm trying to solve than I am right now. And I'm 30 years old. I'm seven, eight years out of school, but I still very, very intentionally stay close to the undergraduate ecosystem and understand what it takes and what the problems are with breaking into the industry right now. So I think it was a combination of being a student of the problem, knowing the problem, knowing it exists, building confidence and desire to become a leader while I was at HBS. And third, COVID, just realizing that a lot of these problems were actually being exacerbated, and they were getting worse, not better. I'm sitting at HBS watching some of the smartest kids I know lose internships. And all I could think was, what does that mean for the Black community? What does that mean for Black undergrads who already don't have the internship that's high paying and kind of seasons through these types of things? And so I wanted to do something about it. And I knew it was going to be bootstrapped. I knew I didn't have a million bucks to put towards it, but I knew I could put something together. And like I said, when I saw the demand for 500+ kids applying, I knew we had something. And in the last two years, we've done a lot and have a long way to go but are really excited about some of the things around the corner. CHAD: That's great context. And so, how did you go from zero to something? BRIAN: The first part was just surrounding myself with people that I thought wanted to be contributors and collaborators and building it, so that's both students and mentors, so building an operating board and people around us to help us do it. I can tell you the process of launching a 501(c)(3) is not fun, and it's not for the faint of heart dealing with the government. And I caveat that by saying towards the end of the process, I almost appreciated how difficult it was because it forced me to get a lot of things in place that were not fun to put in place. And as a result, if I wasn't that serious about building this, I think I would have been paused multiple times throughout the journey. While it's a frustrating manual, kind of nasty process, I do think it's a filtering mechanism for the government. Because the last thing you want to do is allow corporations to give people money that they think is going somewhere good and then it not go somewhere good, so I definitely appreciate that. But yeah, the journey is not fun. I think anything that's bootstrapped...I'm sure you've had plenty of guests on here that have experience at bootstrap companies. If you can't go out and raise $10 million like some of these seed companies on day one, well, then you can't hire five people, and you can't set up all of the right systems online that you want to someday. So I think that's another component that I just learned a ton from was how do we put the things in place to allow us to do this thoughtfully but not necessarily the things in place that we want to have in year three when now we have a 500k P&L and can flex into some different things and bring people on full time? So it almost forced us to build a bare-bones mechanism that just went out and really focused on the product, really focused on is this something that Black undergraduate students need and want? And only very myopically focused on that in the early days. Because all of the other stuff, the infrastructure of a non-profit, the operating board, who we bring around, and what money we raise, none of that really matters if Black undergrads don't see it as valuable. And so I very intentionally spent a lot of our time with the students and was very hands-on, still very hands-on. But really spent time getting feedback and gathering feedback from our first cohort around what are the things you love? What are the things we should change? Who are some of the speakers you wish you heard from? What are some of the ways we can engage you guys now that you have graduated? It's been a fun journey. I'm learning a lot still. As you know, I run a venture capital fund alongside this. And so just finding ways for those two things to talk to each other and to support one another. We back predominantly underrepresented founders. And these founders come from the same ecosystems where our students come from. So it's a really unique opportunity to see synergies exist across the two things I'm building. CHAD: As you were getting started with Takeoff, like you said, the most important thing was the students. So was there anything in particular that you did that you thought worked really well to let people know about this and spread the word? BRIAN: Yeah, I'd say less so in season one, chapter one, whatever you want to call it. Less so in that season than last season. And so what I did is I really turned on our brand ambassador program SO taking the students who graduated from the first cohort and using them to push us into career development offices, help them share on their campuses. We had 50 students, but it wasn't 20 from Harvard and 20 from Stanford. We probably had 35, maybe 40 schools represented where we had a few kids from a few different schools. But the network effects of allowing the students to go out, and there are 100 things on a job board at a school that people are trying to get access to these students. But there's not that many students actually advocating for the programs and saying, "Hey, I went through this, and it was valuable, and here's why it was valuable. And here's why you should go through it." We have a ton of our students who are very proud of the program and share what we're building with other students. And I think that that was a really cool unlock because I think that's the most authentic way to get to know your customers is go through people who really have experienced what you're building and allow them to tell the story for you. CHAD: You said you get 500 applications, 600 applications for the latest cohort, and you're choosing 50. How do you do that? BRIAN: We use a couple of different filtering mechanisms, so the first is the application. So there are questions in there around why they would join the program, things like do you have another internship lined up? We tend to focus on kids who either couldn't get an internship or don't have a Goldman Sachs banking internship already lined up. We tend to find that they're just more absorbed by the program. They're more focused. The second thing is there are a couple of questions around just what their aspiration is. I try to look for students who at least have spent some time thinking about who they want to be when they grow up. That doesn't mean you need to know. But oftentimes, if you're not curious or aspirational on your own, regardless of whether you have confidence, if you're not curious or aspirational on your own, it's very hard for me to elicit that in an eight-week program. And so we really try to filter out the students that we think are excited about getting to the other side or are excited about breaking in or excited about challenging ceilings. That's a little harder to search for than did they fill out their LinkedIn? Did they submit their PDF the right way? So that's the second component. The third component is honestly being very intentional about matching with our mentors. So I try to find mentors that are at least somewhat lined up with the ecosystems these students want to go to. So if I have someone that wants to break into product, I actually think it's super-valuable to get some of our friends that work at Facebook or some of our friends that work at Pinterest who are in product as their mentors, regardless of whether they work on a product-related research project. And so, using our mentors to guide that journey from 100 to 50 students to make sure that they all feel like they are getting someone that can really help advance them. And it's funny; it's pretty incredible. At the end of the program, a lot of them will come and say, "I can't believe how similar I am to Tyler, or Stacey, or Rebecca." It's really incredible how connected they become. And I just like to say, "Oh yeah, I can't believe it too." We are very intentional in the background on making that happen. But our mentors stick around with our advisors, and I hear two years later they are helping each other find a job. Or I'll get a picture of them out to brunch because they check in once a quarter. That's the stuff that just gets me super jacked up to keep doing it is recognizing that these people continue these relationships long after the fellowship program is over. CHAD: And that's great and really shows one of the great things about programs like this, and you already alluded to it earlier, is that they compound. As more people go through it, the value of the overall program hopefully goes up. BRIAN: That's right. CHAD: So are there any interviews or anything as part of the process of getting? BRIAN: There's not. That's new this year, which we're super excited about. The first two years were, again, really just us in the background making that happen. And I wouldn't have known what to interview for, to be completely honest. I think now I have just a better understanding of the type of student that succeeds in our program. I didn't entirely understand that before. And I think regardless of whether you're diverse yourself, I think there's implicit bias that comes with jumping on a Zoom with someone and seeing how they interact. And I don't know that those biases always lead you to the best candidate. And so, I think we tried to take a thoughtful approach but didn't want to over-engineer the early days of building our cohorts. And we beta-tested a bunch of different stuff. So we had freshman, sophomore, junior, senior, and first-year out, as well as Harvard, Stanford, Arkansas State, two-year community college, really just the full gamut. There are 1.1 million Black undergrads in the country in every given year. So finding students from all these different places and then kind of honing that in and figuring out, you know what? I think if you do this program right after your freshman or right after your sophomore year, it's super valuable. And it really sets you up to have that strong junior year internship because that's the one that matters. That's the one that changes your trajectory if you go get a good one. And so just learning those types of things over the first two years, I think, really helped us hone in who we focus on, and why we focus on them, and what resources we provide for them. Because it just, again, it just helps us build that treadmill to really accelerate their trajectory into their young professional career. CHAD: You mentioned undergrad, so the program is specifically focused on people in college going to a university of some kind. BRIAN: It's specifically focused on Black undergraduate students. I struggled with this a little bit because there are a lot of people that need help. I grew up in some underprivileged ecosystems as well. And there were plenty of poor white kids that also should get this or underrepresented Latinos that I knew. And while I wanted to build that, I also knew there's just a lot of noise. There's a lot of resources and advice and people out there trying to help. And I kind of said to myself, "This is the demographic that I understand best." And instead of pretending like I know how to build a platform to help someone from an ecosystem I don't truly understand break-in, I'm just going to focus all my effort on getting more people that look like me because I know that there's a need for that and know that there's a gap for that. And I know that historically, companies have not been good at doing that on their own. So that's been our focus. And I hope there's a day where we have the privilege to expand that horizon and spend time because we have the resources to do it. But for now, I still have a long way to go within the Black community. And I'm going to keep focusing our time there. CHAD: Yeah, I was thinking more about the kids who aren't even getting the opportunity to go to college. So they're 1.1 million Black undergrads. There are probably even more people who don't even get the opportunity to go to college. There are so many people you could help with this. What are your goals for growth? And how do you serve more people? BRIAN: Yeah, I'll tell you the one that's top of mine because we're super excited about it. And this hasn't been released to many places, and so for our lovely thoughtbot community, I'm super excited to share this early, but we're building something called Takeoff University. Takeoff University will be the largest resource repository in the world for Black undergraduate students. Again, I think that the positioning is Black undergraduate students. I don't think that there's a paywall set up where if you don't have a .edu you can't use it. And so, I'm still thinking about how we provide access for some of the people you're describing. But regardless, the idea being our fellowship is very hands-on and very intentional, and specifically focused on accelerating 50 people a summer. But how can we build something that more effectively brings in anyone in their undergraduate ecosystem development? Whether you're a freshman, sophomore, junior, senior, how can we deliver resources to you and get you some of the things that we know you need at the time that you need them and allow you to more effectively become part of the Takeoff ecosystem? Because what we believe is we can build a pretty unique flywheel around the broader TakeOff University ecosystem and some of the content and curriculum and thought leadership and just sharing that can occur there. I think a lot about our older students. When we talk to them about how they engage with younger students, it's oftentimes younger students are sent to them. So they have a classmate who says, "Hey, you should talk to this guy. He broke in, or he had an internship somewhere." And those students come, and one of the first things they ask is, "How do I do it? How do I become you? How do I do the thing you did?" And I think for a lot of students, they don't have a good answer for that. It's hey, let me send you these 2009 PDFs that someone sent me on banking recruiting. Or "Hey, have you checked this out at the career development office?" But they don't send them to anywhere, at least in a concentrated manner. And that's really what got me excited about building Takeoff University was there is not a centralized resource repository where any and every Black undergraduate student should go to prepare themselves for their young professional journey. And so some of the things that'll be a part of that are the first thing is you come in as a career exploratory quiz. You answer a bunch of questions on what you're interested in, what stage you are in your internship development, what stage you are in your academic tenure. And it just helps guide us towards some of the resources that we know you should look at. And it doesn't mean you can't spend time in the whole library but help us guide you in the early days. And then from there, dynamic ways for students to engage, so building community and allowing them to share resources, ways for companies to engage. So allowing companies to come in and identify students that might be top candidates for their program. So really just building an inclusive ecosystem for Black undergrads where they can come and know that they'll give valuable resources. And so we're really excited. We have some really cool things in the oven around this and excited to launch it to the world later this year. CHAD: That's great. What would it take for you to grow from 50 fellows to 100? And is that something that you want to do? BRIAN: Definitely. If you had used the number 500, I might have paused. [laughter] Again, 50 was like, get it right, do it right. I have 100 kids. I don't want to speak for all of them, but I have a lot of students that love what we did over their summer and really shout it from the rooftops to their community. And that means a lot to us. And I'm not entirely sure that if it had been 100 and then 100 that I'd have 200 students who shout that. I think we were able to build a very intimate and hands-on experience for our first two cohorts. And as we grow, and as we introduce technology, and platform, and resources, I think there are ways for us to expand the number without getting out over our skis. And so 100 is in a very near-term goal for us. I'm not sure that it goes much past that. I think instead, like I described with Takeoff University, we start introducing other opportunities. We start putting more things under the Takeoff Institute umbrella. I think a lot like the Aspen Institute. There are so many different ecosystems and community-building efforts going on underneath the larger umbrella. And so long as Takeoff Institute is known as just advancing opportunities, I think we can build a ton of cool ways to have touchpoints with students across the country. CHAD: Are there specific blockers you would identify? Or you have an attentive audience here, are there things you would ask for to get to that 100 fellows? BRIAN: It's a great question. I think folks that have had any experience building, you know, call it Twitter University, Pinterest University, Plaid University, folks who have been on the internal teams that help stand up curriculum and training for employees, again, that's a large part of what we're standing up with TakeOff University. And I'm very, very fortunate to have the funding now and not be in a place where we're looking for money to do that. And so we have the resources to make this really special, and just getting some of the design and product folks that might be listening who might be interested in helping build a community like the one that we're building, we'd appreciate it. We'd love to chat. You can email me at brian@takeoffinstitute.com. I'd love to chat and learn. And even if you don't have time to chat, if there are platforms that you know that look really cool and look like the type of thing that we should be mocking or mimicking, I think it's always helpful to see comparisons and benchmarks. So I think that that'd be a great one. And the other thing I'd add is if you want to be a mentor, please apply, takeoffinstitute.com. It's an incredible experience. I wish I could say I had 100 advisors, but I probably only have 60 because most of the ones who did the first cohort did the second cohort. And they loved it, and they're doing the third cohort. It's an hour a week. It's a very light touch, eight weeks of the summer. It's a very light touch, but I think it's impactful. So we'd love to have some of the folks. CHAD: Do you specifically look for Black mentors? BRIAN: We don't. We don't. I think that that's a really important part of this experience. Like I mentioned, you don't get to choose who your direct report is. And so your direct report might be White, Asian, Black. I don't care what they are. You need to get used to having that direct report experience and building rapport, and building that relationship regardless of what they look like. And so we appreciate having mentors that are male, female, and come from all different walks of life. CHAD: Great. And that website again was? BRIAN: www.takeoffinstitute.com CHAD: Awesome. Well, I think that's a very natural and great place to leave it. I hope folks will contact you and get involved. And there's so much work to be done in this area. And it's a great opportunity to have an impact. BRIAN: Yeah. Thanks for having me, Chad. CHAD: Thank you. You can subscribe to the show and find notes for this episode at giantrobots.fm. If you have questions or comments, email us at hosts@giantrobots.fm. You can find me on Twitter @cpytel. Brian, if folks want to get in touch with you, you want to say your email again and any other channels they should do that? BRIAN: Yeah, perfect. brian@takeoffinstitute.com. And you can find me on Twitter @BHolls1, B-H-O-L-L-S-1. CHAD: This podcast is brought to you by thoughtbot and produced and edited by Mandy Moore. 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: Brian Hollins.Sponsored By:AgencyU: AgencyU is a membership-based program where Chad Pytel works one on one with a small group of Agency founders and leaders toward their business goals. You'll do one-on-one coaching sessions and also monthly group meetings. You'll start with goal setting, advice, and problem solving based on Chad's experiences over the last 18 years of running thoughtbot. As you progress as a group, you all get to know each other more and many of the AgencyU members are now working on client projects together and referring work to each other. Whether you’re struggling to grow your agency, taking it to the next level and having growing pains, or a solo founder who just needs someone to talk to, in his 18 years of leading and growing thoughtbot, Chad has seen and learned from a lot of different situations, and would be happy to work with you too. Learn more and sign up at thoughtbot.com/agencyuSupport Giant Robots Smashing Into Other Giant Robots