Anna Jacob: Maximizing Purpose while Achieving Profits

28 mar · The Founders Sandbox

00:33:09

On this episode of The Founder's Sandbox, Brenda speaks with Anna Jacob about "Maximing Purpose while Achieving Profits". They speak about her broad experience coming full circle from her experiences growing up that informed her future career purpose- and in assisting women business owners to think strategically on exit strategies.

Anna Halloran Jacob specializes in selling privately owned companies and maximizing their after-tax proceeds. She has also served as Adjunct Finance Professor, Loyola Marymount University, 25 years in investment banking, private equity, and corporate operations. Anna was also COO of a full service advertising company with over 150 employees. Anna is passionate about educating business owners on how to maximize the value of their company for a successful exit. She has significant experience in representing companies in the sale of their business, capital raising and valuations.

You can find out more about Anna Jacob at :

Linked IN https://www.linkedin.com/in/anna-halloran-jacob-6543b8193/

Diamond Capital Advisors

Show Transcript:

00:04

Welcome back to the Founder's Sandbox. The Founder's Sandbox is a podcast now in its second season. The monthly podcast reaches an audience of entrepreneurs and business owners who learn about building resilient,

00:32

scalable and sustainable businesses with great corporate governance. I'm Brenda McCabe, your host here on the Founder's Sandbox and my mission is simple. I want to assist both entrepreneurs and intrapreneurs in building their scalable, well-governed and resilient businesses. The guests to my podcast are founders, business owners, corporate directors and professional service providers who, like me, want to use the power of the private enterprise.

01:01

small, medium, and large to create change for a better world. Through storytelling with a guest on topics that we touch on, including resilience, purpose-driven enterprises, and sustainable growth, my goal is to create a fun sandbox environment where we can equip one business owner at a time to build a better world through great corporate governance. Today, I'm absolutely thrilled to have as my guest Anna Jacob.

01:30

Welcome, Anna, to the Founder's Sandbox. Thank you. It's great to be here, Brenda. Thank you. You are a managing director at a Los Angeles-based firm, Diamond Capital Advisors Investment Partners. It is a mid-market firm focusing on investment banking, M&A advisory, and capital markets. And Anna and I are going to talk about

01:55

something very near and dear to your heart as well as mine, is maximizing purpose while achieving profits. And if you allow me, Anna, I'm gonna give a brief background on yourself. Anna Halloran Jacob specializes in selling privately owned companies and maximizing their after-tax proceeds. She also has served as adjunct finance professor at Loyola Marymount University.

02:22

25 years in investment banking, private equity, and corporate operations. Anna was also COO of a full service advertising company with over 150 employees. Anna is very passionate about educating business owners on how to maximize the value of the company for successful exit. She has significant experience in representing companies in the sale of their business.

02:51

capital raising and valuations. It's truly a delight to have you here. You have such a broad experience. It was difficult to choose the topic. And I think your broad experience and having known you now for a couple of years while we work with women owned businesses is a testament that you're coming full circle to the episode's title, maximizing purpose while achieving profits.

03:18

I've known you for a few years and it wasn't until recently that I went, aha, I want to invite Anna to my podcast. I learned that you had an early formative or growing up experience that informed your purpose, Anna Jacob, in assisting business owners to maximize profits and alignment to your purpose. Can you share with my listeners, you know, what was that experience that was so formative and what you do today?

03:48

Yes, absolutely. So I'm one of 10 children. And my father was an entrepreneur. And he had a very innovative orthopedic device company. And it was for the betterment of patients. And we were too young at the time to know this was going on. But what had happened was he had received a couple of offers.

04:19

And unfortunately, he did not have advisors that helped him. And the technology was literally shelved. One of the offers was with the largest global medical device distributor in the world. And that would have changed not only patient outcomes significantly throughout the world, but it would also have, you know,

04:47

the technology wouldn't have been shelved and it would have provided retirement for, you know, my parents and so forth and security. We found this out when I was older and it really impacted all of us. And so I wanted to learn everything that I could about how to help entrepreneurs like my dad get the full value of their company to realize their hard work.

05:16

and to better, you know, people's lives. So after business school, I went to work for Lehman Brothers in New York, and investment banking, and did M&A and capital raising for Fortune 500 companies and learned everything I could. Yes, and I applied that I moved back to Southern California where I'm originally from, and focus and dedicated my career on

05:46

helping privately owned companies, entrepreneurs, to achieve maximum value on exit. And part of that process for me is that I like to get involved early on, as Brenda knows, with the entrepreneurs, and whether you're selling a year from now or five years from now, do you have the right advisors in place? Tax attorneys or wealth advisors?

06:16

in order to prepare for an exit. And also just counseling people that received unsolicited offers, you know, what to do. I'm very, very passionate about helping entrepreneurs in that regard. Thank you. It's always extremely enlightening to know what purpose has driven us into our current businesses. And, you know, I think it's

06:43

timely that you agreed to join as a guest in the podcast, because it's an election year in the US, and it just so happens that there are over 66 elections going on across the world today. Actually, not today, but over this in 2024. Interest rates remain high. Inflation is persistent, not only in the US, but in other countries.

07:13

Two wars continue their course. It appears that the US has made a soft landing, and we're going to avoid a recession. What are you observing in the merger and acquisition markets that there may be risks and opportunities with this backdrop during this month of March? Yeah, so last year, the M&A market definitely was down.

07:43

significantly globally. And a lot of that was driven by a very fast increase in interest rates. Yep. Very unprecedented. And that just causes uncertainty. It also causes financing costs to go up. And private equity is the big driver of the M&A market. And costing them more money, it's

08:12

you know, multiples that are paid for companies, which then puts these sellers on, you know, on a holding pattern. But what has happened and it started happening, you know, last fall is with interest rates starting to stabilize and now people are looking to in the future that hopefully to decline if the market is stabilizing.

08:42

both on a volume basis and also the multiples that are being paid. Okay. This is just very recent data, but we're seeing it's positive. We're seeing the stabilization. And, you know, in terms of, you know, what I would say in terms of risks to sellers, it's, we're still looking at instead of 100% cash deals that were, you know, being done.

09:10

Now we're seeing a lot more earnouts. Okay. And with earnouts, there's uncertainty. So, you know, our advice to clients is take as much cash upfront as you can. And, and just to talk about earnouts, you know, that's basically compensation that you will or consideration is a better way to say that for your company based on future.

09:39

either revenue or typically EBITDA milestones that the buyer is going to set to make part of that consideration. And there's just a lot of uncertainty with that. So what what the good news is, is that there's still a lot of money out there. There is 2.6 trillion just in private equity money.

10:05

And because interest rates, you know, borrowing costs are stabilizing, we are seeing, as I mentioned, the multiples starting to stabilize. And, you know, there's so what I would say to a CEO or an owner is know your cash number. Okay. Know what you want, because the earnout may or may not happen. And what we have actually done in certain transactions is negotiated a lower

10:34

total transaction value, but a higher cash component. Because the seller, their objective was to make sure that they absolutely had that cash number in their mind. So I would encourage people to help find that number is to talk to your financial planner and find out what it is that you would, when you do sell, what do you need? Because that will help you

11:03

well before you get into any negotiation or, you know, help representation in that negotiation in terms of what you actually need. So thank you. I like how you've taken us through both the risk side and the opportunities. And I had a little sigh of relief that we- there is a bit more stabilization, despite the headwinds that we've had over the last, I guess, two years, right, coming out of the pandemic.

11:33

On the Founder's Sandbox podcast, I really pride myself on the content my guests bring on real nuts and bolts for company owners. And what I'd like you to talk about is, all right, I listened to this podcast, met Anna Jacob. Yeah, I'm going to look at what my cash, my desirable cash exit value would be. Can you walk?

12:00

us through what is a real M&A timeline and when does it make sense to really line up those advisors? Yes, absolutely. So deals are taking longer in this market.

12:18

The expectation if you're doing an auction, which is what I would recommend to get the highest price, is typically it's about nine months. Some deals are taking longer. But, you know, typically you're, you're going to, and this is if you're well prepared. And by prepared, I mean that you have your financials and you know, it's readily available.

12:48

Um, if you have the due diligence process is pretty intense. So you want to make sure that when people ask you for financials, that you have them readily available. Um, and that increases your credibility, which increases your value. Um, and you know, to your point, Brenda, um, really you don't want, you don't need to get every advisor involved, involved at the beginning.

13:16

I think the first advisor you definitely want to get involved well before you receive an unsolicited offer and offer is what is that cash number? So that would be a wealth manager. Now in terms of my role as an investment banker, I would want to start talking to somebody a year before they're looking to get together so that I can help them.

13:45

figure out what are those two diligence items that you need so that when you go to market, it's very efficient because the longer a deal goes on, the more things that can happen. So you the process is critical. You want to make sure that you hit the market running that you can negotiate. You don't want to keep buyers on hold. You want to create this very, very efficient process. Okay, highest price. So typically, I would get involved

14:15

about a year before just consulting and then getting retained when you are ready to go. I also, in terms of another key advisor, I would bring in a tax expert, and that could be a CPA or a attorney, whatever makes the most sense, when we're getting ready to consider an offer.

14:45

The minute you hit into what's called a letter of intent, that is when you want to make sure that you have already talked to your tax advisor about what does this mean? So for example, just very specifically, it's not about getting the highest value. Okay, my job is to get a seller the highest after-tax proceeds. Got it. So we need to negotiate, know exactly what your cash number is.

15:14

And then also, depending on the form of consideration, buyers are going to have different types of consideration. Maybe someone's going to pay 100% cash, or maybe someone's going to say, I want to do an earn out, or maybe someone says, I want to do milestone payments. And it's very important that if you're going to do something like that, like a milestone payment, that it's not considered.

15:40

compensation where your tax on an ordinary income tax basis instead of capital gains. So all of these things before anybody gets to that letter of intent and they're giving us bids and we say, what is your form of consideration? We're gonna review all those and we're gonna pick the best one that has the best after-tax proceeds for the company and the highest certainty that it's gonna close. And so that's when we get somebody involved. Right, and you bring it back to the cash value, right? That's-

16:09

business owner has dreamed about. Exactly. In order to go on and build another business. Right. And then the M&A attorney comes in to help with the reps and warranties and any kind of exposure. And that's critical at that point. But that's not until you know that this is, what we're doing is we're vetting the buyer so that the seller is running their company. This is how it should be done. They shouldn't be distracted.

16:39

time-consuming process, they're running their company, they're making their numbers, they're running. And we're doing interference with the buyers and negotiating everything and weeding out the people that aren't gonna be the ones doing the highest bidding. And I should note one thing too about this process, Brenda, that's interesting is that we sold a company last year in the consumer sector and they didn't wanna go to auction.

17:08

They were approached by a competitor. Okay. And what we recommended to them was, we know that you think this is the most logical buyer, but we're going to negotiate a higher price from what they offered you. They offered 54 million, which was a good value. We said, we're going to get you a much higher price. And part of that was by us representing them, we were able to negotiate

17:39

what the company would look like on a pro forma basis to the buyer. How much money was the buyer going to save by buying this company? Because the seller had significant technology that was going to reduce their cost significantly. And so we basically did a pro forma showing this is what you're getting. Right. And, you know, we want you to pay for part of this because you're getting this value and you need this.

18:07

Because if you don't buy this company, you're going to have a lot of problems going forward. That was a negotiation while the CEO was running the company. The buyer also knew that we, at any time, could go out to market.

18:23

And we had a whole buyer's list. We had a book put together. We had all the due diligence done. We negotiated that $54 million to $68 million. Wow. So $14 million. So even if a company says, you know, I don't want to go to auction. I don't want to do that. I know who the buyer is. There's a lot of validity in a very efficient type process. You know, I like.

18:51

of this specific example, because it kind of comes back to the work I do with founders pretty early on. They're just starting to scale. It's like, who was the CEO or which was the company in which you inspired your business? Because you want to look and we create a table of peers or comparables that are largely listed companies. And I want to work with the founder to make them look like that.

19:21

And we always ask, what is your exit strategy? And oftentimes, some of the founders I work with want to sell to a potential competitor. So I think this is a real life example of selling to a competitor. The other thing that I wanted to comment based on the process you've walked us through is the due diligence process is very onerous.

19:51

Get your ducks lined up early. I had another guest on the podcast, Lisa Greer-Quateman, an attorney, and she used the word fluff and fold. She recommends on an annual basis, even if you're not considering selling your company, to really go through those corporate governance documents, your tax filing. So the house is in order in that unexpected, unsolicited offer to buy your company.

20:21

So thank you.

20:25

You know, bring it back also to the sandbox.

20:31

If you were on a board, I work a lot in setting up first advisory boards as the company grows, they're going to bring in another series A, they're setting up their board of directors.

20:49

If you were on a board today in the current market context that you introduced us to, what would be some of the topics that you think should be front and center in those boards, Anna? Yeah, I think today it's we're hoping that things seem to have stabilized, right? But I think one of the most critical things

21:19

And I learned this more so as a CEO, a company with 150 employees. So there's a lot of personnel challenges and so forth is really getting together a strategic plan is whether it's three years, you know, at least at a minimum to look at and make sure that all of management is on board.

21:48

It can't just be the founder saying, OK, this is my strategy, is to get input from the key employees, is to make sure that that is one put together and has projections in there. And that it's revisited at least on every six months, if not earlier, where you have real actionable items.

22:16

It's especially if you're in a very competitive market in terms of what are you gonna do to deliver on those projections on those numbers and how is everybody in the team going to contribute to that? So you have to have people that have responsibilities in order to execute on that plan. I think that's critical. I know that

22:44

Operationally, when I was COO, there were certain things that we could do to increase profitability and to increase market share. But without a strategic plan, I think that is one of the most critical things that a board, being on a board that you need to make sure that that is being implemented in supporting the management team to, you know, give your input on

23:14

you know, does this make sense? Are you really looking at the competition correctly? You know, are these, is this realistic in terms of your projections? Just being that sounding board, I think is really critical. You know, as an investment banker, I would, you know, I am qualified to sit on audit committees as an SEC expert. I would definitely think that you would want somebody who was really looking at those numbers and the cashflow.

23:44

especially for capital intensive businesses in this environment to make sure that you have funding that you're not going to run out of cash. Looking at that is very critical. So I think, you know, those are just the two things that come to mind to me, it's the strategic plan, and then also just making sure somebody's really looking at your cash flow.

24:14

And what would happen if something in a down market to run that case, I think is really critical, which is part of the strategic plan. And I would add, based on your experience of 25 years and in different environments, investment bank and private equity and actually as an operator, I think the power of a good corporate board

24:44

is beyond the strategic plan is really pushing the management team CEO to think about options. Right. So it's around, like you were talking about, is it a cash deal? Is it an earn out? What are the milestones? So what are the options? Because maybe there will be an unsolicited offer by the company. So I think I would add to your two comments of what a corporate board would be

25:14

I think it's all about options as well. I think that's such an excellent point because there is an unprecedented amount of private equity out there. And the number of unsolicited offers that are being received by companies has significantly increased over the last, especially in the last five years.

25:44

they, the private equity firms have to get their money out. When we're talking 2.6 trillion of dry powder, that's what's available. Because their LPs will ask for a back if they don't deploy it. And so it's as a board member, and I know you've been very proactive about doing this Brenda to your credit, is when you do receive an unsolicited offer that the board takes a pause

26:15

and says, is this something we want to pursue right now? Is this a good time? Let's talk to an experienced investment banker that we trust to say, what do you think? Just as a sounding board, is this something we should look at? Is this something, what do we do? Can you counsel our founder or owner? Because...

26:43

Once you start that negotiation, you can, it can cause a lot of domino effect, tax wise and also just credibility, the market finds out or, you know, you, NDAs we know aren't necessarily just signing an NDA, what information are you giving? And counseling them on how to get that number.

27:12

you know, what are these people thinking? Are these people that you even want to do business with? Yes. All those things that Brenda, you have brought up to me before is to say, you know, we need somebody to help and figure out what's the situation here. I think board members have that as a fiduciary responsibility.

27:35

Thank you. I would love you to let my listeners know how to contact you. Yes. The best way is LinkedIn. I should say that it's Anna Halloran Jacob, not LinkedIn. OK.

27:56

Fantastic. And that will be in the show notes, as well as diamond capitalizers. Another part of my podcast, and I do this with every guest is bringing your experience and the meaning of certain topics that I am very passionate about and the work I do with founders. And I always go do around with Robin, what does resilience mean to you, Anna?

28:28

Well, I think resilience is in the face of adversity is.

28:37

finding solutions and moving through it. And that is really important instead of panicking or saying, okay, I'm gonna just throw in the towel as to figure out, look, there's a roadblock, how do we get around this? And the more that you can do that with your management team and board, ask for help, because that's resilience. There's always gonna be a challenge, right?

29:07

And options, exactly. Yep, exactly. And for you, what does purpose-driven enterprise elicit? You know, I think I love that you do this for founders. I think it's fantastic. I think it's like what my dad's company was. It was for the betterment of everyone. And to be passionate and to be able to do

29:36

do something that's bettering the world. I think that that's really what it is. And to have a real vision of why you're doing it and if you're passionate about something and it's for the good of mankind. Yes, the greater good. Yeah. While still maximizing profits.

30:06

Yeah. And I do want to do a shout out here. You do advise women-owned businesses. And this month of March is International Women's History Month. So I want to thank you for what you do in helping business owners that are considering selling the business.

30:33

Maybe are, have, aren't yet at that, what cash amount do I want to sell for? And you're ably guiding them, putting them in contact with the different, advisors, domain experts that can help them make that decision when they eventually do want to sell. So thank you for what you do. Well, thank you, Brenda. And.

30:57

I'm so honored to be on this podcast with you. You're bringing an amazing message to entrepreneurs and it's really an honor to be on this. Thank you. Last but not least, what does sustainable growth mean to you?

31:17

So I look at that as sustainable growth is having a proprietary product or service in a large market, large growing market. Got it. Where ideally you have recurring revenues.

31:44

That to me is a sustainable business.

31:49

Thank you. Last question, Anna. Did you have fun in the sandbox today? I did. I always have fun with you, Brenda, but it was really fun. And I love what you're doing. And thank you so much again for having me on the podcast. Well, thank you. To my listeners, if you liked this episode with Anna Jacob, you can sign up for the monthly release of Founders.

32:15

business owners, corporate directors, and professional service providers like Anna to learn about Founder Sandbox, how to build with strong governance, a resilient, scalable, and purpose-driven company to make profits for good. You'll find this podcast on major streaming platforms, and until next month, thank you very much.

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Purpose: Doing Good While Doing Well
5 sep· The Founders Sandbox
On todays episode, Brenda speaks with Marcia Dawood. Marcia is a passionate advocate for positive change in empowering and educating everyone on how to invest. Her book "Do Good While Doing Well – Invest For Change, Reap Financial Rewards and Increase Your Happiness", is due out in September 2024 and this episode provides previews to our listeners.

Brenda and Marcia speak about Purpose: Doing Good While Doing Well. How Marcia lives her purpose is as an author, host of the podcast The Angel Next Door, Chair Emeritus of (ACA)Angel Capital Association, the global professional society for angel investors, and on the board of Stella, a non-profit that supports female entrepreneurs. She is also a Venture partner at Mindshift Capital, and she currently serves on the SEC Securities and Exchange Commission’s Small Business Capital Formation Advisory Committee.

You can find out more about Marcia at:

https://www.linkedin.com/in/marciadawood/

[email protected]

Watch her Tedx Talk here

Order her Book here

Interview with Catherine Gray host of She Angels Series- Invest in Her:

You can subscribe to Next Act Advisors at https://nextactadvisors.com/product/subscriptions/ and be sure to use the special discount code "sandbox25" for friends of The Founder's Sandbox for 25% off your subscription.

Transcript:

00:04
We're standing on the edge of something big. We're going to make some changes. Hi, I'm pleased to announce something very special to me, a new subscription-based service through Next Act Advisors that allows members exclusive access to personal industry insights and bespoke

00:32
corporate governance knowledge. This comes in the form of blogs, personal book recommendations, and early access to the founder's sandbox podcast episodes before they released to the public. If you want more white glove information on building your startup with information like what was in today's episode, sign up with the link in the show notes to enjoy being a special member of Next Act Advisors.

01:01
As a thank you to Founders Sandbox listeners, you can use code SANDBOX25 at checkout to enjoy 25% off your membership costs. Thank you.

01:18
So welcome back to the Founder's Sandbox. I am Brenda McCabe, host of this monthly podcast now in its third season. This monthly podcast that reaches entrepreneurs and entrepreneurs and business owners who learn about building resilience, scalable and sustainable businesses with great corporate governance. I want to assist entrepreneurs and entrepreneurs in building those scalable, well-governed and resilient businesses. And by way of

01:47
inviting guests to the podcast who are themselves founders, business owners, corporate directors, investors, and professional service providers who also share my mission, which is using the power of the private enterprise, be that small meeting at large to create change for a better world. Through storytelling with my guests on topics that are going to include resilience, purpose-driven, and sustainable growth,

02:16
My goal through this podcast is to provide a fun sandbox environment where we can equip one startup founder at a time to build a better world through great corporate governance. I'm absolutely delighted today. My guest is Marsha Dalwood. She's joining the podcast. She checks a lot of boxes, but she's today joining as a passionate advocate for positive change by empowering and educating

02:45
everyone on how to invest. So when I met Marcia back in February through one of our events with Ty So Kow, she had launched or was speaking about launching her book that's coming out on September 10th, Do Good While Doing Well, Invest for Change, Reap Financial Rewards, and Increase Your Happiness. I couldn't help but ask her to be a guest because she also has

03:14
passion or a mission, and that is for positive change. And one of many things she's done is authoring this book, which we'll get into a sneak preview of the contents of this book before its launch on September 10th, 2024. I like to choose a title with my guests that are around purpose or sustainability or resilience. And we chose a title for this episode

03:43
which is purpose, do good while doing well. So thank you today for joining me, Marcia. So happy to have you here in the Founder Sandbox. Oh, I'm so happy to be here. Excellent. So, you know, our paths crossed, I mentioned it earlier at the Thai SoCal chapter, the Indus Entrepreneurs SoCal chapter, where you spoke recently on some of the data coming out

04:13
the Angel Capital Association, as well as your role with the SEC. Before I get into my first question, I did want to give my listeners your entire background, your biography. It's very impressive and very extensive. You live your purpose as a multifaceted professional, your author of the book that I just mentioned, Do Good While Doing Well.

04:43
You are also a host of a podcast, The Angel Next Door. You are chair emeritus of Angel Capital Association, ACA. It's a global professional society for angel investors. And you're on the board of Stella, a nonprofit that supports female entrepreneurs. You're also a venture partner at MindShift Capital, and you currently serve on the SEC.

05:10
Securities and Exchange Commission's Small Business Capital Formation Advisory Committee. So thank you for bringing your expertise here into this podcast today. Well, thank you for having me. So can you share for my listeners some of the highlights you walked us through in February while distinguishing the role of an angel investor, a range of fund groups versus VC?

05:37
I mean, some of the trends you're seeing in the markets. Sure. Well, to put it very basically, an angel investor is somebody who writes checks out of their own checkbook. A venture capitalist will pool funds from other people, so they're using other people's money. And therefore, they're held to certain standards, and they're held to certain financial returns that their investors are expecting.

06:06
So angels, while we also of course would love and expect a financial return, we invest in the things that we really care about and are very passionate about. And we don't necessarily have the same time horizons and the same guidelines that venture capitalists do, which makes us a little bit more plausible for being immutable for being able to do certain things and invest in the way that we want to. So,

06:34
Over the last two years, especially maybe even going on two and a half now, the market has been very challenging for entrepreneurs to fundraise at any stage. The market has been very challenging for exits and liquidity. So angel investing or investing in early stage private companies means that you're investing in a company that is not.

07:01
publicly traded on the stock market, like you would see a stock like Apple or something like that. Got it. In order for the investor to have any type of liquidity, there has to be an event. Either the company is sold, or in rare instances, the company would go onto a public stock market, or an IPO, as we call it. So in those particular instances, when there is liquidity, then that money can in a way

07:30
can oftentimes be put back into the startup scene, the entrepreneurial ecosystem, as we call it. And a lot of times, investors will take any money that they do get as a gain from a previous investment and put it into other startup companies so that that capital can keep flowing. That's kind of the whole idea behind as people are getting returns. So that's really the biggest difference between an angel investor and a venture capitalist.

08:00
But right now it's been challenging for everyone because of this lack of liquidity that we've been seeing in the marketplace for the last two and a half years. Now we do think that there's been some talk that that market is gonna start to open up a little bit more. We will see more M&A activity. And if that's the case, then hopefully we will start to see more liquidity and then there will be more capital for investing. And

08:26
as an asset class, right? Angel investing. And with your role as chair emeritus and while you were also chair of ACA, what spurred you to write about angel investing, right? Is this the culmination of your years of experience? Walk my listeners through what made you take the time to actually write a book, do good while doing well.

08:52
Yeah, I think it was out of frustration more than anything. I would talk to people, even neighbors, friends, people I would meet at an event. And I would say, yeah, I'm an angel investor. I help early stage companies. And they were like, wow, that seems really interesting. And I would say, well, you could be an angel investor too. And they would be like, me? I could be an angel investor? I thought that was only for the rich and well-connected.

09:22
that isn't something I could do. I don't know anything about that. I don't have a degree in finance. I don't really think that's for me. So it wasn't that they didn't want to do it. They really just didn't believe that it was something that they were able to do in a way, either from a wealth or income standpoint or from a knowledge standpoint. So I thought, wait a minute, I think there's an awareness problem here because we have all these amazing entrepreneurs. They're building incredible innovations that the world needs.

09:52
But they're really struggling. I mean, struggling with fundraising. And it's one of the hardest things that they end up doing. And it's like a full-time job on top of the full-time job of them trying to build this company. So wait a minute, how can we fix this problem? Well, we could fix the problem if more people got involved and became investors, but that seems daunting.

10:17
So I thought, well, how can I help people realize that that doesn't really have to be quite so daunting? And you can kind of nowadays because of a lot of the regulatory changes that have happened in the last eight to 10 years, you can maybe step your way into it and really start to learn with basically putting less money at risk and you're gaining knowledge at the same time. You can also be a mentor to startup companies. That's become very popular and needed in the last several years.

10:46
All of these things that people don't really know about, that was what I was trying to do, demystify it. Right. And if you had to provide a sneak preview on the gut of your book, what would that be? Set takeaway. And who should be your target audience? Is it just the, is it actually entrepreneurs or is it those people that are just kind of wanting to become more informed around the asset class? Yeah, great question.

11:16
So I wrote the book for people who want to make a difference, but they just don't know how one person alone can do that. Okay. I think you feel that charity is a great way to give back, which of course it is, but they have no idea that this asset class also exists in a way that you can give back and potentially get a financial return at the same time. So that's really who I wrote the book for. As far as a sneak peek as to what's in the book, it is a Y2 book.

11:45
about angel investing. So I saw that there were several books out there and some of them are really amazing on how to angel invest. And most, if not all of them, have the words angel investing in the title. I thought to myself, wait a minute, if somebody really wants to learn about this, but they don't even know that it exists or that it's accessible to them, why would they ever pick up a book on how to be an angel investor? Because this has never even crossed their radar. So how can I attract them?

12:14
to think about things in a different way, to think about how they might use some of their capital in a different way. And when I say capital, I don't just mean money. It can be their human capital, their time. They could be helping an entrepreneur through mentorship. How can they start to look at the resources that they have in order to help grow innovative companies? How can they think about that differently so that they will want to then go and help either people in their local community and in their local area?

12:44
or maybe even startups nationwide or globally. I did watch your TEDx talk and I really do like how you have positioned the asset class or why is angel investing important if you want to make a difference versus charitable giving. And in your TEDx talk that will be in the show notes, you illustrated that extremely well.

13:13
That's very unique. Yes, thank you. And I really want people to donate to charity, help charities, that's fantastic. But we've put such a burden on them and they don't have the resources. They don't have the ability to actually take some of these innovations forward. We need those for-profit companies too. And when you look at the amount of charitable giving that happens in the U.S. annually, it's about 475.

13:41
billion, which is a lot of money. And that's wonderful. But that is equivalent to only about 1% of the value of the US stock market. So when we put things into perspective, it's really not doing any of these nonprofits of good service to say that we're going to put the burden all on you. And what is the size currently of the asset class as angel investing per ACA? Well, pretty much, if you look at the SEC data,

14:10
The most recent data has around $30 billion is where the angel asset class kind of lands. And then from there, we can look at that as far as there's angel groups, there's angel funds, and then there are individual angels. I tend to be a pretty big proponent and fan of angel funds. It allows somebody to put in a certain amount of money and nowadays it does not have to be

14:39
a quarter of a million dollars or any crazy big amount, they could put in a couple thousand dollars and get access to a diversified portfolio, which would allow them to spread their risk and not necessarily put all their eggs in one basket, as you would say. Right, right. Let's kind of switch gears here. While not entirely leaving your experience behind from ACA, you're currently, so you,

15:09
are you've had many women leadership roles, right? Now, whether you got there as a woman, I don't believe so, but what you've had many women leadership roles, most recent, well, maybe the most, I think, relevant for this podcast is you are currently an advisor to the SEC's...

15:34
Small Business Capital Formation Advisory Committee. Now getting there, and it really ties in well with corporate governance and how to do things, well informed with data so as to provide our regulatory structures or financial or legal with guidance and you're representing the small business world. Are you the only woman on the advisory committee? Talk to me through some of the women leadership roles you have had and

16:04
how you've obtained them and how you are opening opportunities for other women leaders. Yeah. So I have been on the investment committee of several funds. Okay. We were specifically focused on helping to get capital to female founders. If you look at the data over the last several years, although in angel world, it is improving in the venture capital world. And when you for the bigger dollars that companies really need to scale.

16:34
The statistics show it's been, you know, two to 3% of the funding goes to women and the rest goes to male led companies. So I've really been trying to help change that. And one of the ways to change that is to get the check writers or the people making the decisions about where the money goes to be more diverse. So to me, it was important to serve on some of these different investment committees for various funds, help with angel groups.

17:03
member of Golden Seeds, which invests only in women-led companies. I'm also a venture partner for MindShift Capital, where we invest in women-led companies globally. So those were things that were important to me. At the Angel Capital Association, I also started with a couple of my peers. We started a group called Growing Women's Capital. It's a peer group within the Angel Capital Association, where we help bring focus and attention to the female founders who are fundraising at the time.

17:33
And so those were all things that were important to me. As far as getting to be able to participate on the SEC's advisory committee, that's been great. And it is an extremely diverse committee, which I absolutely love. There's really representation there from men, women, racial disabilities, I mean, everything so that every group, I feel has a voice at the table because we're trying to represent

18:03
small businesses across the country. And that doesn't necessarily always mean startups, startups are scale businesses that people would want to invest in. But we also have people on the committee who are representing your Main Street businesses as well, coffee shops, things like that. Excellent. And the, can you talk a little bit about Stella? It's also.

18:30
a nonprofit group in which you've been involved, I think, since its inception. I have definitely been a champion and a supporter for Stella since its inception. I've only been on the board for a very short period of time. But the organization is really wonderful. They have done a lot as far as entrepreneurial education for women. They have an archive on their website of different.

18:58
different educational materials. They have an accelerator. They're always promoting ways that more female founders can get in front of investors. So they're doing some really good work over there. Can you get into a bit what is your role on the Small Business Capital Formation Advisory Committee? How often do you guys meet? What is the agenda? And what is the term? Because this is just one of many.

19:28
advisory committees under the auspices of the SEC? I'm just fascinated on what is the actual governance around that. Sure. So it's a four-year term, and I'm one year in as of now. We meet quarterly, usually in person at the offices in Washington, DC. Sometimes we meet virtually. It just kind of depends on the situation, but usually we meet in person. Meetings are all recorded.

19:56
and broadcast live over the SEC's website. So anyone who wanted to go back and watch any of the meetings, or if you wanted to watch any of the future meetings live, that is absolutely doable. They're always listed on sec.gov, the website. So the role is really for us to be able to help the commission get a better sense of what's happening, kind of boots on the ground.

20:26
So each of us has a little bit of a different angle for how we represent small businesses. I of course come with the angel investing lens. There's another person on the committee who has a debt crowdfunding platform that he founded. And that's a very interesting perspective since that's something that's kind of newer to the state of how entrepreneurs can fundraise. So we're all.

20:54
trying to have basically a conversation about some of the challenges that entrepreneurs face when it comes to fundraising. And one of the things that we tackled quite heavily, at least for the first few meetings that I was involved in was the accredited investor definition. Got it. As it stands right now, to be an accredited investor means you have to have a certain level of wealth or income, $200,000 by yourself, 300,000 with a partner.

21:23
or a million dollars in net worth minus your home. And there was talk or has been talk that that could be indexed or changed or raised. And we did some rough calculations at the Angel Capital Association. There were also calculations done, then I don't remember the exact numbers, but you could go even go back and watch our meeting on sec.gov and you'd be able to see that, but it would eliminate.

21:47
a lot of the people who were already angel investors. And we only have about 300,000 angel investors in the country. And remember, there's about 330 million of us here that live in the US. So, there's a lot of opportunity, let's just say that. And if we started to eliminate the ability for people to participate based on an income or wealth level, that would be challenging. And it would make fundraising for entrepreneurs even that much harder.

22:14
So what we suggested in one of the, and you can actually see the recommendation that we made on the SEC's website, but we made a recommendation to say, hey, how about we don't actually focus so much on income and wealth and we focus more on education. And we'd like to see there be an education component that would allow for more people to be able to participate in this asset class. And the Angel Capital Association has put in

22:43
And I think there were some others as well who have put in some proposals to say, hey, we could help with this. So that's kind of where we are right now. Right. And as emeritus chair of the ACA, can you talk about some of the innovations that have come out recently? You've talked about angel funds. I'd like you to talk. You've talked a little bit now about credit investor and the definition of your work at the SEC.

23:13
But the recent publication, I'm a member of ACA, attended the annual summit this year. I found the work that you've done on the actual convertible note form for the angel investment is fascinating. Can you talk a little bit more about that? Sure. So there are documents that were put out by the National Venture Capital Association years ago

23:42
companies who want to fundraise to use those documents for a priced round. Of course, that would be for actual equity, you're selling shares of your company, that kind of thing. And those are great. And very, very helpful to entrepreneurs, because I think in some cases, it can save them a lot of time and money in legal costs. However, there wasn't really anything out there that could be used for convertible notes.

24:09
Safes, yes, there is a kind of a standard safe note that people view and that has also saved entrepreneurs time and money, but the Angel Capital Association was interested in putting something out that was like that, but in the convertible note form that was more, quote unquote standard or something that, at least a starting point for entrepreneurs so they didn't have to start from scratch or have to go to an attorney and have them draw up all kinds of paperwork. So yeah, and that's available on the ACA's website.

24:40
So this which gears back to one of your other facets. You are associate producer of a film called Show Her the Money. I first heard of it through, I guess meeting in February and the Thai SoCal chapter on September 19th will be actually screening this film.

25:09
in conjunction with a global competition for women led company. So I'm, when I, um, learned that you would join me as a guest, um, of the podcast, I was delighted to get kind of a scoop also about show her the money, how you got involved as associate producer and what can we expect? Yeah, it turned out to be a tremendous film.

25:35
Catherine Gray and Kai Dickens, who put it all together, Kai Dickens, the director, it was Catherine Gray's idea, have really done a tremendous job of showcasing through storytelling the problem and bringing more awareness to this problem. So Catherine Gray and I met after somebody saw my TED Talk and saw hers and said, hey, do you guys know you're talking about almost exactly the same thing?

26:02
know each other. And this was at the time right before the film came out that Katherine was still looking for a few investors. And so I myself and a couple other angels that I know we, we kind of helped fill that round up so that she could move the move the film forward. And we've been on a 50 city tour that's now turning into probably close to 100 cities. Katherine's been such a trooper. She has really gone to a lot.

26:30
a lot of the screenings. I've gone to several, but it's a lot to kind of go city to city almost, I mean, there's nowadays, there's a showing almost every day in different places around the country. So there, we try to have at least someone from the film or an associate producer there at each of the screenings, but it's really been fun to showcase it.

26:54
We always have a panel afterward and we get questions from the audience. We let the audience kind of, you know, give their comments and what they're thinking about it. And the, I mean, the feedback has just been tremendous. And will there be a sequel? That's a good question. There's a lot of talk about a lot of different types of things, so you never know. Right, excellent. So you heard it here on the Founder's Sandbox. Marsha Dawood is actually.

27:22
Associate producer of a film, Show Her the Money. The Thai SoCal chapter will be screening the film on September 19th at Noah House here in Hollywood, Los Angeles, so very exciting. Well, Marcia, I like to have a part of my podcast where my listeners can learn about how to contact you. They will be, you have many touch points, but what would you...

27:51
suggest as some of the best ways to get in contact with you? Well, I would just say go to my website, which is simply marshadalwood.com. You can learn about all kinds of things. I have lots of free resources there. Currently, you can even download a free chapter of the book as a preview. Oh, to do that, they can do that. And of course, I have everything, I linked everything on there, including the TEDx talk in Charlotte. I did do a rap battle. I don't

28:20
Did you do a rap battle? I did a rap battle called Angel Investor versus Venture Capitalist. Because I was watching YouTube with my step sons one day and we saw a rap battle between Snow White and Elsa. I thought, well, that's clever. And that's a cute way to like kind of get a message across.

28:44
maybe I could do a rap battle about an angel investor versus a venture capitalist just so that people would kind of have a better understanding of what the differences are. So one day I just sat there, this was before chat GPT, and kind of wrote it out, you know, like what it would be. And, and of course, I'm cracking myself up the whole time. And because I was like, Oh, that's funny, you know, how can we make that, you know, more clever? So anyway,

29:13
I debuted it at one of the ACA summits a couple of years ago, but that's all I can say to you. Excellent. So in the show notes, you will have access to the TED Talk, the order online of Marsha Doudwood's new book, and you have your podcast, the Angel Next Door podcast. And who do you invite there? Well, I saw a need about three years ago. That's when I started it.

29:42
that there really wasn't anybody talking about how do you become an angel? Or how would you help a company with either mentoring or helping them with investing? There's a lot of podcasts out there about entrepreneurship, lots of things about pitching, raising money, how did you build your business? And they were great, I like all of them. But I was really seeing a need for how can we showcase this, an angel.

30:08
that can be anybody, it can be your next door neighbor. So that's kind of how the title came about. And on the podcast, I have people who are angel investors who are just telling their story about why and how they became an angel investor, how they learned about it. But from there, it's kind of spun into other things. I've had four Congress people on talking about small business in their community and why it's important and what they're doing in Congress in order to help to...

30:38
spur economic development. I've also had two of the SEC commissioners on, which is fun to go through what they're thinking about and the changes that could potentially also help entrepreneurs. And then I've had several people come on who were experts in areas like equity crowdfunding, debt crowdfunding, revenue-based financing.

31:00
And then of course, one of the things that angels always wanna know about are tax benefits, even though taxes sometimes seems like a boring topic, taxes are something that everybody really needs to know about and there are several tax advantages that angels can partake in, but many are not known. Exactly. Excellent. So before we finish, I actually go back to

31:29
the founder sandbox and kind of the three cornerstones that I am working on as my mission and building resilient, purpose-driven and scalable companies. So I always like to ask my guests and not one guest has the same definition or I guess the meaning to each of these terms. So I'd like each of you to tell me what does resilience mean to you, Marsha?

31:56
So when I think of resilience, it makes me think of how hard it is for an entrepreneur to build a company, just anyone to build a company. So resilience is that tenacity that you need in order to keep going on the hard days and the days that you just wanna throw your hands up in the air and say, why am I doing this? So that is really so important because building a company is such a...

32:22
hard work and it's so much harder than I think anybody ever realizes when they go into it. And I've talked to so many entrepreneurs who've said, oh my gosh, this is like, this is way, way, way harder than I thought it was going to be. But it also takes a village. So that resiliency needs to have a community around it. And so that's why I really am such a proponent of angel investing because we really can form that community and help build the resilience with the entrepreneur. Thank you. Purpose driven.

32:51
I think you have a purpose, right? Which is educating on the asset class and how to become an investor. So what is purpose driven for you? Well, I think that goes back to do good while doing well. I mean, I wasn't necessarily going to title my book that. It was the title of my TEDx talk. However, I went through...

33:16
as you do as an author, you go through many, many, many iterations of what the title is gonna be, because it's one of the most important things. And I did several focus groups where I gave people options about titles and do good while doing well, kept coming back and people were like, that resonates with me. So then I just think, purpose driven, that's what people really, that was the thing that really, it just stuck with them. And so,

33:45
I think aligning your values with your money, with your goals, you know, all of those things are a great way to be purpose driven. To make a difference. Right. Sustainable growth. What's the meaning for you sustainable? So sustainable means like long term, we need to be able to do something that's hard and be able to.

34:12
continue to do it. And if we come up against roadblocks, how do we pivot? We tell entrepreneurs all the time, it's okay to pivot. It's okay if you come up against something in your company and you're like, wait a minute, this doesn't fit or it doesn't work and maybe I need to change something, that's okay. I mean, everything that happened in 2020 with COVID. Oh my goodness. Lots of pivoting, right? So to me.

34:37
sustainable growth is like, how can we do that? How can we be in the right mindset so that no matter what happens, we can keep going and we can keep building what we really wanna see in the world. Very nice, thank you. Last and final question, Marcia. Did you have fun today in the sandbox? Oh, love playing in the sandbox. And had I known that you were also a rapper, I would have had a question in there, but thank you for sharing the fun side.

35:07
angel investing, right? So to my listeners, if you like this episode with Marsha Dawood, sign up for the monthly release of founders, business owners, corporate directors, and professional services go-to podcast to learn about how to build resilient, purpose-driven, and scalable companies while doing good. Thank you very much for joining me and Marsha Dawood signing off for today. Thank you.
- Lyssna Lyssna igen Fortsätt Lyssnar...
- Lyssna senare Lyssna senare
Purpose: Designing for a Next act
22 aug· The Founders Sandbox
On this episode of The Founder's Sandbox, our host Brenda McCabe speaks with Khalid Machchate; accomplished 3 x exit startup founder, operator of a startup studio, board of director positions and now in his “NEXT ACT,“ Khalid is a member of Morocco’s Royal Advisory Committee by nomination from His Majesty King Mohammed 6th, for the development of the Kingdom.

According to Brenda, "Khalid checks many boxes as a guest to the Founders Sandbox. The topic we settled upon is Purpose, when we met for the first time his remark to me about after he found the podcast and later on the website of Next Act Advisors, my consulting business, “It strikes me that not many people are thinking about their Next Act in life.“

They walk through Khalid’s origin story: growing up in a fishing village in Morrocco in a humble family; developing and selling his first software at the age of 11 years, and most recently; Khalid joined as the youngest member of Morocco’s Royal Advisory Committee for the Special Commission on the Development Model by nomination from His Majesty King Mohammed 6th, leading strategically the national development agenda through inclusive and sustainable public policies, technology and innovation. In conversations they share on how they intentionally and proactively work to provide a roadmap through digital transformation and human capital skill-up with clients.

You can find out more about Khalid at:

Linked IN

https://www.linkedin.com/in/khalidmachchate/

https://khalidmachchate.com/

And view more of his content here :

https://www.forbesafrica.com/under-30/2019/07/01/30under30-technology-category-2019/

https://www.bbc.com/afrique/region-41804783

Khalid Machchate: A Day in Our Digital Future | TED Talk

A Revival of Fintech Funding in 2024 is Just a Pipe Dream... Or is it? | The Fintech Times

Top 3 Digital Ways to Become the Best Leader Your Organization Deserves - The Good Men Project

https://www.menabytes.com/startup-golden-rules/

Read an article by brenda on this topic at:

https://nextactadvisors.com/next-act-as-a-prelude-to-a-last-act/

You can read the article in full by subscribing to Next Act Advisors at https://nextactadvisors.com/product/subscriptions/ and be sure to use the special discount code "sandbox25" for friends of The Founder's Sandbox for 25% off your subscription.

transcript:

00:04
Hi, I'm pleased to announce something very special to me, a new subscription-based service through Next Act Advisors that allows members exclusive access to personal industry insights and bespoke corporate governance knowledge.

00:33
This comes in the form of blogs, personal book recommendations, and early access to the Founder's Sandbox podcast episodes before they released to the public. If you want more white glove information on building your startup with information like what was in today's episode, sign up with the link in the show notes to enjoy being a special member of Next Act Advisors. As a thank you to Founder's Sandbox listeners.

01:03
you can use code sandbox25 at checkout to enjoy 25% off your membership costs. Thank you.

01:17
Welcome back to the Founder's Sandbox. The Founder's Sandbox podcast is now in its second season. I am Brenda McCabe, the host. This monthly podcast reaches entrepreneurs and entrepreneurs and business owners who learn about building resilient, purpose-driven and sustainable businesses with great corporate governance. My mission is really simple.

01:44
I bring guests to the podcast who themselves are founders, business owners, corporate directors, investors, and professional service providers, who like me want to use the power of the private enterprise, be it small, medium or large, to create change for a better world. Through storytelling with each of my guests, including topics around resilience, purpose-driven organizations, and sustainable growth,

02:11
My goal is to provide a fun sandbox environment where we can equip one startup founder at a time to build a better world through great corporate governance. Today, I'm absolutely delighted to have as my guest, Khalid Machateh. He's joining the podcast today as an accomplished three-time exit startup founder, operator of a startup studio, board of director positions, and now in his next act.

02:41
He is a member of Morocco's Royal Advisory Committee by nomination from His Majesty King Mohammed VI for the development of the kingdom. So thank you Khalid for joining me in the Founder's Sandbox today. Thank you for having me, Brenda. Great. Well, you check mini boxes as a guest to the Founder's Sandbox. And I talked about business owners, corporate board directors, professional service. But this topic we settled.

03:09
upon his purpose. You know, we met for the first time and you'd actually spent some time on some podcasts as well as Next Act Advisors consulting website. And you remarked to me, you know, I don't think there are a lot of people that are thinking about their next act, right? And so we're gonna talk about throughout the podcast today purpose, Kelly's purpose and designing for his next act.

03:38
Maybe for my listeners, we'll get a glimpse of some ideas of how one's journey, professional and personal, really informs what your next act might be. So through Khalid's origin story, he grew up in a small fishing village in Morocco in a humble family. He developed and sold his first software at the age of 11.

04:05
And most recently, after many, many years, he joined as the youngest member of Morocco's Royal Advisory Committee for the Special Commission on the Development Model by nomination from His Majesty King Mohammed VI, leading strategically the national development agenda through inclusive and sustainable public policies, technology, and innovation. We're going to hear a little bit more about a state visit that Khalid just had.

04:34
in the United States of America. No, in our conversations Khalid, we shared how we both in our businesses, we intentionally and proactively work to provide a roadmap through digital transformation and human capital skill up with our clients. There is more to discover with you today. You know, my journey of moving back to the United States after over 25 years in Europe really

05:03
became my why, became purpose-driven, scalable, and very resilient. And I took that into my business. What would be your tagline, Khalid, if you were to describe your journey?

05:19
My tagline would be probably the out of the box since we're talking about, you know, so we're in the Fambur sandbox. So it would probably be the most out of the box Moroccan.

05:49
has been, basically that is what I hear from everybody, from my family to people that I studied with back when I was in school, to people that know me now. It's the, you don't fit into any box that our kind of corporate world or business world has. And so, yeah, that would be my tagline. I love it.

06:18
out of the box. And again, on your journey, it was fascinating just to research not only your LinkedIn page, the many accolades that you've received over the years. But more importantly, you have your own website, Khalid Machate. And there I we hadn't touched upon it, but you are an active public speaker. And you have speak around different themes, technology,

06:46
business and entrepreneurship, policy and governance, and you also share your own story on the stage. So I'm gonna cut to the chase. I am most interested for my listeners at the Founder's Sandbox on your story. Of course. So my story can resonate with anybody that grew up in a very small town. So I grew up in a...

07:16
in a small fishing village in the south of Morocco. The reason why that is is that my father was a public school teacher. And within our schooling system, once you get a job as a public school teacher for the government, you get assigned to where you're gonna start your career. And so you don't get a say into where you're going.

07:42
And so while we were living in McNaas, which is the city I was born in, after a year of me being born, my father had his assignment and we got assigned about 2000 kilometers south. So in the village, everything is late. The event of internet is late.

08:11
News are late, opportunities are scarce, you don't get access to much. There are no associations for education or for children's activities. And so basically we always had to make up things ourselves. How to get entertained, how to find access to music, et cetera.

08:39
And so one thing that I kind of stumbled upon, because my father was interested in, was programming. So software programming. So my dad, again, public school teacher salary for to give you an idea is around $250 a month for, you know, when you're starting out your career.

09:07
And so he was trying to round up his end of months. And so he self-learned how to fix computers. And a few years into fixing computers, he started thinking, how can I add more to that service? And then started to learn how to program as he kind of fixed himself a makeshift computer at home from the pieces that he would get from each of the fixing jobs.

09:33
And so, and all of this, I mean, he had his job, he had his salary. So the self-starting and the initiative taking kind of came from there for me. It was definitely, you know, a C to learn in my case. My dad never told me to do anything, never taught me to code.

10:00
He was very clear on, you know, I do what I want with my time and I go and I enjoy myself how I want it. But the books would be left around the house, the coding books, and I got just curious and I started taking those books and using the software on my dad's computer and learning how to code.

10:26
And that was how I got to creating my first kind of accomplished software. Started around the age of nine and finished it at around 11, where I started sharing it with school buddies and then my teacher. And at first it was just a, you know, here you can burn the CD.

10:53
if you want to learn, it was a biology course, but made in an interactive gamified way. Because I got bored at biology classes. And so what happened was, I started giving it around, and a teacher of mine actually, not my father, told me, why aren't you like making any money out of this? And I was like, well, I just thought I could help out.

11:20
And I was like, yes, but that is a lot of value. You spend a lot of time working on that. And so, yeah. And so that's how I started selling the software. And then I ended up selling it to school to distribute to their students. And that's how my first- At 11 years of age. Our story. Yeah. Amazing. Yeah. Yeah. And also, you know, you're a-

11:49
a product of the public school system, humble origins, and in your public speaking, you are probably very influential in Moroccan youth today and other Middle Eastern environments, I would imagine. So- I hope though. That's your goal. So thank you. You then went on to-

12:20
create two other businesses, can you speak to them? And were they for profit or nonprofit? So to continue on the story, then around the end of middle school, that's where my dad was able to get reassigned to my my birth city, which was McNeist. And so I started high school there. Now,

12:46
going from where I was, again, where internet had only been introduced at that point, maybe a couple of years, three, four years before that. And so I started finding out that, oh, in the big city, there are a lot more opportunities. So there are associations for students that you can find internships and, you know, different opportunities to

13:14
learn more or to do kind of side jobs or to find also just potential clients because I was always still coding and still making little websites, little management software, etc. And so it just kind of made me aware that the world was a lot bigger than where I started. And at the same time

13:43
hanging out with my family and a cousin of mine introduced me to the culture of manga, which is the Japanese cartoons. Yeah, I was I think 14 at the time. And yeah, I loved it. And I started watching quite a lot of it while being fascinated by the culture. And so

14:10
At some point I started feeling that I was getting fluid and understanding what was happening on screen without having to read the subtitles. And I was like, oh, that would be interesting. You know, I already understand. Maybe let's try to learn also the grammatical aspects of the language so that I can, you know, say that I speak another language, which is Japanese.

14:35
And so yeah, I looked online, I found quite a few websites and quite a few forums where you could learn how to write, you could learn the grammar, etc. of Japanese language. And by the time I was in the end of high school, so the year of graduation from high school, I was fairly fluent and I could write well.

15:01
And so what I did was I got myself into an NGO, a nonprofit that was catering towards university students to have access to internships. And those, you know, you have local internships, but also international internships. This was an international NGO. And so I went to the NGO. I...

15:30
And please, guys, do not hold me up to this. I was 16 at the time. I lied my way through to tell them that I was a student at university while I was still in high school, just because I thought that it wasn't fair that I had the knowledge and I had the possibility of accessing this experience. But just because of my age, I wasn't able to.

15:58
to access it. And so that's what I did. I learned about a particular university and I started saying that I was from that university. Happily enough, they did not check any, you know, credentials and then didn't ask for my ID. I didn't have an ID at the time. Again, I was 16.

16:18
And so, yeah, I had my first interview in the space of like a few weeks after I was enrolled into the internship support program. I met with the CEO of the small company in shipping in Japan that were looking to hire an intern for to help them with their IT management system.

16:43
And five minutes from the beginning of the interview, the guy was trying to speak in English, and it was very hard for him. And so I said, you know what, we can switch to Japanese. Two hours later, the obviously I was hired. But not only that, the guy was saying, you know what, I cannot just hold you for myself. So I'm going to share your resume with all of my CEO friends. So basically, I became the

17:11
this monkey savant that's coming from the Orient, you know, speaking the language and having looking nothing like what they're used to. He shared my resume with I believe 20 of his friends and I ended up having I think five projects at the same time in the space of six months to do for all these folks.

17:39
in Japan. So that was my first international contract. But that's also that was the trigger for me to start hiring other people because well, I was overwhelmed by the amount of things that I had to do. And so I just tried to look for my friends that were you know, coders and hackers of time and people that could that could help me out and started paying them, you know, from from out of pocket.

18:07
And then thought, oh, you know what? This is not very comfortable. Maybe I can, you know, I need a structure to be able to do more, better invoicing or get paid better. And so that's how I created my first company, which ended up becoming my family office now, which is KNW technology group. And so just for reference, KNW technology group, now it's a, now it's a group. It's.

18:36
in five countries. I mean, we have offices in five countries, we have clients in almost 80 countries, we're present in Africa, Europe, Middle East, and APAC, Asia, and the US and covering the Americas. And so, you know, we have quite a large footprint.

19:00
But it started this way. It started by me. At the age of 16, although you fibbed your way through it, right? And learning a language. Amazing. Wow. So you've clearly owned businesses, scaled them not only nationally, but internationally, and at a very, very tender age. Fast forward. OK, we won't talk about your age here.

19:30
People can read them in the show notes. There's some articles for you to feature. So you can do the math and discover Khalid's age. You then struck out pretty recently and decided to obtain credentials as ESG leader with a certification that you pursued both with HSBC and KPMG. Can you?

19:59
What made you pivot to really going deep into ESG, which today it's like, at least in the United States, very front and center. You were a pioneer. So what made you pursue those credentials, Khalid? Thank you.

20:25
In my case, and this was part of the initial conversation, which was preparing my next act. So around, I believe 2018, 2019, particularly 2019, I started feeling that I was kind of ready to move on from managing the group. And so throughout...

20:51
kind of the 15 or something years that I was at the head of the group and developing it, you know, developing various startups under the startup studio within the group. And all of that was exciting and, you know, we were starting projects, but still the underlying structure that is that you're running a large company that answers to clients that, you know, does kind of major projects.

21:20
They all kind of start looking the same after a while. We've worked with over 20 industries. So we've done the rounds. And so now it became more repetitive and there's nothing new under the sun. They started feeling that disconnect. And I really wanted to, basically I had a succession plan in place and I was always thinking that

21:50
I needed to move on from this. This is now is a management play and I'm a creative person, not the best manager or I'm not just not as excited about managing an existing structure as I was starting things and building new things and tinkering with things.

22:16
And so even throughout the 15 years, I've had the great luck of having great COO. And so every now and then I would run away from my duties as a group manager. And I would go do something else. So I was the innovation director for the Abu Dhabi government for a while. I was the, you know, an expert with the G20 in Argentina. I was.

22:45
part of the World Economic Forum panel of experts in Davos. I did quite a few things here and there that mainly had to do with policy at the highest level, strategy and innovation and technology. And so that's kind of what put me on the track of thinking at the time.

23:13
in the early 2010s is the governance and the sustainability aspect is not as commonly talked about compared to profits and margins, top lines.

23:37
And that kind of made me think, oh, so people, when they think about, you know, companies and managing them, they're not thinking as much about the environments within which the companies are evolving, as much as they think about, you know, the ins and the outs of the company itself. So there. And that made me, you know, realize that, oh, I

24:06
do want to create impact here and how can I create impact here is by trying to integrate technology in a way that improves the relationship of a company to their environment and their impact on their environment. And so

24:27
in my next act planning was, okay, I'll transition out of managing the group and I will seek to understand better how to incorporate ESG principles into the board governance. And so the program, which was a full year program,

24:56
was a big kind of micro masters that was very heavily focused on use cases of actual businesses and that's kind of the specialty of KPMG and more on the financial integration from HSBC to

25:25
understands and become a well-qualified board director for publicly traded companies, foundations, family offices, but with a large emphasis on the ESG and on kind of changing the mindsets in boards. So our role as graduates of this program is not to be a regular board seat,

25:54
but to be the kind of change and impact board seat and to kind of negotiate our way into changing the strategy of the company or the foundation or the family office that we are in the board of towards more impactful environment. Excellent. So it started in the 2010s, you said, right? When you kind of cut out

26:23
left the business in charge of your COO, had the opportunity to influence policy, but technology related in the MENA region, and then got formal credentialing 2018, 2019. Still you were head of the wave, right? So you do think out of the box, right? So today you do sit on a few corporate boards.

26:51
for profit and not for profit. What I wanted you to share is some of the work you've done with charitable foundations, your family foundation is one of them, but also for the for profit. So can you speak to a few of the organizations where you have been sitting or you've turned out but you've been sitting as a board member, please?

27:21
role as board member was always, you know, my way of being involved within a particular organization where I can provide the maximum value for the minimum amount of time. So that's kind of how I approached my next act, which is I do want to have more of my time for myself.

27:50
But at the same time, I still want to have impact on a larger scale. And so that's how I both selected the organizations, whether for or nonprofit, that I joined, obviously, other than the fact that I, you know, my personal interests. But it was also my way of giving as much

28:18
impact and of my value and expertise as possible while respecting my own time and my own kind of personal engagements. So I'll talk a little bit about the first the nonprofits as I wanted to be able to touch upon you know all the

28:44
the mission related or my purpose related focus, which was always how do I improve the basic life services for citizens of my country and of Africa. This has been kind of a pulling.

29:11
a theme and mission for me for as long as I could remember. And so one of the activities that I've done is supporting Africa-based entrepreneurs to have access to international markets and to have access to international funding. And so I was on the board of Demo Africa, which was an initiative that

29:40
selected some of the best African startups. So what we mean by African startups is startups that are made by African entrepreneurs and founders and that are targeted towards a need within their market. So it's not a global company or FinTech right away. No, it's actually a company born out of a need that addresses an African market.

30:10
And so taking those, giving them all the tools, teaching them how to be presentable, how to be adapted towards the international market, all the while keeping their focus and their mission on improving the livelihoods of African, you know, of their country.

30:39
Yeah, and so I've done that for I believe three years. You know, in that in that time period, the organization has helped founders raise, I believe over 150 million US dollars. Yeah, my numbers are still I still correct. A lot of them have joined a major

31:06
uh, uh, renowned kind of accelerators like Y Combinator and plug and play. Um, and a lot of them have gone to, uh, uh, you know, establish in, in multiple countries in the world, but always having kind of this underlying mission of serving the continent. Um, so that's one, uh, second would be, uh, the tech green foundation of which I'm still on the, on the board.

31:31
This is a MENA-based foundation that is there to promote and celebrate impactful initiatives and people within the MENA region and supporting them into growing and having more impact across the region coming out of their particular country.

32:00
These are privately held, so there are a few NDAs involved. I'll share just a little bit of the underlying themes. So I'm on a family office board that has multiple holding kind of companies underneath the structure. And the reason why I joined is that because they wanted to

32:29
have a better way of quantifying their impact on the community and on also in bettering the way they track their different investments across the board. And so my role as an independent board member was to come in, both help them with understanding what the financial structures and governance models are that would best suit their multi-facility.

32:58
industry focus, but also how to integrate sustainable monitoring and evaluation practices within their strategic oversight and how to structure their long-term strategies with this in mind, with the sustainability aspect in mind. Another one is a scale-up, which is a larger startup.

33:26
for the lack of a better explanation. So a scale up, they've fundraised, I believe, four rounds till today. They're growing within emerging markets, which is one of the reasons why they've reached out. And so their expansion within emerging markets has found a few blockages with regards to

33:53
cultural contextualization and understanding the mechanics of emerging markets, which is one of the things that I've worked within. Again, the 80 countries that I'm operating, a lot of them are, actually most of them are within the emerging market category. And so, yeah.

34:16
My work was to support them, understand how to contextualize for emerging markets, understand that the regulatory aspects of each of these markets, and that they needed to account for that both from a risk management standpoint, but also from an operational dilution of culture and dilution of processes and principles. And so...

34:45
This might sound a little bit more technical, but obviously to our entrepreneurs and board director listeners, it might be kind of what they do on a regular basis. But I just wanted to give a little bit of insight on that. That is quite extensive. Thank you for that. And there is at least two common themes, either in both the nonprofit

35:14
for profit. It's all around contextualizing for emerging markets, the regulatory regimes around technology, right? And the environmental and impact and society, so ESG. So how it affects the livelihood of those people, stakeholders, be they employees, suppliers,

35:42
in the markets of these that these companies for profit serve. So there is a common, common theme there Khalid. You know, you've received many accolades. I'm going to name them off here, and they will be in the show notes. And I'll get to the question in a minute here. You've received the Forbes 30 under 30 in 2019. You've received

36:11
the United Nations 100 most influential people of African descent. And that was this year. The young Arab pioneer and 2023 Africa lion and entrepreneur of the year 2017. And I don't know whether I left any out. But are is there one that you felt was more rewarding than another in hindsight now?

36:43
Well, actually within the list, I mentioned mainly the ones that were a bit transformative for me in a way. I believe the tally now is about 30 international awards.

37:05
And so the ones I mentioned were mainly ones that came at a turning point in each case. So 2017 was kind of the one of the largest international expansion years for us. Okay. It was one where one of our startups was, you know, very, very well.

37:32
uh uh uh uh prized and and poised within the uh the the international scene um and you know we had accolades from europe from the u.s um uh but the fact that we've won the you know the the the the africa lion and entrepreneur of the year for me was um oh so um you know within my continent i am you know somebody sees what i'm doing

38:02
and I'm doing something right. Whenever you're in an international forum, you feel like sometimes you're the token piece of representation. That's either due to DI or whatever the case may be, right? And so I've come to appreciate

38:30
the fact that I would be the one opening the door perhaps for others. And so being the first on the G20 stage or at a World Economic Forum stage became a way for me to say, oh, so there, you know now that there's the possibility that you also as a Moroccan, as an African, um, become part of this, um, uh, you know, become also, um, uh, Forbes 30 under 30 or, um, uh, speak at a World Economic Forum.

39:00
But back then in 2017, again, I was like this, you know, company founder with all my focus being on how do I break my imposter syndrome? You know, as a 20 something year old, how do I get over the fact that I feel that everything is undeserved, whatever we receive. And so that was that that's why.

39:29
that is on the list that I shared with you because for me that was like, oh, so the, you know, the idea of you can't be a prophet in your own community. Well, we've broken through that. The United Nations one is just because that honors me as a person.

39:53
Instead of, you know, some of my companies or whatever the case may be, but that's not you actually made impact beyond the organizations that you've worked on that you've developed that you've made. And so it felt like a, you know, lifetime achievement award type thing, you know, it just happened on the year that I finally put the mantle of the manager of the group down.

40:23
And so it felt like a consecration and a validation of all the 15 years that I've worked towards and all the things that I've done. So it was like, for me as a person that I've done good. And the Forbes one was in 2019, which came at the time where I was thinking, oh, I want to leave soon.

40:51
And at the time, before that, we didn't have any fancy, you know, kind of world-renowned prizes. We had regionals, we had in Europe, we had in the US, but none of these kind of everybody knows it award. And at the same time, also, I was approaching 30.

41:17
And you know, the, the, the imposter syndrome part started kicking in again, saying, Oh, you, everybody that's anybody has had a 30 under 30 listing, you know? So for, for founders, uh, that's kind of the, the Holy grail that you, that once you get before 30, you're, you know, you're stamped in stone. And so, yeah. So it was, uh, it was really, uh,

41:45
a fun thing to think, oh, I've gotten it actually a little bit earlier than 30. But I got it and now I can relax and get over, you know, the fact that I get to the three zero, I got my Lister. A lot of these are actually imposter syndrome related but

42:14
and really putting yourself out there to be an example for aspiring entrepreneurs to see that you can think out of the box and become relevant in the business world, while also following some purpose, which is around sustainability, which is around human capital development, and providing opportunities for the livelihood of others. So.

42:44
there is that commonality. One, you know, when I was reflecting, reading your materials in Seneca, the Roman philosopher said, you know, luck is what happens when preparation meets opportunity. So for your last, it's not your last, it's your next and current involvement, you have been named the youngest member.

43:14
of the commission for the what is it called here? Yes, the Royal advisory committee, Royal Advisory Committee by nomination from His Majesty King Mohammed for the development of the kingdom. You recently did a State Department tour in several states here in the United States. And while not, you know, revealing state secrets.

43:43
know, what was what is that like? How does that fit into your next act, Khalid? Um, of course. So let's, you know, again, one of the one of the things that I've done, and that, you know,

44:06
And that I appreciate doing. And I've done again throughout my professional career, getting out of managing the company was public policy regarding like around technology and how can different countries and states collaborate with each other for the

44:32
of their people's societal situation or socioeconomic positioning. And so since putting down the mantle as a manager, two things came to mind. One is that I wanted to continue sharing my expertise.

44:59
And that's where speaking, sitting on boards comes in. So I don't want to let all of the experience and all the richness of the things that I've learned, that I've practiced go to waste. And so that's one. And two, I want to be an eternal learner. Like I have been throughout.

45:25
my work as an entrepreneur. I want to always learn and always improve myself. And so the program with KPMG and HSBC was the first one on this journey, but I've also set up a few learning journeys, let's call them. And this-

45:54
to the US was one of them. And so the learning is by meeting all sorts of actors within the United States, whether it's public or private, around an open, secure digital economy. So talking about the subjects like cybersecurity, regulation for AI, development of digital economy,

46:24
understanding emergency management and all the things surrounding how to regulate also blockchain and cryptocurrencies and all of these things. So in three weeks, we've met, I believe, above 50 organizations from state actors to

46:52
US attorneys offices to companies like Discord or Plug and Play to universities like Carnegie Mellon and their centers for research and development to organizations like NIST. And so we've had quite a large panel of organizations that we've collaborated with and kind of had these exchanges.

47:20
of experience and knowledge, both from the US standpoint, understanding how things function within the US and what those organizations are working on, but also from our side to give them a little bit of what the rest of the world, how we view regulation versus the US's view, how we view the research and development paradigms.

47:50
etc. So this was kind of it for me. It was a learning journey but also a formal exchange with these organizations as you know a way for both of us to develop a better understanding of the state of the world of best practices from both sides and it was definitely a great

48:21
Thank you. You know, we were talking about your, your, the State Department visit, and I shared with you the largest seed fund in the United States of America is the SPR, right? And it's different branches, you know, National Institutes of Health, the National Science Foundation, etc. And I asked if they're, you weren't too familiar with that, right? Small business.

48:48
Innovation Research, SBIR, and early, early proof of concept, phase one and phase two with $250,000, typically non-dilutive. That's kind of how the US does it. And the equivalent in Morocco, what were you sharing with me? Because I thought it was fascinating. Yes. Can you share? Sounds good.

49:12
So akin to the SBIR, which you mentioned during our last conversation, in Morocco we have an organization called, previously called the CCG, but now it's called Temwilcom, which is kind of a state investment vehicle. It invests in a lot of traditional environments,

49:41
as the state investment vehicle. It has also an SME and startup support vertical. It started, I believe about seven years ago throughout a co-funding from World Bank. I believe it was a 50, $50 million co-investment, so $100 million in total.

50:09
And it is structured for Moroccan entrepreneurs as follows. You have up to... It started as up to $20,000, now it's $40,000 of grants. So, full grant.

50:28
Then there is an addition of, it was $70,000, now I believe it's $100,000, $120,000. And it's cumulative, so like if you start the first one and you are at the end of the funding, you can request the second one.

50:48
The second one is what we call an honor debt, which is basically non-dilutive, non-collateralized funding. So basically, if your company makes it, great. Then you have, they call it a couple of grace periods, so I believe three or four years where you don't have to pay back.

51:15
and then you start paying back in small installments. If your company makes it, if your company doesn't make it and closes, that's fine. And there's no pursuit of recuperation of fund from your person.

51:34
And so, above this, so between the two, I believe we're at $160,000 between the grants, at least in the current edition, which starts this year. And afterwards, you get, I believe, up to $350,000 or $400,000, and that's dilutive capital. But with no, like, where the collateral or the guarantee.

52:02
is not made by yourself or by your business. It is co-sponsored by the state, so co-sponsored by this fund. So the organism of investment actually co-invests in regular VC and PE investment funds. To allocate a guaranteed section of the funds,

52:31
for these companies. So while the money is not all from the state, but the state covers the percentage that allows the funds to kind of skip over the risk management aspect and not request collateral or not look at the companies existing infrastructure as collateral, but

52:59
the percentage that is coming from the state is what constitutes the collateral in that case. Wow, and you know, you, there are probably a lot of Moroccans that don't even know that this exists. It's my own experience and my consulting practice when founders, particularly in deep tech. Have you applied for an SBIR? What's that? It's a fabulous instrument for non-dilutive funding and to really test your ideas.

53:27
So out of the lab and to potentially commercialization. Well, we're coming to almost the end. Every single guest that joins the Founders Sandbox podcast, I ask you questions that are related to really what I'm passionate about, purpose-driven companies, resilient companies, and sustainable or scalable companies.

53:54
What does resilience mean to you? And not one guest has the same definition or meaning, and it's just a delight to hear what does resilience mean for you, Khalid? So because of the way I grew up and because of the way I, you know, I structured all my businesses with zero regard to any particular business book, just because

54:23
I wanted to go on everything by instinct. And my instinct was very risk averse, which is weird for an entrepreneur, because my objective was to basically take care of my family, take care and support the development of my country and young people that did.

54:50
that were in the same situation as I was, which is not having access to opportunities and struggling throughout their schooling, trying to find their way through to a better future. And so that's why from day one, I've never asked anybody that I've hired for a degree.

55:18
I've never asked them to speak a particular language unless it was really necessary. I structured my company in a way where people can work on what they really want and they can change what they want to work on at any point in time. I worked on the agile model way before it was as much of a trend as it is in the past few years.

55:46
We've had work from home since almost day one. The office is there just for client meetings if the rest of the teams are working from home. Yeah, I mean, again, everybody, whenever I install some different policy in the company or even when I started the startup studio.

56:15
model, it was really just to enable myself and people from my organization that wanted to be entrepreneurs and tell them, you know what, your family, if you want to start a venture, or if you have a great idea, let's do it here. Why do you have to like try to go unsupported anywhere else and try to make it on your own? And so resilience for me was a personal

56:43
like a big personal thing. I've had quite a few interesting kind of runnings with health issues, you know, with a lot of... So I was in a wheelchair for a year, as after, yeah, after an accident. I had typhoid fever coming out of nowhere and the...

57:10
antibacterial resistant one, so 60% chance of not making it. I've had quite a few things along the way that were that made it very hard to do what I wanted to do or to develop my my business or to even think straight. And so resilience is a strong word for me because that's the only thing I see as kind of a

57:39
uh theme on me building my business. It's how many challenges and how many difficulties I've had to to to come through to be able to access the opportunities that I've had or to be able to develop uh you know my company just a passport you know how hard it is to have a visa to Europe or the US or anywhere else with a Moroccan passport it's ridiculous. So try it like making it to

58:08
to your meetings and to sign like a big client to only find that you've been refused a visa for some very random, stupid reason. So again, resilience for me as a person that came from where I came from has a very, very kind of existential meaning. I can see that. And it ties probably into purpose-driven enterprise. So purpose-driven.

58:37
define that? Those startups that go through your accelerators? I mean, what is that strikes you? Curiosity. The startups that ran through my accelerator, one was in education, one was in healthcare, one was in emergency.

58:58
support for. So you can see the purpose going through right there. And the the the health care one was because, you know, my my my, my mom was was going out, trying to find, you know, some some medicines for for my cousin who was staying with us at the time and couldn't find a single it was a weekend.

59:28
And so to find a pharmacy on the weekend, you have to be able to like go and see on the ministry's website, what are the names of the pharmacies that are open at any particular weekend and because they switch. So every weekend, it's different pharmacies that you have to look for. And so it was very inconvenient, very difficult to access. And so I was like, why isn't there an app that can show you on a map what is this weekend, the active pharmacy?

59:58
And then I was like, okay, so not only that, but every time you want to go to the doctor, you have to look for the paperwork that you've gone through your tests and whatever that you've taken from your last visit. Why don't, why wouldn't you be able to have that on your phone? And so, yeah, all of that kind of culminated to a health personal assistant that had all these functionalities.

01:00:23
into one app. The emergency services, again, my mom and dad had an accident. It was in the middle of the city and still they've had to wait almost two hours for the emergency services to come in because it was in a darker alleyway and they just, you know, they avoided a dog, I believe, and hit

01:00:53
kind of bad, severe accidents. Yeah, sequels from that. And for me, it was like, how come that we don't have a system that can notify emergency services to where you are instead of, you know, a person that goes into an accident, even when they're awake enough to call for, you know, the emergency services.

01:01:20
They have to find where they are, even though they're in another town or they're disoriented. They have to describe where they are to the emergency person. It seemed so easily fixable with the basic technology. And so for me, that's what purpose is, is that we can't change the world all at once.

01:01:46
But we can change the things that we see in our lives. And if we changed it for us and for people that are around us, that impact can grow. Because if you have that issue, it's very likely that others do as well. And if you change what's around you, that change will resonate.

01:02:12
with everybody around you. The last point I will make is the platform that I've contributed or led the development of under the OCP Foundation came again from this very basic belief that people were going to university, going for things that they didn't really

01:02:42
understand or want, they weren't well oriented when they came out of high school. And then once that either that curriculum ends or doesn't even end or they drop out because they don't, you know, they don't feel that they can contribute through that, or simply don't find a job, it's, you know, in biology or philosophy or whatever the case it is.

01:03:11
economic opportunity market. They, you know, what are they going to work in with a philosophy degree other than, you know, in a mall or in a restaurant. And so, yes, there's a lot of content that's available online for them to learn a new skill, but they have to pay for most of the things that give you enough credibility or accreditation.

01:03:39
to have access to higher value economic opportunities. And so I was like, well, there is companies in the world that have a lot of these programs that enable you to have access to the certificated learning pathways within particularly within the digital economy for free.

01:04:05
You just need to be an organization that's affiliated with this company and you need to basically do a little bit of work to fundraise or to get that kind of support. And so I was like, why would my the young people from my country and from my continent not have access to these just because it's not usual?

01:04:30
for non-profits or organizations from our continent to have access to these things. And so that's why I developed the platform. And because of who I'm connected with and people that I've worked with throughout the years and my presence internationally, I knew who the director of IBM CSR was and we've worked together on a few things before.

01:04:54
I had a direct relationship with the director of partnerships of Coursera, so I was able to reach out to him as well, or the CEO of Microsoft Africa. So these connections enabled me to go say, hey, do you guys have any problems with accrediting a non-profit in Africa to be able to disperse those programs that you do?

01:05:21
And then taking those programs and putting them into a pedagogically better structured environment for students to go through one, two, and three to be able to be certified as a professional of software development or design or data or cybersecurity. And so this is again how I view purpose is that.

01:05:45
seeing something that is wrong or that is that you want to change within your environment and stopping to think that you can't change the whole world. But if you just, every one of us actually tries to change the things that they can throughout their means and if they can stretch just a little bit further to be able to impact.

01:06:11
the person next to them, I think that we'd have a much better planet to live on. It was the Dalai Lama that said, be the change you want to see in the world, right? Exactly. Fantastic. Sustainable or scalable growth, what does that mean to you? When you see it, you know it, right? Yeah. Sustainable for me is when everybody within the equation

01:06:41
of your stakeholder circle is happy with you being there. So if your company is in a town where you made that town better, if people that work for you don't want to leave unless they're forced to.

01:07:09
The organizations that represent people that work for you, your clients, your beneficiaries, whatever the case may be, are all going along or aligned with your vision because of your understanding of your presentation and you being amenable to supporting those.

01:07:38
elements of your stakeholder engagement circle. For me, that's what sustainability is. And I mean it, obviously, in a perfect world, right? So obviously, you know, some organizations or some people will have ulterior motives, some will have, you know, more personal things to go along. And as you know, you know, corporate politics and nonprofit politics are real.

01:08:05
thing that you need to be careful of when you're trying to engage with your stakeholder circle. But that's for me, I still view it as to what to strive for. And if you, you know, strive for the stars, the land on the moon kind of thing. So if, you know, if that's the best or the perfect situation, how do you try to approach or to get closer to that?

01:08:34
Scalability for me, and I don't see them as separate simply because I could have scaled my company to 10 times larger than it is today. But the reason why I've chosen to stop the growth at a certain level is that because that was the ideal size for me to be able to retain my sustainability.

01:09:03
goals and to retain the humanness of my organization, if that makes sense. Obviously, it's not a choice for everyone, but I believe in that growth for the sake of growth is no longer a sustainable trajectory for the world. We're thinking

01:09:30
infinite growth against finite resources. How do you marry those two? And so for me now, giving the understanding to organizations that you can actually be profitable without growing in that kind of unruly, unmanaged, unlimited growth. You can grow.

01:10:00
with your stakeholders, you can grow with your community. It will take a longer time, yes, but it will also enable you to grow in a more healthy environment, to be more solid and more resilient actually, which is why a lot of these kind of unicorns and hyper scalable, as we call them companies,

01:10:26
You find them, you know, going into the ground a couple of years later, it's because they stretched what hyper growth is, and they've broken the chain of both trust and resilience within their organization. Final question, Khalid. Did you have fun in the sandbox today? Yes, it was very, very fun.

01:10:51
Kind of, you know, you dug a lot out of me. I think the last point is something that I don't share as much just because it's not as, you know, I don't get questioned about it a lot, but it's definitely made me kind of re-remember how I view sustainability and scalability and purpose. So thank you so much for being such a...

01:11:19
both a graceful yet very investigative host. That would be great. And I thank you for the time. Again, we chose the title purpose designing for NextAct. You've taken us through a very fast paced and short period of time journey along the different

01:11:48
choices you've made personally and professionally. And I think you're well on your way to your next act and you've put the cornerstones in place. So thank you for sharing this. And I hope you achieved your purpose, which was for this podcast, which was not too many people are thinking about their next act. So I hope this podcast to my listeners, if you like this episode with Khalid Machate.

01:12:17
sign up for the monthly release. We gather founders, business owners, investors, corporate board directors, and professional service providers, and motivational speakers who checks a lot of the boxes like Khalid with his own journey, three-time exit founder, accelerator, sitting on corporate boards, and giving back through social impacts.

01:12:47
Thank you again Khalid and to my listeners, you can download and listen to the Founder's Sandbox. Again, there's a monthly release on any major streaming platform. So thank you, have a great rest of the day. Thank you, you too.
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Data, Data, Everywhere: A NAA Blog Reading
8 aug· The Founders Sandbox
Brenda A. McCabe, MBA's personal experience has contributed to the work at Next Act Advisors. The Growth Strategies of NAA clients are always informed by current regulations and the understanding of why things have evolved to where they are because of the regulations and how they might change in the future. Enjoy this special Founder's Sandbox Podcast episode of Brenda reading one of her published blogs, "Data, Data, Everywhere" ; Now that all our data – private and enterprise, is out there, how can enterprises uphold trust?

You can read along to this blog with your NAA subscription at : https://nextactadvisors.com/data-data-everywhere/
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Purpose: Freedom to Support Lifestyles
25 jul· The Founders Sandbox
On this Episode of The Founder's Sandbox, Brenda speaks with Matt Clark-Chief Rainmaker of The Virtual Edge and, in his own words, "Chief Igniter" for business owners. They discuss Purpose in the context of Freedom as Matt shares his background as a rainmaker first as a waiter, where he discovered his gift in connecting people. Soon he evolved to selling door to door telecoms services, and co founder of a business that reached $6mn in two (2) years only to find himself with “golden handcuffs;” he had a wage and began selling his shares in the company after the thrill of building a company was no longer.

From virtualedge his goal is to empower business owners to achieve growth without sacrificing their freedom. To learn more about how Matt’s journey into helping businesses wasn't just a career choice; it was a calling to fill gaps he saw in the market and to change lives.

Matt discovered his purpose and while traveling the world, he has served 1,800 clients in 26 countries representing over $100mn in sales.

You can find out more about Matt at:

The Virtual Edge

[email protected]

Transcription:

00:04
Welcome back to the Founders Sandbox. I am Brenda McCabe, your host. This Founders Sandbox podcast, it's now into its second season.

00:27
The monthly podcast reaches entrepreneurs and business owners who learn about building resilient, scalable and sustainable business with great corporate governance underlying it. My mission is very simple. I want to assist entrepreneurs and entrepreneurs in building those scalable, well-governed and resilient businesses. The guests to the podcast are business owners themselves, corporate directors, investment funds, professional service providers who like me

00:57
want to use the power of the private enterprise, be that small, medium or large, to create change for a better world. Through storytelling with my guests on topics that will include resilience, purpose-driven enterprises and sustainable growth, my goal is to provide a fun sandbox environment where we can equip one startup founder at a time to build.

01:26
a better world through great corporate governance. Today, I'm absolutely delighted to have as my guest, Matt Clark, who's joining us all the way from across the world in Thailand. He's joining in his capacity as chief rainmaker of the virtual edge. And in his own words, his role is one of chief igniter for business owners to enable them to be happy and richer. That's right.

01:55
Thank you, Matt, for joining us today. Thanks for having me on. After our initial introductory call the other day, it got me really excited to join in today and just have a conversation, ask some deep questions, and say what's on the mind. You speak about what's on the mind of many people today. Absolutely. And my listeners are business owners themselves, but also

02:21
corporate governance, corporate board directors, and professional service providers who really are affecting change through the companies they advise. And I'm really excited that you reached out as the CEO of the Virtual Edge, because I think what you're doing to provide freedom to business owners to live a very fulfilled lifestyle is quite unique. And I'm eager to get into the questions.

02:51
We chose my listeners, again, the podcast is available on most podcasts streaming platforms. And I always like to work with my guests on a catchy title that really goes back to either purpose, resilience, or sustainability. And Matt and I chose purpose, freedom to support lifestyles. So catchy title, but you'll hear more as we progress in the interview today.

03:21
Matt and I do have some commonalities in the type of services we provide. We both work with B2B companies and we are absolute connectors. How his ability to connect people is key to being a rainmaker and his choosing to create freedom for business owners to live a fulfilled life is what this podcast is going to be about today. Woohoo.

03:50
Woohoo. So you have a serial background as a rainmaker. You first started out, I believe in South Africa as a waiter. You discovered early on your gift in connecting people. You then were selling door to door sales and then co-founded with two partners, a business that in only two years you got to $6 million in revenue. And at that stage you

04:18
told me in your own words, you know, I felt like I had golden handcuffs and I really didn't feel fulfilled anymore. And so you set out to travel the world and nine years later, Virtual Edge is still going and you discovered your purpose while traveling in the world. And at this stage, nine years in, you've served 1,800 clients in over 26 countries.

04:47
representing over about a hundred million dollars in sales. So absolutely delighted for you to really walk us through your journey, what it is in terms of secret sauce at the virtual edge and as Chief Igniter, you bring to your clients. Can you share your origin story, Matt? Thank you. Yeah, a hundred percent. And you kind of touched on some of their, I was never one of those people who knew what I wanted to be when I grew up.

05:17
You know, when you meet those people and they're just like, it's gonna be a doctor. I wanted to be a doctor, became a doctor. And in some ways I envy them, where it's like they know what they wanna do and they can just go and do it. And in some ways I don't because there's just one path. And so I didn't know what I wanted to do when I left school. And my dad was like, you're gonna be the first Clark to go and get a degree. I was like, well, I think you barking up the wrong tree there.

05:47
I hated school. Yeah. And, you know, I actually went and my first job was as a waiter and I figured out that I really loved talking to people and I was good at it. And so, you know, I went over to the UK, started doing door to door sales there. And it's a really tough industry. All right. I've actually had one other guest, um, to the podcast who also did door to door sales while she was.

06:15
pursuing her undergraduate degree. It is truly a test of true resilience. I love when I get to talk to other business owners who are doing really well and they say, yeah, I also started in door-to-door sales. And then we go down and have a bit of a laugh about some of the stories that we've got along the way and doors that have been slammed and things that have been said to you. And it definitely does build resilience. And I think

06:44
For me personally, it was the foundation for everything that I've done in my life going forward. I mean, there's not much anyone can say to me that I'm gonna take offense to or get upset by and into days, day and age where people are getting offended by everything. You know, it's, people are more sensitive, let me put it that way. Where people are more sensitive, you know, when you come from a stage where

07:14
You've just been drilled every single day. There's not much that can bother you. And if it bothers you, it actually kind of clears the way for you to go out and do what you want, um, because you're doing it on your terms. And so, you know, when I came back from the UK, uh, I started a, I started working for a company in South Africa, doing door to door sales, we were selling telephone systems on a five year lease agreement to businesses. Okay. And that's where you started with B2B, right?

07:43
It was kind of less harsh, maybe. Yeah, I wouldn't go that far. I heard that. We'll talk about B2B, right? Yeah, let's say they're different. I don't know if they're less harsh and you know, you've got more, more obstacles to go through because you got to get through the gatekeeper or the receptionist or whoever that person is. So it's a different relationship. Right. And so.

08:12
You know, what we learned and what I really uncovered there that made sense to me was that there is a process for everything. And it's a system, right? We were doing things manually, but it was still a process, still a system. And I landed up, you know, starting a business where, I mean, in that business alone, we were selling 200, 400 systems a month. We had offices all over the country. It grew like wildfire. Nice.

08:39
And then two buddies and I started a business and within four years, we'd taken that business up to $6 million a year, just doing door to door sales. And that thing of systems kept coming back to me because we could literally take somebody that had never sold before in their life. You could find them, we could hire them, we could train them. And within two weeks, they're up and running selling, making money.

09:08
That is truly remarkable. A repeatable system. Right. We had a system for how do we find them? We had a system for how do we qualify them? How do we hire them? How do we train them? How do we keep them going? How do we fix them when they're broken? We even had a time when, um, one of our competitors poached all of our sales people, we were left waiting from.

09:35
We went from 18 salespeople down to four overnight. And it was myself, my two business partners and two sales guys in Johannesburg, two sales guys in Cape Town. And what we did was we still went out and we went and sold and you know, we, as owners stepped up and we went crazy. I would say is a good word. In fact, we had one of the best months we've ever had.

10:05
Wow. While that was happening, we were able to replace our entire sales team. So we actually decided to have a smaller sales team with better quality people. Okay. But within a month, we'd replace the entire sales team and back at the same revenue that we were at. Okay. That's truly remarkable and a sign of resilience, right? And you know, having skin in the game as a business owner.

10:28
Exactly. You've got to because you know, what are the options? It's like, do I let this whole thing fall over and then everything that we've built goes to waste? Or do we get stuck in and go and fix it? And so the good thing is, is that we built the systems to be able to do it and to do it quickly. Right. And so I've taken that thinking into what we do now. Okay, because

10:53
For me, you know, my wife and I have been traveling the world for the past two and a half years. Our business has been growing on average, we work with about 50 clients at any given time. And in order to do that, you need to have systems in place.

11:09
So let's go into exploring specifically the use of social media platforms to reach B2B. All right. It's kind of at the core of what you do. And you're going to explain more. But Gina, you and I work in the B2B space. And I was really shocked. You have clients that are from the energy, telecoms, high-tech companies.

11:38
You use LinkedIn, Facebook, Instagram, perhaps others. I would not have thought that the buyers of these products and services would be on these platforms, maybe LinkedIn. I mean, what's the use of, so the secret sauce, using social media platforms and what is the typical buyer decision profile? That's kind of a loaded question. It may be a great question.

12:08
You've already served 1,800 clients. I want to learn some more. Thank you. Yeah, a hundred percent. Uh, it's actually a really good question and not something that I've been asked before, so I love that. We use LinkedIn as the primary channel for generating leads on the B2B platform. And the reason that we do that is because I don't see LinkedIn as a social network, a social media network. LinkedIn is a networking platform. Right.

12:37
And for me, the reason that we got onto LinkedIn was when I sold my shares in the previous business, I wanted to create something online. I wanted to break free from those golden handcuffs. Okay. And I couldn't figure out Facebook, uh, the kind of clients I was looking for. I couldn't find them. I couldn't figure out Google. I couldn't figure out YouTube. I couldn't figure out these things to actually make it work for me. All right. One of my friends said to me is like, you've got to go check out LinkedIn because it's like, I'm doing amazing on it.

13:06
And I did, and you know what I realized? Is that it's like virtually knocking doors. Except I can skip the red tape, I can skip the gatekeeper, I can go and speak directly to the exact person. I can find them, I can connect with them, and I can start a conversation with the exact person that I'm looking for. Wow. And that blew my mind. Okay. So we started doing it.

13:35
started signing up some clients. Then I went to some of the people that I was working with, some of the clients I was working with, I was like, hey guys, you've got to check this out. This is what we're doing. Would it be valuable to you if you could book an extra five to 10 calls a week with the exact person that you're looking for? And they're like, hell yes, of course, it's a no brainer. So we started helping some clients and they loved it. And then we started running events, teaching people how to do it at scale. Okay.

14:02
we, you know, live events, we'd have like 300 people in a room, teaching them how to do it at scale. And it just kind of grew from there. And now we've kind of gone full circle back to the more personalized, um, working with more specific clients, uh, helping them going deeper and helping them get bigger results. So the buyer decision profile that you then, um, use your system and

14:31
is developed jointly with your client, right? Correct. And we've got a strategic advisory part there. That's interesting. Okay, I get it. Yeah, so we do that. Each client is individual, right? I mean, we work with a lot of our clients are B2B service providers. And who they're looking for is they're looking to sell to other businesses. So typically it's a small to medium organizations or some of them are looking for corporates as well. Okay.

15:01
Um, we've worked with energy companies, we've worked with accountants. Um, we've worked with a company that does, that's an auction house, right? They buy and sell heavy earth moving equipment, you know, where a minimum sale is $200,000. I mean, they did $25 million in six months with six salespeople that they send me publishing houses, right? So it's high ticket services. And it's

15:26
for people that are looking for a very specific kind of client, they know who their buyer is, they know who the decision maker is, they're trying to get in front of them and they're trying to walk them down the journey. Now how we look at it and how we look at our process and what we take our clients through is that we've got about 11 different ways in which you can reach out to them, connect with them, get them on calls, walk them down the journey. Right. And we've created like pre-built processes and campaigns systems.

15:55
that can be plugged in. And when we work with the client, we will identify who is that ideal client that they're looking for. What are the trigger points that are gonna get them moving down, that are gonna get them to connect, to open up a conversation and then move down the buying cycle. And then what's the conversion event that needs to happen? Do we need to be getting them to a call? Do we need to be getting them to an event? Do we send them to a sales letter? What's that conversion event based on?

16:23
their process. Do you want to get them to one of your salespeople, whatever it is? Okay. And we help them structure that. All right. Now, the journey between getting from connection to paying client is where the magic happens. And how we look at it is that if we look at like golf, right? Everyone knows what golf is and how golf works. You stand at one side, goal is hit the ball into the hole. Right.

16:53
oversimplification. If there's any golfers listening to me, I have, I do play and have played golf. So I know I'm oversimplifying. You won't share handicaps on this. My handicap is that I haven't played in a hell of a long time. So I don't even know. Cause you're running a business. I'm traveling the world, right? I tell you one thing that doesn't fit in a 20 kilogram suitcase is golf clubs. So how we look at it is, is if we look at golf, right? So,

17:23
If you are the, you're the person who's swinging the golf club, the ball is the prospect, right? The person that you're trying to convert and the whole is the goal to get them to become a client. Now, what most people are trying to do in their sales process is they're trying to hit a hole in one every single time. They're trying to go from hello to buy my stuff. Right. And if you look at in golf, not even the professionals do it every single time.

17:52
Yes, they get that it does happen from time to time, but it's not, especially if it's like a par four or a par five, you have to have a couple of hits because you just don't have the power or the strength to get there. So we look at it a little bit different. And instead of trying to hit a hole in one of every single ball, we can have multiple balls on the field, right? On the fairway. And we now have somebody that doesn't have to be a professional that can just tap the

18:22
towards the whole. So when they get in, it's an easy tap to get in the hole and become a client. So the approach, right? Exactly. So the best part is because how we've built that is you can have a team member run it that doesn't have to be a marketing expert or a sales expert. It's about building the right assets, the right communication structure and the right journey to walk the client down that it becomes an easy tap in the hole. Excellent.

18:53
instead of trying to hit hole in ones all the time and just being frustrated and disappointed. Actually, another guest that has joined me here in the founder sandboxes, Gaurav Kumar, CEO of Beyond Code, and it's a lead generation and appointment scheduling company, headquarters.

19:19
in the United States, but operations in three continents. He wrote and authored a book and it's inspired. I'm looking for it on my shelf right now. I think it's covered up on the golf game and the similarities of what you're sharing here, the approach and the different tactics that are analogous to a good golf game. So I will introduce you, all right? Amazing. Because it's, yeah.

19:49
there on the other side of the world. Thank you for sharing that. I get it now. And the energy telecoms, high-tech companies. Let's switch gears a little bit. Part of my mission with this podcast as well as my consulting next act advisors is I work with founders, particularly on investor readiness.

20:17
to take in external capital, right? And just take in the amount of money that they need in exchange for a percentage of the company, but not too much, right? So that they can scale with the money they bring in to then increase the valuation of the company and do second and third rounds of investment with outside stakeholders that sometimes operationally help you, but ultimately they want to have a return on their investment.

20:46
I do not work when I do my intake business. I do not work for lifestyle businesses. So I had some dissonance, cognitive dissonance when I'm talking to you, Matt, about, you know, providing business owners the freedom to follow their lifestyle. So walk me through how founders

21:13
maybe have different definitions of success without going for external capital and you at the virtual edge are helping them. Yeah, absolutely. So, you know, we kind of look at business a little bit different. And I had my mindset completely shifted when I spoke to a buddy of mine. And, you know, he's started 40 companies. He's taken 10 of them to eight figures.

21:43
Um, he consults with some of the biggest well-known companies in the world right now. Um, you know, he's just came back from a weekend with Richard Branson, like that's the kind of level that he's playing at. And he said something to me one day and he was like, you know, so obviously there's someone you want to listen to, right? He kind of knows his stuff. Yeah. Uh, he said to me, he's like, you know, Matt, I think about things very differently. He's like, I decide I don't build my business around my life.

22:12
I mean, I don't build my life around my business, right? And this is the trap that most people fall into. So they start a business, they go crazy. Next thing they look, they've built a monster. They've got all the staff, all this team, spinning a lot of plates, a lot of moving parts. And exactly like what I did, then you land up with golden handcuffs. And so what we do is build things differently. And here's the explanation on this, which we've taken to heart and implemented with our clients, is that we first decide what...

22:40
is the life that we want to live. Okay. Right. What sort of, how, how, how much do you want to work? What sort of investments do you want to have? And how much money do you need in your personal income in order to achieve that lifestyle that you want? Okay. Then you go and you build the businesses around it. In fact, what he says is he calls them boxes, right? You go, you stack the boxes. Okay.

23:09
There's three ways to, to earn wealth, right. And to create wealth, which is start a business, invest in property and then pay the assets, you know, stocks, bonds, crypto, I'm chucking that in with that as well. And essentially it's pretty simple. It's that you choose which ones work for you. Some people are more directed towards business. Great. Some people work in jobs and they like going into property or they invest in stocks or.

23:38
whatever it is, it doesn't really matter. You take the emotion out of it. And the only question that you're asking is, how do I stack the boxes so that I can get the lifestyle and the income that I want? And that removes the emotional energy from it, which means you can look at it objectively and make better decisions. And then you can step back and say, all right, now I know what I wanna create. I know how much I need in order for that to be a reality. Now, what boxes do I need to stack?

24:08
And then when you're looking at them as boxes, you're not as, I mean, you're always going to be emotionally invested, but it's not going to become your baby. And you can look at it objectively and say, is this working for me? Is it getting me close to my goal or further away from it? And that will determine the actions that you take and not only determine the actions that you take, but also if you're building a business, it'll determine how you build the business.

24:33
Cause you'll make very different decisions. If your goal is to work three days a week, or if your goal is to take three months off and go travel, or you're trying to stack a whole bunch of cash so you can invest in property, you can have very different goals and you can have very different decisions that are going to be made to achieve those goals. And different systems you need to put in place in order to get there. And it would, when you bring on a client or a client,

25:01
or prospecting, do you have these conversations or do they find you because of that? Is that your tagline? I mean, how, this is a very interesting concept. Yeah, so it's interesting that people generally work with us because they wanna build systems. They wanna build systems around, how do I find my ideal clients, connect with them and convert them? All right. And where we always start when people come in is ask them, well, where are we actually going with this business? What's the vision for this?

25:29
You know, take a look at the next three to five years and see what the plan is actually bringing in. And then we build the model working backwards to help achieve that. Because it's going to be a very different plan if someone's coming in and saying, well, I just want to get to $20,000 a month than if someone comes in and says, I've got three to five years and I want to sell this business. Okay. You know,

25:56
This is almost a skill set that is prevalent today in the wealth advisor role, working with business owners backwards. Like, when do you want to, what is your exit plan, right? Or how much do you want to have as, you know, monthly income, you know, maximizing your net tax proceeds.

26:26
of selling a business. So again, lovely, highly consultative. This is very unique. I'm thankful that you reached out and wanted to join me in the founder sandbox. Yeah, you know, let me share something with you that I think you'll actually appreciate that might be quite relevant to a lot of people here. Okay. I actually just got off a call with a buddy of mine

26:56
in South Africa. Okay. He's done really well, built massive businesses, like multiple big businesses. And he landed up, you know, selling everything and taking quite life just got too much, right? And, you know, caused some personal issues. I won't share all his, all of his stuff, but cause some pretty significant personal issues. And we got

27:21
chatting again and we actually jumped on a call and he said, you know, Matt, I've gone into this new niche where I work with CEOs of tech companies and I helped them to focus on health, right? Because companies that grow have KPIs to track and measure the growth, but busy CEOs don't have KPIs to track and measure their health. And this is do we help them track and manage it and grow it from there. And his big challenges is like, now I want to go into a new market.

27:51
I don't have any audience. I don't have any network. I'm selling a high ticket offer. It's $15,000 just for the first six months. Right. So it's a high ticket thing and I need to go out and start having conversations and finding them, connecting with them, validating what I've got this and actually start making some sales. And so we worked through that plan, worked backwards. And the first step for him is not to go out and create an offer and make offers

28:20
drive leads and drive calls. His first step is to do market research. Okay. Very smart. And understand his clients on a deep level, because if he does that now, yes, it's going to be more work now, but later on, it's going to save him so much more time because you can get the message, the positioning, the offer, you can run some tests, you can pick up a couple of clients along the way, and you can actually validate his product as he's going through this. Very helpful.

28:50
Um, yes. And it is, um, mental health month here in the United States. And this business is in the mental health space. And there are actually, um, consulting firms catering to the same CEOs of high tech companies, and there is, there are podcasts, there are articles, particularly this month around mental health and yes, running a business is highly stressful. And, um,

29:19
you need to take that time to not read tool, it's just refresh yourself. So thank you. We're gonna switch gears. I sit on corporate boards. I always like to bring my guests back to really think about in your systems today, your processes, your business model. We're all dealing with the advent of generative AI. And how do we...

29:48
bring it into our companies, either for scaling up our talent, for improving processes. It's not necessarily a cost down effort. So you have shared with me that with the 1,800 customers, one thing that you've developed over the years is a proprietary large language model that powers an AI tool, that informs perhaps these 11 different ways

30:17
of identifying your ideal business buyer decision profile. Can you talk to me about how you at the virtual edge have thought about the regulatory environment? It's a hot topic right now, right? Are the AI models biased? Or how is it going to affect my workforce? Share my workforce?

30:44
How ethical is it that we are we getting to the right people or are we excluding some segments of the population? So talk to me through how you've been dealing with AI, your own proprietary large language model and shed some light. So we're not as I think left out, you know, worrying. Maybe we're over concerned by the advent of generative AI and our business models.

31:14
Yep. And it's a great question because there's a lot of people out there. I think everyone has just jumped on the bandwagon and is screaming at the top of their lungs. You need to be an AI or those businesses is going to fall over or become irrelevant or whatever it is. So it's almost like a bit of fear mongering in a, in a way. Yes. There's fear mongering on the one side and there's FOMO on the other side. Exactly. Everyone's like, Oh, this is amazing, but like I wanted, but I don't know what to do with it. So.

31:43
You know, we've gone through a lot of AI tools. We've tested a ton of stuff out. We've implemented stuff. There's a lot of junk out there, right? People that have just thrown stuff together and trying to make a quick buck. There is a lot of really good stuff out there. Okay. What we found is that no matter what tool you use, right. And no matter what system you use, the quality of the output is determined by the quality of the inputs. Say that one more time.

32:13
by listeners. The quality of the output is determined by the quality of the input. Okay, there's a saying called garbage in garbage out. You've heard of that? Yes, I have. With AI, with systems, with automation, if you put garbage in, you get 10 times garbage out. It multiplies that garbage. Right? Yes. So

32:40
What we've done and how we use it and how we help our clients use it as well is that we've been doing this for a long time. We've built frameworks, we've built methodologies, we've built a whole bunch of different stuff. Scripts, templates, frameworks, video scripts, you name it. We've built everything for every piece of the puzzle that we needed. And we used to

33:06
give this to people on a Google doc and have hour long training videos that would walk them through it. Instead of what we did now is we took that thought process, we took that thinking, we went and looked at how we train our people, what are the things that they've got to think about? And we built that into an AI system. So now what happens is that when people in the past used to have to sit and think about this hard and...

33:34
question their life's decisions sometimes and go really deep and it would take long. This was the problem, what it would take too much time to get to results. Whereas now we can literally ask them a couple of questions and it'll give them an answer based on our frameworks and our methodologies that'll get them 80 to 90% of the way there. So prompts, right? That's how you ask questions. Well.

34:01
We ask the questions and then questions feed into the framework that we've built in the back end and then it gives the answers based on our methodologies and our frameworks. So it's very specific to our process.

34:18
And it's the body of information is growing and enhancing the large language model over time. Yeah, absolutely. And the more we use it, the more we refine it because as we're consulting with our clients, then new stuff comes up as we go into new markets or as we come to people that are experiencing new things that are different from what we've done in the past.

34:46
we can tweak and update it so that it'll get them to where they wanna go faster. And what's happened for us is that what used to take our clients three months to get through is now taking three days. So if we go back to the question around regulatory, yes, is if, sorry, I don't know why this thing, I did close it, is if we are looking at how

35:14
it gets used in a regulatory way. I would say once again, the quality of your input term is the quality of your output and use it as a guideline, not as a rule. And you still wanna put your own stuff in there. So I would be looking at questions instead of how do we get AI to take stuff over for us, rather, how do we put our stuff into models?

35:41
and then train it on our models so that it becomes our own internal processes. And in a way, you clone yourself.

35:54
Okay. Yeah. And if you base it around the frameworks and models, it's going to give you much better output type, you know, we look at for, um, for us with, uh, with the coaching and consulting that we do with clients, all the questions that we used to get asked where people get used to get stuck, those disappeared. Yes. That's nine years of craftsmanship, right? With the aid of automation. Yeah. And this has literally been built in the last six months. So.

36:23
It takes you nine years to get there and boom, six months overnight success. Congratulations. That's a lot of hard work. And I would ask, are you protecting it in any way with a trademark or at least patent? Yes. Trademark. Good. Good. OK. I am a listener to the Founder's Sandbox.

36:49
I have listened to Matt, Chief Rainmaker of the Virtual Edge. I'm kind of interested in building a business to support my lifestyle. How do my listeners contact you, Matt? Awesome. Um, so very simple. I'm on very easy to find Matt Clark Rainmaker, M-A-T-T-C-L-A-R-K Rainmaker on LinkedIn, Matt Clark Rainmaker, Facebook.

37:18
Matt Clark Rainmaker, hell, even send me an email, matt at the virtualedge.com. I love it when people mail me, ask me questions, I respond to them all personally. I love connecting with people. And if there's stuff that we can do together, great. If not, that's cool too. Maybe we grow the network, maybe we share our networks with each other, connect, refer stuff to each other. I don't know, who knows?

37:48
I don't know until we, until we reach out, I think there's, there's so much stuff around, especially in today's day and age where everyone's just trying to use social media to sell, sell, sell, sell, sell to each other. Uh, that personal human touches is now more important than ever. Authenticity, right? And personalization, you know, I was going back, I was chatting to a guy yesterday, uh, as part of our, uh, sales process and he's booked to call him with us and he wants to sign up.

38:17
work with us. And we were just voicing notes in back and forward. And he's like, I love this personalized approach. He's like, I actually don't talk to anyone unless they send me a voice note. I was like, well, there you go. Yes, it is personalized. Now, I want to take us back to the founder sandbox. And I started by

38:46
talking about my mission is very simple and really helping business owners to be more resilient beyond their purpose, purpose-driven, sustainable and or scalable growth. I like to ask each of my guests, what is the meaning of those terms? Not one guest has the same definition and it's just a delight to listen to you as a business owner, eight years or nine years now into the virtual edge, helping over 1800.

39:14
companies and growing across 26 countries. What does resilience mean to you, Matt?

39:22
You know, I think all of them, if I can kind of bundle them under one answer that can expand, it means that you've got systems in place that you can track and measure what's going on.

39:38
Right. And the reason I say that, because if I think about all the times where we've had amazing highs and low lows, how do you be resilient if it's just based on feeling and energy? There's only so much willpower that a person has. That's right. Right. But if things get tough and they always do, there's always winter always comes. Right. Sometimes it's just a short little.

40:07
a cold burst, sometimes it lasts a long time. And when those downs hit, if you've got nothing to look back on and say, where did it go wrong? What worked? What didn't? Then everything lands up being emotion-based and that's a spiral, it's a downward spiral.

40:28
takes and when exactly. And you're going to focus and the human brains are designed to focus on the negative. That is true. Right? That's why the news is so had got so big and why they so negative all the time, because that's what captures attention. And so when we look at this, if you look at the numbers, it takes the emotion out of it. And we went through a downturn, uh, last year and

40:57
last year or year before, I don't know, these years are kind of starting to blur a little bit for me when things happened, you know, you move so- You had a winter, let's say. We had a winter, okay. And we look back and we're like, what is actually going on? Why is the stuff not working that's supposed to be working? And we're like, well, I've got a great idea. Why do we pull up all the numbers and take a look at where the gap is? And we look through all the numbers and we're like, okay.

41:24
That's exactly where the problem is. That's what's not working anymore. Let's just fix that one little piece. And guess what happened? Went straight up again. Okay. Remove the emotion, look at the data and just go back and focus, right? Exactly. Because it's a lot more easy to be resilient when you're looking at the numbers and the numbers are showing an upward trend.

41:48
It's difficult to be resilient if you're looking at your bank account and your bank accounts going down, but you've got no reason as to why it's going down or where the points are that things are breaking.

42:00
Right. Then you just living, you're addicted to opium. It's what we call it. Hope is not a strategy. So purpose-driven, I think your own story. Um, I don't want to steal your, your thunder, but your purpose. Um, I remember when we first started our conversation the other day, it was like, I really want to know your origin story. What makes you do?

42:29
you do today? What? The Britcha Wedge. And you said freedom. So what's it? Yeah, purpose driven. Can you tell us a bit about the freedom element? Absolutely. We've got one life, you know, and maybe I can even, I can share a story that hit home for me in a big way. And so a wealthy

42:59
wants to go out on a day of fishing. And he's sitting there on the pier, goes out fishing with one of the local fishermen in a small little boat, single motor. They have a great day, catch a lot of fish. They come back to the place, sitting, having a beer. And the businessman says to the fisherman, he's like, you know, that was amazing. You could do really well at this. You know, if you did this once every day, you could buy another boat. And the fisherman says, hmm, that's interesting. What then?

43:28
He said, well, if you continue to do that, then you can have two boats, then three boats, then a whole fleet. He says, hmm, that's interesting, what's then? He said, well, then you can actually buy a warehouse and you can start running imports and grow the business even then. You can own the whole dock. And he's like, hmm, that's interesting, and what then? He says, and then you can sell it, make tons of money and retire to the beach and come fish every day.

43:58
Brilliant. Thank you for providing another lens of success and freedom within the business world. So, I guess the point is, the freedom is we've got one life to live, do the things that make you happy.

44:20
Fantastic. Final, second to last question, sustainable growth. I suspect what you're gonna, your definition, but tell me in your own words, what does sustainable, scalable growth mean to you? Systems, measurable. Yep. Measurable systems, what do the numbers tell us? Based on the numbers, we can make the right decisions and take the right actions. Don't go feeling, go with decisions, make data-driven.

44:49
And then, you know, at different stages of a business's growth, different data is going to be important. So if you're starting out, you don't need all the systems and numbers and KPIs that a corporation has. Right. You need to know how many people are you reaching out to a day? How many are starting conversations? How many are you getting on calls and how many are converting? So where's the broken points in that? Right. And Matt, that, um,

45:18
I didn't ask this question before, but the types of companies that you serve are from startup to scale up. Talk about the different profiles of your clients, right? Yeah. So most of our clients are, they've got a small team, you know, under 10. And you know, they're doing anywhere from two, 25,000.

45:47
in a month. So it's at 300,000 a year to a million. So about 300,000 to 3 million is sort of like the first group of people that we work with. And then we also work with companies with large sales teams, eight, nine figure businesses that have sales teams that are in the B2B space looking for very specific clients. So the principles are exactly the same, slightly different implementation strategy.

46:16
Um, but the process works. In fact, we often find it's easier to work with the bigger companies and the bigger sales teams because they get results 10 times faster, right? Right. Cause they've got a validating. So, yeah, well, everything's probably bringing a lot of knowledge already of the, um, ICP, right. The ideal customer, right? So there's some, and everything's already proven, you know, we have to build anything. They just need to go get more. Right. Well, thank you. Last question.

46:46
Did you have fun in the sandbox today? Yeah, it was amazing. It was the second time I'm talking to you and the second time I heard a phone talking to you. To my listeners, if you liked this episode with Matt Clark, sign up for the monthly release of the Founder Sandbox. We learn here how to build with strong governance, a resilient, scalable and purpose-driven company to make profits for good.

47:14
And I'm absolutely delighted that we had Matt with us today from the Virtual Edge. And he literally is on the Virtual Edge. He's on the other side of the world, but caters to a lot of US customers. So thank you very much and wishing you all a great day. Bye.
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Unleashing Creativity for Business Excellence
27 jun· The Founders Sandbox
On this episode of The Founder's Sandbox, Brenda McCabe speaks with Sue Tinnish- an executive coach working with CEO's and Presidents of middle-market companies. They discuss "unleashing creativity for business excellence" , ranging from Sue's experience while in hospitality to make events interactive and engaging, to using playfulness with very complex issues in analogies and stories to lead good alignment of the organization.

Sue is a seasoned professional who has worked in a variety of settings. She has a diverse background in business with specific skills in leadership, formulating strategy, managing change, building teams, and delivering on strategic and tactical projects. She is currently an executive coach working with CEOs and Presidents of middle-market companies. She supports executives as they deal with their own leadership issues (delegation, time management, prioritization, decision making & mindset) as well as supporting their organization’s growth addressing issues like talent optimization, sales, finance and risk.

Sue earned her PhD from Benedictine University in Lisle, Illinois. She holds an M.B.A. with a concentration in finance and marketing from University of Chicago’s Booth School and a B.S. in communication studies from Northwestern University. And she likes to have fun!

You can find out more about Sue Tinnish at:

Linked IN https://www.linkedin.com/in/suetinnish/

or Contact her at:

[email protected]

Resources:

Why playfulness matters in Startup to Scale up.

https://www.humorseriously.com/

Transcript

00:04
Welcome back to the Founder's Sandbox. I am Brenda McCabe, your host. This monthly podcast is now in its second season and it reaches entrepreneurs and business owners who learn about building resilient, scalable, and sustainable.

00:32
and sustainable businesses, all with great corporate governance. I wanna assist entrepreneurs and business owners in building these scalable, well-governed and resilient businesses. And I bring guests to the podcast that are themselves, founders, business owners, corporate board directors, investors and professional service providers, like Sue Tinnish, who's with us today. We all share a common...

01:01
interest in this using the power of the private enterprise, be that small, medium, and large, to create change for a better world. Through storytelling with each of my guests on topics that are gonna include their own experience with resilience, purpose-driven enterprises, and sustainable growth, my goal with the Founder Sandbox is to provide a fun sandbox environment where we can equip one startup founder at a time to build a better world through great corporate governance.

01:30
So today my guest again is Sue Tinnish. Thank you so much for joining me here, Sue. So happy to join you, Brenda, in this context. Excellent. Sue's joined in the podcast today in her capacity as a Vistage leader. For those who are actually seeing the video, I love your back screen, leading a life of a climb with Vistage.

01:57
She also has, as a member of Vistage, shares oftentimes in LinkedIn a newsletter called Making a Difference. I encourage everyone to follow Sue in LinkedIn because the messages that come across in this newsletter do resonate with business owners on making a difference. Today, we chose a topic, again, I'm all about resilience, sustainability, and purpose-driven

02:26
businesses. And when speaking with Sue on and off, we both share University of Chicago Graduate School of Business, Abu School is our background, right? That's we didn't meet there. But we did meet the alumni network is really quite active. And we discovered that we both use innovation and creativity with the work we do with our with our clients and

02:54
As I learned more of Sue's background, which I'll get to in a minute, I was just fascinated on specific tools, techniques, writing that she's used over the last 20 years at least. I'm gonna give you a brief introduction to Sue. She has a diverse background in business with specific skills in leadership, formulating strategy.

03:22
managing change, building teams and delivering a strategic and tactical projects. She is currently executive coach, working with CEOs and presidents of middle market companies. Prior to this activity, she's had experiences in academia, corporate banking, consulting and being an entrepreneur herself. So you check a lot of boxes, Sue. I thank you. I thank you again.

03:51
Also, the other aspect that we want to explore today is kind of you're a co-chair of the Chicago based Vistage Chief Executive Group and it's co-led by a male and a female. And I believe it's one of the unique or only chapters that is co-led and you're bringing in the diversity to the actual classroom itself. So I'd love to learn a little bit more later. All right.

04:19
So Sue and I have been in contact through our affiliation to the Chicago Women's Alliance. And I'm absolutely delighted that Sue's gonna tell us a little bit about some of the tools and techniques she explores as leader of Vistage. So can you share what has been a common denominator through your professional journey that has released or discovered, which you've discovered creativity?

04:49
Such an interesting question. So I guess I would say that as a leader, I've always had a real strong focus on people and teams. And so I really have encompassed playfulness, humor, and really creativity to help foster organizational growth. But it's really through people that that has happened. So that's been a very common denominator. And

05:18
I grew up in an era where what I was taught and learned about management was a little more like straight-laced and forward. And just my own personal growth, I really discovered, you know, through the process of learning and growing, I've discovered that that's not necessarily the way that you have to be. And I also think that, you know, interestingly, being a female, we bring different skill sets to the environment.

05:47
being more authentic has been meant that I've relied both on my own sense of humor, curiosity and playfulness to be effective. And you bring that into those monthly meetings with CEOs, I'm certain. Yes. You know, you, one of the articles that will later be in the show notes, is you brought in or explored kind of the entertainment.

06:16
element as a platform that unleashes creativity when you were working in the hospitality sector. Can you walk us through that specific kind of experience? It was, again, when you helped me prepare this, I was reading with awe. I was like, wow, I hadn't ever, you know, it goes back quite a while to

06:39
Yes. So when I worked in hospitality, I specifically worked in sort of the meetings and events and conference space. Okay. And my focus was really on how to create more innovative learning environments in that space. So it wasn't really focused on the logistics or the hotel arrangements or even the food and beverage. And really, earlier in my career, I spent a lot of time focusing on training and

07:09
And so I really thought a lot about how can you make these events, meetings, really more interactive and engaging in a way that's also going to create more knowledge, that's going to make what's happening in those meetings really stick. And so entertainment was one of those fields that I explored to talk about why entertainment can both be entertaining, but also.

07:38
or valuable in helping messaging stick. So like one example would be, think about like the topic of sexual harassment in Illinois, in many places most organizations. It's a requirement. It's a requirement, exactly. So no one's gonna raise their hand and say, oh yes, in a public environment, I've been sexually harassed or I'm a harasser. But when you use actors or entertainment or some kind of role playing,

08:08
a delicate subject out there in a way that people can maybe see themselves or see themselves in that situation and allow themselves to really go internally, aha, I understand now what has happened because of what I've seen on the stage. So I think entertainment can be used in a more strategic way beyond just being entertaining.

08:33
That is fascinating. And thank you for specifically providing an example. I'm just actually visually imagining a setup whereby a hairy topic is addressed in kind of an entertaining way with actors. Amazing. And I liked what you said about it allows maybe some of the learning that is happening within the meeting to stick.

09:01
because one is more relaxed, laughing, right? I actually had written a blog about two years ago on why playfulness matters in startup to scale up. And I discovered kind of five fundamental elements that I have seen or I've observed, I've introduced to my clients, there's no rules, right?

09:27
to generate more ideas, have a problem statement, allow people from all different levels of the organization compete in generating those ideas. But more importantly, when you were talking about the sexual harassment or using entertainment with professional actors, one founder I worked with actually brought in a surprise question at the end of the all hands on deck meeting.

09:56
And then there was a prize. So it really got people to pay attention to what the monthly message was about as the corporation grew. So I'm very happy to know that I'm doing something right and you're basing it on many years of experience in Vistage as well as the entertainment, the hospitality industry. So thank you. I'd like you to, I pride myself on lots of

10:26
really practical nuts and bolts in this podcast that listeners can take away and bring into their own companies. And so you provided some insight on Harry Gardner's similar work on people's concept of multiple intelligences. And there's seven ways people are intelligent. And then you bring that in actually to some of the tools and techniques you use in your session. So can you provide that background on?

10:54
Yeah, sure. What about intelligence? So, you know, Rhonda, you and I, we think we're fairly intelligent. We went to a fabulous business school. And yet, if we were in, you know, the outback of Australia trying to survive, we would not be as smart or as intelligent as an Aboriginal woman. And so there are different ways that we think. And obviously there's been a huge interest in EQ, you know, emotional intelligence,

11:24
IQ, but really, when you start to think about the skills that a surgeon might have, or an architect, they have kinesthetic skills that maybe other people don't. And so kinesthetic is another form of intelligence. Naturalism. There are people that have natural affinity to mathematics. And so you can think about your group, and some groups are more

11:53
homogenous, like an industry group, like an association. So you can think about what kind of natural intelligence that group might have, and then you can target some of the learning and the sessions in a way that's gonna harness the way that those people think. And it may not be humor or playfulness, but you're really leaning into their strengths. And I think that's so important in this topic of adult learning. That is fascinating. Again, I am...

12:24
the seven, you know, one was musical. Again, back to some of the writing I did, and I just saw it reinforced when listening to you is, you know, Mozart was a learner, but he would, he would have to write the music, but then he would never, but to keep it in his memory, and then he would never use it again. But it's really fascinating how I imagine in your Vistage meetings, you have a

12:54
cohort of, I don't know, 10 or 12. You create a safe space where CEOs are sharing current business challenges. Ultimately, they leave the monthly meetings though, and are gonna communicate decisions made to the companies that they lead, right? Yes. How do you share with them how to bring in humor if it's required, right? For the leaders communication, what have you seen to be more effective?

13:24
in some cases. Well, first of all, I'd say that, humor does not mean that you're a standup comedian. Really, when I think about humor, I think about it as more as like levity. And so my first tip always is not to be caustic or sarcastic, cause that's not gonna fly. But leaders can bring in this levity to their communication. I say in several ways. One would be just being able to laugh at yourself. Okay.

13:53
much more approachable, it helps build rapport and trust, and it makes you more authentic and human. So that's the first way, just being able to laugh at yourself. The second way is I think you can use a joke, a little levity to just capture people's attention. You know, we've all been in meetings, blah, blah, blah. Yes. Non-drona. So humor's an opportunity to catch people's attention and really get them to sit up.

14:21
Kind of like the example you were saying before about the leader that had something at the price. I also think maybe it's not exactly humor, but certainly playfulness. It allows you to take complex ideas and make them more simple. Not saying that you're trying to dumb down the conversation, but the kind of strategic issues that leaders are facing these days can be difficult to communicate. And so a little bit of humor or playfulness

14:51
really allows people to make things understandable. Like specifically, I would think about metaphors or analogies, those are great ways, or good stories can help communicate these more complex ideas to people so that people can remember them, and then you have good alignment in the organization. So those are just three tips. Right, and what about storytelling? You just...

15:19
touched it at the end of your comments there, but I've observed primarily because of the working from home and having distributed teams. And there are more and more CEOs that are stepping up and actually using storytelling to become, or appear more authentic. Are you observing that? And can you talk about storytelling and authenticity, please?

15:49
Yes, happy to do so. So storytelling can be personal. I think those are great stories to tell. And so in doing that, you bring your whole self, that whole authentic self to the table. Okay. I just made a post yesterday on LinkedIn where I was talking about my goal around losing weight. And I was like, walking around thinking I had been more successful than I had because I didn't really, I didn't really

16:19
I didn't write my goal down. I didn't write my stating weight down. And then all of a sudden I had the realization, I'm like, oh my gosh, I really actually went up by two pounds, not down by more. And so people commented on how refreshing it was. So those kinds of stories can, and then really to drive the point home, the post was really about goal setting and also how you can do a reset.

16:47
change your mindset to make sure that you do achieve your goals. Because we still have half of the year left. So I could do this. The importance of, of, you know, self belief. And so it was a story that poked a little bit of fun at myself, but really add a message. And so many people responded to that post just by talking about, oh, my gosh, it was refreshing, so honest, so authentic, they use those kinds of words. And so I think those

17:15
That's an example of how you can use a story to resonate with the population. Because again, almost like we were talking about entertainment, people grab onto stories. That's why we go to films. That's why we read books is because for that storyline, that plot. And so finding the hero and how you can get to employees that you could be the hero or you are my hero or you are part of the hero team.

17:44
in the story can, I think can be quite effective. Wow. What about the, the leading from creativity and the use of humor to actually promote creativity? Have you seen that? Do you use those techniques in your Vistage groups or elsewhere?

18:13
So, you know, one thing is humor, right? To enhance maybe leaders communication and the other is actually creativity to generate new business ideas or to think about a problem statement. What have you seen in your work? So. Yeah, I think there's great opportunity to be playful and to unleash creativity. And I know that this is something that you and I both believe strongly in. So I think there's, you know, there's a lot of things you can do.

18:42
Metaphors, I kind of alluded to this before. When you say one thing is like another, and so you can say, you know, I feel like our organization is like a twisted pretzel right now, and why is that true? Like, how is our organization like a twisted pretzel? And so that just encourages people to think more broadly about the concept. So I think metaphors are a good way. Even choosing a random word,

19:12
picking up a book, pointing at a word like, what does bananas have to do with the strategic issue that we're facing right now? And it just causes people to be like, oh, I gotta think about this differently. And it kind of breaks the ice. Yeah, exactly. Yes, and so it just gets people to say, I don't have to think about this in the same exact way. I'm also a big fan of field trips. And so one of my efforts when I was

19:40
uh, leading a training and development effort for an association was that we, um, took field trips around Chicago. Actually related in the hospitality industry. We went to various places unrelated to hospitality and we just said, what can you learn by just going on site to a chocolate place, Garrett's popcorn, a museum, what can you learn about the way that the.

20:09
those organizations greet people, the entering experience, the engaging experience, the exiting experience. What can you learn from that that would cause you to rethink how you do it in your own organization? So I think by taking field trips like when we were kids, I think that's another other way to foster creativity. I like mind mapping. I think that's a real

20:33
good way causing people to start to write things down visually or even using props or toys to try and encompass a concept. I think those can be very effective. I love, you know, I love the improv technique of yes and, which of course is useful in brainstorming, but also useful in saying we have a product design, and it's good.

21:01
And yes, and what can we add on or what else do we need to do? So I think those are some techniques that I think promote playfulness, but also cause us to open our minds to being more creative. These are very actionable. Have they been, is it necessary to, in your experience, have these in person? Can you do this virtually? And how do you get CEOs to allocate time on their busy schedule?

21:32
Well, it's, who doesn't, I mean, what CEO doesn't want innovation and creativity in their organism? So having said that, the question is, how do you really foster it? And you don't just say, okay, let's sit down and we're going to be creative, because that's not gonna work. We all have our own cognitive biases. We have our frameworks, our assumptions, our biases for how we think.

21:58
What you wanna do is break through some of those. And in order to do that, I think you really need to think intentionally about how to do it. And to me, some of the techniques I described are not wasting time at all, but rather an intentional way to allow people to be more creative. Excellent. And so.

22:24
Can you speak to it's actually not in the script, but what is a typical Vistage meeting and cohort look like in your world in Chicago? You co-lead with a male. You have two groups that you're leading now. So what is the typical format, duration, size of group? What are the things that you're finding? Are they Illinois based companies? Do you have any?

22:51
people participate virtually. This is your opportunity to share your craft as a leader of Vistage. Okay. Well, I guess I'll first talk about the group and then I can talk a little bit about what happens in the group. So the peer group is part of the Vistage experience. There's other things, research, virtual events, the one-on-one time with me as an executive coach. But in the group, typically 10 to 18, 15, 16 members

23:21
and everyone represents a different industry. They all own their own lanes. So no competitors, no vendors, customers in the room so that you can really have an open kimono and be vulnerable and being willing to say something out loud. So the kind of people I look for are clearly, you know, very successful already in their own right, but really humble enough to say, hey, what got me here may not be what...

23:50
I need the skills and the mindset and the way I need to lead in the future. We've been through a life-changing event in terms of the pandemic, and it's had a lot of repercussions. And so how do leaders function in a new environment? And so the way you may have done it in the past may not necessarily be the way that you need to do it in the future. So you wanna be, I want people who are already successful, they...

24:17
but they're still hungry. They're hungry for personal growth. They wanna grow their teams and they also wanna see revenue growth in their organizations. And then sort of putting on my University of Chicago hat. So that's sort of the psychographic. But I also think about my group as a portfolio. What I mean is I want certain voices in the room. So like right now I would love to have a person in the staffing or executive search.

24:47
industry because talent's such an issue. So I want to have that voice in the room. So my people, I look as almost like a portfolio. I also look to make sure that I have industry sectors that are either leading or lagging indicators in the economy because those leaders are going to see things first and they can bring that to the group and say, hey, here's what's already happening in

25:16
And so what's happening in my industry is gonna happen to you probably later. And so this portfolio approach, I think, enriches the group and allows everyone to really benefit from the diversity that is inherent in every Vistage group. Fantastic. What about, do you have mixed gender groups? I'm just wondering. Oh, absolutely.

25:46
Not it's people come and go in groups. It serves them well and then they need to move on. Right now I would definitely, I'm definitely looking to add some more female voices to the group. All right, well you heard it here on the founders. Exam clocks. Yes. Thank you. I'm you.

26:10
For this podcast, you provided a lot of articles that you've written over the years. That's a gift. You're a prolific and a polished writer. How do you find the time, Sue? And two, do you believe the ability to write is a skill that leaders must master? Such an interesting question.

26:40
leading does require strong communication skills. And obviously, I think there's many kinds of writing. Yeah, there's academic writing, which I've done published in journals, not necessarily very persuasive, not always persuasive writing. And then there's, you know, writing to to communicate. And so I think that

27:05
I guess I would say, you know, you can be a skilled writer, like a speechwriter, but that doesn't necessarily mean that you're going to be a skillful communicator. And I think leaders need a little bit of both. I mean, it's the kind of businesses and leaders that we work with are typically not hiring speechwriters. And so I do think it's an important skill to have if you're a small or medium sized business owner.

27:36
CEO of a huge, you know, fortune 500 company, of course, you can have speech writers write your thing, right, right stuff. And that's a that's a specific skill. So I would say, for our audience, what good or bad, you have to be skilled at writing, but also communicating those words to people. And writing in a way that is going to be persuasive and communicative. And perhaps playful.

28:04
right using humor, which is the topic of today's podcast. You know, when we I was preparing this, you know, I've been pursuing you for quite a while now. Thank you for joining. I did come across in other forums, a book that is accompanied by an assessment test called it's called humor series business. And to

28:31
professors at Stanford's Graduate School of Business have developed a course online to actually discover your type, right? And humorseriously.com. Have you had any experience with this? I thought it took off actually right in the pandemic. And just curious, because we are on the topic of humor and creativity. So,

28:58
what do I love? I love growing and learning and being a life-long learner. And so honestly, Brenda, I had never seen their work or heard about it. So I did watch their YouTube, which I found fascinating. I'm sure you'll include it in the show notes. And it's interesting, not, I think Stanford has done a really interesting job as a business and as a B-school or as a school, I guess I would say, as a university continuing to evolve.

29:24
So actually when I saw that they had this course in their business school, I wasn't surprised. And I actually have followed Stanford for a while because of their D school, their design school. Interesting. And so design thinking is not necessarily only related to the creative arts, but you know, you think about firms like, you know, who started with this concept like IDEO, but you know, this design thinking definitely has some

29:53
some good roots in creativity, innovation, breaking through borders, not thinking about constraints as true constraints and boundaries. And so to me, I wasn't surprised to see that these two were from Stanford. And it was a great listen. Thank you. I too, I was surprised to hear about it and two great schools, University of Chicago and Stanford with great alumni. So...

30:20
I do like to give my guest opportunity to share how you may be contacted. What's the easiest way and this will be in the show notes. Okay, well, I respond to my emails. I also respond to phone calls and voicemails. I love the younger generation that never listen to their voicemails. I actually do. So you can find me via phone at 847-404-7325.

30:47
Email always works and my email is su.tinish, my last at, and then here's the nice long after the at, VistageChair, like a piece of furniture, VistageChair.com. Then I am often on LinkedIn, and so people can DM me on LinkedIn and follow me. They can sign up and subscribe to my newsletter, make a difference. Yeah. Happy to respond any way that people want to.

31:15
Reach out to me, text, phone, email, or DM. Fantastic. So I'd like to bring us back to the founder sandbox and kind of the three cornerstones that I work with founders on and that's around resilience, purpose-driven enterprise and sustainable growth. And by bringing each of my guests back to, hey, what's the meaning of each of these terms? I'm absolutely fascinated that each one of my guests has a different.

31:42
you know, concept and it's so rich to listen. So what does resilience mean to you and your many years as practitioner with CEOs and small to medium sized companies? I'd say the first thing is really having a good balance between positivity and realizing that I have to grow and change and accept feedback. That maybe everything is not.

32:11
So I think especially for entrepreneurs and startups, I mean, you have such great belief in your concept. And so you do have to stick with it and stay positive, but there is that fine balance between accepting feedback and realism. And so I think resilience is balancing those two things appropriately. The second thing, the second characteristic I'd like to call out today is just really...

32:40
facing up to uncertainty. In other words, not being an ostrich and putting my head in the sand. Being resilient to me says, I'm willing to squarely look uncertainty in the face and I may not have all the data that I need. I may not be fully clear on what's the right direction, but resiliency is making that decision, taking responsibility, moving forward.

33:06
and accepting the consequences and then dealing with it all over again. Those are the two things that I think are most important to me personally about resiliency. Thank you. What about purpose-driven enterprise? Harkening back to my PhD where I did something on sustainability. Did you? Yes. So to me, purpose-driven enterprises really mean that you're gonna...

33:34
you will focus on value creation beyond simply profit. And the second quality is that there's really a strong integration in your ecosystem of all your stakeholders, not just shareholders, but that everyone is aligned and integrated and that your strategy is focused on an integrated purpose that serve all stakeholders, customers.

34:02
employees, your vendors, everyone in that ecosystem. And that's it. So you actually were a profit in your own land. Because your PhD, if you wrote on sustainability, I don't know how many years ago, it's just come back full circle, right? Yeah. It's got to be on every CEO's agenda. A triple bottom line. That's right.

34:27
And you heard it here, sustainable growth. So I kind of interchange sustainable with scalable. Again, we work with companies that are growing pretty rapidly. What is the meaning to you for sustainability? So first off, I think there's a difference between running an organization, leading an organization that's growing and leading an organization that's scalable. And so you desire both things,

34:56
you have to build in scale to make sure that you could manage your growth. So that's an element of sustainable growth. And as I alluded to earlier, I do think that this focus on the triple bottom line is really important. And even if you as a leader are not bought into it, think about the kinds of employees that you're hiring and the customers that you're serving as you get younger and younger.

35:24
this triple bottom line is so much more important to them. And so sustainable growth, in my opinion, can only be really fed by that focus on a triple bottom line. Wow. You heard it here. Thank you. Well, I have one last question. Did you have fun in the sandbox today, Sue? Oh, I did. It was fun to dig. It was fun to dig back into the past and think about the future. Yes. So delightful. So thank you so much for inviting me.

35:53
Thank you. The tools and techniques that you provided and just our conversation as well as what will be found in the show notes are invaluable. So thank you for offering these resources to my listeners. To my listeners, if you like this episode with Sue Tenesh, sign up for the monthly release of The Founder's Sandbox. It's available on all major podcast platforms.

36:20
where you're going to learn how to build with strong governance, a resilient, scalable, and purpose-driven company to make profits for good. Signing off. Thank you for being part of the Founders Sandbox.
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Purposeful Culture Driven Sales
2 maj· The Founders Sandbox
On this episode of The Founder's Sandbox, Brenda McCabe speaks with Kelly Breslin Wright, Founder & CEO of Culture Driven Sales. They discuss resilience and purpose related to the Culture Driven Sales methodology where Kelly Breslin Wright operates as a C-level executive, board director, advisor, and adjunct university professor.

Kelly Breslin Wright is an experienced executive and corporate board director for both public and private companies, with over 30 years of experience in leadership, sales, operations, and strategy roles. She has served as an Independent Director and Advisor for multiple Boards and has helped companies navigate multiple stages of growth. These include IPOs, enterprise expansion, CEO and leadership transitions, globalization, M&A, financings, business model changes, and global crises. She has a unique mastery of sales, go-to-market, leadership, transformation, strategy, growth and scaling, data and analytics, and culture.

As an operator, Kelly Breslin Wright served as President and COO of Gong, an artificial intelligence platform that serves revenue organizations to deliver insights at scale. There, she managed all go-to-market functions, including Sales, Customer Success, and Marketing. For nearly 12 years prior to Gong, Kelly Breslin Wright was Executive Vice President of Sales (Chief Revenue Officer) at Tableau Software (formerly NYSE: DATA). She joined as the company's first salesperson, where she grew Tableau’s worldwide sales and field operations from zero to $850M in revenue and managed over half of the company’s 3,400 global employees. Tableau was purchased by Salesforce in 2019 for $15.7B. Before Tableau, Kelly Breslin Wright spent time at Bain & Company, McKinsey & Company, Bank of America, Dale Carnegie Training, AtHoc, and Southwestern Advantage.

You can find out more about Kelly Breslin Wright at:

https://www.linkedin.com/in/kellybreslinwright/ 

Culture Driven Sales Website: https://culturedrivensales.com/ 

University of Washington Foster School of Business Website: https://foster.uw.edu/faculty-research/directory/kelly-wright/ 

Winning the Board Game:
How Women Corporate Make THE Difference

Show transcription:

00:04

Welcome back to the Founder's Sandbox. The Founder's Sandbox is a podcast now in its second season. It's a monthly podcast in which I reach entrepreneurs and business owners that want to learn

00:33

about building resilient, scalable, and sustainable businesses with great corporate governance. I am Brenda McCabe, your host on the Founder's Sandbox, and my mission is really simple. By interviewing guests through their stories, I want to assist entrepreneurs in building those scalable, well-governed, and resilient businesses. Guests to my podcast are founders, business owners, corporate directors, and professional service providers

01:01

who like me want to use the power of the private enterprise, be it small, medium, or large, to create change for a better world. Through storytelling with a guest that will touch on topics that include resilience, purpose-driven enterprise, and sustainable growth, my goal is to recreate a fun sandbox environment where we can equip one startup founder at a time to build a better world through great corporate governance. Today, my guest is Kelly Breslin Wright. Thank you, Kelly, for joining me today.

01:31

Thank you for having me. I'm excited for the conversation. I've been pursuing Kelly for a number of years. And finally, we're making it happen today. So Kelly and I are going to talk about purposeful, culture driven sales. I'm going to give you a little background on Kelly. She is founder and CEO of Culture Driven Sales. She has promoted and led the Culture Driven Sales methodology as a C level executive,

02:01

public and private company board director, advisor, and adjunct university professor. She is an experienced executive and corporate board director for both public and private with over 30 years of experience in leadership, sales, operations, and strategy roles. We actually share a common past. We both originated from McKinsey and Company, where are paths crossed there. She has served as an independent director and advisor for multiple boards.

02:30

She's helped companies navigate multiple stages of growth, including IPOs, enterprise expansion, CEO and leaderships transitions, globalization, M&A, financing, business model changes, and global crisis. So we're in for a treat today. I asked Kelly to come because she really has a unique way of bringing in culture

02:58

behind sales. I think sales often times is a hidden or unwanted child. And I was amazed that none of my guests up until now has the expertise nor did they speak about sales. So it's the first time, Kelly, that you're gonna be talking to my listeners around your 30 years experience in sales. As an operator, Kelly served as president and COO at Gong, an artificial intelligence platform.

03:28

And we're going to talk a little bit about AI today. And prior to Gong, Kelly was Executive Vice President, Sales Chief Revenue Officer at Tableau Software. And it is formerly was on the stock exchange with the sticker symbol DATA. She was there for nearly 12 years. And she joined that company as the 10th employee. And we're going to listen to her story and what brought her to them.

03:57

So thank you again for joining me on the Founder's Sandbox, Kelly. Thank you for having me. You know, when we were just prepping for today's podcast, Kelly said, what actually made you wanna reach out to me? And it goes back quite a few years. Our first encounter was through a common passion serving on corporate boards. And you reached out to me to thank me for sharing my experiences that is in a book.

04:26

published and written by Betsy Berkhemer-Credaire, winning the board game, how women corporate directors make the difference. So I'm always thankful to people that do reach out unexpectedly and just thank you. And I finally, two years later, I've achieved what I wanted to get you on my podcast. So I am honored that you agreed to share

04:56

quite a few real world experiences that started while in undergraduate days and informed your career choices that led you to be the first sales person to join Tableau and number 10 employee. And while you were the CRO, the company went public. The learnings you continue to share as advisor, educator, board director, and executive to private and public companies are centered around your passion for culture-driven sales.

05:26

In preparation, I listened to a recent podcast interview on operators, building and scaling companies and your recruitment to Tableau. It had something to do with educational books. It also had something to do with grit and resiliency. And I work on resilience with the founders I serve as the foundational piece. And I wrote an article myself on empowering resilience

05:54

by unlocking your personal and enterprise value. I touch on three things, Kelly. I'm knowing oneself as a leader, having options and making choices, and finally being thankful. So can you share why Tableau asked you to join as employee number 10? That's going way, way, way back to the beginning of the career. Well, so,

06:20

it's interesting, you mentioned about selling books door to door. When I was in college, I knew I wanted to do something entrepreneurial and I wanted to be independent. And I came across this opportunity to run my own business selling educational books door to door. And that's what I did for my four summers when I was in college. And I think there are a lot of things, Brenda, that you had touched base on. One was sales. And we'll talk about that a lot today.

06:49

The second was resiliency. And I appreciate that you're always talking about resiliency because it's so critical, not only in business, but in life. And selling educational books door to door, when you show up at someone's house, you're not the most welcome person that they want to see that day. So there's a lot of doors that are slammed in your face and a lot of adversity that I dealt with in my 18 to 21 year old formative years.

07:20

taught a lot about resiliency of how to get yourself back up, keep on going, being able to learn to control what you can control and not worrying as much about the rest, a whole bunch of things. So we could talk about resiliency. Anyway, going back to how I started at Tableau, because when I was in college, I was known as this person that while everyone else was doing these cool internships or

07:48

They were lifeguarding at their home pool. I was talking to thousands of families, working 80 plus hours a week, running my own business. And people thought I was crazy, but I ended up making quite a bit of money. I paid for my undergrad, it paid for my first car, paid for my first house, paid for most of business school. And so later on in my career, when people were starting their first,

08:17

their startup or starting their own entrepreneurial venture. Oftentimes people would call me and say, hey, Kelly, you did that crazy job in college. They'd say, you sold all those books. Maybe you can help us. And that's exactly what happened at Tableau. So what happened at Tableau was the CEO of Tableau had gone to Stanford Business School and was classmates with a friend of mine from undergrad.

08:45

And so I had met him multiple times as Tableau was an incubation idea. And we had met actually at an Oscar party. And so when it came time to, to hire the first salesperson, there was this conversation of, Hey, maybe you should go talk to Kelly. And I remember thinking about resiliency and just raising your hand. When I first had that conversation and I looked at the job requirement.

09:14

Brenda, I literally didn't match anything on there. It was understand a lot about data, has taken multiple companies public, has been at companies that have grown to sizable amounts of revenue. And I had done none of that. So I think I'd had sales and hopefully the, smart and can think on your feet, hopefully that matched, but I didn't match any of the other things. And it really came down to,

09:41

having a passion about what the company's mission was and alignment of the values and how we wanted to work, which is how I ended up joining as the first salesperson. And then the story goes on from there. Wow. And you did just touch briefly on mission and we're gonna get to that in the next question. Okay. Yeah. So, so Tableau, 12 years, amazing. I admire that company.

10:08

A piece you wrote back in 2021, it's on your website and it will be in the show notes. It's called creating winning company culture by perfecting these two elements. You touch on mission. Often founders wait for later in creating a mission statement. And that they're either focused on for a client, a customer, their product or service, hiring a few of their team members

10:39

When does it make sense in your experience, Kelly, to create a mission statement? And what are those two elements you believe that create a winning company culture? That's a loaded question, but you've written about it. We're gonna hear it here on the founder's sandbox. Well, Brenda, I think that it's really important to have a mission from really early days.

11:04

And I think you're right in that companies often feel like they need to have, they need to figure out their product, they figure out the service, they figure out their operational cadence, they go get the first customers. But it can be very confusing if you don't understand where you're going. The way I like to describe it is building a business as you hire employees and as you get investors and

11:32

as you find your first customers and partners, it's building with these building blocks, similar to having a map. Okay. You have a map, you have to have a destination, you have to know where you're headed, because otherwise you can get very lost. And so although companies might not have their exact wording of a mission statement from very early days, it's important, I mean, I think it's important to have a mission right from the beginning. When I talk about Tableau,

12:02

Tableau from the time I started, the mission was help people see and understand data. And that was something that I really was drawn to, which is how I ended up joining as the first salesperson and employee 10 before we even launched version one. Because everyone then that we were hiring, our customers, the whole team was aligned on what it is that we were doing. What was the company's purpose? What was our why?

12:31

And what ends up happening is when companies are not clear on what that is, you might hire different people that all know you're building something in this space, but they may have very different ideas of the reason and the purpose of the company, the why of the company. And so it's really imperative to not only drive the alignment, but to also...

12:57

be able to make sure that the people that you're hiring to go on this journey with you are passionate and committed to what it is that you're trying to build. And if you don't have a stated mission, then everyone will come up with their own definition and reason for why you exist. And it's not always the same. And one thing, Brenda, that I really liked, like for instance, when you started off and kicked off this podcast, the first thing you said is at the Founder's Sandbox, our mission is this, and you explained it.

13:28

So everyone knows what it is that your, what your purpose is and why they're listening. And it's really important for companies to do that. But the mission isn't the only important part. So the two things is there's a mission and then also core values. Okay. Any companies that I meet with, they'll say, we're not gonna spend that much time on mission and core values, because then they're just words on the wall. You throw it up and it doesn't mean anything. Well.

13:54

If you're going to have mission and core values and they're just going to be words on the wall, yeah, then they're not going to work. They're not going to work and it's not going to mean anything. But it is actually really important to have them and help them guide and advise how you build your business, how you hire, how you engage with your customers, and then holding yourself and your teams accountable.

14:22

to make sure that you're behaving in a way that's in accordance with your core values or your operating principles. And I'm sure we can talk about that more as we go through. But each company that I have joined is very intentional about their mission and core values. And that helps them to be very intentional about how they build their culture and how they're guardians of that culture. Yes, and you actually, for your...

14:52

the course you're teaching in the Culture-Driven Sales Institute. You did a lot of surveys and interviews. Can you shed some light on some of the background? I think you talked about the 85 companies at different stages of growth. Tell us a little bit about what you found, those aha moments of particularly back to mission and core values. Yeah, well, so at Tableau, just to go back a little bit.

15:19

So at Tableau, the management team at Tableau had not built a business of that scale before. We were all doing it for the first time. And so we were in a space that was very disruptive and transformative. We were in business intelligence, we were doing data analytics in a different way. We had a different go-to-market approach of how we were actually handling sales. And there weren't companies to go look at to how to do it. So the way we were doing it as,

15:49

first time executives in a first time team is we were very clear, I mentioned on our mission, to help people see and understand data. And we had very specific core values that helped to drive the way that we were behaving. We were on a mission, we used our products, we kept things simple, and we could go through and talk about a lot of these other core values. Well, that is really what helped us to go build this

16:19

really transformative company. When I finished at Tableau and decided that in this next stage, I wanted to be able to help other companies to grow and scale and do work both in teaching as well as an advisor or board director. I wanted to figure out, well, how can I be the most helpful? What is it that companies actually need? And so I ended up meeting with the whole slew

16:47

of founders, go-to-market leaders and CEOs. So in that first year, I did, I sat down with about 85 founders and CEOs over the course of the next few years. I've met with maybe 135, 140. And I asked these companies some very specific questions. One of the first questions that I've always asked, because I'm so passionate about mission, and I just assumed that companies were doing it in the same way we did at Tableau. And I found out,

17:16

that that actually is not the case. So when I was meeting with companies, one of the first things I would ask these CEOs is, well, tell me about your mission. Tell me about your company why. What I learned was actually quite eye-opening. Some of these founders would say, our mission is to get 30% market share. Our mission is to get to profitability in X number of years.

17:45

or very operational KPIs. And so I'd say to them, that's not a mission statement. That doesn't rally around the purpose of what you're doing. And sometimes these CEOs would say, no, that is our mission statement. That's how we're rallying our team. And so that I kind of was scratching my head. That's not a mission statement. Even more interesting to this though, is often times these CEOs or founders would say, hey, Kelly, you're an expert in go to market.

18:13

we're having some lack of alignment and we need help of why we have our salespeople don't want to sell what it is our product team is building or our sales team is trying to sell something that's different than how the marketing team is marketing it. Got it. And so then I would say, well, let me talk to some of those other leaders. And I would ask everyone that I talked to, first question is, what's your mission statement? And this was what was so...

18:42

crazy. I would ask the CEO, I would ask the co-founder, I would ask the chief revenue officer, I'd ask the chief marketing officer, the head of product, what is your mission statement? And guess what? Almost all of the time, each executive that I would ask would have a different answer to what their mission statement was. Wow, at the same company. So crazy, even if they had a published mission statement. And that's when I realized, oh,

19:12

People are just using these as words on a wall. And then you wanna know, well, why is a company not aligned? Well, if you have a product leader who is driving the engineers according to one mission statement, and you have a sales leader that's going and trying to engage your customers with a different mission statement, well, duh, you're not aligned if you're actually training your teams and advising your customers that you do something different.

19:42

And that was a huge aha. And the same thing was true for the core values. And so it is actually, here's just a main takeaway. Okay. Companies need to realize that the corporate strategy is very intertwined with the go-to-market strategy. Got it. Many companies think of their corporate strategy is often very aligned with the...

20:12

product strategy, but it all trickles down to how are you hiring? How are you engaging with customers? How are you making sure those customers are successful? How are you telling your story on your website and how you engage with your investors and in the world? And that go to market strategy goes all the way back up to the corporate strategy and all starts from mission, vision.

20:41

What is your company's story? What is your company's why? And we need to roll that all together. And that's a lot of what I teach in my course on culture-driven sales. That's a lot of how I end up helping companies when I'm advising or on the board. All right. So I often pride myself on my guests bringing in some practical tools while in the interview.

21:11

alignment of strategy with the culture. All right, we get that. Corporate strategy is very intertwined with sales strategy. And again, depending on the stage of the company, what do you see as key takeaways? I mean, how do you recruit? Is it dependent upon stage of the company? What are those KPIs or what are those core values? How do you measure? So can you walk us through some specific examples and tools that you perhaps used at Tableau?

21:42

on bringing in the mission to the core processes, hiring, training, the sales motion. What are those behavioral elements that you would include in your managing your teams, as well as growing the company? Yeah. Well, Brenda, I think it is really important to be able to have very specific hiring and performance management tactics that help to make sure you're managing that.

22:11

bar of your mission and value. So here are some very specific things. And I can give kind of tangible examples. Like for instance, companies should be using behavioral interviewing. And what happens is many companies are focused so much on the experience and the resume skills that they're looking at, has someone done this job before? Have they been successful in doing this exact

22:40

thing that I need, whether it's enterprise sales or have they been a CFO before, depending on whatever the role is. But it's really important that everyone can do behavioral interviewing. Now behavioral interviewing can be kind of tricky. The first thing you need to do is you need to make sure that you understand what behavioral traits you're trying to flesh out and be very specific on that. And then training everyone that is in the interview process on

23:08

How do you do behavioral interviewing? Now, some of the things that to do with behavioral attributes is look at the most successful people in your company, what are the behavioral attributes that they have, and then how do you interview and flush that out in the interview process? So that's example one, and we can do a little bit more there. Number two is how...

23:36

can you make sure that your core values are being identified and fleshed out, not only in your interview process, but in performance management? So I'll give a very specific example. At Tableau, one of our core values were like the first core value was we build great products, second core value, we use our products. How do we flush that out? In at Tableau, I had.

24:06

at the end, maybe 1800 people on my team in the GoToMarket organization. Virtually every single one when they were hired during the interview process had to do a demo on Tableau because our mission was we help people see and understand data. Our product was so easy, everyone could use it. And typically in software sales, it's the sales consultant or the sales engineer

24:34

that does the demo. But in Tableau, it's so easy, we wanted everyone to use the product. So here's an example of what often would happen, especially for someone that was more experienced and further along in their career, we would give them the assignment of, we need you to go download the product, takes 90 seconds to download, go find your own data set or you can use our sample one and do a demo. And this is gonna be one of the interview stages.

25:04

And sometimes people would be very excited about it. Other times people would say, hey, you know, Kelly, I'm interviewing with a ton of companies. And if you hire me, then I will learn the product, but I'm not gonna spend tons of time to go learn the product in the interview process. And the answer there, you can imagine Brenda, was thank you very much. The interview process is done.

25:33

And yeah, because, and that was a few things. One is our mission is we help people see and understand data. We want people that are super excited about that. So if you want to work here, we want you to be very excited about understanding what it is that we do. And if you're not going to do that in the interview process and you're not really that passionate about our mission. But secondly, we wanted people who were going to be all in and be able to use our product.

26:00

And that was one of our core values that we fleshed out very early on. So there's ways that you can look at that. Another tangible is in the annual performance review, it wasn't just the work that you did, but in our annual performance review, at most of the companies that I've been involved in, one of the checks are how much are you abiding

26:28

and embodying the core values of the company. People didn't get promotions, they didn't get pay increases, they didn't get high ratings unless they were living every day according to the core values of how they interacted with the internal team and with the customer. So those are some tangible ways to summarize again, behavioral interviewing flesh out the core values in the interview process.

26:58

and make sure that those core values and adherence and passion about the mission are part of your annual performance review process. Thank you very much. Three practical tools when you're scaling your organization, not just in sales, the entire organization. That's very, very helpful. You've recently launched Culture Driven Sales Institute.

27:28

And I know in one of the podcasts that you've been a guest to, you talk about storytelling and that a salesperson has to have at least three stories. So I wanted to do a practical exercise here today. Give you a bit of your own medicine, right? Which is you've started a culture-driven

27:58

that you would tell about. Yes. Well, so let's back up a little bit and why storytelling is so important. Thank you. I think what happens is when companies think about selling their product, they often are so focused on the what and the how, they miss the why. And the why comes back to why the mission is really important. Because

28:28

Well, when you think about not only employees, but for customers, customers want to understand why a company exists. Because what people don't realize is that the whole process of purchasing is very emotional. People use logic to do their research, to make sure that that product or service has everything that they need. But the lion's share of why someone actually makes a purchase decision,

28:57

is actually emotional. And so companies need to be emotionally connecting with their prospect and their customers. Think about this on a very tangible level. Just think about it separately of why you as an individual would buy a house or why you would buy a car. If you're looking for a house, you know you want it in this neighborhood, you want this number of bedrooms, you want this amount of square footage, this amount of bathrooms, but in the end,

29:26

you have to like feel it with the house. It's an emotional connection with that house. And this is the same reason that people buy, even if it is a software or an enterprise product or whatever it is that people are buying, a system or consulting, you need to feel it with the person and company that you're going to be interacting with. And it's shown in, if you look at research,

29:56

had done a whole survey to understand why people buy a certain product or service, most companies behave as if it is the specs of the product or service and the price. And as it turns out, those are two reasons why people buy. But the largest reason why people buy is actually their engagement and experience with the company. So this is really important to think about. So now going back to the stories.

30:25

The stories are, well, you want to be able to communicate the company story. You want to be able to communicate the individual, your personal story, and then also your customer story. So three stories, company story, personal story, and your customer story. So if I were to talk about it specifically for me, the company story of why I founded culture driven sales in the first place was.

30:54

What I realized is companies were just focused so much on the what and the how, focused so much on operational processes and operational execution and all these tactics. And they were missing the real reason of why companies buy, which is tied to

31:19

having an integrated go-to-market strategy that ties back to the corporate strategy, coming all the way from mission, vision, company story, values, but then how that ties into how a company tells their company story. What are your unique differentiated value propositions? Who is the ideal customer profile that you're trying to reach?

31:48

And then what is the best sales approach to be thinking about it? Companies were often asking me, well, how can I go get my specific sales? Hey, Kelly, just help me with, should I be enterprise sales or a different motion? What should be on my sales operational tactics? And they were getting in at such a detailed operational level, they were missing that high piece, which helped guide the strategy on the go-to-market strategy. So this is why.

32:16

I founded Culture Driven Sales in the first place. The second reason of my personal story is why was this important to me? Well, when I talk about what we did at Tableau, remember we discussed how this was the first time I had built an enterprise software team. And the first time that I had been building a company from zero up to a public company.

32:46

We had a team that we were so focused not only on building a great company, but thinking about our high priority was we want to build a great place to work. We were intentional on creating a great place to work with a great culture where people felt like they could bring their authentic self and be able to really build their career at Tableau. That was as important a goal to us.

33:15

as it was to go build a huge sustainable business that was creating great products for our customers and good returns for our investors. And what I realized was not all companies were thinking about that, but we were creating this movement where our customers were really excited and our employees are really excited. And this is something companies want to do, but they just don't know how to do it.

33:45

by putting culture at the center is really important. And so having culture drive sales rather than just focusing on your sales and thinking culture will just fall out on the backside. Culture isn't just a derivative that happens. You have to be as intentional and thoughtful about culture as you are in driving all of your other strategic priorities as a company. So that is the whole company story.

34:12

And then my own personal reason, my personal story for why I did it for a customer story is customers are actually realized that they get better results when they do this. And so when I'm on these different boards, oftentimes companies are saying, you know, how, like what, what, one specific example is oftentimes a company will say,

34:41

Well, how can I do this myself? If you look at their website and then you look at the website of their five competitors, they might all look identical. You take their name and their brands off and they all say that they're doing the same thing. But when you weave the company's story into it and their unique differentiated value propositions, that company gets more of a personality. It actually is unique. And that is what...

35:10

can really help to light up these individual companies so they can be different, they can be unique, and they can understand how they're gonna go and differentiate themselves across everyone else in the noise when they go and focus on culture more than they have before. Yeah, so what maybe, you know, biodegradable chickens are largely made by emotional, right? Okay, so.

35:38

One of the things that we did that was very different at Tableau is we did storytelling training. Okay. Many companies, they do when they're training their salespeople, they do customer centric selling, they do spin selling. They're trying to talk about solution selling in a way where it's really more about pitching the wares of the company. When you're really focused on the customer more.

36:06

you want to do storytelling because we've already established that it's an emotional type of cell. So we did a very atypical type of training. We brought in storytelling training and we taught people, well, how can you learn to tell stories? More about the company's why, more about the customer story, more about your personal story. And it was very interesting what happened is after this two interesting derivatives came out of this is

36:35

Our employees said, wow, this is not a typical sales trading. This is a communication trading that's helping me to communicate with not only my prospects and my customers, but everyone in my life, my family, my kids, all these things, because sales is about communication and emotionally connected. So that was the first derivative of our employees said, this is really useful.

37:05

The second derivative that came out of this is we had our customers came back and they were saying to me and my team, huh, why is it that Tableau is selling in such a different way? It seems like the Tableau salespeople are understanding me and my problems and my company in a way that others are not. And it was because when you're storytelling,

37:31

you're really emotionally connecting in this more deep communication way. It's not just twitching your wares. This is why you should buy. Here are all the things that we should do. And companies want to really be able to strive to do that. And the companies that do this well, they're often talked about that they're creating a movement. They're doing something transformational and disruptive where they're bringing these customers in that really wanna be

38:01

part of that whole aura, rather than just buying the widget in a transactional way. It's a way to really connect with your customers in a much deeper, more meaningful way. Thank you. You heard it here. Storytelling training. This is fascinating. Going to switch gears. Let's get back to the corporate boardroom. All right.

38:28

The right you check so many boxes. So you with scaling companies. They start out with advisory boards, but when they're at their first fiduciary fiduciary board of directors, what would you be seeking in a high performing company, Kelly, for this important milestone in terms of all the nuggets you've provided today, mission, core values.

38:57

storytelling, what are some of the nuggets you'd want to bring into the boardroom at the fiduciary board level?

39:06

at the board level? Well, that's a really wide question. I think there's a couple things, Brenda, to consider, especially if people are considering adding board directors or for those in the audience who are considering maybe being a board director yourself. Okay. First thing is companies will often have a board matrix. They'll have their idea of what are the different skills that they want to have represented

39:36

on the board. And so if you're a company, you want to be able to be thinking of what are the different skills and experiences that you want on the board to be able to help guide your executive team and your entire company. So for instance, for me, I brought, I've been a strategic consultant, so there's strategy. Strategy is a very big part of what happens on the board to help

40:06

the company think about their short and long-term strategy. Two, I'm a go-to-market expert, I'm in sales. And many boards will have different experts in different disciplines. So pretty much every board will have a former or currently sitting CEO to be a CEO coach or mentor. Oftentimes there will be a financial expert who was a CFO or worked at one of the big audit firms.

40:36

because they might be chair of the audit committee to help drive all of the financial and regulatory issues that are on there. And then oftentimes they'll have a product person that helps them with the actual product. My expertise would go to market for sales and marketing and branding. And you want different members on the board to have different expertise. So you can bring that and have resources for all those different areas of knowledge

41:05

will help to upscale and scale your team. The next piece is you want to be able to have a culture in the boardroom that is reflective and complimentary to your culture as a company. So you just in the same way, you want to do behavioral interviewing for your employees to make sure that the employees...

41:31

are aligned and operate in adherence with your core values and are passionate about your mission, you want that in the boardroom too. You don't want people that are just gonna tick the boxes for experience and resume, but they're passionate about what it is that your company is doing and that they will behave in a way that will help to further those core values and the culture. The last thing that I'll say is,

42:00

You want to be able to have discourse and open conversation in the boardroom. Yes. And you want to be able to promote diversity of thoughts and ideas so that you not only can have different experiences represented in the boardroom, but you're going to be able to have different respectful conversation so that the best idea wins.

42:29

and that you can have board directors who will challenge your way of thinking and ask questions to make sure that you're getting that top performance. And many companies, they think they want that in the boardroom, but they actually operate in a way where they want more yes people on the board. Just people to validate and say yes and agree, that is not going to be the most effective board.

42:57

You actually want people in the boardroom who are going to be able to challenge your way of thinking to call you when there may be a better way to do things. And of course, they're not the ones ultimately making the decision. You as the operators are going to make the decisions, but you want to have a respectful discourse where people are going to be able to challenge the way of thinking.

43:27

rather than just have a stamp of approval.

43:32

Excellent. Thank you for changing course there. So skill matrix, largely functional, strategy, finance, go to market sales, prior CEO or sitting CEO, culture in the boardroom, that is reflective of the company. So actually choosing and through the interview processes, right? For the corporate boardroom. I like that. And then finally, diversity of thought.

44:01

Right. First thing you thought is really important, not only in the boardroom, it's important inside the company too. And that is when we go back to having the best culture and behavioral interviewing, all of those kinds of things. Remember when you're thinking about culture, companies evolve. So in the past, people talked about cultural fit. I don't like to use that term because cultural fit is they're fitting into the mold of what the company already is. It's more of.

44:30

Are they going to be culturally additive to help to abide by these core values and to help to continue to grow and extend the culture in a way that you're scaling and growing into your next space? Thank you, Kelly. I want to ask you a question because last night when I was preparing the Zoom, we record this on Zoom platform,

45:00

they now have generative AI. And it is the presence of AI for me as an operator on my podcast and other materials that I generate myself, it's quite overwhelming and kind of intrusive. So I tried to turn it off, right? I was unable to. So after this recording, we'll have AI generated summary. How do you see...

45:30

AI's role in sales motions. And can you share your experience while perhaps you served as president and COO at Gong, which is indeed an artificial intelligence platform that serves revenue organizations to deliver insights? Just bring some light and maybe I'll be less overwhelmed. Well, I think Brenda, anytime you're introducing a new technology,

45:58

There is a transformative time because things change. And a lot of it has to do with change management and people just accepting that new technology. And you can think about that with, it took a while for people to accept new cell phones and smartphones. If I think back to early days at Tableau, for people to say, wait, you're going to collect all my data?

46:22

Are you, oh my goodness, no, there's the privacy and all of that. Now that's the same thing that's happening now with generative AI. Okay. Saying, Oh, it's a little scary. It's a little big brother. I don't want someone to be looking at all of this data and information. It seems a little creepy. And this is just typical of technology evolutions. You have the first movers who are the early adopters.

46:49

And then you have the rest of the world you ask to get comfortable with that. So, so Brenda, you shouldn't feel bad. It's just, there's many companies that are saying, Hey, I'm not sure that I'm really comfortable with it. I think the next thing though, is it's interesting for companies to look at it in a different perspective and see generative AI and AI overall. It's here to stay. It is not going away.

47:17

and it's going to transform businesses and transform the way we do work in a pretty meaningful way. And so you can push it, but it's gonna catch up anyway. So the companies who are actually going to do the best are going to be those who embrace the new technology and figure out how they can make it beneficial to them and help get through that change management faster.

47:46

Now you asked a specific question about how is it going to transform and augment go to market and sales. Yes. If you think about a sales person, salespeople have to know so much. I mean, when you're interacting with a company and a prospect, you have so many conversations, you have emails, there's texts, there's so many different things and there's their. Customers are going to your website. They're putting in.

48:15

report and support questions and tickets and all of this. And it is very difficult for any one human being to actually recognize, synthesize, and know everything that's going on with all those customer interactions. Okay. And from a sales way, if you could as a sales person actually have a technology that would help you to understand

48:43

What is this customer a prospect? What are they most interested in? What are their key issues and problems and challenges? What are the main things that they've been bringing up consistently on all of these prior conversations and sales calls and interactions and support tickets? And it was able to say to you, Hey, this is what you need to know. Okay. Then it, then it doesn't become scary anymore. Then it becomes, wow.

49:11

I am helping someone as my own personal assistant to do my job faster and more effectively. And that is what AI does. That's what Gong does, is Gong takes all the interaction with the customer and helps to tease out what are the most important things that you need to know. And now it can even be more of an assistant of I'm writing an email to you as a followup for this call.

49:37

Well, the AI will actually tell me, here are the most important things we talked about. It might even draft the email. And then it allows me to have more time to help my customers and less time having to parse through all of these disparate sources of information and content to try to remember, or sometimes it's not even remembering because I wasn't even involved in all those conversations. So you should think about AI as a way

50:07

that is a personal assistant to help you be faster, more effective, and you can always change it and you can augment it and you can edit it, but it's helping you to do your work faster and better and more effectively. Excellent. Productivity. Productivity, yes. Helping productivity. Wow. So the show notes are actually generated in Zoom. I have...

50:36

use a different platform myself, Riverside. But you should see how it works. Yeah, and it's amazing. Yeah, and it was in beta and now it's fully, so I was like, oh, that saves me at least two hours of running things. It saves you two hours of time. So ask yourself, it seems scary and overwhelming, but if it saves you two hours, then one, you have two hours of your time back to do more meaningful work.

51:04

but it also might give you a bunch of good ideas of synthesizing the content in ways that you hadn't thought of, or it might actually bring up something that you would have missed. So it's making you more effective at your job, but you are still in complete control because you can use it or not use it, right? So it's just helping your productivity. Thank you, thank you. Well, we're...

51:28

This is the time that I want my guests to have an opportunity to provide some contact information on how to reach you. It will also be in the show notes. Would you like to share some contact details? Absolutely. There are two of the best places to reach me. The first is on LinkedIn. Please go find me, Kelly Breslin-Wright on LinkedIn. Connect to me. Reach out. Send me a message. And would love to be connected there.

51:57

The second is on my website, which is cult Just the three words, cult There's tons of content there. There's a lot of tips and tricks and podcasts and speaking bits of what we have talked about there. There's also a contact form on that website. If you would like more information, if you would like to do one of my workshops for your company, if you have any kind of questions,

52:26

or would like to engage in a different way, please go visit the website and I look forward to hearing from you. Thank you, Kelly. So I'm bringing it back to the Founder Sandbox now in the second season. I do ask each of my guests to share what the meaning is of certain areas of work that I work with founders on, which is resilience.

52:56

purpose-driven enterprise and sustainable growth. So not one guest has the same definition which makes it so rich. What does resilience mean to you? We kind of started the interview around the grit and resilience you had selling educational books. I think resilience, if we go back full circle to where we started, resilience comes back to one, being able to bounce back, being able to

53:26

control what you can control because there's a lot of uncontrollables. But resilience also means embracing failure and growth with the growth mindset because we learn a lot more from our failures and where things go wrong and our challenges, often than we do from what goes right. And resilience is being able

53:52

to be elastic in that way of not everything is going to be perfect and be able to continue to grow and develop. So that would be my answer on resiliency. And what about purpose driven enterprise? What does that mean to you? Well, purpose driven enterprise. I mean, this is a very easy one for me. I teach class on culture driven sales. Much of that is helping companies to really think about

54:20

What is their mission? What are their core values? So that they can understand and operate in accordance to their company's why, be able to communicate that. And so much of this means is, if you look at what is engaging employees the most now, yes, employees want to be employed at a company where they can identify with the mission and the purpose.

54:48

where they can see how the work they're doing, they're not just a cog in the wheel, but they're actually contributing to have an impact on a larger purpose. So this is important for the employees. The thing though, when it comes to purpose-driven enterprise, it's important for all of those different communities as well because it's not only the employees, it's the prospects, it's the customers, it's the investors.

55:17

it's the communities in which we serve, people want to understand who is it these companies that they're dealing with? And do they believe in the purpose of what that company is? So it's important for not only the culture side, but these purpose-driven enterprises, they're the ones that are getting much better, proven, factual results. The data shows.

55:46

The person driven enterprises are actually the ones that are doing better, getting better performance. Amazing. Sustainable growth, not to be confused with sustainability, but sustainable, scalable growth. What's that mean to you? Yeah. Well, with this for sustainable growth, it's interesting because there's always a balance between doing what's important right now for the short term.

56:15

And also making sure that you're looking far enough out into the future. And the things of this is if you think about companies, companies are building day by day. So one of the tidbits that I often will give companies is don't get too ahead. Don't go too far over your skis because companies are built day by day. And oftentimes there might be a smaller company. I deal with a lot of

56:42

startups or hyper growth companies and they'll say, hey, I want to be a public multi-billion dollar company and they might be at a hundred million now. Well, you're not going to get there overnight and you have to remember that companies are built one day at a time. So make sure you don't go too far at the same time though. You need to balance and say, okay, sometimes people get so looked at what is sitting right in front of them.

57:11

They forget to see the forest between the trees and they're only focused on, well, I'm gonna do this today, I'm gonna do this this week, I'm gonna do this next month. And they end up adding a whole bunch of operational processes and systems that then in six months or a year or two years from now, they're gonna have to rip out and redo. And so we need to be thinking, well, as we add, is this something that is going to help create

57:41

like the baseline of where we're going to go. So it's always a balance of make sure you're not getting too far in advance, but make sure you're not getting too stuck in the weeds today. And I think that if you can balance out those two, then you can really have sustainable growth. Yeah, so thank you so much. This is truly from the voice of an operator. I appreciate that. Last question, did you have fun in the sandbox today?

58:09

I did have fun in the sandbox and Brenda, it's always good seeing you. I appreciate the conversation and looking forward to continuing to connect with people that are going to go play in your sandbox. Thank you. So to my listeners, if you liked this episode with Kelly Breslin, right? Sign up for the monthly release. We're founders, business owners, corporate directors and professional service providers.

58:37

help to share their lessons on how to build with strong governance, a resilient, scalable, and purpose-driven company to make profits for good. Thank you, signing off for this month. Have a great day.
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Resilience: Journalist to Venture Capitalist
4 apr· The Founders Sandbox
On this episode of The Founder's Sandbox, Brenda speaks with Genevieve LeMarchal about Resilience: Journalist to Venture Capitalist. They speak about Genevieve's "Phoenix Manifesto", and what journalism and venture capitalism have in common.

Genevieve LeMarchal is the Managing Partner of Suncoast Ventures, an early stage venture capital fund specializing in healthcare impact and equity funding opportunities in medical AI, digital health, health tech, medtech and select therapeutics. She launched and ran Expert Dojo’s healthcare program and ran 3 full cohorts of health tech and medtech companies, becoming one of the most prolific early stage vc investors in Southern California (Crunchbase, 2022) and winner of the 2022 Biocom Lifescience Catalyst Award. She loves to innovate financial models and find better ways to structure and fund companies and deals. She previously served as Partner at a science focused advisory and fund in formation, was a General Partner at Oregon-based FoundersPad VC Fund II and she is co-founder of the XXcelerate Fund. She is the host of the AdVentureous Podcast. Genevieve writes and delivers talks, keynotes and training programs to groups all over the world about venture capital and entrepreneurship, impact and equity investing and more.

You can find out more about Genevieve and Suncoast Ventures at:

https://www.suncoastvc.com/

adventureous podcast

linked in

Transcript:

00:04

Welcome back to the Founder's Sandbox. The Founder's Sandbox is a podcast now in its second season. It's a monthly podcast that reaches entrepreneurs, business owners, and business owners.

00:30

who learn about building resilient, scalable, and sustainable businesses with great corporate governance. I am Brenda McCabe, your host on the Founder's Sandbox. And here my mission is very simple. I want to assist those entrepreneurs and entrepreneurs in building those scalable, well-governed, and resilient businesses. Guests to this podcast are either founders, business owners, players in the VC,

00:59

private equity, ecosystem, professional service providers who like me want to use the power of the enterprise be that small, medium or large to create change for a better world. Through storytelling with each of my guests, we're gonna touch upon their own personal and professional journeys. And I always tease out topics around resilience, purpose-driven businesses and sustainable growth. My goal with this podcast is to really

01:29

create a fun sandbox environment where we can equip one founder at a time to build a better world through great corporate governance. Today my guest is Genevieve LeMarchal. It's an honor to have Genevieve today with me. Thank you Genevieve. Thank you. I'm excited to be here. You know Genevieve is the managing partner of Suncoast Ventures.

01:56

an early stage venture capital fund specializing in healthcare impact and equity funding opportunities. I'll go a bit more into your background in a moment. Genevieve and I go back probably two years when you were at Expert Dojo and their healthcare fund. And recently we met again at an investor summit and got to have dinner with Genevieve.

02:25

and discover kind of her journey to what she does today as managing partner of a venture fund. And in that dinner discussion, I discovered actually the theme of that. So very near and dear to my heart, which is around resilience and her own personal and professional journey is all about resilience. And the title for the episode today is resilience on journalist.

02:54

to venture capitalist. So thank you again Genevieve for joining me today in the Founder Sandbox. I'm gonna give a bit more color to your very deep expertise in healthcare. You're fun today, invest in digital health, health tech, med tech and select therapeutics. You also launched and ran

03:22

at Expert Dojo, a healthcare program running three cohorts of health tech and med tech companies. Shout out, quite a few of those companies are women owned. You become one of the most prolific early stage VC investors in Southern California as per Crunchbase 2022. You also were the winner of the 2022 Biocom Life-Size Catalyst.

03:50

Life Science Catalyst Award. You have a strength in developing innovative financial models, and you find better ways to structure and fund companies and deals. We all know that life sciences has a really long time to market. A lot of patient money has to sit behind that. You also previously served as partner at a science-focused advisory and fund information. You were a general partner at an Oregon-based

04:19

Founders Pad VC Fund 2, and you are co-founder of the Accelerate Fund. And you also have your own podcast. So this is not new to you. She is the host of Adventurous Podcast, and she writes and delivers talks, keynotes, and training programs to groups all over the world. You're a Pacific Northwest native, and you now reside in San Francisco Bay Area.

04:49

Genevieve, thank you. Thank you. After the dinner, where I had the honor to sit beside you, I came back and took a look at Suncoast Ventures website. And digging through it, I landed upon the Phoenix Manifesto, which is on your landing page.

05:15

And I want to read it here because I think it so encapsulates before you tell us what does journalism and BC investment have in common. I'm going to read this. Again, this is on the website of Suncoast Ventures. I am a phoenix. I am shakeable, not because I have never had setbacks. I am intimate with pain and failure. I stand tall.

05:43

and look it in the face and I have always pushed through. I always show up and I never give up. I believe anything is possible no matter the odds. I have faced the odds my entire life, fighting for my place in this world, for my right to walk the pathways to achieve greatness. What makes me resilient has nothing to do with what you see on my surface and everything to do with what lies.

06:13

within. Science and technology for betterment of society is how I choose to contribute to the world. I have dedicated my life. This is how I live and love. I'm willing to bend, but I'll never break. And the darkness can't get me because I burn on my very own. This is how I create my own light.

06:43

I have risen from the ashes many times. I am forged and fired full of grace. I am unshakable. So with that, tell us your story Genevieve. What does journalism and VC investment have in common? Yeah, well, so I started out my career for a short period of time as a journalist. Straight out of college, I went to school for journalism, all of that.

07:11

And journalism school is actually very difficult. You have to be very, they teach you to be very precise and they teach you to have extremely high standards for your work because if you mess up or if you have an incorrect fact or something that's inaccurate or whatever that might be, it can't run on paper. It does, you're gonna make the paper look really bad and you're probably gonna get fired. So.

07:40

So that's really ingrained. But then the next thing that's really ingrained into journalism students and eventual journalists is just this insatiable ability to tell a story and the desire to find one, to seek the truth, find out what's really going on. And so even though I had to report as the youngest and new reporter in the newsroom on the really boring story is things that no one could do.

08:08

talks about, no one wants to read. I had to write about the squirrel that was going rabid on somebody's roof and they called the police, just turned out it was a squirrel. It was a small town. News was limited, but things like that. And then, but I was always, I had this dream, I wanted to break a story, and I really idolized the great journalists like Edward R. Murrow.

08:35

of course, Anderson Cooper. I really thought that he was like a really revolutionary journalist of our time and all these different things. And so I was always looking to dig past what I was being told on the surface and get down to the truth. And that is something that you have to do every single day as a venture capital investor, because unlike investing in...

09:02

later stage deals or even like public markets or things like that, the information is not readily available. So you have to dig for it and you have to look for it. And you're also making bets on really nascent things that don't really exist yet. So you're always looking for information to piece together to try to determine whether or not an area of investment is viable.

09:31

Is it a gap we should be focusing on? Is it not a gap we shouldn't be focusing on? And that doesn't just come from one person's single observation of what they see on the surface. It comes from lots of information gathered and aggregated over time to create a story. And then we hope, as investors, that the story is true. So I would say those are the parallels. And that's a great segue to the next question.

10:00

around you hope as investors that the story that you've been able to weave together jointly with the company your funding does come true. There are parallels with running a fund, setting up a fund VC fund to that of being a founder, right? Yeah, not not all of them. Right. And so you know, what has you you?

10:30

have been through a couple funds. And the most recent is, is you are the fund manager. You know, what does staying true to your purpose, right? And your fun mean, you know, we've we've coming up for you raise this fund in June of 2022. Yeah, you bring in some of the companies from the cohorts coming up about expert dojo, you're really centered on the thesis of

10:59

of health care. You know, what is it that allows you to stay true to purpose?

11:06

That's such a big question. Like you can write a whole book about that. I need to talk about that. I think that the thing that allows me to stay true to purpose is the fact that I've been burnt out so many times and a lot of it has to do, had to do with the fact that I wasn't being true to myself. I wasn't being just, you know, I was hiding something. I was lying to myself. I was, you know, trying to be something that I really wasn't.

11:35

And it's not to say that you won't get tired and burnt out by being true to yourself. In fact, I feel very burnt out right now at this moment. But it's different because I think now I have the skills, the ability to be resilient. That whereas past I hadn't, but also because I'm still being true to myself, I just have a lot of my plate. But I think that when you kind of look at your

12:02

tendencies and it you know, one of the things we'd get as adults is the ability to look back at patterns of our own selves and patterns of our own life and say I always tend to do this and then I end up in these situations and It now it doesn't have anything to do with anyone aside from myself. I'm the common denominator How do I fix this, you know and and you start to call and you start to edit? And you over time you kind of realize like really?

12:32

The area that I always come back to is this core. And this might have been trendy at the time, and maybe I wanted to do it. Or this might have sounded interesting, and I was influenced by someone. Or this seemed opportunistic, and I went after it for a while. But at the end of the day, this is where I'm always ending up. And you have that kind of feedback as an adult if you're willing to listen and learn from it. You know, on your own. Yeah, that's very authentic.

13:01

Thank you for that. You also are a big follower, Warren Buffett. I think one of your, going back to your being true to yourself, your financial acumen and how you look at companies. Can you speak a little bit to the fundamentals that have informed your fund? Yeah.

13:26

Yeah, well, so the Warren Buffett thing is interesting because it's like Warren Buffett's investing mindset and his fundamentals. He would probably never be a venture capital investor. You know what I mean? But at the end of the day, Warren Buffett is who Warren Buffett is. And he has been very successful because he has stayed very true to his core principles. He has always made the main thing the main thing.

13:53

And I think in venture capital, we tend to get so pulled into all these different areas that are hot or new or that people seem to be doing or whatever. And you don't see a lot of steadfastness in venture capital like you might see in funds like what Warren Buffett has. And we can benefit from that because the legendary fund managers, the Warren Buffetts of the world, the Ray Dalios of the world.

14:22

They all focus very, very strongly on just core fundamentals of investing. And in venture capital, like you mentioned earlier about the time and patient capital, that's one of the things that people get so swept away in is trying to make venture capital all things. And it's like, oh yeah, we're going to get these quicker returns. They're going to be high in this unicorn.

14:46

And then you watch these things fall apart. You watch the bottom fall out. And you're like, it was never real. It was always alive. And maybe some people made money. They got lucky. They got out or whatever at the right time. I don't know. But the point being, we're always trying to manufacture some sort of crazy situation when in reality, and one of the ways we manufacture it is by doing round upon round upon round of.

15:13

higher and higher valuations that are getting crazier and crazier. And then it all comes crashing down, and we wonder what happened. And we say, venture capital is massive class is bad. It's like, well, not really. The mindset that we might be approaching it as managers is sometimes not right, because we need to remember venture capital is patient capital. It's slow. Our investors and LPs, while they are my bosses, they know that this is not going to, you know,

15:41

turnover overnight and start to create returns. The pressure that I feel to produce returns is healthy to an extent, but we need to remember that we're investing the gaps. We're looking for opportunities to invest in underpriced assets. Yes. And that's the bet we're making is this asset is underpriced and it will be, and that doesn't mean this asset is underpriced per what the public market might say. That means this asset is underpriced

16:11

like now, you know? And I think that if I invest in this, it will generate a positive markup and eventually a positive return because it's creating real economic value and not just paper returns on paper returns. And so those, I mean, I could go on and on about what the fundamentals are, but I think it comes down to, we then vilify the asset class.

16:39

when the asset class is actually not the problem. The problem is the way that we try to finagle it to get to get it to be what we want it to be. And it's not like that. That's so elegant. And I also am a true believer in the patience that is required in life sciences, biotech, that anything that is any startup

17:06

it's any startup a particular life sciences or right that those there's no hockey stick, right? It is you, you have to introduce largely against the standard of care, right? That is incumbent within treating a certain therapeutic area. Let's let's kind of change the messages for my listeners here on the pad cat podcast. So at

17:36

the founder sandbox, I often end up being a mentor to CEOs and digging in when when times get tough, we know we are coming off particularly difficult two years with head winds, you know, we have high interest rates, there is a lot of dry powder out there. Yeah, but what and I and how I work with founders oftentimes is hey, have you written?

18:05

And will you show me a thank you letter that you've been, that you've sent out either to somebody within your personal or your professional network. I did this really early on with founders because to build resilience, I think being grateful and just recognizing those people because you are riding on the shoulder. Sometimes your team might not be following you along. The market's timing isn't the greatest. So you've had a recent change in your family.

18:34

and new addition. You're running a VC fund. You have you're raising money as well. How have you built resilience and how you do you continue to build resilience to naive within the new arrival to your family? Yeah, that's a really good question. And I don't know the answer to it. Oh, 100% yet. But last year, I'm decided to make my kind of word of the year.

19:04

Perfectly imperfect. Perfectly what? Perfectly imperfect. I love, okay. And the reason I chose that word was because, you know, I've always been a very high achieving person. And ultimately, I was always, as a high achiever, also very controlling. Okay. Not of other people, but of, of like, what was happening.

19:30

you know, I have very specific goals, very specific outcomes. And I would say, oh, I was being goal oriented, but no, I was being controlling. And I wanted things to go a very specific way. And when it didn't go like that, I would be, I would work harder, fight harder, try harder to get a certain outcome to occur. And then when things were going differently in my life, I made myself wrong for that.

19:54

And so it was like this perfectionism thing and trying to control the outcomes of my life so that it could look the way I thought it should look. And it was not healthy. And then when I realized that I'm not in control no matter how hard I try, I'm not in control no matter how much I might stress myself out and try to make myself in control. And if I let go a little bit and do more steering and allow,

20:22

things to occur, it's hard because it's going to require me to have faith. It's going to require me to face a lot of the fears I have about not achieving the thing I'm trying to get to of, you know, and all the things associated with that. But oftentimes the outcome that ends up occurring for me is better than what I wanted, had I... Figured that. You know, yeah. So I was like, well, this is interesting because I'm not in control anyway.

20:50

And this could very easily become very much a spiritual discussion. It could keep it not that, but like, you know, if I want to create this life of purpose and life of impact, I've got to just stay core to the values and core to that and move, but allow things to happen. And so with having a child recently, you're even more not in control.

21:19

this child is in control. So the word of the year continues to be perfectly imperfect because accepting that things may not necessarily look the way you want them to. I used to have these idyllic mornings where I'd wake up and rested, you know, and have my coffee and, you know, catch up on my email. And like, you know, everything in my life was very easy.

21:44

and very prescripted almost in a way. And this morning I got barfed on, you know? Yeah, that happened. Yeah, and so I was like, well, you know, but how, but it's different, but the only thing that makes it bad is that it's not my idea of what things should be. You know, things should be this way, should be that way. So when I let go of the shoulds, it's perfectly imperfect just the way it is.

22:10

I got you've heard it here on the founders sandbox with Genevieve LaMarchelle perfectly imperfect. I great I love that. I love it. Okay, up until now, you've shared and I've shared your background, many, many success stories, many awards. We all know that the road to success is often fraught with some stories of failure. Can you share some of these stories with my listeners here?

22:39

I have a lot of failures. In fact, it's interesting because I just think a lot of those successes were actually like kind of a failure but it worked out or something like that, you know, in a way. But I think I often tell people that I came into venture capital off of a failure and not off of a success. As a founder, I had a startup and a lot of things went very, very, very wrong.

23:08

in that startup and a lot of it was my fault. Some of it was not my fault. And some of it was just like perfect storm of crap that occurred and it was just like, well, this is, it taught me a lot after I finally was able to recover from a lot of that that happened about how

23:36

one thing like what is failure and what is success really? And how would I have, I have the outcome that I wanted in my head, but when things are going really bad, you kind of create a new outcome and that becomes success. And the definition of success started to change. And so I realized like, I don't actually think that in startups, there is a way to be successful. I just think you don't fail.

24:05

for long enough and you eventually get lucky. That's full. We were unlucky and I didn't have the experience or the resilience or the support in order to be able to navigate out of some of the situations, you know, and to your points about, you know, governance, we didn't have good governance. We didn't have any governance whatsoever. That probably would have helped us a lot, but we didn't have it. So, yeah, I think when...

24:34

at the end of the day after you've recovered from whatever the fallout of your failure is, you're left with wisdom. But you can only be wise and you can only turn that wisdom into like gold if you're willing to accept yourself as someone who failed. You're willing to, you're not trying to hide it. You're not trying to like shove it under the rug or pretend it didn't happen or pain.

25:00

paint a picture over it, lipstick on a pig, if you will. Right. To say, this was a garbage fire, and it was my garbage fire. And this is what I learned from it. And this is what I can help now to either not do it again, or in my case, as a VC and advisor to a lot of companies, help them not do these things. I made a lot of pretty common mistakes, pretty common stuff. Yeah. And thank you for sharing.

25:30

your, I guess, failure, a startup that eventually did not prevail in getting financed. I couldn't help but listen to and hear from you lack of governance, but also about you didn't have the operational help around you. That would have perhaps ushered you to

25:59

success and getting funded. What are you doing at Suncoast Ventures to operationalize those founders? To operationalize the founders or? Yeah, to help them. Yeah. Well, so I mean, there's not a lot I can do because the founder, like I'm not on their board. I don't have a board seat in the companies, nor do I really want one because of the operation Suncoast would have to

26:28

With those founders, oftentimes now I can see the signs of things that are going wrong. And not only do I see the signs of something going wrong currently, I can see a train coming. And that's something that I don't think a lot of other people have that foresight that I've gained over my years of failures. Is I can recognize a failure when I see one. Like I know a speeding train is not a, I don't know.

26:58

I'm making up something weird, but so I, you know, I can kind of talk with them about that. And I also, because I was a founder and I went head strong and I did think I knew the best and, and things like that. And truthfully, as we see, you want to back the best founders and the best founders are resourceful. Yes. They'll listen to you. They won't always implement what you said, but they will actually listen and they'll actually take it to heart and things like that.

27:27

And so the best founders are very, very communicative. They share with you what's going on, the good and the bad. But if you have to drag the bad out of them, because of course you wanna present the best light to your investors. I know, I certainly do. And so when they share, or when you ask, what are you struggling with right now? And they kind of dance around it. I can quickly kind of pull out what's happening and say,

27:57

I know that you don't have a lot of time to do this administrative activity over here with the cap table, or I know that you're feeling really stressed and stressed and you don't really have time to address this issue or that issue. But here's why I think we need to do it now. Here's why it's not going to be as hard or scary as you think. And here's what could happen if we don't do it. And those types of conversations.

28:27

Then you leave them. They'll usually set the ball in motion to make that right. And I often have my founders allow me to help them at that point, where I can say, I know it's challenging. We've got a cap table problem. It may not seem like a problem now, but it's going to be a problem at series A, and that's not that far away. So let's fix it now, because I don't want you to be in a position where you can't raise your A round because.

28:55

we've got this fixable thing, but it's just going to take time. So let's just solve it now. And they're like, Oh, I hadn't thought about that. And so, and then they'll let you solve, then they'll let you fix it with them. Excellent. But it can't just be like a, you got to fix your cap table is a mess, you know, or it's, um, as you said, you do have to have founders that are communicative and, um, you know, tell you the good, bad and the ugly, right.

29:24

Yeah, on a recurring basis so that you as the fund manager and the investor are able to provide your wisdom that you've acquired with your many, many experiences. And you can get a vibe early sometimes from founders. As I'm sure you've noticed, sometimes the conversation with the founders vary one way. They're just pitching at you and they're not really listening and they have their response. And you're like, this is like...

29:53

interesting company, you know, great founder, great team, but I get this weird feeling that I'm just being, this is very one way and it's not reciprocal. And in the seed stage, especially if you're going to be one of the first like VCs or professional investors in that, it's really important that you get the vibe that there's going to be a reciprocal communication going on.

30:22

You know, your Suncoast Ventures Vintage One is from June 2022. So kudos to you raising a fund in a pretty tough market. You've been in the venture space for over 10 years, right? As an emerging fund solo manager, can you share some of the lessons learned? Maybe it's about aciclality, because life science is acyclico.

30:51

Talk to us about how it's how you weathered through raising a fund, particularly with the headwinds that we've had. Right? Yeah. Well, so I mean, all things all early stage venture is not tied to public markets. It's not it's not. So that's so as a person, whether you're thinking about being an angel or whether you're thinking about having a fund or whatever, if you have the ability to weather storms, which requires

31:19

patients and resilience and all this stuff like that, early stage is the great place to be, even with the companies that completely blow up. Early stage investors usually did kind of okay when you look at a lot of these as examples. That being said, in where we specialize in healthcare technology and medical AI type tech and things like that, we're also...

31:49

Health tends to be a laggard in terms of technology adoption. The stuff that is super bleeding edge that we're looking at like Nvidia is doing and things. Yes. Health care is not there. So I do sometimes have some of the benefit of being able to be with the pack that's a little bit more of a laggard in terms of technology because you can see how other industries adopted it or didn't adopt it and adjust. So there's some of the foresight there. But.

32:17

You know, in terms of the cyclicalness of this, I think that's where almost the journalism training comes in. You know, you don't get, actually, I love my quotes. So Warbuffet, love him. John Wooden, he had a quote that was like, you can't let praise or criticism get to you. It's a fallacy to get caught up in either one. And I remember hearing that, or reading that, or something like that back in my 20s. And in my 20s, I was just chasing

32:47

validation and praise, like we all were, you know, and, you know, come from a military family, they were very much like, um, focused on high achievement. And, and so I was really looking for that, looking for that and all the places, both right and wrong. And, um, and so the idea that it was a fallacy to get caught up in praise, I was like, huh, why would that be the case? You know? And, but

33:14

So over time, you can liken John Wooden's quotes to the craze that happens around anything. Right now, it's AI. Before, it was about there's crypto, and then there was a bunch of Web3 stuff going on. And it's sort of like, don't get caught up in any one thing. It's always a cycle. The market's great. Awesome. The market's not great. Fine.

33:39

Like, you know, I'm sticking around. And so last year as the market cycled, it was a little scary to watch my watch managers, um, not that dissimilar to me, just old everywhere, just fall apart and, you know, and be afraid of for myself. But I just thought, you know, we're, we're going to hunker down and we're not going to go anywhere and then, you know, and that keep doing what we do. And.

34:08

Maybe we'll slow down a little because we have to. Maybe we will make slight adjustments to course because we have to. But we're not going to respond with these big swings to whatever the market is doing. And so last year, I started thinking a lot about market cycles. And I went back and looked at some of these really, really old investment analyst documents that I found. OK.

34:36

from like the 1960s. And I can't remember who had produced this, but it was like a photograph of like a brown paper, sketches. And I was looking at this and I was like reading recessionary trends and just being a nerd. And I was like, this guy in 1942 to 1965 or whatever that he was doing this, the curves are the same.

35:06

they're just maybe slightly closer together now because things happen much quicker. The velocity. We're still doing this. So, you know, let's not act like right now as a unique situation because it's not, we've seen it before and we know what we would have done or should have done back then. So let's just do that now, you know, which is not lose your head and- And stick to your knitting. Yeah, just keep going. Yeah. Excellent.

35:36

I would like to give you the opportunity Genevieve to tell us how to reach you, my listeners. Please, is that on LinkedIn? Yeah, LinkedIn is great. Please don't pitch there. My inbox is involved with pitches. And most of them aren't even like in thesis for what we do. So you know, if a company does, if someone's a founder and they want to submit Suncoast on our website, you can submit on the website. Okay.

36:07

So that, and we do look at those, like those things come in and we do look at those. So that's the best way to reach me as a founder. If you wanna not pitch, if you just wanna like connect and, you know, read posts, you know, and interact on LinkedIn, LinkedIn is great. But just don't pitch on LinkedIn. And then if you have an Instagram. Okay. Yeah. Is it Sankos Ventures? No, no, it's just my name. It's at Genevieve. Genevieve LeMarchal, yeah. Okay.

36:35

that. And then of course, you know, there's adventurous podcast, which is on all major podcasting channels, there's links to it, you can get to from Instagram and things like that. And also, I have a website for it. I don't use it much, but it's adventurous podcasts.com. Thank you. All of these ways to connect and what to do and what not to do will be in the show notes. Yeah, just don't pitch on LinkedIn. Yes.

37:05

Very sound advice. I always asked my guests to kind of come back to the founder sandbox with me. I work on themes of resilience, purpose driven enterprises, and sustainable growth with the founders I serve. And I do not one guest has the same description of the the meaning of this word. So resilience, what does it mean to you? I mean, your man, your Phoenix manifesto is for me.

37:35

the an amazing show of resilience. But what does resilience mean to you? Resilience, I think it just means that like.

37:51

you're going to give yourself grace, but you're, and you're going to stay the course, you know. And so, you know, there's times when it's hard to be resilient when, you know, we need, we need to give ourselves grace. We need other people to give us grace. You know, we need that. It doesn't make you any less resilient because you need that. First and foremost, you give it to yourself.

38:21

some grace doesn't mean you're not going, you're not continuing forward. You're not pushing forward and you're not staying in course. So, um, I guess while moving forward, I don't know. Yeah. Yes. And I loved within the manifesto I'm willing to bend, but I'll never break. So that, that ability to, to have grace, give yourself grace, purpose-driven enterprise. What does that mean to you? So, um,

38:49

What purpose-driven means to me is that it is really aligned with what we've defined as purpose and impact and health. Purpose-driven means that it has a greater, it's a bigger outcome than simply just large returns. It doesn't not mean large return. It should mean that in fact, because if you want more and more.

39:15

assets and allocations to be put into impact or purpose driven enterprises, you need to produce returns. But that's what it means to me is more than just the financial outcome. And also I'll go back to your Phoenix manifesto, science and technology for betterment of society is how I choose to contribute to the world.

39:43

Sustainable growth. What's that mean to you? Sustainable growth. I'm sexy growth. Don't chase the latest, right? Yeah. Thank you. And your last, the last question. Did you have fun in the sandbox today? Yeah, absolutely. Thank you for sharing. It's time with me.

40:13

And my listeners will be better off after listening to Genevieve. Is it Lamar call? Is it? It's lay Marshall. And they marshaled. Genevieve, they marshal. So if you've liked this episode, sign up for my monthly release of a podcast where you're going to be listening to entrepreneurs, business owners, VCs, professionals, and risk providers.

40:42

on how to build strong governance in a resilient, scalable and purpose driven company to make profits for good. This podcast is available on any major streaming platform and I look forward to dropping again in on a monthly basis this podcast. Signing off until next month. Thank you.
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Anna Jacob: Maximizing Purpose while Achieving Profits
28 mar· The Founders Sandbox
On this episode of The Founder's Sandbox, Brenda speaks with Anna Jacob about "Maximing Purpose while Achieving Profits". They speak about her broad experience coming full circle from her experiences growing up that informed her future career purpose- and in assisting women business owners to think strategically on exit strategies.

Anna Halloran Jacob specializes in selling privately owned companies and maximizing their after-tax proceeds. She has also served as Adjunct Finance Professor, Loyola Marymount University, 25 years in investment banking, private equity, and corporate operations. Anna was also COO of a full service advertising company with over 150 employees. Anna is passionate about educating business owners on how to maximize the value of their company for a successful exit. She has significant experience in representing companies in the sale of their business, capital raising and valuations.

You can find out more about Anna Jacob at :

Linked IN https://www.linkedin.com/in/anna-halloran-jacob-6543b8193/

Diamond Capital Advisors

Show Transcript:

00:04

Welcome back to the Founder's Sandbox. The Founder's Sandbox is a podcast now in its second season. The monthly podcast reaches an audience of entrepreneurs and business owners who learn about building resilient,

00:32

scalable and sustainable businesses with great corporate governance. I'm Brenda McCabe, your host here on the Founder's Sandbox and my mission is simple. I want to assist both entrepreneurs and intrapreneurs in building their scalable, well-governed and resilient businesses. The guests to my podcast are founders, business owners, corporate directors and professional service providers who, like me, want to use the power of the private enterprise.

01:01

small, medium, and large to create change for a better world. Through storytelling with a guest on topics that we touch on, including resilience, purpose-driven enterprises, and sustainable growth, my goal is to create a fun sandbox environment where we can equip one business owner at a time to build a better world through great corporate governance. Today, I'm absolutely thrilled to have as my guest Anna Jacob.

01:30

Welcome, Anna, to the Founder's Sandbox. Thank you. It's great to be here, Brenda. Thank you. You are a managing director at a Los Angeles-based firm, Diamond Capital Advisors Investment Partners. It is a mid-market firm focusing on investment banking, M&A advisory, and capital markets. And Anna and I are going to talk about

01:55

something very near and dear to your heart as well as mine, is maximizing purpose while achieving profits. And if you allow me, Anna, I'm gonna give a brief background on yourself. Anna Halloran Jacob specializes in selling privately owned companies and maximizing their after-tax proceeds. She also has served as adjunct finance professor at Loyola Marymount University.

02:22

25 years in investment banking, private equity, and corporate operations. Anna was also COO of a full service advertising company with over 150 employees. Anna is very passionate about educating business owners on how to maximize the value of the company for successful exit. She has significant experience in representing companies in the sale of their business.

02:51

capital raising and valuations. It's truly a delight to have you here. You have such a broad experience. It was difficult to choose the topic. And I think your broad experience and having known you now for a couple of years while we work with women owned businesses is a testament that you're coming full circle to the episode's title, maximizing purpose while achieving profits.

03:18

I've known you for a few years and it wasn't until recently that I went, aha, I want to invite Anna to my podcast. I learned that you had an early formative or growing up experience that informed your purpose, Anna Jacob, in assisting business owners to maximize profits and alignment to your purpose. Can you share with my listeners, you know, what was that experience that was so formative and what you do today?

03:48

Yes, absolutely. So I'm one of 10 children. And my father was an entrepreneur. And he had a very innovative orthopedic device company. And it was for the betterment of patients. And we were too young at the time to know this was going on. But what had happened was he had received a couple of offers.

04:19

And unfortunately, he did not have advisors that helped him. And the technology was literally shelved. One of the offers was with the largest global medical device distributor in the world. And that would have changed not only patient outcomes significantly throughout the world, but it would also have, you know,

04:47

the technology wouldn't have been shelved and it would have provided retirement for, you know, my parents and so forth and security. We found this out when I was older and it really impacted all of us. And so I wanted to learn everything that I could about how to help entrepreneurs like my dad get the full value of their company to realize their hard work.

05:16

and to better, you know, people's lives. So after business school, I went to work for Lehman Brothers in New York, and investment banking, and did M&A and capital raising for Fortune 500 companies and learned everything I could. Yes, and I applied that I moved back to Southern California where I'm originally from, and focus and dedicated my career on

05:46

helping privately owned companies, entrepreneurs, to achieve maximum value on exit. And part of that process for me is that I like to get involved early on, as Brenda knows, with the entrepreneurs, and whether you're selling a year from now or five years from now, do you have the right advisors in place? Tax attorneys or wealth advisors?

06:16

in order to prepare for an exit. And also just counseling people that received unsolicited offers, you know, what to do. I'm very, very passionate about helping entrepreneurs in that regard. Thank you. It's always extremely enlightening to know what purpose has driven us into our current businesses. And, you know, I think it's

06:43

timely that you agreed to join as a guest in the podcast, because it's an election year in the US, and it just so happens that there are over 66 elections going on across the world today. Actually, not today, but over this in 2024. Interest rates remain high. Inflation is persistent, not only in the US, but in other countries.

07:13

Two wars continue their course. It appears that the US has made a soft landing, and we're going to avoid a recession. What are you observing in the merger and acquisition markets that there may be risks and opportunities with this backdrop during this month of March? Yeah, so last year, the M&A market definitely was down.

07:43

significantly globally. And a lot of that was driven by a very fast increase in interest rates. Yep. Very unprecedented. And that just causes uncertainty. It also causes financing costs to go up. And private equity is the big driver of the M&A market. And costing them more money, it's

08:12

you know, multiples that are paid for companies, which then puts these sellers on, you know, on a holding pattern. But what has happened and it started happening, you know, last fall is with interest rates starting to stabilize and now people are looking to in the future that hopefully to decline if the market is stabilizing.

08:42

both on a volume basis and also the multiples that are being paid. Okay. This is just very recent data, but we're seeing it's positive. We're seeing the stabilization. And, you know, in terms of, you know, what I would say in terms of risks to sellers, it's, we're still looking at instead of 100% cash deals that were, you know, being done.

09:10

Now we're seeing a lot more earnouts. Okay. And with earnouts, there's uncertainty. So, you know, our advice to clients is take as much cash upfront as you can. And, and just to talk about earnouts, you know, that's basically compensation that you will or consideration is a better way to say that for your company based on future.

09:39

either revenue or typically EBITDA milestones that the buyer is going to set to make part of that consideration. And there's just a lot of uncertainty with that. So what what the good news is, is that there's still a lot of money out there. There is 2.6 trillion just in private equity money.

10:05

And because interest rates, you know, borrowing costs are stabilizing, we are seeing, as I mentioned, the multiples starting to stabilize. And, you know, there's so what I would say to a CEO or an owner is know your cash number. Okay. Know what you want, because the earnout may or may not happen. And what we have actually done in certain transactions is negotiated a lower

10:34

total transaction value, but a higher cash component. Because the seller, their objective was to make sure that they absolutely had that cash number in their mind. So I would encourage people to help find that number is to talk to your financial planner and find out what it is that you would, when you do sell, what do you need? Because that will help you

11:03

well before you get into any negotiation or, you know, help representation in that negotiation in terms of what you actually need. So thank you. I like how you've taken us through both the risk side and the opportunities. And I had a little sigh of relief that we- there is a bit more stabilization, despite the headwinds that we've had over the last, I guess, two years, right, coming out of the pandemic.

11:33

On the Founder's Sandbox podcast, I really pride myself on the content my guests bring on real nuts and bolts for company owners. And what I'd like you to talk about is, all right, I listened to this podcast, met Anna Jacob. Yeah, I'm going to look at what my cash, my desirable cash exit value would be. Can you walk?

12:00

us through what is a real M&A timeline and when does it make sense to really line up those advisors? Yes, absolutely. So deals are taking longer in this market.

12:18

The expectation if you're doing an auction, which is what I would recommend to get the highest price, is typically it's about nine months. Some deals are taking longer. But, you know, typically you're, you're going to, and this is if you're well prepared. And by prepared, I mean that you have your financials and you know, it's readily available.

12:48

Um, if you have the due diligence process is pretty intense. So you want to make sure that when people ask you for financials, that you have them readily available. Um, and that increases your credibility, which increases your value. Um, and you know, to your point, Brenda, um, really you don't want, you don't need to get every advisor involved, involved at the beginning.

13:16

I think the first advisor you definitely want to get involved well before you receive an unsolicited offer and offer is what is that cash number? So that would be a wealth manager. Now in terms of my role as an investment banker, I would want to start talking to somebody a year before they're looking to get together so that I can help them.

13:45

figure out what are those two diligence items that you need so that when you go to market, it's very efficient because the longer a deal goes on, the more things that can happen. So you the process is critical. You want to make sure that you hit the market running that you can negotiate. You don't want to keep buyers on hold. You want to create this very, very efficient process. Okay, highest price. So typically, I would get involved

14:15

about a year before just consulting and then getting retained when you are ready to go. I also, in terms of another key advisor, I would bring in a tax expert, and that could be a CPA or a attorney, whatever makes the most sense, when we're getting ready to consider an offer.

14:45

The minute you hit into what's called a letter of intent, that is when you want to make sure that you have already talked to your tax advisor about what does this mean? So for example, just very specifically, it's not about getting the highest value. Okay, my job is to get a seller the highest after-tax proceeds. Got it. So we need to negotiate, know exactly what your cash number is.

15:14

And then also, depending on the form of consideration, buyers are going to have different types of consideration. Maybe someone's going to pay 100% cash, or maybe someone's going to say, I want to do an earn out, or maybe someone says, I want to do milestone payments. And it's very important that if you're going to do something like that, like a milestone payment, that it's not considered.

15:40

compensation where your tax on an ordinary income tax basis instead of capital gains. So all of these things before anybody gets to that letter of intent and they're giving us bids and we say, what is your form of consideration? We're gonna review all those and we're gonna pick the best one that has the best after-tax proceeds for the company and the highest certainty that it's gonna close. And so that's when we get somebody involved. Right, and you bring it back to the cash value, right? That's-

16:09

business owner has dreamed about. Exactly. In order to go on and build another business. Right. And then the M&A attorney comes in to help with the reps and warranties and any kind of exposure. And that's critical at that point. But that's not until you know that this is, what we're doing is we're vetting the buyer so that the seller is running their company. This is how it should be done. They shouldn't be distracted.

16:39

time-consuming process, they're running their company, they're making their numbers, they're running. And we're doing interference with the buyers and negotiating everything and weeding out the people that aren't gonna be the ones doing the highest bidding. And I should note one thing too about this process, Brenda, that's interesting is that we sold a company last year in the consumer sector and they didn't wanna go to auction.

17:08

They were approached by a competitor. Okay. And what we recommended to them was, we know that you think this is the most logical buyer, but we're going to negotiate a higher price from what they offered you. They offered 54 million, which was a good value. We said, we're going to get you a much higher price. And part of that was by us representing them, we were able to negotiate

17:39

what the company would look like on a pro forma basis to the buyer. How much money was the buyer going to save by buying this company? Because the seller had significant technology that was going to reduce their cost significantly. And so we basically did a pro forma showing this is what you're getting. Right. And, you know, we want you to pay for part of this because you're getting this value and you need this.

18:07

Because if you don't buy this company, you're going to have a lot of problems going forward. That was a negotiation while the CEO was running the company. The buyer also knew that we, at any time, could go out to market.

18:23

And we had a whole buyer's list. We had a book put together. We had all the due diligence done. We negotiated that $54 million to $68 million. Wow. So $14 million. So even if a company says, you know, I don't want to go to auction. I don't want to do that. I know who the buyer is. There's a lot of validity in a very efficient type process. You know, I like.

18:51

of this specific example, because it kind of comes back to the work I do with founders pretty early on. They're just starting to scale. It's like, who was the CEO or which was the company in which you inspired your business? Because you want to look and we create a table of peers or comparables that are largely listed companies. And I want to work with the founder to make them look like that.

19:21

And we always ask, what is your exit strategy? And oftentimes, some of the founders I work with want to sell to a potential competitor. So I think this is a real life example of selling to a competitor. The other thing that I wanted to comment based on the process you've walked us through is the due diligence process is very onerous.

19:51

Get your ducks lined up early. I had another guest on the podcast, Lisa Greer-Quateman, an attorney, and she used the word fluff and fold. She recommends on an annual basis, even if you're not considering selling your company, to really go through those corporate governance documents, your tax filing. So the house is in order in that unexpected, unsolicited offer to buy your company.

20:21

So thank you.

20:25

You know, bring it back also to the sandbox.

20:31

If you were on a board, I work a lot in setting up first advisory boards as the company grows, they're going to bring in another series A, they're setting up their board of directors.

20:49

If you were on a board today in the current market context that you introduced us to, what would be some of the topics that you think should be front and center in those boards, Anna? Yeah, I think today it's we're hoping that things seem to have stabilized, right? But I think one of the most critical things

21:19

And I learned this more so as a CEO, a company with 150 employees. So there's a lot of personnel challenges and so forth is really getting together a strategic plan is whether it's three years, you know, at least at a minimum to look at and make sure that all of management is on board.

21:48

It can't just be the founder saying, OK, this is my strategy, is to get input from the key employees, is to make sure that that is one put together and has projections in there. And that it's revisited at least on every six months, if not earlier, where you have real actionable items.

22:16

It's especially if you're in a very competitive market in terms of what are you gonna do to deliver on those projections on those numbers and how is everybody in the team going to contribute to that? So you have to have people that have responsibilities in order to execute on that plan. I think that's critical. I know that

22:44

Operationally, when I was COO, there were certain things that we could do to increase profitability and to increase market share. But without a strategic plan, I think that is one of the most critical things that a board, being on a board that you need to make sure that that is being implemented in supporting the management team to, you know, give your input on

23:14

you know, does this make sense? Are you really looking at the competition correctly? You know, are these, is this realistic in terms of your projections? Just being that sounding board, I think is really critical. You know, as an investment banker, I would, you know, I am qualified to sit on audit committees as an SEC expert. I would definitely think that you would want somebody who was really looking at those numbers and the cashflow.

23:44

especially for capital intensive businesses in this environment to make sure that you have funding that you're not going to run out of cash. Looking at that is very critical. So I think, you know, those are just the two things that come to mind to me, it's the strategic plan, and then also just making sure somebody's really looking at your cash flow.

24:14

And what would happen if something in a down market to run that case, I think is really critical, which is part of the strategic plan. And I would add, based on your experience of 25 years and in different environments, investment bank and private equity and actually as an operator, I think the power of a good corporate board

24:44

is beyond the strategic plan is really pushing the management team CEO to think about options. Right. So it's around, like you were talking about, is it a cash deal? Is it an earn out? What are the milestones? So what are the options? Because maybe there will be an unsolicited offer by the company. So I think I would add to your two comments of what a corporate board would be

25:14

I think it's all about options as well. I think that's such an excellent point because there is an unprecedented amount of private equity out there. And the number of unsolicited offers that are being received by companies has significantly increased over the last, especially in the last five years.

25:44

they, the private equity firms have to get their money out. When we're talking 2.6 trillion of dry powder, that's what's available. Because their LPs will ask for a back if they don't deploy it. And so it's as a board member, and I know you've been very proactive about doing this Brenda to your credit, is when you do receive an unsolicited offer that the board takes a pause

26:15

and says, is this something we want to pursue right now? Is this a good time? Let's talk to an experienced investment banker that we trust to say, what do you think? Just as a sounding board, is this something we should look at? Is this something, what do we do? Can you counsel our founder or owner? Because...

26:43

Once you start that negotiation, you can, it can cause a lot of domino effect, tax wise and also just credibility, the market finds out or, you know, you, NDAs we know aren't necessarily just signing an NDA, what information are you giving? And counseling them on how to get that number.

27:12

you know, what are these people thinking? Are these people that you even want to do business with? Yes. All those things that Brenda, you have brought up to me before is to say, you know, we need somebody to help and figure out what's the situation here. I think board members have that as a fiduciary responsibility.

27:35

Thank you. I would love you to let my listeners know how to contact you. Yes. The best way is LinkedIn. I should say that it's Anna Halloran Jacob, not LinkedIn. OK.

27:56

Fantastic. And that will be in the show notes, as well as diamond capitalizers. Another part of my podcast, and I do this with every guest is bringing your experience and the meaning of certain topics that I am very passionate about and the work I do with founders. And I always go do around with Robin, what does resilience mean to you, Anna?

28:28

Well, I think resilience is in the face of adversity is.

28:37

finding solutions and moving through it. And that is really important instead of panicking or saying, okay, I'm gonna just throw in the towel as to figure out, look, there's a roadblock, how do we get around this? And the more that you can do that with your management team and board, ask for help, because that's resilience. There's always gonna be a challenge, right?

29:07

And options, exactly. Yep, exactly. And for you, what does purpose-driven enterprise elicit? You know, I think I love that you do this for founders. I think it's fantastic. I think it's like what my dad's company was. It was for the betterment of everyone. And to be passionate and to be able to do

29:36

do something that's bettering the world. I think that that's really what it is. And to have a real vision of why you're doing it and if you're passionate about something and it's for the good of mankind. Yes, the greater good. Yeah. While still maximizing profits.

30:06

Yeah. And I do want to do a shout out here. You do advise women-owned businesses. And this month of March is International Women's History Month. So I want to thank you for what you do in helping business owners that are considering selling the business.

30:33

Maybe are, have, aren't yet at that, what cash amount do I want to sell for? And you're ably guiding them, putting them in contact with the different, advisors, domain experts that can help them make that decision when they eventually do want to sell. So thank you for what you do. Well, thank you, Brenda. And.

30:57

I'm so honored to be on this podcast with you. You're bringing an amazing message to entrepreneurs and it's really an honor to be on this. Thank you. Last but not least, what does sustainable growth mean to you?

31:17

So I look at that as sustainable growth is having a proprietary product or service in a large market, large growing market. Got it. Where ideally you have recurring revenues.

31:44

That to me is a sustainable business.

31:49

Thank you. Last question, Anna. Did you have fun in the sandbox today? I did. I always have fun with you, Brenda, but it was really fun. And I love what you're doing. And thank you so much again for having me on the podcast. Well, thank you. To my listeners, if you liked this episode with Anna Jacob, you can sign up for the monthly release of Founders.

32:15

business owners, corporate directors, and professional service providers like Anna to learn about Founder Sandbox, how to build with strong governance, a resilient, scalable, and purpose-driven company to make profits for good. You'll find this podcast on major streaming platforms, and until next month, thank you very much.
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Shashi Triphati: Design Driven Life
8 feb· The Founders Sandbox
On this episode of The Founder's Sandbox, Brenda speaks with Shashi Triphati. They speak about the purposeful "design driven life", Shashi's personal struggles as an immigrant to the US, the growth and recognition as CIO and as entrepreneur. Learn more about his fund nurture.ventures and their work at TIE SoCal.

Shashi is a serial entrepreneur, investor, board member and advisor to several companies. His focus areas have been in technology, and healthcare. He has deep experience in healthcare working across hospital, clinics, health plans and life-sciences. He has been awarded CIO 100 by CIO Magazine, Best Patient Engagement Strategy and Medical Design Excellence awards. He is a founder of nuture.ventures an early stage venture fund which focuses on a broad range of areas including health technology, cyber security, applied artificial intelligence & customer experience.

You can find out more about Shashi at:

Linked IN Shashi Tripathi

https://www.linkedin.com/company/nurtureventures/

Other resources on this episode include:

TiE SoCal https://tiesocal.org/

February 12 Join TiE SoCal’s event Venture Investment: Strategy and Tactics

Ralph Waldo Emerson’s poem

Show transcription

00:04

Welcome back to the Founders Sandbox. I am Brenda McCabe, your host. The Founders Sandbox is now in its second season. It's a monthly podcast that reaches entrepreneurs and business owners who learn about

00:31

building resilient, scalable, and sustainable businesses with great corporate governance. My mission with the Founder Sandbox is to assist entrepreneurs and some entrepreneurs in building those scalable, well-governed, and resilient businesses. And guests that come to the podcast are either founders, business owners, corporate directors, VCs, professional service providers, who like me want to use the power of the enterprise.

01:01

be it small, medium or large, to create change for a better world. Through storytelling with each one of my guests on topics that while discovering their own journey, we're gonna touch upon resilience, on purpose driven enterprises and sustainable growth. My goal is to provide a fun sandbox environment where we can equip one startup founder at a time to build that better world through great corporate governance.

01:30

Today I'm absolutely delighted to have as my guest, Shashi Tripathi. Thank you Shashi for joining me today. Thank you, Brenda. Good morning. We were just saying that we're not morning people, but we'll do anything to help founders. Yes. Yes, so Shashi's joining the podcast today as founder of Nurture Ventures and board member of the chapter of the TIE SoCal organization.

01:59

He could speak to many, many things, but today we're going to hone in on actually purpose-driven design of life. Sashi has an incredible background. He's a serial entrepreneur. He's an investor, board member, and advisor to several companies. His focus areas have been in technology, healthcare. He has deep experience in healthcare.

02:27

working across the entire spectrum just blew me away, starting with actually med tech, then to move to hospitals, health plans. And he has been awarded CIO 100 by CIO magazine, best patient engagement strategy, and medical design excellence awards. So it's truly an honor

02:56

and incredible breadth as well as depth within the healthcare industry. So again, thank you. Thank you, Brenda. I appreciate it. You know, our paths crossed recently, we joined the SoCal, the TiE SoCals board, and we're in for a fun two years. You possess again, a unique broad and

03:22

deep understanding of the healthcare system in the United States. You worked primarily at, or when you first came to the United States in supply chain management, really addressing the large waste issue in the medical sector. You then went on to the hospital side, the payer side, and finally you ventured out and became an entrepreneur and founder where you built and sold

03:51

Follow My Health, which was a mobile enterprise patient engagement platform that connects millions of patients to their doctor in a whole new way. I think you said at one time you're touching over 20 million lives. Wow. Well, it's challenging to do you justice in this 40 minute podcast. Let me begin by thanking you again. And then again, I was blown away by your breadth and depth. And I am an avid reader. I Love

04:19

Ralph Waldo Emerson. And I thought of this quote that to describe your background, and you're going to share here with my guests today. "To laugh often and much, to win the respect of intelligent people and the affection of children, to earn the appreciation of honest critics and endure the betrayal of false friends, to appreciate beauty, to find the best in others, to leave the world a bit better, whether by a healthy child, a garden patch,

04:49

or a redeemed social condition, (I get all teared up) to know even when life has breathed easier because you live, this is to have succeeded. " So thank you again for joining me. How would you like, would you like to share your arrival to the US in 1999? As an immigrant, how did that inform your entrepreneurship journey? So first of all, Brenda, thank you. What an honor to be here with you, Brenda. You yourself.

05:19

are amazingly talented. And I was getting goosebumps by the way, when you were sharing that poem from Ralph, making the world or society a bit better. What a world that is, a bit better. So, coming back to your question, I grew up in India. I did my masters from IIT Bombay.

05:48

Immediately after that, I got a job through a company called I2 Technologies and I got to headquarters in Dallas. And I always had dreamed to come to US by the way. Here I am, my dream is getting fulfilled. I get a flight, land in Dallas Fort Worth airport and my manager then was supposed to pick me up and he forgot.

06:16

And I'm a 23 year old boy, afraid, nervous, excited internally, but now I'm nervous. What do I do? I had no choice, but just to wait at the airport. And after two and a half hours, he came and he took me to the apartment. Dallas, as we all know, is a big city and it's hard to walk.

06:46

I didn't have car, didn't have credit card. Many nights, Brenda, I had only bread and milk as my dinner. And so my company gave a month for this apartment and then after I have to find an apartment, no one will give me apartment. Because I have no credit history. So I went to a bank.

07:15

I gave the bank $500 as a restricted deposit, meaning I cannot spend more than $500 to build my history. Right. Slowly, I built my history. I didn't have cell phone. And I did not even know the proper English in the US. So I took a course on accent reduction.

07:42

I remember sitting in front of CNN and Fox. And in those days, we didn't have all this gadgets we have today. So I had a thick accent and I will pause and see the word. Wow. So to learn in a hard way about adjusting in US culture and US society. But in some ways, I'm glad it happened to me. Because that made me resilient.

08:12

and a strong person. And where I am today, I'm not afraid. And because I've seen the low, what is the lowest I can go, I didn't have a home. I didn't have food. And so it always has instilled in me to fight for it. And things are only going to look upwards. And I think you use the word perseverance and resilience, just one.

08:42

step at a time and in a very intentional way, Shashi. I mean, just going in, you know, when I came back, there was, I didn't have credit history. I was living in Europe. So it is the way, it's a difficult market to crack. And so that was 25 years ago. So what made you, what you have a huge passion for healthcare as I've shared with my listeners, starting with life science/med tech and

09:10

going into the hospitals and actually into the payers. It's quite extraordinary. What underlies this passion for healthcare? Thank you, Brenda. I mean, if I look back my childhood, my mom, my dad, and even at the childhood, Brenda, I always had passion to create things. Okay. And I would get immense pleasure if what I have created is used by someone.

09:40

And that someone can be a small group, it doesn't need to be big. So that at the childhood level. So when I came here to do my supply chain projects, I got into a company called Medtronic, it's a large medical device company. And then I got a really big exposure to healthcare, learned a lot, found that in US, we spend $2.3 trillion total per year. Out of that,

10:10

approximately $800 billion is waste. B. B, not M, is B. And this is per year, this is not one time. And in a very small way, I felt the products or solutions we are creating or designing, if we can make even a small difference in reducing that waste while making an impact to the human life.

10:40

why not? And that really solidified my career, my passion to remain in healthcare. And if I wanted to be in healthcare, I wanted to know the details of it and all the angles of healthcare. Right. So while working for Medtronic, I got a lot of exposure to hospitals and clinics.

11:04

So I felt if we are selling our product and services to hospital and clinic, I wanna work inside the hospital and clinic. And how did that go? So it went really well. So I joined a group called Facey Medical, which is part of Providence Health and Services and learned a lot by the way, how a patient operates, what's really important to the patient, what is really important to hospital. And

11:33

That gave me a lot of exposure and also the appreciation for patient care, by the way. Okay. Because at the end of day, anything we do in healthcare is really important to how it's impacting to the patient's care. Absolutely. Healthcare is the only industry Brenda, where if you improve the quality, you reduce the cost, that's the only industry. If you go in that again, say that again. That's very important.

12:01

If you go in hotel, for example, if you buy a five star, you pay more. Am I right? That's right. But in healthcare, you improve the quality. The cost goes down. That's the only industry by the way. It's very fascinating. So learn a lot about the wider side, which is the hospital clinic. And then I said, for all this, that someone is paying and yes, patients pay the portion in The US.

12:28

but the health plans are the one which are paying majority of our US healthcare cost. So I said, I need to go to the work for the health plan. And crack the code for CPT codes and all that. Exactly, ICD and CPT and claims. So I went to work for a company called New Century Health and there I learned a lot about risk contracts and how we manage the provider, what is really important to the claims.

12:58

how we do the utilization management. So I learned a lot about how the payment system in US healthcare works. So, and then of course the company Follow My Health, I got a lot of exposure about patient side. Right. Because at the end, whatever we are doing, either from life sciences or hospital clinic or health plan.

13:28

It's really impacting the patient in the end. So I feel privileged and somewhat lucky, to work in all the facets of health care systems. Affecting patients' lives one by one. Perhaps the most far removed is that of payers. And that was your last venture. And by creating Follow My Health, you create a new life.

13:55

removed a bit of that friction, I imagine, for patients and their providers. Right. Yep. Excellent. So when did you have time to do Follow My Health? If you're busy working in these large companies, cracking the code, what changed in your life, if anything, to abandon the helm?

14:21

of, you know, working in enterprises to create companies to then become a founder of a venture fund. So walk us through those purposeful decisions that help you design your life. Yeah. So as we look, as I shared with you that I love creating product. Okay. And I love

14:47

the product which we are creating is making a difference in human lives. So when I was the CIO at Springfield Clinic, working with Jim Hewitt, we created this platform back in 2011. And the idea was to make it simple to every stakeholder, to the physicians who are using it, to the patients who are going to be using it.

15:17

and if you make it simple and useful to the stakeholder, money will come. Um, and I remember a story, uh, when I was CIO at a Springfield clinic, uh, I used to walk around and, um, I would sometimes talk to the patient and I talked to a patient who was elderly, probably early seventies or maybe even late eighties, uh, uh, late seventies. Um,

15:46

And I asked him, what do you like about us? And he said, oh, I love this new product you guys have launched, Patient Portal. I said, what do you like about it? And he said, when I didn't have this, I go home and my wife will ask me what happened to you at the doctor's office. And I didn't remember all that and she would get mad. Now I've given my user ID and password to her and she knows everything about what happened. So I don't have to memorize it. So that probably gave you goosebumps as well.

16:15

Right. So these are the stories which give me extra energy to move forward. Same concept in merlin.net and the patient who has pacemaker or ICD is implanted. Okay. In those days they had to go see their cardiologist every quarter. Okay. So we felt was why don't we create external device.

16:44

which can communicate to the implanted device, takes the data, and then over the internet has that data and we build the whole web application for cardiologists and electrophysiologists to monitor the patient. So now patient can be anywhere in the world and they can be monitored. My sister-in-law, by the way, has that product and she often appreciate how beneficial

17:13

Merlin.net is because she can go travel anywhere in the world, not worry about her appointment with cardiologists and she is being followed. So these are the moments which makes me propel, gives me extra energy to keep pursuing and creating the products and services which makes a difference in human lives. And what was the, I guess,

17:41

point in which you decided to abandon those 16 and 17 hour days and, and you'd exited a few companies. You know, what led you to create nurture ventures and can you walk us through the thesis and does it go back to your passion? Right? Yep. So it always goes back to my passion, which is creating product and helping society and balancing life.

18:10

in the process. So I got married. I have two kids, my daughter is 13. My son,, he just turned seven actually on the weekend. We had a party. And we all know, by the way, entrepreneurship life is very hard. Yes. People see the success, they don't see what has happened behind the scene. Yes.

18:39

And for any entrepreneur, I mean, yes, there are some exceptions, but I would say majority of the entrepreneur, they work very hard. Um, I would say 16, 17 hours, um, per day is this hard. And so I have kids now and I have to balance my life. Um, but yet I still wanted to achieve my dreams and be associated with the entrepreneurs.

19:06

why don't I start investing? And I started very small by the way Brenda. My goal was not to go big really. But again, it goes back to simplicity and not with the goal of making money. So I designed my investment very, very LP friendly. LP is a partner who are investing with me into the companies. And because of that simplicity,

19:35

And also just happened to be, I would call it luck. Okay. I got lucky and we got an exit, um, carbon card, which gave us, uh, seven times return in 11 months, but it did happen to us and, uh, some of my LP got money back in their bank, um, so it put our name on pitch book and crunch base and

20:04

So we started growing. So we have now 45 limited partners. We have invested in total 31 companies now. We have a fund, we have an SPV. So it has been grown more than I expected. And I'm really happy because now again, I go back, I follow my passion about creating products and services.

20:34

which are helping society grow. And I'm doing not directly but indirectly because when we are supporting the founders and they are growing and their product and services are being used in society to make a difference, I feel privileged. Many of our portfolio companies, by the way, started small, $40,000 ARR per year. Now, they are six million ARR just in two years.

21:03

Wow. Happiness that we were a small part in making a difference in growing that company and in return, they are making a difference into the society. So that's how I got into this world. I love it, actually. And is the thesis only around healthcare technology companies or is it broader than healthcare? Your passion. So we started healthcare. But in order to make a difference.

21:31

You have to also see what is other things which are impacting and growing. And part of our early thesis was artificial intelligence, software as a service, and financial technologies in addition to healthcare are growing very rapidly and much needed into society and making a difference in human lives. So those are part of our thesis to invest in those four areas.

22:01

artificial intelligence, software as a service, healthcare, and fintech. Excellent. Now, you are also a member of the Angel Capital Association, ACA, and we recruited you from TIE SoCal to join our chapter in SoCal. You also have become a board member for the 2024-2025.

22:29

period, we both have joined the board after the effusive leadership of Gaurav Kumar.

22:38

What would you, I'm going to describe a little bit, TIE, as a nonprofit organization for my listeners. And then I'll get to the question of what your contributions are going to be and how it goes back to your passion. So the Indus Entrepreneurs, TIE T-I-E, was founded in 1992 in Silicon Valley by a group of successful entrepreneurs with roots in the Indus region with a mission to foster entrepreneurship.

23:07

globally through funding, mentoring, networking, and education. Today, the TIE ecosystem comprises over 25,000 startups and 15,000 members across 58 chapters in 12 countries. Within TIE, there is an angels organization for profit. It started in 2010, also in Silicon Valley, and has moved into another eight to 10 chapters.

23:36

representing groups of angel investors. And they're in actually 12 cities with over 3,000 accredited investors. Last year in PitchBook, actually TIE SoCal was among the top 10 in the number of companies that we had invested in. So what's it gonna be like with your presence on the board? And what have you been tasked to do, Shashi?

24:05

My God, what an incredible honor to join this group as you described how powerful the TIE is, but more than power, the impact it continues to make in society across those 50 chapters. As you pointed out, Gaurav Kumar, such a strong leader, and I'm beyond privileged to work with you and others

24:35

to take TIE SoCal to the new heights. Part of TIE SoCal, I have been tasked to lead what we call it TIE Angel Program. Okay. And it basically has three areas within the Angel side. Bring the companies to our members. Okay.

25:06

So they can choose to invest into those companies. The second vertical is we do events very focused on investment, venture capital, or angel investing. And third is having a fund which relates to the first one and take the fund and go invest into the companies.

25:35

catering the entrepreneurship journey and entrepreneurship society. Part of this, by the way, Brenda, we are hosting an event on February 12th, which is Monday, Hyatt at Long Beach, from 3.30 to 8.30. And it's a wonderful group of speakers which are coming and talking about venture capital

26:05

strategies and tactics. And then we have our flagship event, which is scheduled on Friday, April 26th, again in Hyatt Regency. It's a full day event, and will be roughly attended by 400 venture capital, angel investor, startup. If you are any one of those, this is not to miss the event.

26:34

And you do not have to be a member of the TIE SoCal organization. So anyone can attend either of those events, by the way. February 12, which is Monday, 3.30 to 8.30, and April 26, all day, big event, our flagship event, hosted by TIE, but anyone who belongs to those communities. So either investors, a startup,

27:03

or you're supporting any one of those. So you can be service providers. Do not miss any of these two events. I'm very excited to be part of TiE SOCAL and continue to work with intelligent minds like you and others to make a difference in our society. It's going to be an exciting next two years. And I...

27:31

want to share with my listeners, there's a lot of nuggets in the podcast today with Shashi. And so there'll be more information in the show notes with respect to Nurture Ventures, Shashi himself, TIE SoCal, and the upcoming events on February 12th and April 26th. So thank you for leading the charge there. Thank you, Brenda.

27:56

You know, 1999, we're in 2024. It's going to be your 25th anniversary, Shashi, in the United States. I was doing the math yesterday. I went, wow, that's a major, what are you going to do? You've done everything. All right. Oh my God. I'm getting goosebumps right now. My gosh. I'm now thinking about my day when I arrived in Dallas Fort Worth airport. Right.

28:25

I'm nervous. I didn't know where my life will be, but Brenda, I'm so, I'm really in debt of this country. This country is so powerful. If you're willing to work, that's the key word. If you're willing to work, this country is powerful. And there's so many good people. I often hear that, oh, people don't support and help. That's not the experience I have had here.

28:54

Nor has it been mine. I met some incredible people who have helped me to grow my career, who have helped me when people were saying, don't do that. You are crazy. Don't start a company. But there were at the same time, there were many who were there to support me. My family, of course, they endured me so much. All my craziness and.

29:21

all my travel across US and beyond. My parents, I remember my dad, by the way, who I lost here. Sorry. Thank you. He did not want me to come here. Oh my. His goal was that in India, there's a government job, I should go and work into that area. And I end up not. But when I came here, he was the biggest supporter.

29:51

my mom, my wife here, my two kids, and all those who have supported me throughout my career in the last 25 years. I am in debt to so many people I cannot name all of them here on this podcast. Well, thank you. Those are really beautiful words. And you continue to be that young child that wanted to create.

30:20

products that affect people's lives. That's quite laudable. You know, I like to do a round of questions with each one of my guests. I go back to the cornerstones of the consulting work I do at Next Act Advisors. I work with scaling companies on resilience, on sustainable growth.

30:47

purpose-driven. And I ask my guests, you know, what are the meanings of those three words? And that one guest has a similar definition. There's no right or wrong. It's just fascinating. And with your broad and deep expertise in the ecosystem of healthcare and also early stage companies and large, what would you consider? What would you define? What would be your definition of resilience Shashi?

31:15

So in my view, don't give up if you have a passion for something. You will encounter the reality of the life is you will encounter challenges. You will encounter problems. Do not give up on it. There is going to be people.

31:39

who will tell you, you are crazy, don't do that, this is wrong, but at the same time, there will be people who will support you and will root for you. And even if you don't, by the way, believe in you. Believe in you if you wanna do something and go change the world. That's what resiliency to me means. I often do this Brenda and I don't share much when I start to do something new.

32:08

I always plan a worst case plan in my brain. Okay. I always think, I'm going to create a company, for example, how low I can go. I lose my phone, lose my car. That's fine. I'll manage it. We've all been there. Yeah, exactly. So if you in your mind, if you have planned the worst case scenario, I'm not suggesting go do it, but just plan it to give a feeling in your head that that's the lowest possibility that always helps you.

32:38

So coming into challenges and problems, other thing I often say is when you hit the wall, go deep. And we all hit the wall in our personal life, in professional life. Don't give up, go deep. Find it out what elements, what detail elements which are letting you hit the wall.

33:07

And once you figure those details, you, our brains are so powerful. We just have to access those elements of our brain to go deep, find the solution. And I can say it with very high confidence. If you believe in you and try to find a problem, you will find the solution to the problem. And that's what it means. Powerful. Hit the wall. Go deep. You heard it here on The Founders.

33:37

Sandbox. What about purpose-driven enterprise? You have a purpose-driven design to your life. What about purpose-driven enterprises? Yeah, so I often say this also. When you are designing a product, solution, or enterprise, don't make money as your primary objective. And I'm not saying don't be financially conscious, by the way. Your primary goal should not be making money.

34:08

If your primary goal is to make a difference in human lives, if your primary goal is to make a product and services, which people will buy and will help improve their life or their experience or their feelings, believe me, money will come. That's true. So when you're designing product or running a company, think from those aspects. Who is your customer?

34:38

and what is making them to delight your customer. And if you take customer or consumer or your end user, trying to design your product and solution and business processes also, by the way, money will follow to you. And that's purpose to me because if you have that in mind, you will sustain on a long-term basis.

35:06

Which leads us to the definition for you of sustainable growth, right? Yeah, so to me, sustainable growth is how you are growing without adding the debt and liability in your company. So most people can go get a debt, get liability and not think too much about the long-term growth, not think too much about

35:34

improving the value into society, that will not be sustainable growth. Sustainable growth in my view is

35:44

the value you have created for society, the value you have created for your customers, for your end users, how they are driving you to grow. And if they are, money will come and there will be VCs and there will be investors who will give you money, but not just go acquire the money and start to grow, not other way around. Grow first. Take all those...

36:14

stakeholder into the mix first. Yes. And then go look for venture or money to grow the company. That's how sustainable you can be, in my view, Sinder. So self-funding until you do have product market fit and continue to innovate. And the money will come if you're addressing the needs. Correct. Yep. Excellent. Keep customer and end user in the mind. Society also sometimes.

36:43

enterprises think, oh, I'm spending this for the benefit of society and it's going into taking away from my Point of view. Not the case. I mean, if you add value to society, at the end of day, who is the user of your product and services society? Society. We all, we human beings, we are using your product and services. And if we see that

37:12

you care about me, believe me, I will spend money because I know that in return, you're going to care for me on a long-term basis. And if you can get into the hearts and parts of the people through your product and services, it's very hard to go back. You will grow. I will come to you asking, Hey, what is your next product? Because I believe in you.

37:41

Did you have fun in the sandbox today? I loved it. Brenda, thank you so much for having me here. It's just exciting and amazing. And what an incredible work you are doing, Brenda. Thank you. By inviting people to your show where we all can learn from each other. Yes. Seen some of your podcasts in the past, and I can learn. And hopefully, through this, someone can learn. And even if we can make a difference in

38:11

one human life. I think we have done our job. So thank you Brenda and the work you are doing is amazing. Any help I can do, I'll be happy to do so. I'll see you in the sandbox at the TIe Socals board soon. Busy year. Well, thank you. It's been an incredibly fun and insightful podcast. To my listeners. If you like this episode.

38:40

with Shashi Tripathi. Sign up for the monthly release where founders and business owners join me here in the sandbox to learn about how and share how to build strong governance in a resilient, scalable, and purpose-driven company to make profits for good. You can listen to this episode and more on any of the mainstream podcasts, platforms, and

39:10

I look forward to next month. Again, this is the monthly podcast. I'm signing off until next time. Thank you, Shashi.
- Lyssna Lyssna igen Fortsätt Lyssnar...
- Lyssna senare Lyssna senare
A sustainable business model in a sustainable market
1 feb· The Founders Sandbox
On this episode of The Founder's Sandbox, Brenda speaks with Oscar Neyra, CEO and founder of Lisus Energy, about building a sustainable business model. Lisus is focused on identifying better sites to source materials for batteries. Oscar holds a Doctorate in Environmental Science and Engineering from UCLA, as well as a Master studies in Homeland Security from USC and Global Security from John Hopkins. Before starting LISUS, Oscar was a Research Associate at NASA's Jet Propulsion Laboratory. He also founded an environmentalist group called GR, which has over 5,000 members.

Here is a sample of what you will hear in this episode: types of teams in deep tech, challenges of entrepreneurship in the current enviroment and as an immigrant founder, and product market fit.

To contact this week's guest, Oscar Neyra, or for more information follow the links below:

[email protected]

www.lisusenergy.com

https://www.linkedin.com/in/oneyran/

Resources listed in this episode:

Gene Pool Engineering for Entrepreneurs

https://www.khoslaventures.com/gene-pool-engineering-for-entrepreneurs/

https://www.Rabbit.tech

https://nextactadvisors.com/when-spending-time-in-the-sandbox-isnt-fun-anymore-and-yet-you-still-can-play/

Show transcript:

00:04

Welcome back to the Founders Sandbox. The Founders Sandbox is a monthly podcast. I'm Brenda McCabe, your host. This was launched in September 2022. We're into our second season. And as I said, it's a monthly podcast.

00:33

that features entrepreneurs and business owners who learn and share about building resilient, scalable and sustainable businesses, all with great corporate governance. I have a very simple mission with this podcast. I want to assist the entrepreneurs and entrepreneurs to build scalable well governing resilient businesses. The podcast, the Founder Sandbox, is just an additional channel to

01:02

materials on my website, NextAct Advisors, and originally authored blog posts that you can find on LinkedIn. My guests are founders, business owners, corporate directors, and professional service firms who, like me, want to use the power of the enterprise, be it small, medium, or large, to create change for a better world. Through storytelling, each of my guests touches topics around resilience, purpose-driven enterprises, and sustainable growth. And my goal with this

01:31

monthly podcast is actually to equip one startup founder at a time to build a better world through great corporate governance. So today my guest is Oscar Neyra. Oscar is the CEO of Lisus, a venture-backed startup that is focusing on identifying better sites to source materials for batteries. And when I spoke with Oscar, we came up with the episode title

02:00

a sustainable business model and a sustainable market. So Oscar, thank you for joining me here in the Founder's Sandbox. Thank you so much, Brenda. It's my pleasure to be here. Let me give you some intro. Oskar holds a doctorate in environmental science and engineering from UCLA, as well as a master's studies in homeland security from USC and global security from Johns Hopkins. Before starting Lisus, Oskar was a research associate

02:28

at NASA's Jet Propulsion Laboratory. And he also founded an environmental group called GR, which has over 5,000 members. Oscar, my past that crossed at USC Viterbi Engineering Schools, Massey Entrepreneurship Prize Competition. About three years back, I was one of the judges on the panel in the pitch session. About a year later, Oscar asked me to join his advisor.

02:58

in corporate governance in lisus. And I'm sharing that here in my podcast as a full disclosure. And we have, we see each other frequently. And I thought as a first time founder with really deep technical and scientific knowledge and into your third year, you have a lot of stories that you could share here on the podcast. And I'm going to ask you, you know, I'm delighted you joined, but I'm going to ask you to start.

03:27

Just, you know, share how your life up till now, Oscar, has shaped your journey in entrepreneurship. Thank you so much, Brenda. Yeah, I think definitely entrepreneurship is a really interesting endeavor. You know, I don't come from a wealthy background. I come from a small town in Mexico. And all my life, I've been used to navigating against the current.

03:56

probably being the first member of my family to come to the US to study or to go to grad school. So I think entrepreneurship and this adventure resonates a lot with the path I've had in my life because it's a lot about being persistent and definitely going against the current and against

04:23

all the challenges that entrepreneurs like me face on a daily basis. Wow, thank you. It's always good to know the background of my guests. When you accepted to join me in the Founder Sandbox, I couldn't help. And you're technical scientists, right? PhD. Yeah, it took me back to an article I wrote some time back. It's called, When Spending Time in the Sandbox Isn't Fun Anymore.

04:52

and yet you can still play. So what I wrote is really about the teams. There are three types that I have discovered when working with technical founders. And we're gonna cut to the chase. I'm gonna ask Oscar in a minute what his perfect team is like. But in that blog post, I talk about technical scientific founding teams. Typically they come from a large enterprise. They excel at their craft as engineers, inventors. They have written patents, have worked at the bench for years.

05:22

And while their secret sauce has become a business, they don't have the skills and competencies in a technical or scientific founding team. They're insufficient to scale the business and they need time away from the sandbox and really working on the commercialization. And the second type of team is they've been there and done it. Founding teams, maybe it's their first or second exit. They've been there and done that. They may have the skills and competencies acquired at a large enterprise.

05:52

or a family-owned business, maybe they've been part of a startup, or they are bringing to life the idea of a patented product. Again, we're talking about scientific founders. And time in the sandbox, we're always gonna go back to the sandbox, was never an issue because they had access to abundant resources. Finally, a third type of team that I've been exposed to is the adult supervision.

06:16

And they are founders that have never worked for a large or medium sized enterprise with the processes, systems and operations that enable scaling a company. They've never hired or fired and they're many first. And they look around, say, isn't there an adult around that can help, can take the time to do those unnecessary things. So Oscar, of those three teams, you know, where would you place the licensed teams? And more importantly, you know, what does a perfect team?

06:47

mean to you and how have you, what makes a perfect team? Perfect, yeah. To the first question, I would say we're probably in the first definition, which is we come right from the lab. And before founding a startup, we definitely didn't know what was going to be. And of course, what are some of the things that you need to do?

07:15

in order to build a startup. I think something that has been really interesting to me is that in the lab, you are allowed to not know anything. And especially it's important kind of like to challenge every assumption that you make. Whereas when you're a founder and when you are building a startup, you are expected to have all the questions. So that is...

07:43

kind of one of the major differences that I've seen from the lab and from the startup world. So the ability to ask questions outside of the scientific realm, right? Exactly, yeah. Wow. Another thing that I think is very important is that, in my opinion, not knowing has a lot of value. And in a startup, unlike in a lab, it's better to not know.

08:12

because that is what opens many doors and what pushes the boundaries of what's possible. Wow. So the open sky. Exactly. That's my personal opinion. But yeah, I would say we are in the first box. Thank you. So what has been a major challenge in entrepreneurship? While building licensure into third year, what would you share as a major challenge? Perfect. Yeah. I can tell you

08:41

about the challenge and of course, coming back to your question about the Perfect Team. Yes, sorry. Yeah, I would say to the first question of the major challenge, definitely the landscape, when we started actually scaling with the company, it was when Silicon Valley Bank started to fall. So I remember we were in a meeting, we were in Menlo Park and then suddenly everybody starts texting and then we say, what is going on?

09:10

So we drive in front of the Silicon Valley Bank headquarters in Silicon Valley, and then we start seeing the people there. So I would say we were born out of a time of crisis, and that's what has made us stronger. But the major challenge is definitely the landscape right now. And most importantly, I would say the...

09:40

higher kind of a the higher kind of bar that you are subject to as an entrepreneur because in these times only the best ones thrive. So it's definitely a really fun time to be in and really exciting but also challenging. Thank you. Yeah. So let's go back. Do you have the perfect team to address and thrive in this and these challenging times? I yeah.

10:09

I like to think kind of like out of the box. Yes. As a technical founder and leading a deep tech startup, I see many companies that try to put together teams that are mostly PhDs with a lot of experience, post-docs, former professors, that kind of profiles. But in my view, the biggest challenge of those kinds of teams is that you get, as you advance in life, you get a little bit more

10:39

skeptical of what can be done. So to me the ideal team is similar to what we put together in license which is a combination of a lot of experience with a lot of innovation and a lot of youth. And this goes to a story that I really like from an article that is really

11:09

When one investor funds a company, a really big deep tech company, and the investor as the company, how was the team integrated? And the founder says, okay, like we have the best from this part, the best from this part, the best scientists in the world. And he asked the founder

11:39

And how many of those are under 35? And he says, wait, none. Yeah. And I think that's really interesting because the investor ends up saying, okay, to me, a diverse gen pool needs to have a combination of this kind of experience and also the value of, understanding the value of bringing, you know, people in their 20s that are right side of school that have all the energy in the world. And that don't necessarily know what they are getting into.

12:08

To me, that is the perfect thing. And I can think of a couple of examples of these kinds of things. Actually, you did have some interns during a period of time, right? Postdocs, are they working on the docs from USC or UCLA? Exactly, yeah. Right? Yeah, correct. We had some teammates. That's what I realized, because we have, as teammates, very experienced people.

12:37

And then you see the energy that the interns bring, the perspectives, the desire to push these boundaries. So that's what I love about it. And if you see one company that I really like, that right now is really famous in Los Angeles and that is like thriving, is Rabbit. Before Rabbit started to get hot as it is getting right now once they presented.

13:07

one of their hardware. I was looking at this company in their crunch base profile, and I look at the team and it was really interesting to me that when I saw the team, I saw that their CTO is like 20 years. I think he was part of Carnegie Mellon. He graduated from Carnegie Mellon and he right after became the CTO of this company. And when I saw that, I thought to myself, okay, this is the perfect CTO for this kind of company.

13:37

Yes. So pushing the boundaries, right? Digital natives and representing that generation. That's fascinating. Exactly. And of course, having adult supervision. Right. So a combination. Exactly. Yeah. Right. So you're into the third year. Market wins, they changed in March of last year, as you alluded to with the...

14:06

SVB and First Republic Bank debacle, right? With that background, have you continued to evolve the product market fit because of the market downwinds or what have you done with the product market fit? Yeah, that's a great question. Has it evolved? Yeah. I would say, you know, we need to think in terms of our customers, but also we need to think in terms of our times. Yeah.

14:36

2021, I would say there was a big focus on having the best technology at any cost and more in delaying, for example, revenue, profit, good unit economics. Now that the market has shifted, not only on the investment side, but also on the customer side, the focus is more on...

15:05

the focus of our products is more in generating revenue faster and in building a business that is more real and that can thrive regardless of the market conditions. So yeah, I would say that has been the major change. And in this search for the product market fit, we've realized that it's also important to focus to be super cash efficient.

15:34

to build instead of experimenting with three, four products, it's better to experiment with one product and to testing, but testing with a margin of safety rather than just testing every single perspective. Can you, for the benefit of my listeners that are not deep tech founders, walk us through actually the product in its current state

16:04

how are you creating the ability to identify sites that have better resources, more efficient? So what's the actual tech stack and how are you able to then think about monetizing that? Okay. That is a great question. So we have a product called Alchemist. It's a mineral exploration tool where we integrate remote sensing capabilities and state of the art artificial intelligence algorithms.

16:34

in order to prospect the areas that have potential for critical minerals. So we use remote sensing in a non-invasive way so we can explore for these minerals. So the way we've integrated a platform is in two components. One of them is the platform itself, which is what the customer interacts with. And the other thing, the other component is...

17:02

the what we call the license labs, which is essentially a very sophisticated platform that in the backend allows for the exploration and integration of AI capabilities. So that's the way we've structured it. I think with this advance that has been going on with AI and remote sensing capabilities, I think it's gonna get very exciting in the next few years.

17:32

So we love it. In terms of monetization, definitely. We've thought of some interesting approaches to it. Excellent. So Oscar, in continuation of my question around challenges of an entrepreneur, would you add any challenges as being an immigrant founder? Yeah, Brenda, that's a great question. I do think.

17:59

as an immigrant founder, you get a different perspective and probably you also lived it when you were in Spain. Yes. But one of the major things is figuring out how to build actually a business from scratch in a completely different legal system in a completely different landscape and building a network out of scratch too. Because you come from, in my case, I come from a university that like...

18:28

where I don't have any connections here. And then it's important to learn how to knock doors and how to search for opportunities out of zero. That is one of the major challenges. The other one is culturally, and I've seen it not only as myself, but also from friends that come from Australia, that come from India, that come from Japan.

18:55

that you see that there are some things that you need to be familiar with so that you can make sure to do the things in a diplomatic way. Okay. So I think that's also important. And that's those are the things that people don't tell you about. And the third one is definitely the immigration system, which is, you know, when you're trying to start a company here, you don't even know

19:24

like whether you're going to be able to do it, if you're like allowed, if you can sell something because it can be defined as work. So early in the beginnings of Lisus, that was our major concern. It took us a while to figure it out, to do the green card application, things like that. And once like you solve it, you are like in an even field. But yes, an immigrant, those are things

19:54

a long time and that we have in the back of our mind all the time. I've seen it with many, many founders and it's always a funny to see that we share the same challenges. Thank you for sharing. So, you know, the founders podcast is not solely around deep tech. So I have a lot of listeners that are business owners or founders in non deep tech. So could you describe

20:24

the business model of lysis. You talk about full stack, right? Business model. And I really would like you to get into the weeds to provide some more context of what is the product and how is it scaled and how do you monetize it? Definitely. Yeah, we're product Alchemist. It's a mineral exploration product that we use to search for critical minerals

20:54

And our business model is a full stack play. And essentially this means that we are not using our software and selling it by providing services. Rather we are using it as a tool or as leverage so that we can generate revenue in a faster way. To give you kind of like a better explanation or like a more in depth perspective on the full stack business model.

21:24

I would say when there is a transition or a big opportunity such as the one we are living now, it could be the energy transition where you are living this shift to the electric vehicle. So it could be a long time ago when we transitioned to the World Wide Web or when we started using the cell phone. All of these changes.

21:54

are defined by two waves. You have the first wave where there is a companies that try to solve and to actually serve a market. And there are companies that serve the companies that are trying to serve that market. So full stack means that you are, instead of being a service provider in a market, you're actually the solution provider. In the case, for example, of...

22:23

vehicle electrification should be the most common. There are companies that at the beginning, they started to focus on actually selling vehicles and electrifying. And there were after that, the second wave, a lot of companies that were trying to serve the market of electric vehicles through battery analytics, through efficiency, through different materials, but the big opportunity

22:51

in our view was actually in being the one providing the product. So what we're doing at Lysus is being full stack and becoming a materials company since the beginning. Yes, we have an amazing platform, Alchemist, and we use it to partner strategically with the miners, but we see a lot more value and as a company in being the actual solver of the problem and being the actual supplier of

23:20

the materials rather than just serving miners and serving companies that are focused on providing materials for batteries. That's why we think it's really an interesting business model and most importantly because full-stack businesses have proven in history to provide much better opportunities for revenue. Let's say

23:48

Some examples are Flexport, for example, SpaceX, companies that since the beginning, they tried to solve the problem rather than just being a service provider. Excellent. I also am thinking of Atlassian. They created quite a bit of work tools for developers of code.

24:17

Jira is one of their products, but they built, right? So Last scene is one of the companies, it's out of Australia, funny enough, created a lot of enterprise value early on and their tools are pervasive in the engineering teams that are building code today. So that's the analogy that I found while working with Lysis trying to get out of clean tech and looking at other.

24:44

There's similar analog businesses. Yeah, no, Atlassian is a great example. And we use it on a daily basis. I bet. We use all the tools, and it's amazing. So that kind of thing we have. Right. And we just had a great segue into clean tech. So Lysis is full-stack working in one of the deep tech sectors or verticals of clean tech. What are some of the things you're

25:14

clean tech market right now? Yeah, that's a great question. You know, the most interesting to me, of course, is critical minerals. It's probably the most boring, but it's also the one where we're gonna see the most exciting changes and advances. Some other things that are interesting are new materials. That is really interesting to me, because I think there is gonna be big opportunities in new materials and in...

25:44

in nature-based solutions. That's also something that's very... Right, synthetic. So within the biotech applied with nature. Exactly. And yeah, and I've been exposed also just to new techniques applied to solar panels that increase the efficiency. So there's always, it's all about efficiency, right? To compete with...

26:12

Oil and gas, right, in terms of the parity or gas lead for your car, right, electric vehicles. Yeah, no, I agree. Yeah. And something that is really interesting, too, I think that in the future, like, I envision a world where materials are going to be produced differently. And we are going to leverage nature to produce these materials. So I've seen, for example, very interesting companies that are using nature to produce

26:42

to separate minerals, for example, or that are using it to produce different type of materials, modifying it, et cetera. Of course it has its risk, but I think it's really interesting to see organic-based solutions. So that is another one that is interesting. And the other ones are in energy. I don't think that our energy system is gonna change drastically, but I do think

27:12

there is gonna be a lot of changes in how we use energy, how we store energy, yeah, what is the way in which we use energy. Those are some things that are amazing to me and where I see a lot of changes. And yeah, probably we're gonna see very interesting models for carbon capture.

27:41

Dequestration. Exactly, yeah. And technologies to solve the problem in the point source. I am not that much excited about the kind of like carbon credits, things like that. But I am very much about the technological approaches to it and also innovations in transportation. That's also really exciting. It's the biggest sector in energy consumption.

28:09

Actually, transportation, people don't think that. I think it's right. I'm sorry, in the emission of CO2. Correct, yeah. And GSD is transportation. Right. And what about, this is actually a nice little conversation about innovation and clean tech. But what do you think about the space that Lysis is competing in? Right.

28:37

efficiency and better site identification where the rare earth metals or the critical minerals are. You've got other competitors that are looking at it in a different way. Can you talk about how the identification of rare earth metals is evolving across the world?

29:06

Yeah, that's a great question. It's definitely an interesting field and one that is very small, because of course, it has a lot of barriers to entry. So when people realize that it's not as easy as they thought, they leave it. So yeah, definitely all the founders that are working in this sector have heard of each other or know each other. So that is fun. I would say.

29:35

in the part of critical minerals, in the market of critical minerals, it's a really old school field. It's really old school. You're using tools that you have been using for a hundred years and they've been working really well. So the big opportunities are in bringing new type of sensing and incorporating it in the sector of mineral exploration. But also I think it's very important to continue using some of the things that

30:04

have been done really well and help them optimize their operations. I think the major innovation in the sector is not gonna be in the technology, but on the business model. And I think, and I've seen it like with all the companies, all the funds, everyone is trying to figure out the right business model and go beyond just the project financing and being a fintech company, which in reality, all the mining companies are fintech companies.

30:33

into being more of a company that can produce better returns in an interesting way. So yeah, I think it's one of the most exciting fields to be in because there is going to be so much innovation, but also innovation is not going to come in the way we think it's going to come.

31:03

you to provide my listeners how they may contact you personally, right? Oscar is CEO and founder of Lysis as well as your company contact details. How's it best to learn more about Lysis, Alchemist and yourself? Yeah, through the website, you can in the website, you can get into contact us. So what is the website? The website is www.

31:33

Lizusenergy.com. And then right there, you can request to contact us and then you're going to get access to our calendar. And as quick as that, you can book a time with us to chat. And then also, you know, we're emailing, which is partnerships at Lisusenergy.com. There we can also chat. And if you have any ideas, careers, or any interesting perspective, we would love to hear from you.

32:02

Excellent. And I love to do a round of questions to each of my guests that kind of mirrors what I do at Next Act Advisors. I talk about sustainable businesses, resilience, and purpose-driven organizations. Not one guest has the same definition, and it's fascinating to do a little round of questions here. What does resilience mean to you, Oscar?

32:34

Yeah. Resilient to me means a, I see it kind of like as a synonym of perseverance, which is even if you fall, you can fall a hundred times and you stand up and continue going. That's what resilience means to me, being able to get hit and keep going. And it's very necessary in the early stages of a. Possibly. I would say it's possibly much more necessary than.

33:04

having a good academic background or having experience as an entrepreneur. What I've seen is that the best entrepreneurs are the ones who are resilient and who keep going no matter what. Excellent. Perseverance. Purpose-driven enterprise. You know, the title that we chose for this podcast episode is a sustainable business model in a sustainable market. What is purpose-driven enterprise for you?

33:35

To me, purpose has to be holistic rather than just focusing on one specific thing. I think it's important to think holistically and incorporate different attributes to pursue the right purpose. So I would say a purpose-driven enterprise is a company that has a very clear north star and that has different paths to go and follow that north star.

34:04

That's the way I would define it. What would be licenses Northstar? I would say over Northstar is sustainability and not environmentalism. So the way we see it is that there is kind of like certain currents where companies tend to try to be only environmentalist without incorporating other aspects. Got it. So to us...

34:34

that would be the north star, like being sustainable rather than being just environmentally friendly. Excellent. And finally, sustainable growth, not to be confused with sustainability. What is sustainable growth? So what is that growth curve right for you? How to consistently grow a business? Yeah, that's a great question. Sustainable growth means, in my view,

35:03

considering the environmental aspects, but also considering a sustainable business model that can self-fund itself. So the way I would see it is, okay, you're gonna build a company of X. And if you're gonna build this company only thinking in terms of environmentalism, you are doing it not in the right way, because you also need to consider how you're gonna fund.

35:32

those, that purpose and that mission. So sustainable growth means constantly, constantly checking to make sure that you are doing it well, but also creating systems so that you can fund that mission. Very good. That's very holistic, as you as you suggested. Exactly. Final question. Did you have fun in the sandbox today, Oscar?

36:00

Definitely. Yeah. It's the first time that I do a podcast. And I love it. Really interesting. And there are many things that you don't get to share on a day to day basis. So amazing opportunity kind of like to talk about some of the things that we believe in. Thank you. I want to let my listeners know that we will be providing

36:29

the show notes and the release of this podcast during the month of February. And more importantly, the article you've mentioned about how to build a perfect team, right? And your eyes will reference that in the show notes, as well as how to contact the founder of Lysis Energy. And yeah, so thank you very much for joining me and the founders sandbox.

36:59

along with Oscar Negra of Lysis. This episode will drop in February and you will always find the podcast available on all major platforms, Spotify, Apple, and wherever you get your podcasts. So thank you for listening in and see you next month. Thank you, bye.
- Lyssna Lyssna igen Fortsätt Lyssnar...
- Lyssna senare Lyssna senare
Matthew Lopez: General Counsel Solutions to Scaling Startups
4 jan· The Founders Sandbox
Listen to the latest episode of "The Founder's Sandbox", where Brenda tackles the topic of starting discussions with your clients on setting up the board. Brenda speaks with Matthew Lopez, managing director of Wolf and Snow, about board creation.

Matthew Lopez is the Managing Director of Wolf and Snow, the first national firm providing fractional General Counsel services to founders. After years as in house counsel, Matthew wanted to serve more than one client at a time. He started the firm over 3 years ago and began with 3 clients and now serves from the practice of Wolf and Snow 30-40 clients spanning the US and international with a full-service legal services including paralegal and services that include connections to potential clients, partners, investors and talent. Wolf and Snow works with companies with a minimum of $1 mn in recurring revenue.

Other Resources mentioned in this podcast:

Strategic Board Formation key steps for startup growth

https://www.clerky.com

https://carta.com/

Learn more about Matthew Lopez, and Wolf and Snow:

[email protected]

Linkedin: https://www.linkedin.com/in/matthewtlopez/

Episode Transcription

00:04
Welcome back to the Founder's Sandbox. The Founder's Sandbox is a podcast now in its second season. The monthly podcast reaches entrepreneurs and business owners.

00:33
professional service providers who learn and share about building resilient, scalable, and sustainable businesses with great corporate governance. I'm Brenda McCabe, your host on the Founder's Sandbox. My mission when working with founders is very simple. I want to assist the entrepreneurs and entrepreneurs in building scalable, well-governed, and resilient businesses. On the Founder's Sandbox podcast.

01:02
I invite guests who are also founders, business owners, and corporate directors and professional service providers who like me want to use the power of the small, medium, or even large enterprise to create change for a better world. Each of my guests tells a story that include topics around resilience, purpose-driven, enterprises, and sustainable growth.

01:30
And my goal with the Founder Sandbox is to provide a fun sandbox environment where we can equip one startup founder at a time to build a better world through great corporate governance. Today, my guest is Matthew Lopez. He's Managing Director at Wolf & Snow. And Matthew and I are going to talk about creative and innovative

01:58
General Counsel Solutions to Scaling Startups. Thank you, Matthew, for joining me today. I'm happy to be here. Thank you for having me, Brenda. And I'm gonna call you Matthew because we've always called each other. I don't like short names. I like Matthews. So Matthew Lopez is creative to the extent that not only is he an entrepreneur, but he provides fractional general counsel services.

02:28
and connections to potential clients, partners, investors, and talent to founders with over $1 million in recurring revenue. You know, when I first started working, we find each other in many events where there are startup companies, we found that we both like to work on scaling companies.

02:57
And we'll talk a bit more in this podcast today. We know also, Matthew, that there's not one recipe to scale a company, is there? No, there's, in fact, I think that you actually have to find your unique answer to how you're gonna scale your company, because if you're taking a playbook from someone else, it's not gonna fit you perfectly. It doesn't mean that you can't look at other people's playbooks.

03:24
to be able to kind of be like, hey, I want to take a little bit from over here, some of this and take inspiration from stuff. But if you're just copying other people's playbooks, it's probably not going to end as well as you think it's going to. Super. And you know, you've been an in-house counsel for most of your career. And it was about three years ago that you struck out on your own and you founded your firm.

03:53
which is very creative, right? Offering fractional general counsel services to, again, startups that are over $1 million in recurring revenues. So at any one time, you have 30 to 40 customers, US-based and international. So without, you know, taking, dismeriting your go-to-market strategy, I'd like you to share.

04:22
with my listeners how you also became creative and created your own company. Yeah. So it kind of started off with, I kind of got burnt out doing one company. And so I decided, Hey, I wanted to work with like three to five companies, uh, three to five quickly turned into like 10 and I had to hire someone to help me with it. And I realized that I really liked.

04:47
the fractional work. I really enjoyed being able to help companies at that earlier stage and be able to help scale them. And eventually it started to turn into more. And now we're at 30 to 40 and we've scaled up to being the first fractional legal department in the United States. So we actually plug into these companies from GC all the way down to paralegals, clerical staff. And we just added on HR services.

05:15
as something that we're handling because it's one of those things, it's a progression. You listen to your clients and you start, like they told me what they wanted and we started building the things that they wanted. And yeah, we've come up, it's not like I planned on trading this firm when I first started, it just naturally evolved. And I think that's what a lot of startups need to do is they need to listen to their customers and build what their customers want.

05:45
and be able to service them properly. Excellent. So I'm very happy that you're going to talk about how Wolf & Snow works in the boardroom, right? Of some of your clients. And you know, we are coming to the end of 2023. Many of us are taking stock of our year and preparing for 2024. And you offered to kind of share your best practices and what you're finding.

06:14
in terms of setting up a fiduciary board. But before I get there, I did want to share with the listeners that on my website, Next Act Advisors, I do publish quite a bit of the blogs that I've written over the years and the work that I do. While I'm not general counsel, I am a corporate board member. And I wrote a piece called the Strategic Board Formation.

06:44
key steps for startup growth. And I was so pleased when Matthew agreed to be a guest to actually get into the nuts and bolts of starting a corporate board, a fiduciary board. So when do you, Matthew, start a discussion with one of your clients on, hey, it's about time to set up a fiduciary corporate board? So every company actually has a fiduciary board.

07:13
The minute you form a company, you actually, whoever's the owner of the company is the fiduciary board member. So we always set up the board to begin with. It's usually the CEO of the company or whoever that is as the original board member. The question is, when do you add to that board? When do you actually do something that is expanding it to bring in people? And I like to try and talk to my startups as early as possible.

07:43
about this. And it's about identifying and building relationships with people they might want to put on that board. Because the worst thing you can do as a founder is bring someone on that you don't have a relationship with, you don't have that trust with. Because what's going to end up happening is when you reach your series A,

08:10
the lead investor is going to want a board seat. And so you're hitting up, that's your time. You have until your series A just form your board. And you don't generally want to do it too soon because it's too young. It doesn't make sense at that stage besides like the founders being on the board. And it's between...

08:36
Like your seed and your series A, that that's really the time you got to start figuring that out. And you need to start identifying people you trust, people that are strategic, that can help you make introductions that are going to be valuable on your board, that are going to bring gravitas to your board. Like, so it's thinking about like, there's multiple factors, there's multiple reasons to have someone on your board. And that comes down to trust, it comes down to

09:06
the ability, the helping ability and bringing a huge name onto your board is also a great reason. But again, I like to really emphasize it's that trust piece. If you don't have trust with that person, because the whole point of this is to create your board to kind of stack it. So that way when you start bringing on investors, your investors don't overrun your board. And so generally I try and tell my startups,

09:34
before you get to your series A, you want to have a board of four people. Okay. Because you always want an odd number. And so you're going to want to get to four because when you do your series A, you're only going to want to give up one board seat. So that way you get to your five. So that's how I try and, I try and advise them is you prep for the odd number, like you prep for that odd number.

10:04
because then it makes sense, like you can then, because your investors might want two seats, but if you have an even board, you're gonna be like, no, we really want an odd number. So if they want two, well, then it gives you leverage to add a fifth person onto it. And I would highly recommend pushing back against any investor that wants to have two board seats.

10:34
at that early stage. Unless you have two VCs leading your round, then it might make sense. But again, if you're at your Series A and you're at seven board seats, your board is going to get out of hand by the time you get to your C or your D round. Right. Because all of a sudden...

11:01
it gets you're gonna have a huge board. And that's a lot of people to personalities that you got to maintain and be able to do these things. And it also comes like, as you've probably talked about before is your VCs that you're picking to be on your board, you have to be very careful about them as well. So how would you suggest my own experiences, advisory boards, right? They're not fiduciary. Is that a good in your experience? Is that a good

11:31
hunting ground for potentially those trusted relationships. Or are there, I'm certain there are other avenues, but share a bit how the advisory board, how it's composed, how it's remunerated as well, all right? Kind of as a preface before the fiduciary board. I completely agree with you that your advisory board is where you probably are gonna be looking for

11:58
your board seats and moving people from a advisory position to a fiduciary position. It also might be people in your industry that you might want to go after, people that are CEOs in other companies, other like name people that you might not, that you've maybe you're going to the same events and you're seeing them there and you're developing that relationship and they'll help you out. They'll make introductions for you. But

12:27
They're not necessarily, you don't have a formal advisory relationship with them. That's the other place I generally tell my startups to look. But those are two of the best places that you're gonna wanna look for someone to move up. When you're talking about advisory boards, I like to tell my founders that you can never have too big of an advisory board.

12:56
when it comes to this, but it depends on there's two different types of advisors that are generally that you have. One are the people that you want to have a relationship with, that you're doing regular meetings with, that you are, that you're giving equity based on just those meetings, not based on performance. So

13:24
Non-performance based advisors are very trusted people that you know are going to, that have a bunch of knowledge that you want to be able to pick their brain about. You want to be like, Hey, like I'm thinking about doing X. What do you like, can you let, let's talk through this. Exactly. So that is one type of advisor. It's non-performance based in my opinion. It's

13:53
you've already, they have so much knowledge that you're just doing meetings with. And the second type of board advisor or the advisory group that you have is performance based. It's, Hey, you're going to make X. If you do this introduction, I will give you some shares. If you like help me find clients, or if you help me raise money, if you, there's so many different things that you need access to in this world.

14:23
as a founder. And so I generally say that second group, you can never have too many people in there because you never know who's going to be able to open a door for you. And it, there's really key ways that you want to draft those agreements to cap your, how much equity someone's going to be able to earn in those, unless it's like,

14:49
customers or it leads to a direct customer or it's referral like a referral agreement that you're giving them where it's like Hey, if you introduce me to a customer, I'm happy to give you like 5% of those sales for that first year those are the type of advisory roles that I Tell my clients sign as many of those as you can like give them out like they're candy Because guess what? It's all performance-based if they don't bring it if they don't bring something in

15:20
didn't cost you anything besides signing the agreement. Yeah. So back to the agreements themselves. So in my experience with advisory of the performance type, I have found. Helpful to have a term limit. Yes. You should hear they need to show up. They need to be delivering and then it can be renegotiated, but which is that I'd like you to speak a little bit to term limits and how.

15:47
Because it's, and the actual agreement itself, have a cap. So I've generally done, there's a couple of things. One, I completely agree with you on the cap on the term limit. Two years is the general basis for an advisor. It's the standard kind of procedure that is in the industry. So I highly recommend that you have a term limit in there. That's point none. The other unique clause that I put in my advisor agreements

16:16
If you don't perform for a certain period of months, the agreement auto terminates. Wow. Okay. Because this is where we get in, especially in the first category, where there's not like, hey, like it's more of, I'm gonna rely on you to have conversations and do X, Y, and Z services for us.

16:42
And so we put into, I put into my agreements that if we don't use your services or you don't perform the services within like a two month or three month chunk, we auto terminate because I've just, I've had so many founders come to me and be like, Oh, I signed this agreement a while ago. I was hoping that they would be a good advisor and then they never did anything. And now I have to go deal with that advisor and be like, Hey, like

17:10
trying to fall back that equity. And so this was just a way for me, like, because I don't talk to my founders like, hey, have you talked to this one? Have you talked to this one? I'm not, I'm not your mom. I'm not going to follow up. But if you tell me, hey, they're not performing, I'll terminate. But most founders don't do that until it's too late, until it's six months, a year down the line. And they've vested a bunch of equity at that point. And so this is just one of those things

17:40
it's a safeguard that I put in place for my founders to make sure that if I don't hear anything bad, well, guess what, there's a way we can terminate and it auto terminated and I can then go back and send the termination letter for a previous date in existence. Okay, this is really timely because we are coming up to the end of the year, right? So from your firm, do is this a

18:08
busy time a year and kind of doing a fluff and fold of corporate governance agreements of your startups or do you, I don't know how active you are or some of your staff. I mean, do you do a kind of check in on those agreements? So usually end of the year, no one's doing business. Everyone's focused like from pretty

18:37
to like the first week of January is probably my slowest time of the year. Got it. And it's because everyone's either folk, like unless you're trying to meet quarter end goals where like we're doing, we're trying to push like an agreement or a sales contract through the door. I'm pretty dead for the most part. This year is a completely different story. I think this year I've been swamped all year and it's just,

19:07
I've hit a crescendo in December. Like everyone and their mother has come to me in December. But I think it's an anomaly, a nominally this year. And I really think that most people come to me in early January with what you're talking about. Okay, that's helpful. Like they're usually thinking, okay, how do I start the year clean? How do I move forward nicely? And so that's where I'm getting a lot of those

19:37
I like the call fluff and fold. Yeah. It's the fluff and fold at that point. Like, Hey, we need to think about these things. And that's where I'm usually getting those, those questions that, because they probably did think about it at the end of the year, but they're too busy with everything else that it gets pushed to January. Wow. There are a lot of gyms in this interview and thank you for taking time with me at this busy time. All right. It's an anomaly, but it's busy. Yeah.

20:08
You know, so I'm a founder. I've got my advisory board. I've got probably two, I have three directors on my board. It's typically in the bylaws there. How many meetings should I have a year? How do I run that meeting? Walk me through the mechanics. My question has an altering

20:38
This is very important. It's not gonna be a time sync if you listen to the words of Matthew, right? So it really depends. If you don't have any VCs, then I highly recommend you do one a year because it's required by Delaware law. All right. I think it's personally a waste of time. Because before you get a VC on your team, you can do...

21:07
The people that are on your board are probably the people you're doing day-to-day operations with. That you're having conversations with already about these things. You don't need a formal board meeting to do a lot of these things. You might need to do like board consents for stuff. And you can, there's two ways to do them. It's by having a meeting or by written consent. Got it. And so you can get a lot of your...

21:35
daily or your monthly like corporate governance things out of the way pretty quickly with written consents and doing one board meeting a year. And we generally recommend that you do it February, March. Got it. Because January, February, you kind of do your planning, you figure out where you're going to go, you do your board meeting, you get it out of the way, and you kind of set the tone for where you want to go for the year. Now, I'm going to push back a little bit.

22:04
Um, in my experience, and particularly in some enterprise SaaS companies preparing for SOC 2, right? You, it is required, our best practice quarterly board meetings, right? They could be written good sense, but there's, they SOC 2 certification in my recent experiences last year and it's, they're upping the ante.

22:31
is really looking at how many board meetings did you have? What was the meeting agenda? Right, what was that? Right, did the invite get sent out? So again, maybe I'm a bit more cautious, but I have seen that in my experience this year. So at least my experience is most companies are getting their SOC 2 compliance, either pretty close to their Series A or after their Series A. Because SOC 2 compliance is

23:01
a fairly costly process to do and requires enough people in your organization or hiring an outside person to help you through that process. So generally it's one of those things. I think that if there's a reason for you to have meetings like a SOC 2 compliance, let's say you're a fintech company and this is something that you did early on, then yes, make sure you're doing your board meetings.

23:29
What I guess my advice is if you don't have a reason, one meeting a year is all you need. There's always outlier cases of why you might need meetings, like SOC 2 compliances and stuff like this, but in my experience, once you get a VC on the board, then you're moving to quarterly. You're doing a quarterly meeting to inform your investors what's going on. And this might be something that

23:59
your seed investors might want. They might want for you to start doing quarterly board meetings because of this. It really depends on your investors and what they want. But my suggestion is you need to have good communication with your investors and how you do that is generally a board meeting. And before your series A, you're probably gonna wanna send out a monthly update

24:30
to your investors, your future investors that you're trying to court for your series day. I always tell my founders, you should be doing, by the time you've raised money, you need to be doing every two weeks or monthly updates to your investors, to your future investors, to interested parties. Get a list and it can be a very short list.

24:56
little email and I have a format that I like them to utilize to be able to give information about what's going on. I love it. You know, let's talk about the annual board meeting. How do you run it as CEO? The best thing you can do is it depends. There's again, two sides of this.

25:24
If you are on your, if you have investors or other people, there's a very, there's a formulaic way that you should do it. Okay. If you are a founder that doesn't have one of those talk to your council, talk to whoever it is, because generally what those board meetings are is, Hey, let's get everyone together, let's do it. And let's.

25:50
let's get through all of the corporate governance that we need to do. Let's approve all the things. Let's talk about the things that are coming up next year. It's more like, it's really approving a lot of the board resolutions that you need to do stuff. And then kind of putting into plan, like what is the plan for next year? That's really, I don't try and over engineer them at the beginning.

26:20
because let's be real, most of the stuff that these founders need to be doing is day-to-day operations and scaling. Focus on those things. Corporate governance is a minor issue. It's a housekeeping issue at that point. And you're really just trying to make sure you're maintaining it properly. And a good attorney will help you with that process. A good board advisor, someone that's knowledgeable about the corporate governance space can help you through it. Got it.

26:50
Um, what does need to get approved? Again, my listeners, there's, there's a giant list of stuff. We have, we put, uh, we have a white paper on this. Uh, here's all the requirements that you have to do. And here's the, you probably should, or like, it's up to you if you want to get approval for these things. Um, and I'm happy to share that with you, Brenda, if you want to share that with your.

27:20
your viewers. I think it'd be great after this when we circulate this podcast and contents, Matthew. What about... So you're creative, you have an interesting revenue or fee-based services, right? Based on performance and the like. And what is your...

27:45
What is your experience with the VC coming in on the board? How important is the due diligence in terms of corporate governance type documents? Is it the basics? What's required? It's usually the basics. Okay. Like most, it depends on your stage and where you are. And if you're at the seed stage and raising money,

28:12
you're not going to need, like you need your basic documents. When you start getting past your series A, your corporate governance and your corporate document folder that we build, like we do data rooms for our clients and we organize all of the documents and we have a special way that we do this. Okay. Um, and that folder starts getting really full very quickly as you start going from like your series A to your series B. It gets very full very quickly with stuff.

28:42
From your seat, your series A, you start getting some more more documents in there. Usually before your seed it's, Hey, your, your bylaws, your like incorporation docs and some basic board resolutions. It's, it's really not that complicated. And, um,. Clerky it, I push almost all my clients to clerky for their formation stuff. I.

29:12
I don't think you don't need an attorney to form your company. It is a waste of money. Most big firms are going to charge you an arm and a leg for it. I don't, I will do it for a client, but it's a waste of my time. It's a waste of your money. And, Clerky will do almost all of your bylaws, your board resolutions, all of these things, and then you just need some supplemental board resolutions that Clerky doesn't do. And.

29:41
that should get you through a lot of your corporate governance at that point. I do want to call out also especially the need for a board approval of the 409A. Once you start granting options to your employees. 409As are highly important. Again, I don't get paid by any of these companies,

30:11
rate. If you are going to do a 409A, you might as well get Carta because you get a free 409A with your top level subscription. If you talk to them and you're sub certain requirements, you can get it for free. They will give you their software for free because they're hoping that you stay on it as you grow and generate plenty of money off of as you scale on it.

30:40
It's also great for your investors, your employees, everyone to be able to see their options and be able to have to know what's going on. You don't necessarily need it to be real until you get to your Series A, but you're talking about a couple of brands to do your 409A and might as well pay for Carta to do it for you, in my opinion. Yes.

31:07
How to do so board minutes. Again, this is a really practical nuts and bolts podcast today, right? Yeah. So tell us the mystery of board minutes. I don't want to do a have your attorney or someone that's really good at taking notes. Be like, your job is to take notes on this. And so the reality is if there are templates for the way I usually

31:37
and tell my founders, if you're going to run a serious meeting, board meeting with your VCs, you need a presentation. You need a slide deck with everything that you're like, it's twofold. It's telling all of the VCs and the board what has happened. What is the plan going forward? And what do we need approvals for? Those are your three major categories that you'll probably need every time.

32:07
And so you break it up onto those three things. You do a slide for each thing that you need. And there's things like financials sales, you're going through like the, like the high level of what's going on in your company. And then how are you going to like, Hey, we're having this problem. Here's how we're going to solve it. Like there's so many different things that you need, like you can do. And talking to someone like Brenda or me.

32:35
that's how you build out your template. Because your goal is to build a template so that way your board knows exactly what you're gonna talk about and in the same order and running it that way. And then it becomes really easy to do the minutes after that because guess what? 80% of what's gonna be talked about is in the presentation. That's right, yeah. So it makes, go ahead. And less is better than more.

33:06
and your minutes, correct? Yes. You really only want to...

33:16
you really don't want to document too much because guess what? Most of your board's gonna be listening to what's being said. And so your presentation is probably pretty good and you're just gonna be like, we talked about X because there was a slide on X. And then you wanna say if there was any decision made on like, especially if there's a board resolution, there's a particular format and you really do need to talk to attorney because you need to put

33:46
the right formatting to be able to approve certain things. And usually you're doing that after. So usually there's three documents that you're gonna do. There is the board presentation, there's the board minutes, and then there's the board resolutions that get signed after. The minutes get signed as well after, because usually you're presenting the minutes. That's one of the first things you're doing is here are the minutes from the last meeting. Can we get these approved?

34:15
And so you're generally sending out the minutes to all of your, from the previous meeting to the board, the board members to get approved as part of the process. Excellent. I love it. Very practical insights. I've taken away three goodies, Matthew. One is agreements for advisors and your advisory

34:44
particularly for performing. You have special clause in there that auto terminates if there is no performance. Thank you for doing that. You also have a list of things that need to be covered or require board approval at one stage, so you got laundry list. And I just, I didn't realize that you from your law firm are actually kind of managing the data room, which is great. It's a habit.

35:14
I highly recommend you have like what usually goes wrong between your investment rounds is no one's updating your data room. Exactly. And what we found is that as the law firm, we see, we get almost everything signed through us for our clients. And so we see all of those things. And so I just have one of my clerical staff, we have a filing system, we have it all.

35:43
They file it in multiple places, the data room within our internal system and possibly in a third place and costs very little to do. And that way when you're ready for your next round of investment, it's all done. You don't have to go chase down a bunch of stuff. And one of the things that we also do is we prep like when you're saying, Hey, we're getting ready for our next investment round. Like, okay.

36:09
here's your to-do list, here's all the things that you now need to build for the next data room. Got it. Because each round you do, there's more and more things that you need to show to your investors. For next round, yeah. Exactly, and so because as you go through more stuff, they want more detail, they want, because there's bigger checks involved, and there's more things involved in the company. When you first start at your seed stage,

36:38
There's not much you might have like a contract signed. By the time you get to your series A, you now have some employees. You actually have a lot of, you have some contracts and now there's compliance issues with all of those things. By the time you get to your series B, it blooms massively getting ready for that. Excellent. So in your experience now, you're working with startups.

37:07
Can you describe what a well-functioning board, kind of your best practices you've seen out there?

37:17
Most, I think, and this might be an unpopular opinion in the VC world, your VCs on your board don't run your company. And you need to understand that they are there to advise you, they have a fiduciary duty, but sometimes their interests are not aligned with yours. Because they have fiduciary duties to their investors.

37:46
the people that gave them the money to invest in you. And your job is to run a good company, not to make that VC look like they invested in a good company. And so understand what your job is, and understand what your power is, and understanding how you can talk with them and be able to be like, yes, I'll listen to you, but I disagree.

38:16
Just because your VC or someone on your board says you need to do something, does not mean you have to do it. And so that doesn't mean you shouldn't take it into consideration or shop it around to other people that other, other founders are great sounding board. Excellent. But that is probably my main thing is controlling your board, understanding that as the CEO, as like.

38:45
If you set up your board before your series A properly, again, having four people that you know and trust on your board that are going to back you, you now control your board. You can make decisions. You can dictate the policy of your company. When you lose your board, that's when you're in trouble. That's when you no longer as a CEO are in control of your company because the board can fire you. They can get rid of you.

39:13
they can dictate policy. And so always, always make sure you're very confident in the people that you're putting on your board because you might be the CEO, you might be 100, you might have a majority share of the company, but guess what? That doesn't necessarily mean that you control the company anymore. The board does. And so understanding how board seats are issued and controlled,

39:43
Very important. Most EOs don't understand that. And when the VCs come in to change your bylaws, it's very important to understand that and make sure it's done properly to protect you in the long term. And that's why I wanted to have you as my guest, very practical insights and very founder

40:13
in a scalable and a well governed way. So I can't thank you enough, Matthew. How can my listeners find you? We have no website, no marketing. You can find me on LinkedIn at Matthew Lopez, or you can find Wolf and Snow on LinkedIn and or you can my personal email is M Lopez at Wolf and Snow as well.

40:42
Okay. And if you can't find any one of those, reach out to Brenda and she has my contact information. Absolutely. And there will be the LinkedIn and other contact information in the show notes when this podcast drops. So perfect. Yeah. I do like to close out with all of my guests with a series of fun questions. I have fun for me because at Next Act Advisors,

41:12
I really like working at scaling companies like you that demonstrate resilience. They do have a sustainable path for growth and revenues, and they are purpose-driven organizations. So I'd like to ask my guest, and not one guest has the same remark. So what does resilience mean to you, Matthew?

41:42
adversity, challenge, defeat, to keep going. Like, and that is something that I look for in the founders that I work with. Like, you have to be resilient because if the slightest thing is gonna derail you and force you to quit, then the startup world isn't for you. The startup world is a brutal, unforgiving world. And so many people are gonna say no to you. And you have to just keep chugging along

42:12
Well, guess what? I just need one person to say yes. I need one person to give me a check. I need one person to be my first customer. Because once you get your first one, the second one's a little bit easier. Third one's a little bit easier than that. And it keeps going from there. But you have to have that resilience to just be able to take that no and be like, that's a maybe, I'll come back to you in three months. That's right. You know, one trick I've learned over the years is when

42:41
They say no, say, hey, for that check, will you get open your Rolodex and provide three additional contacts? And it really disarms some investors. They're not ready for someone to say, all right, I'll take a note from you, but you have a network. So there's three, there's actual psychological study about that. And is there where, yeah. So if you ask for something big.

43:07
and they say no to it. If you ask for something smaller, you're probably going to get a yes because they just feel so bad about you. And it's the Girl Scout method. Hey, would you like to buy five boxes of cookies? No, no, no, no. What about one? And guess what? One box of cookies. They actually did this psych study with Girl Scouts back in the day and it worked like a charm. So founders take heed. This is great. How about sustainable growth? What's the...

43:36
the meaning for you, Matthew? I think this is probably the thing that most founders and most VCs are messing up. And there's a big trend in the VC community to reestablish not growth at all costs, but sustainable growth. And that means that you're growing within your means of your budget. Because the reality is most companies, I try and tell them,

44:06
By the time you get to your series A, you should be breakeven, if not cashflow positive. When every time you're getting to your next funding round, your goal should be, how do I get to cashflow positive or breakeven? Because if you can do that, guess what? The checks will be signed. Because guess what? You can still operate your business indefinitely. You don't need to take a check. And that's, it's just like loans. If you need a loan,

44:35
No one's going to give it to you. If you don't need a loan, guess what? That's where every company's like here. We'll give you as much money as you want. And that's where sustainability comes into me is each funding round. You want get to break even very wise and, um, ahead of the times that we're living. How about, um, purpose.

45:00
driven enterprises. I heard you say during the podcast today that you do also like to work with founders that are extremely purpose driven. What's what's the meaning for you? And maybe in your own practice? I think it's whatever makes you tick. Like there's so many founders that I've like, they had an experience like one of my favorite founders is just notarized. And the founders names Al and he got victimized by title fraud. And so he ended up

45:30
creating a company that helps solve that problem. There's two to five billion dollars of title fraud in the United States a year. And that's because it's literally built on from like, when we were formed as a country. It's literally a stamp, that's all. There's more security in buying alcohol at a grocery store than with your, than when you buy your house. Wow.

45:59
And so he went in and fixed it. He got it to a point where it verifies your ID does all of these things. And to him, that's a purpose. He has such a purpose driven for that because of his life. Right. And each founder needs that purpose, because if you don't have that internal like drive, you're not going to be resilient because if you're not like, ah, I need to change this to make the world a better place.

46:28
or to be able to do something, you're not going to have that resilience. You need a purpose in order to get through it. Thank you. Last question, Matthew. You have fun in the sandbox today? It was great playing with you in the sandbox today. I want to thank you for joining me on a really, I think, insightful and timely podcast as we're coming to the close of the year.

46:58
Matthew Lopez, managing partner at Wolf & Snow, talked to us today about creative and innovative general counsel solutions to scale startups. So thank you for listening to the Founder's Sandbox. It's a monthly podcast available on the major streaming platforms. Have a great day, thank you.
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Back to School with Brenda McCabe: Servant Leadership
12 sep 2023· The Founders Sandbox
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Resilience: Co-Creation, the Music Supporting the Storyline
31 aug 2023· The Founders Sandbox
Check out this month’s timely podcast with film composer and creator, Carlo Siliotto. We talk about co-creation; the music supporting the storyline.

The Writers Guild of America strike that began on May 2, 2023 continues as of the date of the release of this podcast.

You can listen into Carlo’s soundbites on AI in the creative process, the economics of residuals and governance as a committee member of the Academy of Motion Pictures Arts and Sciences.

Carlo Siliotto is a Golden Globe nominated Film composer. Since 1984 he has written music for over a hundred projects, ranging from theatrical features to documentaries and television series. Carlo is a prolific composer of concert music.. Carlo currently lives and works in Los Angeles, California.

See you in the Founders Sandbox!

Transcription:

00:04
Welcome back to the Founder's Sandbox. I am Brenda McCabe. I own and operate a consulting firm, NextAct Advisors, where I have a simple mission. I like to assist entrepreneurs and entrepreneurs.

00:33
in building scalable, resilient, and well-governed businesses. The Founders Sandbox podcast is just an additional channel to feature founders, business owners, creators, corporate directors, and professional service firms who, like me, want to use the power of the private enterprise, small, medium, and large to create change for a better world.

01:02
Through storytelling with a guest on topics that include resilience, sustainable growth, and purpose-driven corporations or enterprises, my goal is to provide a fun environment to help each founder, one founder at a time, to build a better world through great corporate governance and creativity. Today, my guest is Carlos Idioto.

01:33
Carla and I are going to talk about resilience, the creator economy, co-creation with music supporting the storyline. So thank you, Carlo, for joining me in the Founder's Sandbox today. Thank you. So Carlo, among many things, is a Golden Globe nominated film composer. Since 1984, he has written music for over 100 projects.

02:02
ranging from theatrical features to documentaries and television series. Carlo is a prolific composer of concert music as well. Carlo currently lives and resides in Los Angeles where we met years ago. And he is a proud member of the Academy of Motion Pictures, Arts and Sciences. So thank you again for joining me in the Founder's Sandbox today. You're very welcome. Thank you for having me.

02:32
Harlow, you and I met during the pandemic and the peak. Your score and the documentary, Kassak produced by Oliver Stone, were both nominated for several awards, including the Asian Film Festival. I think it's really timely that you've agreed to be a guest on the Founder's Sandbox podcast, because we are living currently a writer's stride.

03:02
Right? The AMPTPs share of the residuals. There's a lot of discussion about the chat GBT, how it's affecting the creator economy. I think it's really timely that you agreed to speak to me here in the founder sandbox. So I would like you to start going back many, many years. Where did it all begin? You know, you and I've talked about your childhood in Italy.

03:32
and how I think it was at the age of six, you picked up your first violin. So how did it start? No, it started, I guess between six, seven and 10, something in that area. When my mother took me to a big art festival in the central Italy, in Spoleto, Umbria,

03:59
called the Two Worlds Festival, the Festival di Duemondi. This was a few hours from Rome. My mother would drive a little compact car and the concert she took me to was the Black Nativity performed by a band, a group of singers called the Voices of East Harlem. And it was the first time in my life

04:29
when I saw black people. I'd never seen black people in Italy at that time, you know, never ever. We arrived there, the main tenor, the principal voice of the group was a blind man, a big man, wearing a white robe, and they would perform the black nativity. So...

04:57
Oh, and I still remember some of the melodies because I got to get a record in that time. So I still remember some. So by the way, the concert, the end of the concert was like this. All the people on top of their own seats in this Baroque theater, clapping hands on time or rhythm with them. And it was kind of an epiphany to me, you know?

05:26
And on my way back to Rome in the car of my mother, she asked me, what you want for Christmas? You want a guitar or a bike? And I said, I want a guitar, I want a guitar. And this is how it started really. And so gospel music really dragged me to the music in general, you know, and still there. Yeah. And this is the very beginning, the unction.

05:54
You know, like, yeah. And it's interesting, it was actually a performance, right? With music as well as acting, right? And the Black nativity, correct? Yeah, but it was no acting. It was just music, but they were so beautiful to see while performing. And everything took place in a big baroque theater.

06:21
Marvelous Baroque theater, the theater Caio Melissa in Spoleto. And so it was all a big trip, actually. It was, yeah. And I know later on in your early, I guess, 20s, you formed a band and you would tour through Europe. And actually you had a specific tour in Africa. Yes.

06:50
We formed this band in the early 70s, which band was supposed to create new kind of sound by using the roots of the Italian South and Fork music, and create by studying it and by reproducing it a new sound, which we did actually.

07:18
We were one of the first bands in Europe of what they today would call world music. As far as I know, we were only two bands in Europe. One was our band and the other one was Alain Stivell in France, in Brittany.

07:46
In the late 70s, we have been invited to tour five countries of recent independency, Somalia, Tanzania, Mozambique, Zambia and Kenya. And before the tour started, I asked to our foreign ministry, because we were kind of a tribute to them, to the new democracy of these countries. I asked them to be able to have a twin

08:16
band in each country. So to perform together with and to rehearse together. So for us to learn about African music and for them to learn a little bit about our music and then perform together. And this was, and after the tour, actually I had the chance to be invited to teach music in Somalia. So I spent

08:44
many, many months in Somalia teaching composition because they needed Italian speaking teachers. Somalia used to be a colony of Italy and they had only North Korean teachers and they would teach music just saying ta ta ta and they know it's ta ta ta, know it's ta ta ta because they had no common language, no common way to speak.

09:13
except music. But so the musicians, when we first toured Somalia, they asked me to come back and to do something in Italian for them to progress a little bit. And I did it. And I was very, very young at that time. And that was a big, big experience. Because I was coming

09:43
fading out, disappearing with the old history of the rural Italy. And so I was familiar already with dealing with different cultures, you know, and that is what happened. What was the name of your band, Carlo? You didn't mention the name of your band. What would you mean? Sorry? The name of your band. The name of my band was Cansoniere del Lazio.

10:12
And there is some... Cansoniere means kind of a songbook, and Lazio is the region of Rome. So it's Cansoniere de Lazio, because we started by searching for local music in our region, as others had done in different regions. Actually,

10:39
The beginning of all this is also American, as my gospel choir was, because the very first guy searching music was Alan Lomax, and he did it in America. And he's the one who discovered Sonaterio Brown-McGee, Pete Seeger, and all the others. And he befriended with Diego Carpitella in Italy.

11:08
I was also an ethnomusicologist, and they started searching music in Sicily, producing different albums of their recordings. And so a group was created, and an institution, a istituto Ernesto de Martino, where all these materials landed eventually. And we became part of this big...

11:37
bigger body, you know, of searchers and lovers of Italian traditional music. Yes. And is there some similarity with the folk music that you so love and Central Asia and why you did the score for the series Nomads as well as Oliver Stone called you to do the composition, the score for Kazakh?

12:05
Yeah, of course, of course, it's the same path is the same pattern. Because when I came to Los Angeles, I was living still in Italy. And I arrived to Los Angeles to meet my new agency. And the first the very first meeting with my agency was, oh, you are going to meet all the people in the music departments of the studios.

12:32
Oh, but there is a movie cut for you and did this is its name is Nomad. I didn't even understand. I understood Nomad. And my English was very bad, worse than today. But at that time, so I, I have been looking on the web, but I didn't find any evidence of Nomad instead was Nomad.

13:00
I have the poster here. And so I was in competition with many others, but I do think that the thing that made them hire me was the fact that I had a different attitude towards the local music. So I said, if you guys want to hire me, you have to fly me to Kazakhstan, because I want to study the local music.

13:29
in order for me to include the local music in the concept, in the general concept of my score. Because this was an epic movie about the birth of a nation, basically. It was a period movie, 1710, when these wise men or us put together the children of all the different tribes of that area of Central Asia.

13:56
in order for them to grow together and to be connected one to another. You know, and this was the very beginning of the modern Kazakhstan, actually, today's Kazakhstan. So definitely it was fantastic because I went there first time and they sought for me everything. I had a collaborator. She...

14:25
they organized all the meetings for me to get aware of, I mean, knowledge about different instruments and stuff. So, but afterwards, actually I produced, I produced a documentary after scoring Nomad, I produced a documentary about the Kazakh music, which is called The Wolf on the Drum, because yeah.

14:55
Because after recording the old score for Nomad, my collaborator gave me, as a present, an eptagon frame drum, and once I hung this drum in my apartment here in Los Angeles, the image of a wolf formed. And this was two years later.

15:24
that I had back this drum in my apartment because it was before in my son's apartment in Los Angeles. And so I took it as a sign and I decided, because the wolf is the most shamanic among the animals. Take the she-wolf of Rome, feeding Romulus and Remus, but also in the Central Asia shamanic tradition, the wolf appears often.

15:54
And so I decided to put together a co-production between Italy and Kazakhstan. And we went back to Kazakhstan and we met with the Shaman people, shamans and musicians. And we put together this documentary that you can find on Arcoiris TV, which is an Italian kind of streaming TV. And now is there. It's called The Wolf on the Drum.

16:24
Yes, yes. You know, I'd like you to share with my listeners, most of my listeners are business owners, they're in technology that's driven by the digital, right? The web, the digital disruption. And they're creating enterprises that are scaling and bringing in investor money. And I consider it a privilege to have a true creator.

16:52
in the art space, right? The music space with me today. So I was struck, you know, we met when, when Kasak had been nominated for some awards and you had actually gifted me the original score, a CD, right? So I was listening and prior to going to some of the, the award ceremonies and at the film and listening to the final CD that was produced,

17:20
the titles of the songs were different to what you had originally. Yes. You're right when you composed these. So for business owners, and what is it like to co-create and have a give and take? I mean, what does it feel like for you as an artist to create, but also knowing that the ultimate consumer, buyer of your product, the producer, right?

17:49
may change some of the elements of your artwork? He did it, but it wasn't truly a conflict. It was a surprise for me to see that he wanted to change the name of the cues on the CD. But I guess he did it because he wanted to relate more to the images rather than just the feeling of the music. So he wanted to.

18:18
to have a more compact package. So I think he did it because of it. And actually at the end of the day, eventually I agreed with him. Because I remember I didn't even give proper names

18:48
before recording the cues. I had kind of codes, A1, A2, B1, B2, for this were my working titles for the cues, you know? Or then when I had to make up some titles for the CD, I create some titles, but actually I have to recognize that the titles

19:17
Igor, the director, gave to the music, were better than mine. And then we changed after he giving some titles, we shared some opinions and we changed some of them. You know, because- I imagine it's not only this film, but it probably happens in the industry itself, right? A movie producer will select-

19:42
Yeah, it depends who is producing the CD. In this case, the director and producer of the movie was also the producer of the music. I mean, he had the last say and there was no conflict. Actually, I asked him to change two or three of them and we changed them in perfect harmony.

20:11
If I take it back to the sandbox or the founder sandbox, I chose the name sandbox for this podcast because I work with a lot of technology founders with code. They have a sandbox, which is where they have their, like you said, you would name your scores A1, A2. They have code names as well. So it's again, a concept in the technology, the software space or digital health, the

20:41
or I'm trying to bring in the analogy to the creation of music for films. So thank you, it's fascinating, it's fascinating. What about, let's switch gears. I like to talk about resiliency, right? Again, a lot of the listeners of the podcast have very scarce resources and they're trying to create a large company, right? And it's all about resilience, is wearing the multiple hats.

21:11
As an artist and making money in the music business, can you explain the concept of residuals for my listeners and how perhaps the digital economy has enabled you artists with more ways to capture your residuals and actually have different revenue streams through the digitalization of the same? So two questions.

21:41
and how artists... So residuals are... And authorize is what the music you wrote is earning by being broadcasted, by being sold in CDs or in DVDs, by being performed.

22:10
and by being distributed and used by different people. So there is a second life for the music itself also out of the movies themselves. So the music I write for a certain movie earns authorized and residuals while the movie

22:39
every single time the movie is broadcasted, performed, screened, whatever, you know, but also the music can have its own life, you know, being broadcasted by itself or performed in a radio or by being sold in the form of CDs or albums, etc. This is basically

23:07
And this is the source of our earnings, I guess. I am the worst person to deal with money and with stuff, because I have a very bad relationship with money. And I consider music something sacred.

23:37
sacred that has been given to me as a gift from the universe. You know, and so I really don't like all these people who are thinking...

23:54
who are targeting, they are, those who want to make music in order to make money. I don't like them. I understand this market, I understand that we need people taking care of this aspect, but they have to be different people from the creators, you know, because, and definitely, I mean the number of the ones who don't want to deal at all with money.

24:24
You know, I'm so embarrassed when I have collaborators, for instance, right? And I don't want to know how much they've been paid by the production. If it's not me to pay them because I'm dealing with a package deal or something, you know, so it's for me to know, I have to know, you know, but I hate that.

24:52
I hate everything which is connected with money because I think that creation, and even if you take an example when you have a small budget for a movie, right? So you know already that you have to deal with, that you cannot afford the large orchestra even if needed and stuff. Okay, I pretend that the budget is the no budget.

25:20
So I, because I don't want the economic part of it, the money part of it to affect my creation and my freedom to imagine the universe, to imagine the never-ending space, you know? I have to feel that I'm free to create whatever I want to create with no limits. And then I would deal.

25:49
with the production, with the money part. So I am the worst of all. I cannot advise anyone. The only advice I can give to people is find the right partner for that. Find the right, thank God we have...

26:16
We have these societies representing us like ASCAP. I'm represented for North America by ASCAP, while I'm represented for Italy and the rest of the world by CIA in Europe. And they collect our money, you know, all around. And they are societies, groups, collecting our money.

26:42
the for perform for performing rights. You know, like I conduct my music. I am a performer. So there is some residuals coming from me performing. And also there is a secondary market, which is when, when a movie is, and this is true residuals, when, when, when a movie is a, after having his own life, but he has a second life on TV and here and there, blah, blah, blah.

27:12
It collects money, still keeps collecting money. And so, but thank God I'm well represented by ASCAP here, by CIA in Italy. And I also have in Italy kind of a manager slash advisor slash

27:38
accountant taking care of my economic situation in Italy, because I'm here, you know, and he is on the field. So he helps me a lot with this part of it. But really, I don't think music has been meant to, you know, the authorize, so the fact that, and then I have to say also that there is a different culture.

28:06
in America or in Europe. America is more copyright culture. In Europe and rest of the world is more authorized culture, which is meaning that if I write a cue, it is not, you can never ever sell.

28:34
to anybody this cue, because it's a product of my talent and is mine forever. It's not that I can sell to someone else and say, okay, put your name, give me the money, and the cue is yours. This is in the culture, but it's not in the European culture. It's not in the culture I grew up with.

29:02
which is different. So sometimes it's difficult to deal with both size of the medal. But I think that we are going to have a final result, including both cultures at the very end. Eventually we will have something like that. I love how you...

29:31
find the creative process as a composer is separate from the production. Yes, absolutely. And there should be professional managers that handle the money side. I think that is a very, it's a learning moment here in the podcast for founders. So your secret sauce may be the creation of code and maybe.

29:57
the new drug you're developing, but the production, so scaling things to get out to distribution is done by another entity or another person on your team or your co collaborators, right? I love it. Thank you. And without limitation of budget, the sky's the limit. I'm going to switch gears to another topic that's very near and dear to my heart and

30:25
part of the themes that I cover in the founders sandbox. And that's one of governance. I like to work with founders that early on work with proper governance structures to run the company, to create enterprise value for the shareholders, for the employees. It's about really governing, right? In ethical, legal and regulatory way. And

30:55
You have been sitting in the Mecca of the Academy of Motion Pictures, Arts and Sciences. And it's while it's not a governing body you've shared with me, can you share kind of some of the mechanisms by which you do work as a member? Do you work through committees? What is your...

31:24
last three years in the executive committee of the music branch of the Academy. So we are a big body in the sense that I think that the members of the music branch in the world, we are about from 700 to 1000 or something, okay? But of course you need a smaller group of people to lead.

31:53
the whole process we need to go through every year, right? So eligibility of the scores, new members, eligibility of the songs, all this stuff, plus different programs, side programs that Academy has, like the, every year I opt in to be...

32:19
in the committee of the international movies. So I vote for the international movies, for all these movies submitted by all the countries all around the world. So it is a very privileged observatory. You can see the best of the best coming from all around the world. And this is only the academy able to do such a thing. And so this is what we do. But besides, we change the

32:49
rules meetings, which means that we change the rules, for instance, what is the bar of time for the eligibility of a soundtrack or different rules that you can consider. And I think that the Academy is there to be and to keep being the beacon and the inspiration for everybody all around the world.

33:19
about the quality of filmmaking. We are supposed to keep the quality of the filmmaking at the super top notch. And we really mind the quality and is what we are preserving and fighting for.

33:49
And of course we have new elements every single time entering the scene, like the artificial intelligence. And I foresee that this year we are going to have a very big debate inside the Academy about artificial intelligence,

34:18
with the intellectual property of the things. And again, the academy is not for the academy to make decisions about money or exploitation of music and stuff, but quality and ethics, yes. And also...

34:47
or integrity and all this stuff. This is for the Academy to do. While there are other different groups, including ASCAP or CI, or the Society of Composers and Lyricists, which is not the guild, but is our Society of Composers and Lyricists here in America. And this group is actually taking care also of the economic parts. And also,

35:15
of the protection of the rights of the intellectual owners of the creations. And so this is what we're dealing with at the Academy or with the Society of Composers and Lyricists, which I'm also a member of. And so we are in good shape in this sense. I love it. Thank you very much. You're welcome.

35:46
timely issues as well with the current strike that's still going on and we're into the third month. You know, I like to give an opportunity to my guests to provide to my listeners how they might contact you or find your craft, your work. Would you like to speak to how we can find you and your website and the like?

36:13
that is very simple. You go Carlos Iliotto, oneworld.com, and this is my website. There you have my email address. And, but if you want to know more about my music or if you want to listen more about my music, you just Google my name and you go, or you go YouTube and you Google my name. And there are many, many things there that you can listen to.

36:44
Yes. Thank you, Carlo. So before we finalize, I'd like to ask all of my guests three questions. Actually, there's four, but I work with founders on building resilient companies. What does resilience mean to you? Resilience to me is

37:09
But I'm a white fly, I'm telling you. So I don't think I can help any entrepreneur by saying what I'm going to say because this is my craftsmanship, my artisanate, you know. Oh, I recently...

37:29
Talking with friends, with people in different environments about artificial intelligence, for instance, right? My reflection was basically this. So what is intelligence about? Intelligence, just intelligence, you and me, and the people who are listening us.

37:53
Okay, to us. And what is intelligence like? Intelligence is the way you connect your knowledge, you know, and you create something out of it, or you project what you're after connecting. And so the more intelligent is the one who connects at the best, you know, all the information he has or the experiences they went through or all this, okay.

38:23
Artificial intelligence does the same, exactly the same. So, but the thing is that artificial intelligence cannot, is not able to create excellence because, because they, the artificial intelligence fish into a pond, which is, uh, they already existed, they already existing. Yeah. And so.

38:50
And so, okay, they can combine, artificial intelligence can combine the elements and come up with something, suggesting something, but forget a new creation, forget something really, you know, you can use the voice of some singer and have this singer singing a different song, but you cannot create a new...

39:18
knew something, you know? So it's like, so by the way, in my business, I do think that artificial intelligence already exists in the sense that, you know, in movies, editors and directors, they use temporary music while they editing a movie, no? So temporary music, which is not the music of the

39:48
and using it on the screen there. And so, and sometimes they ask the new composers to emulate, to imitate that music. And so what comes up is no meat, no fish, is something, is an hybrid, which is not even...

40:13
manageable by the composer or the self-naming composer who does this kind of stuff. You know, you cannot, you don't imitate someone else. Either you have your own voice, so it is worth for a director to hire you, or if you have to just put together a replica of something else. So this is artificial intelligence. And we had people

40:42
true people, bones and flesh, being artificial intelligence already. So I do think that the use of artificial intelligence in the future will increase their job, but not my job. I am a potter. I am a kind of an artisan, a craftsman.

41:12
making pottery, you know, in my own atelier. But without me, IKEA or other big groups would never be able to create a new vase or a new lamp or new, if people like me wouldn't exist. You know, if some creators of original stuff wouldn't exist, how could possibly an industry?

41:41
replay them, you know, then you have the good designers working for the industry, but they are, they are craftsmen, craftsmen too, you know, a good, a good designer is, is a craftsman too, is someone who creates something new, original, and they create the chain then to, to sell it out, you know, but, but, but you know what I mean? So, so how

42:11
What was the question? So artificial intelligence today cannot, it exists, but it cannot create excellence. No, cannot, cannot because, because it works on the already existing. So what at the founder sandbox with Carlos. Next question. I ask all my guests.

42:37
Not one answers the same. There's no right or wrong. That's the beauty of asking this question. What is purpose-driven enterprise or purpose-driven craft? What does that, what does purpose-driven mean to you? The purpose is the pleasure to do it. It's the pleasure of the process, you know. And you know,

43:06
I learned this from the great ones. And I don't know if you are familiar with the name of Pierpaolo Pasolini. Pierpaolo Pasolini was a director, a poet, philosopher, whatever, you name it. And at the end of a movie called The Cameron by Boccaccio, right? He's impersonating the painter Giotto.

43:36
And the painter Giotto is painting during the movie, like kind of a coma here and there, is painting a big fresco in a cathedral. At the end of the movie, before delivering to the authorities the fresco, the next day, Pasolini Giotto sleeps in the night and he dreams of his painting, of his fresco. And this fresco,

44:05
or gets life. So the Madonna becomes Silvana Mangano, the actress and the angel, Nineto Dauri, another actor, and everything is in movement. So the next morning he wakes up, stares at his own painting and goes, why to realize an opus of art when it is so beautiful only to dream of it?

44:30
And I've been questioning myself about the meaning of this phrase for a long time. And finally, I have an answer. The answer is to dream of something when you dream of something while you are in the process of doing it. I'm writing my own opera in this moment, right? And I'm writing my opera absolutely in a spec way, speculative, so nobody...

44:59
commissioned me is something, but they have the freedom while writing it to dream of it. And while I'm writing a sequence or something or a specific scene, I see the actors, I see the theater, I hear the orchestra. And so what moves me and also because it has been the only thing I was able to do it. I mean, and I understood this kind of in my early days.

45:29
And I was, I studied architecture too, but you know, but I never graduated. I missed only four exams before graduating. I said, but I am a musician already. Why should I take a diploma for architecture? I will never be an architect. I am a musician. So, and so I'm not able to do anything else but this, you know?

45:59
Last one, second to last, what does sustainable or sustainability mean to you?

46:07
Sustainability to me means integrity. Yes. So in my job, in my environment of work, I mean in my business, which I don't like to call business, but just to use a simple term, means integrity. So the way you deal with the people, the way you deal with the orchestra, the way you...

46:37
You deal with people and you deal with the orchestra, with everybody surrounding you and helping you while doing something. Beautiful. Thank you, Carlo. Last question. Did you have fun in this Founder Sandbox today? Yes, yes, absolutely. Also, for a reason, the listeners will never know. So I want to thank you from the bottom of my heart for joining.

47:07
me, Carlos Liotto, creator, composer, member of the Academy of Contemporary Art, and an incredible creator himself, who brought us to through stories in his craft of creating music, many analogies to that art.

47:36
a craft of creating a business that is resilient, purpose driven, and sustainable. So thank you for following the founders sandbox on your mainstream podcast channels. Have a great day. Thank you.
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Resilience: Creating a new Category
8 jun 2023· The Founders Sandbox
On this episode of The Founder's Sandbox, our host, Brenda McCabe speaks with Rushabh Mehta- CEO and Founder of MatchbookAI. They speak about Resilience: creating a new category by filling unmet needs with a new Data category. Rushabh shares his point of view on the primary challenges faced today in large enterprises, including latency, high costs associated with how data is used across enterprises and the control of the data.

You can find out more about MatchbookAI or contact Rushabh at:

[email protected]

https://campain.matchbookai.com

Transcript:

00:04
We're standing on the edge of something big. We're gonna make some changes. Welcome back to the Founders Sandbox. I am Brenda McCabe. I own and operate a consulting firm, NextAct Advisors, where I have a simple mission. I want to assist entrepreneurs

00:32
and entrepreneurs in building scalable, well-governed and resilient businesses. The Founders Sandbox, the podcast you're listening today, is an additional channel to feature founders, business owners, corporate directors, and professional service providers who like me, want to use the power of the private enterprise, small, medium, and large to create a change for a better world.

01:01
through storytelling with my guests that include topics around how they built their companies. We're gonna touch on topics like resilience, purpose-driven enterprises, and sustainable growth. And my goal with my guests is to provide a fun sandbox environment where we can equip one startup founder at a time to build a better world through great corporate governance. Today, I'm absolutely delighted. My guest is

01:29
CEO and founder of Matchbook, Rishabh Mehta. Thank you Rishabh for joining me today. Thank you, Brenda, for having me on this podcast today. I'm really excited to talk to you. We're gonna talk about data and truth, right? Yes. So Rishabh and I, we're gonna talk about resilience. The company that he founded back in, wow, 2018, and even before that out of his garage.

01:59
is truly creating a new category. And it's a great story, I think, to support the resilience theme that I often work with founders on. Roshabh is passionate about data quality and the power of data. So passionate that he started over five years ago, Matchbook AI, as a solo founder. Along the journey, and as I actually got to work with him, the pain of bad data

02:28
was actually a journey that he started over 20, 25 years ago and working at Raymond James, as well as with some government entities on really identifying the provenance of data, where it's coming from, and the truth and accuracy. So I wrote in a blog, some time ago, it's one of my evergreen posts around purpose-driven organizations and

02:57
John McKay, who at the time was whole field CEO, had written a piece on the trust-based organization. And he called out four types of business models that are today pretty prevalent as entities. He called out the models of the good business models, the true business models, the beautiful business models, the heroic and the true are

03:25
business models that are discovery and furthering human knowledge. In these sites, examples like Google, Intel, Genentech, and Wikipedia that express this higher aspiration as a trust-based organization. So they're true. So I think today, what we're going to talk about, Rishabh, is how matchbook AI and you bring truth to the space of data. So how did I begin?

03:55
So I have a long history with data as you well mentioned. I have been a passionate data guy since in the 90s and data has always interested me, attracted me and it's attracted me because of the potential that data has for organizations and through my journey over the last

04:24
25 plus years in working with data and in working with various organizations how I've seen how data can transform businesses and transform lives of others as well. Whether it's increasing efficiency in businesses, whether it's affording better decisions or whether it's lowering risk as well. So there is a lot of potential to data and that is what really attracted me to

04:54
to data and everything that I have been doing along this journey. So this to me, matchbook AI is really this natural progression of all the challenges that I have seen in that 25 year career with data and the challenges people have with data and how do we make that better? And so matchbook AI really started with the seed of we need to solve certain problems

05:23
in access to data, in access to the right data, the right information that can solve these business challenges and solve it more effectively and faster. So this is really the seed of Matchbook AI. It started as you mentioned in my garage. It was something that I was passionate about, wanted to learn more, wanted to see how we could solve and provide a solution to the space.

05:52
where there was nothing and solution was greatly lacking. And so that seed of providing access to data and the right data started back in your garage. The market you're addressing is actually quite larger than that of access. I think you're bringing me the

06:20
the data access to a different level. Can you speak to us about, you know, what is the market? And specifically, what are those pain points that you've identified on that journey, right? There was a seed, but then you've evolved it. Absolutely. So it's definitely any journey is about evolution. It's about looking at what is the future, right? And how do you impact the future? So it's not only looking at

06:48
what problems can I solve today that's in the marketplace but how do I solve a problem that's sustainable in the future that makes future life easier as well. So in terms of the problems we are solving, it's as I mentioned, the primary problem is access to data, access to the right information for decision making and this

07:16
just that problem comes with a number of challenges along the way. It's about the latency of access to data because latency can have a fairly adverse impact on business decisions on this data. So it's about solving for that latency. It's about solving for that very high cost that companies incur when it comes to bringing in the right set of information and getting it actionable.

07:45
and useful for business decisions. It's about taking decisions away from a few within the organization and into the hands of many. So these are all of the challenges that we are looking to solve with Matchbook AI. Wow. So you've talked about latency and the high cost of bringing in the data. And what I like the most is kind of the democratization, right?

08:15
Absolutely. It's about democratization and it's about giving people that have the ownership of this data, the power to make the decisions and the power to work with that data. And how you do that, how the platform at Matchbook.ai does that? Can you walk my listeners through instead of a top down, MDM traditional, bottom ups and the

08:44
different use cases across large enterprises. Absolutely. So if you think about a large enterprise, there are so many decisions at so many levels within an enterprise that need to happen on data. Each of these decisions have different inputs to them, have different data needs. So...

09:07
What I've seen in the industry today is when it comes to a lot of data being brought into the enterprise for decision making, there is almost this one size fits all model of here's the data and do what you may and as a result today what happens is when you need to make a certain level of decision you are going out and finding other ways to access data and you're really not only increasing the cost of data

09:35
within the organization, you're also increasing the cost of access to that data. And after that, a lot of this data is coming in and staying siloed within business decisions and not used across the enterprise. So if I, if I think about a simple use case of sales and marketing, and, and I just talk about the various types of data you may need at different points within that cycle of sales and marketing.

10:05
If you look at prospecting, you are wanting to bring in some basic information so you can figure out which accounts you want to go after. If you think about once you figure out which accounts you want to go after, you want to do market segmentation of those accounts so that you can either give it to the right salesperson within the enterprise to go after that account or you can classify it in a way.

10:33
that you have the right sales motion against that enterprise. Now those classifications could be based on the size of this account. It could be based on the revenues. It could be based on the industry that a particular account is in. And there's just this multitude of factors that go into that particular decision of market segmentation on who and how we are going to target that particular account.

11:00
Then as you go further down into the sales cycle, you start having to make other decisions like maybe we are ready to contract and sell to this organization. So now it becomes a question of, if you are an organization that needs to give certain credits, how much do you give? And now this takes a complete different set of inputs because this could be based on

11:28
simple thing like a credit score. It could be based on a multitude of things of not only the credit score but also having a deeper understanding of payment histories and other things about this organization that you're about to work with or the customer and being able to take that into account into that decision-making process of what can we sell them and how much credit can we give them and

11:58
And then as you get even further into your legal and contracting, legal and contracting may have its own set of needs for data. And these again are very different from everything else that you've brought in about these entities. They may need to know, for example, can we do business with this enterprise? Is this a verified company? And so they may need a completely different set of information that they need to bring in into this decision-making process. So if you think about just sales and marketing,

12:28
There's so many different decision points that happen within sales and marketing. And each of these decision points require different inputs and different data. So imagine today's world when all of this data is so completely siloed access to this data siloed, each division is taking its own unique path of deciding what data they need, where they source it from and how they get it. And the incremental cost of the human.

12:58
capital or the human cost of thinking in the right information so that they can make decisions. And then if you take into consideration latency, by the time you make these decisions, by the time you have all the data you need and you make these decisions, the data that you made that decision on could already have been outdated. So latency can play a major factor into that.

13:28
say give a certain credit limit to a company and you've used that credit score from two months back and suddenly the company started having financial stress or something happened, there's a bankruptcy warning or something like that on the company, you don't have that information to rectify your decision in real time and so there's a lot of cost to the organization and so this is just one example.

13:57
of where there's so much data need and there's so many inefficient processes today to get this data. And then lastly, even with all these processes, you still have to contend with the latency of the information you're using for your decision-making. And this is precisely what we're trying to solve. Yeah, so how is it that this new data category, what have you architected that addresses latency?

14:27
the high cost of ingesting data of multiple sources into an enterprise and decision-making across multiple organizations. How are you doing it differently and creating truly what you say is a new category? Right, absolutely. So, an interesting thing, I've been mulling over this for a while. Okay.

14:54
when we've been talking about the fact that we are creating a new category. Yep. To me, a new category is really about solving an age old problem and legacy processes in a completely different manner, rethinking something from the ground up in a way that it can not only impact the status quo, but it can, it can change how these things are done in the future.

15:24
So to me, that is what is creating a new category. It's, you rarely ever create a new category where you're doing something so completely different that it's never been done before. There are absolutely examples of that. If you look at Amazon and what they did to just the whole idea of being able to buy and sell products online. That is a completely new category.

15:52
where you've defined a completely new market. In our case, it's about taking age-old processes, it's taking legacy, it's looking at all the problems in that legacy pipeline, and then coming up with a solution on how we fix that. So to me, that's a new category. So the way we've looked at designing this is we've really looked at the problem head on. We've looked at the mechanics of the problem. We've looked at...

16:22
what is it underneath the scenes that is happening that is not only causing these issues with the latency and all that but it's also about what are the components that are required to solve this problem in a meaningful way and we actually started with looking at the people on the front lines. We are looking at the solutions, the business processes on the front lines to look at

16:52
how do we solve for that? And through that, how do we solve for this across the enterprise? And so by focusing on that, by focusing on not only looking at this sequentially, okay, these are the challenges that accessing your data, accessing the right data that you need for decision-making to looking at how do you then...

17:19
taking the next set of challenges within the enterprise and how do you solve for that and the next set of challenges and at the end of the day, it's all about how do you make this information more actionable. So we've gone through these stages even within our own platform to look at the most fundamental challenges, solve for that and then start solving for what are the next steps that an enterprise needs to take.

17:48
in order to get to that utopian point, which is an informed decision. And that's essentially how we architected Matchbook from the ground up to then solve for these problems. So we've really looked closely at what our customers do, what are not only their initial pain points, but what are the next steps in their journey and the next steps in their journey and keep addressing those.

18:18
till we get to that point of actionable data, actionable decision, and how do we solve all of that? And then of course, looking at, you know, if it was an ideal world, if the customer had everything they needed to make those informed decisions, what else would they need? What else would they be asking for? And really looking into that future, trying to look at that hourglass and say,

18:47
Okay, if you had everything you needed to make an informed decision today, you obviously need to then be able to have predictive capabilities of these decisions. You need to have good insights into the decisions you made and make sure that you have that constant refinement on how you can keep making better decisions into the future. And this is really what drives us and what drives Matchbook as a solution to solve for these.

19:17
very cold needs of enterprises. You know, it's a great, first of all, thank you. The predictive capabilities in the era we live now with Shadjibiti and the AI and matchbook AI. It's very exciting what we can do with data. The segue, I think you said it very well, by addressing an age old legacy album with the new solution from ground up, but you went to

19:47
the frontline workers when building this. You've also, who are your customers? You're very customer-centered company. Can you talk about some of the biggest lessons that you have learned from current customers that actually surprised you and maybe informed the future architecture of Matchbook AI? Can you tell us a story?

20:15
Let's see, that's an interesting question. So.

20:21
I remember the first customer we went to. We had essentially built the code plumbing of solving this basic challenge that we really thought because at that point, that was the challenge we had looked at, at the fundamental level of connecting for the system and access to external data. And we had built that out. And when we went to the customer,

20:51
They said that this is great. This is very useful for what we need and what we are doing today. But here's some other things we need to be able to do. And the one thing that stood out to me through all that was we don't just have one system integrating with third party data. We actually have multiple systems that need multiple data sets. And so when I initially started this,

21:20
I hadn't given it as much thought because I was really at that most fundamental level, that most fundamental building block of this platform. And so that really opened my eyes to the fact that we need to account for the fact that an enterprise is very unique. And even within the enterprise, there are so many colors. It is not

21:48
simple, it is not the same. Every system, every access point within the enterprise has different needs, has different types of data, has different data quality. And that really opened my eyes to the fact that a good solution cannot just address a single channel of integration, it needs to address an enterprise need.

22:17
which is very different, which can have many colors to it. And then how do we make this accessible? How do we make it easy for them? So that was a big learning for me. It was a big eye-opener for me to realize this is really what enterprises was all about and working with enterprises. And so that allowed me to go back, look at the solution.

22:47
look at how do we make something that we had initially built with a purpose in mind and build it for that higher purpose, how do we morph that? Some of the other learnings we've had from customers is again just within the same vein, there is so many differing needs within the enterprise that you cannot just assume that it's a one size fits all. So you just cannot

23:17
go into a platform or go into an enterprise with a one size fits all solution, that does not work. Also importantly, when you think about trust in data, and at the end of the day, this is what we are trying to do is we are trying to achieve trust in data. And trust also means transparency and it means control. So the fact that

23:46
people want to know where the data is coming from, how that data is coming in, and what sort of controls they have in place on that data was very important. I have seen other solutions fail because of lack of transparency, because they're simply black box solutions. And businesses, even though they use it because it solves a need, they're always uncomfortable because it does not allow them to have that trust.

24:16
And so for us, building trust into our solution was just as important as building a solution that met enterprise needs. Fantastic.

24:30
You're now into the fifth, sixth year of a company and you scaled from what five employees up to how many today? We have between I think full-time, part-time contractors and everything we have close to 82. 82. Now. Always been a distributed company. You've survived through the pandemic. You've been growing at a hundred percent.

25:00
year. Can you speak to the resiliency and bootstrapping this company as you've built? You know, 82 person strong, 32 customers, fortune 1000 customers. So how has bootstrapping and the resiliency? What is in your toolkit? So resiliency is interesting. Resiliency is

25:30
Going through a hundred no's before you get to a yes. Resiliency is about the trust that other people put in you and upholding that trust, whether that's a customer that's come along this journey with us, whether it's employees that are willing to take the risk of working with a startup.

25:59
whether it's our investors that are willing to back us up and believe in me, believe in my vision and that truly is humbling to me. So resiliency is about making sure that we can uphold that trust that these people have put in us and into the organization and as I said, it's going

26:28
It's not an easy path by any means but it is definitely made easier by the trust that people put in you. Thank you.

26:41
And can you share with my listeners what it is you look for when you're discovering talent and you're building and scaling the company's culture? You're at that really, really critical point where you're going down if you're C-suite and bench strength. So what's critical when you're seeking talent to maintain the company culture?

27:10
Absolutely. So when I seek talent, I am truly looking for aptitude. It's less about the experience, it's more about the aptitude to learn because I have built teams before and I know that the most successful people

27:37
are not necessarily the ones with the most experience in a particular area, but the ones with the aptitude and the drive to want to succeed. So I place that above all when I'm looking for people to hire. When I'm looking to hire leaders within the organization, I'm also looking at how well they can build teams

28:06
they can lead and lead by example. I think that's very important to be able to build teams and build leadership that can lead by example as well. Thank you. I always like to allow time for my guests to share with my audience how to reach out to you and or your company. Can you speak a bit how to get in contact with Matchbook AI? Absolutely.

28:36
So anyone can go to our website, which is matchbookai.com. They can reach me at rmeta at matchbookai.com. Would love to talk to you, hear your thoughts about data, your challenges with data, or even just have a conversation around when you think about trusted data, what do you think about?

29:06
I love it.

29:09
So I have the honor to work with my guests on something that's very near and dear to the work I do with my clients and next act advisors. I work on themes or topics of resiliency, on purpose-driven organizations and sustainable growth. So I always like to finish the podcast asking my guests, what's the meeting to resilience? I think you've already shared

29:38
your definition, but what would be your, what does purpose-driven enterprise mean to you? To me, a purpose-driven enterprise is about changing the lives of others for the better, whether it's changing the enterprise for the better, whether it's changing the lives of people working within there for the better with better decisions.

30:08
It's about doing something that can have a positive impact into the future. Thank you. And from a CEO that's bootstrapped the company, what's sustainable growth mean to you? It's interesting. If you think about sustainable growth, that it could mean making sure that you're not spending more than you make.

30:38
That's not always the case with startups as we well know it. To me sustainable growth is about taking those measured steps and then really it's about building a company that has an impact way into the future and not just an impact into the now. To me that's a sustainable growth. Excellent. Last question.

31:08
Did you have fun in the sandbox today, Ruchav? Absolutely. Absolute fun. This was a nice way to spend a Monday morning, especially a Memorial Day. That's right. That's what we do. That's how we rock and roll in the startup world. Well, I wanna thank you for making this podcast possible because in full disclosure, I have been with you along the journey

31:38
for many years now and like to think that some of my good craft is at work at Matchbook AI. It truly is an honor working for you and really seeing how you bring resilience, creating a new category to the marketplace. So thank you again, Ruchat. And for my listeners, thank you for...

32:06
downloading the podcast, the Founder Sandbox, drops monthly and look forward to talking to you next month. Thank you. Thank you, Vlenta. Thank you so much.
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Min-Yi Shih: Intrapreneurship Through the Lens of a Scientist Solving Nonlinear Equations
16 maj 2023· The Founders Sandbox
On today's episode of The Founder's Sandbox, our host Brenda McCabe speaks with Min-Yi Shih. Min- Yi has a background in Physics and Ph.D. in Electrical Engineering, (quantum optoelectronics field aka laser, etc), got his MBA from UCLA, prior CTO, COO and GM in the R&D, defense, medical and communication equipment industries, angel investor and more recently advisor to early-stage founders and academics in the deep tech space.

Brenda and Min-Yi speak about “intrapreneurship through the lens of a scientist solving nonlinear equations”; How his journey started as a Research scientist at GE Global Research – where he considered himself an individual contributor; soon evolved to an individual enabler as a program manager, and eventually as an organizational “sherpa “guide for startups and academic institutions.

You can find out more or connect with Min-Yi on his linkedin page at: https://www.linkedin.com/in/min-yi-shih-86506a3/

Transcription

00:04
We're standing on the edge of something big. We're gonna make some changes. Welcome back to the Founder's Sandbox. I'm Brenda McCabe. I own and operate NextAct Advisors, a consulting firm. Where I have a very simple mission. I want to assist entrepreneurs and entrepreneurs in building scalable,

00:33
well-governed and resilient businesses. The Founders Sandbox podcast that you're listening to today is an additional channel that features founders, business owners, corporate directors and professional service providers who like me want to use the power of the private enterprise, be that small, medium or large to create change for a better world. Through storytelling with each of my guests, we'll touch on topics.

01:03
like resilience, purpose-driven enterprises, and sustainable growth. And my goal is to provide a fun sandbox environment where we can equip one startup founder at a time to build a better world. Today, I'm absolutely delighted. I'm joined here with my guest Min Yi Shi. Min Yi has a background in physics, and he has a PhD in electrical engineering.

01:32
actually in quantum optoelectronics field, I got lasers. We're gonna talk about lasers today. He got his MBA from UCLA after prior operating roles as chief technology officer, COO, and general manager in the R&D, defense, medical, and communication equipment industries. He's also an angel investor, and more recently advisor to early stage

02:01
founders and academics in the deep tech space. Min Yi and I are going to talk about entrepreneurship through the lens of a scientist solving non-linear equations. So welcome Min Yi to the Founder's Sandbox. Hi, glad to be here. Thank you. How his journey started first as a research scientist at GE Global Research, where he considered himself

02:30
an individual contributor. It soon evolved to an individual enabler, in his own words, as a program manager. And eventually as an organizational sherpa, or guide for startups and academic institutions, is what today's podcast is about. So thank you again for joining me in the founder's sandbox. You know, you and I, we've...

02:56
found each other in many pitching events, largely in deep tech, you're with Tech Coast Angels, Los Angeles Adventure Association, and a lot of the universities here in Los Angeles, UCLA, USC. So we've run into each other, but more frequently, more recently, you posted in LinkedIn an interesting post about how you work with deep tech scientists

03:26
to identify pricing strategies using nonlinear equations. And I thought it was interesting how you work with these scientists and it struck an interest in me because I work with the Deep Tech founders and I work with them on pricing issues around supply and demand. So I come at it from an economist point of view. So can you share a little bit about that post that you provided in LinkedIn and that cut?

03:54
caught my eye and I asked you to be a guest and you delighted me and agreed. So thank you. Sure. Well, thank you very much for the very kind introduction. The post, the reason I wrote the post is that after talking to a few startups, specifically those are startup with a co, with a founder that have a very deep technical background.

04:21
Right. They all start up with, you know, CEO is in a financial background or any other background, sales background. But because I work in my field, I talk to a lot of founder in the deep tech area or med tech area, medical. Oftentimes they are approached things in based on their training.

04:47
And what I try to do is actually speak the same language, the language we share as a scientist or engineer that be able to convey the message and then we can move forward and be able to ask you what we discuss and then come and find the answer or the answer is close enough to what we try to achieve by the sensor. So...

05:16
During the conversation, and I used many example of how we were solving equations, those equations don't have exact analytical answers, but there's an approach to find a range or getting too close to the true answer, for say. So that's how we started. I love it. So let's talk about nonlinear equations, bringing it into the mix and entrepreneurship. I love it.

05:45
So you agreed to join me here in the sandbox. And I'd love to go back to your origins. You were born in Taiwan. Yes. And always wanted to be a scientist from get go. And you have a huge fixation with physics and specifically lasers. Was it Star Wars time? Or can you give us some background on where did it all begin?

06:12
So if I say Star Wars time, is that review my age? It does. It is. When I grow up, I want to be a scientist from the early age for sure. And, you know, watch TV, reading books.

06:36
The fascinating thing is there are things that make sound like a pew pew pew. And it's visible, it's a colorful. And I was fascinated by those things. And then naturally getting to start my early interest in the physics, particularly in the optic area. And then that's how I get my things going, we'll say.

07:03
And what was going on in Taiwan about that time when you were in high school? There were four Asian dragons that were largely growing really rapidly. Today Taiwan is a lion or a huge dragon in terms of semiconductors, which is front and center due to the supply chain constraints.

07:33
do in your spare time that led you to continue to follow a science education. You picked up parts, you made a laser. What was that you did? Yeah, lots of people that are close to me probably heard that story more than one times. Yes, in the high school time, it's a doom in the booming of the economic in Taiwan and

08:02
or Little Dragon. And everything's just booming and lots of material. You'll be surprised at a time the reason Taiwan grow really fast because a good tie with the U.S. And in fact there are specific industry that import lots of scrape parts from U.S. high-tech industry. They have a

08:32
you know, there are huge market in Taipei at the time. And then that's what I spend most of my weekend just going through the scrap yard and just see if there's anything interesting and useful. And then sometime I even get to ask the questions of what is that? And then there are people be able to answer me and help me to understand. So early on, that's my...

08:58
my own adventure to expose myself to the technology. And then I come across a few parts and then I was able to make the connection, actually acquire a laser tube and the amplifier and a few other components and go back home and put the trigger and turn it on. And that was my first laser. Amazing. And it's still operating today, right? If you go back. Yes, it's still operating today. And last time I checked, yes.

09:28
So after completing your undergraduate degree, you did military service and continued to be in the physics field and came to the United States to get your master's degree, right? And on to get your PhD in electrical engineering, always in the optoelectronics field? Yeah, yeah, optoelectronics. Yeah.

09:56
you know, continue with a journey that, like I said, early on, interesting in physics and the specificity in optics, naturally, I'm getting to those areas surrounding by lasers or quantum optoelectronics. I also, because from Taiwan at the time, we have a very good solid training on the solid state physics, which is a fundamental for the semiconductor.

10:25
So combined with the optics and the semiconductor that allow me to continue my own pursue or being a scientist for say, and then the focus on those area on the content side. All right. So after graduate school, your first employment was with GE Global Research. And I loved how you shared with me

10:54
that you considered yourself, you're a scientist, right? An individual contributor. You were gonna let him, right? And while still at GE Global Research, you then moved kind of up the food chain to a program manager, right? Acquiring. Yeah, I was fortunate enough. And throughout my journey, even in my school, and I go to GE,

11:20
I consider a lot of people that being important and critical that helped me to grow. And the very fortunate I was given a certain opportunity and be able to get into play a bigger role and making more impact. And I feel like I'm extremely blessed. And what I found interesting too, when speaking with you.

11:50
preparation for this podcast is you after GE, you then moved into a for-profit company. And you were managing first office CTO, then COO, an entire program of different grants that eventually would be...

12:16
commercialized, right? So products that had received grants and then were commercialized. So you were managed an entire set of programs. And again, moving up the food chain. And that I found was interesting, because you decided at one stage to go to the dark side, you went off and got your MBA at UCLA. Yes, I think I'm a PhD, you know, did you were you missing a degree? What made you do that?

12:45
Well, I cannot get enough of school. So I decide to go back to school, spend more time in school. Now it's this, it's throughout the journey. And like I said, I was giving and I was super blessed and giving a lot of opportunity after GE war for defense industry. And then lots of those government grants, non-diluted funding, be able to translate innovations.

13:15
good ideas into commercial. That whole journey is just to keep me going. And of course, during the time that I was giving many opportunity become a top executive for the company. However, I always feel like I'm learning things from quote unquote street, from my supervisor, from my colleagues.

13:41
and then slowly acquire a different skill and along the growth of my own career. So at a certain point, I decided to go back to school and to see what exactly is being done. And I'll try to get more from the street smart for say that gets a little bit more book smart. Right. And you know, as a physicist, right?

14:09
Yeah. And fast forward to what you do today, advising startup companies or even academic programs. You continue to think like a physicist in solving equations, right? Nonlinear equations. But what is that? What are those elements that you found while doing your MBA? So time, money, resources. And what does a physicist bring to solving

14:38
business problems with great technology. What's in that equation, Min Yi? Okay. First of all, let me clear that. Yes, I want to be a physicist. And then some of my friends even always call me and say, you are the one to be a physicist. Because I get my degree, they teach me because I eventually get my degree in the electrical engineer.

15:03
I think that train me well in a sense that we can streamline a complicated problem and be able to hopefully and see what the essence about any complicated issue or challenge and be able to address that. So by training, we solving equations, we solving complicated equations that involve with the time.

15:32
and of course apply to a business that is money. And if you want to extend the equation with a different parameter that I for say, there will be things like an infrastructure, like IT, like a location, like resource, the tool, the hardware tool, the software tool you use for the enterprise. And then eventually,

16:00
that all include the most, I find out the most important factor and which is a super, super nonlinear in those very competent equation is the human. Business around the human. So just in addition to those factors, human become a, human factor become a big of my own thesis for say, or the equation for say, and try to solve in the daily.

16:30
basis for the business. Yeah, so managing personnel, right? Managing the talent is one of those critical elements in the equation. I think you were still at GE Global Research. You were working largely in, I think, fiber optics. 9-11 happens, right? Oh, yeah. Yeah. I believe it was the first week I worked at GE.

17:00
Oh my god. 9-11 happened and everybody running around and don't know what's going on. Internet literally down, CNN only have one page and they say, we will be right back. There's a jet hit the World Trade Center. At the GE, someone in engineer was be able to salvage a

17:25
black and white TV with antenna and the plug-in and turn on and see a live broadcast from TV. So that changed me a lot. And then that's also triggered me later on that want to get involved on the homeland security and defense side because I think that is a point a lot of people triggered and start to pivot their thinking.

17:55
what they really want to grow into and get back to the society or community. Yeah, that's a very critical point in my life, yeah. And so you started working more in defense, as you said, and also the US government's budget, right? Yes. Through lots of money. I mean, there was a major shift and the largest seed fund in the United States of America

18:24
for my listeners, a lot of people don't know this is SBIR, right? Small business. Yeah, and STTR. And can you talk about, first of all, some of the defense programs, or R&D programs that had dual purpose technologies, and explain that to my listeners, right? Because there's a commercial component. And likewise, you know, speak to

18:53
What is SBIR? What is STTR and how you are today collaborating with a lot of companies and academic institutions, right? At LARTA. So, it's a loaded question. Thank you. Yeah, it is. And I will say that I have a lot of experience with SBIR, STTR, and they are many, many experts out there. And I'm going to provide my own point of view.

19:22
It is a big industry and it is the biggest, largest seed funding for innovations. The US government different agency, not just in the Department of Defense, is that also the Department of Energy, NASA, NIH, and Health, and Homeland Security, and Department of Transportation. Everybody have SBIR program.

19:52
is to encourage that the small business that specifically defined it for small business. It's not for the large corporate to grab the money for the encourage a small business, especially startup to be creative and to generate a new idea to, and then throughout this funding, allow those founders and the small business and be able to get help from the federal government, execute their plan and then...

20:21
eventually commercialize it or transition their technology or solution into the market. The dual use is mentioned a lot in those programs. Basically, the government, different agencies like NASA, Defense, Homeland Security, NIH, they may have a different point of view of certain applications for certain technologies.

20:48
So they use the funding to encourage small business to be creative and then establish their business because all the startup in the early stage, they all need a certain cash injection. That's capital injection, that's for sure. Right. And for- Yeah. And by that, it's not only, I think the return

21:15
to the US government is not just help the small business for say, but it's also promoted the entire entrepreneur spirit for say, I mean, in the entire US. I do think that is a cornerstone for the US economy. And then, in fact, if you want to call that a be part of the American dream, that is what is a program actually leading to.

21:42
Yeah. Right. And SBIR is Small Business Innovation Research and STTR is? The STTR is similar to the SBIR, but that require a collaboration for the small business with nonprofit institute. Oftentimes it's academia. So the STTR will be a vehicle that for example, you can help a group of researcher or professor or students.

22:11
they have a great idea of a certain technology or solution and be able to through the similar channel and bring the solution to the commercial market. Yeah, so dual use and dual purpose technologies are goods and software and technology that both have a civilian as well as a military application. Right? Military and can be at home and security. Right, home and security, exactly.

22:40
You know, the...

22:47
You started at GE Global Research. We jumped ahead today in the podcast to talk about what you do today as an angel investor and advising early stage companies. There was a middle. I'm going to bring us back to the episode title of the podcast, which is intrapreneurship through the lens of a scientist solving nonlinear equations. And when I was reading your bio,

23:17
Minyi, it just jumped out at me because you truly moved to the private enterprise as CTO for IntelliSense systems. And you were responsible for a wide range of standard and customized integrated electronic systems. Some of these were at early stage and you were eventually selling these, spinning these off, right? And, you know, so I'd love you to talk about

23:47
What was it like being an entrepreneur, right? Within a corporation, what was that like? Yeah, that's maybe that's what I try to explain that is everyday gimmick going.

24:10
Because as a scientist, if you, not just myself, even when I interview my fellow employee throughout my journey of my career, is always ask and I interview a lot of PhDs. And I always ask them, what's your vision? What's your dream? And everybody is more or less, I will say more than 90% of people are saying that I want to working on a unique solution, innovative solution.

24:39
and I will make it work and I will bring into the market so other people can benefit from it, from my innovation, from my good ideas. And I think that was a fundamental driving force for a lot of scientists and engineer to continue to improve their own skill and continue to working on a solution and eventually be able to solve problem.

25:08
to overcome any limitations and to face a challenge, a different challenge every day. And that is a truly a driving force for a lot of scientists and engineers outside, out there. Amazing. So while this podcast is being released in the month of May, 2023, the first week of May,

25:36
from April 30th to May 6th is National Small Business Week. Every year since 1963, the President of the United States has issued a proclamation announcing National Small Business Week, which recognizes the critical contributions of America's entrepreneurs and small business owners. You currently are serving as a principal advisor at LARTA Institute. Yeah.

26:06
where you contribute to programs both in the Department of Energy and National Institutes of Health, SBIR and TABA program. Yes. So what are you seeing as a principal advisor? What's coming through the pipeline in terms of interesting small business ideas? Oh, there are plenty. And that's, that's why we are in the United States. There's a plenty of good idea and

26:33
I love it. And yeah, this is the spirit of the entire country, I will say even, and that is to be innovative and to continue to progress, making progress, face challenge, overcome challenges. There are plenty of new ideas in different areas. I think the medical area specifically is booming.

27:02
because the aging population, and as well as a lot of new technologies, such as AI that we heard morning, one time per day now, and different infrastructure, architecture like IoT, that enable a post-COVID environment that there's a fast growing of the telemedicine, there's a fast growing of how to

27:32
analyze the data and be able to create new solutions, even in the drug discovery right now. And so I think that there's a, because the innovation we accumulate over the time and because the society is also changing, I think is a great opportunity for a startup entrepreneur to start a new idea and then leverage the SBIR, STTR opportunity to get the funding.

28:01
And along the side, the Top Prop Program is designed to help these founders specifically to do the market research because oftentimes they may have a lack of experience on how to conduct a proper market study and go to market strategy, pricing strategy. That's how we met at the beginning.

28:26
and all the different aspects of how to really run the business and then address any met need from the market and tailor their solution for it. So I believe the pop-up program on top of the SBIR, STTR program is definitely the way to go for a lot of...

28:53
a startup and they definitely should look into and try to leverage it. Yeah. And you were saying that the application, well, the grant writing process for an SBIR STTR is very similar to writing a pitch deck, right? Oh, yeah. Yeah. That's also come to.

29:16
That's why we have the episode today is to the lens of the scientists, right? Yeah. A lot of founders, they are scientists and engineers to begin with, like I say. They oftentimes write or put together a pitch deck, write a proposal or pitch deck in a way that presents their technology, presents their idea. It becomes a publication at a conference, scientific conference or...

29:43
a proposal will read like a publication, a scientific publication. And so I'm right now actually guiding and coaching a lot of small business and try to put together a business idea to support their technical solution. Like a pitch deck and all the proposal. They are a sale document.

30:12
you try to sell your ideas. And that, no, so not only you need to address there's a truly a market need and that you would be able to address the need, but you also need to come out with a show, both you have a capability and a capacity to execute the business plan, which means money, people, tools, infrastructure.

30:40
And so a lot of this is very similar, is a pitch deck versus just a proposal on paper. In fact, recently the Department of Defense, a lot of different agency, Air Force specifically, that they start have a very similar like a shark tank style pitch day. Oh really? Yeah, you submit your presentation within 15 minutes.

31:10
And by end of the day, you maybe got a check size this big. With your name on that. And then so, yet again, and there's a very similarity for the startup on how you prepare your pitch deck as well as you prepare for the proposal. Right, then you know the CIA has their own seed fund. In Utah, right? Yeah. In Utah, so. Yeah.

31:39
That's out there. We're all innovating. Hey, this is, this is your moment, Mindy. I'd like you to help my listeners know how to find you. You want to share your, your information, please? Yeah. I think that nowadays social media, LinkedIn. Yeah. LinkedIn will be the easiest way to find me. I do not have a TikTok though, so don't try to find me there. And linking will be the best way.

32:10
Fantastic. So I love to bring my guests back to the founder sandbox. I work on three topics with founders. I work with a lot of founders in deep tech myself, but it's around the topics of resilience, sustainable growth, and purpose-driven organizations. And I'd like to ask my guest, what does resilience mean to you? Meany?

32:40
that that's actually right away two words appear in my mind. Okay. One is core and the other word is flexible. So there's a one old Chinese saying that a good gentleman should be like a bamboo. You are strong, tall, but when the wind's coming, storm coming, you will bend.

33:09
and you'll come back. That to me is that you have a very strong core, you'll believe of what you are doing. And, but meanwhile, when we reach everybody knows, I mean, especially startup company, it's not easy to navigate through different obstacles and challenges. So from time to time, you need to be flexible, you need to adapt to the environment, but don't lose your core.

33:38
and don't lose your vision. And that to me is a resilient. Thank you. R.

33:50
It is, they have a different meaning now. So if I use the latest trend, the AI type of thinking, I will say that means your decision-making is based on data. Got it. Your decision-making or the way you run business is based on measurable KPIs. Right.

34:16
And that to me is a purpose driven enterprise that as long as you understand what you're doing and then equip yourself with the latest technology or tools and then build a business strong. Nice. Final question. Actually, it's second to last question. Sustainable growth.

34:44
and the work you do, what does that mean to you? That means that you not only need to take all the short-term challenges, but you also need to be ready to address long-term goals. Mm-hmm. So

35:07
So for an entrepreneur, for say that you need to deal with a daily activity, you are wearing multiple hats, there are many things throughout the year, maybe a finance, maybe an employee issue, maybe the markets, maybe the funding. But go back to what we just talked about previously that

35:31
Throughout this time, not only you deal with short-term challenges, but also you need to start to equip yourself and then learn from the data, learn from the information you gather throughout this journey and be able to prepare when is a new challenge coming up in the long run. So as a result, a sustainable growth that can really occur.

36:01
Lots of people try to fight and have a short-term vision and work on short-term things. And then you're going to have a hard time to pivot if you don't equip yourself or have enough capacity for say when a new challenge presents themselves. For the long term. That's super helpful. Thank you. Last and final question, Min Yi. Did you have fun in the sandbox today? No, I don't have fun because I could check out quiz.

36:30
No, I have a great fun today. Yes. Yes. I hope that everybody understand I'm, you know, gobbling and understand I'm, you know, sharing my experience and that kind of thing. Yeah. So I thank you. It's been a lot of fun. I love talking about deep tech. I like to have guests that are practitioners working in this fabulous ecosystem on building.

36:58
really resilient companies that can scale and have a purpose. So thank you, Mingyi, and your insights about intrapreneurship through the lens of a scientist solving nonlinear equations was a delight. Thank you to my listeners. I'm signing off for this month and thank you for joining the Founder Sandbox. Have a great day.
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Enhancing Resilience and Supporting Good Governance by Tapping Legal Expertise
13 apr 2023· The Founders Sandbox
On today's episode of The Founder's Sandbox, our host Brenda McCabe speaks with Lisa Greer Quateman – Corporate Board member, recently retired Attorney, and advocate of a greater presence for legal expertise on Boards of Directors. They speak about “Enhancing resilience and supporting good governance by tapping legal expertise“- how to incorporate legal practices into your startup to enhance the governing principles of your company.

You can contact Lisa or find out more about her at:

https://www.linkedin.com/in/lisa-greer-quateman/

https://www.directorsandboards.com/articles/singlemy-board-journey-lisa-greer-quateman

[email protected]

00:04
Welcome back to the Founder's Sandbox. I am Brenda McCabe. I own and operate a consulting firm, Next Act Advisors. At Next Act Advisors, I have a very simple mission. I want to assist.

00:33
entrepreneurs and entrepreneurs in building scalable, well-governed and resilient businesses. The Founders Sandbox is an additional channel to feature founders, business owners, corporate directors and professional service providers who like me want to use the power of the private enterprise, be it small, medium or large, to create change for a better world.

01:03
Through storytelling with a guest on topics around resilience, a purpose-driven company and sustainable growth, my goal is to provide a really fun sandbox environment where we can equip one startup founder at a time to build a better world through great corporate governance. So today my guest, I'm absolutely delighted, is Lisa Greer-Quaitman, a corporate board member.

01:32
recently retired attorney and advocate of a greater presence for legal expertise on boards of directors. Lisa and I are going to talk about enhancing the resilience and supporting good governance by tapping legal expertise. Thank you, Lisa, for joining me today in the Founder Sandbox. Brenda, thank you. It's a pleasure to be with you.

01:58
You know, I've known you ever since I landed in Los Angeles. We both were members of Women Corporate Directors. At that time, you were the LA managing partner of Pulsinelli and also a member, I'm working on getting your corporate board skills kind of honed at the National Association of Corporate Directors and the Pacific Southwest Chapter. Today,

02:27
You're a board member of the National Association of Corporate Directors, and you have chaired the marketing and communications committee, of which I was a member. And we learned a lot about social marketing and social media. Didn't we, Lisa? We did. We really did, especially during the pandemic. Oh my goodness. So kudos to you. And as a consequence of some of the work we did there, I got my

02:53
I guess the goal to actually go ahead and launch a podcast. So thank you for inspiring me. You know, eight years later, I've been in LA. I am also thankful for you. I am certain that my listeners who are many founders and business owners use legal expertise, but I think you're gonna shed some more light on why it's important from a corporate board expertise. I want you today,

03:22
to really demystify what it is that a board of directors does, right? And now that you're a full board member on several companies in the public sector, as well as private and nonprofit, how you do that in terms of bringing in legal expertise is what this podcast is about today. So thank you for coming in here and demystifying what a corporate board is. Oh, great. I'll do my best.

03:51
Thank you. So tell me, I always like to start with a story. Where did it all begin? You know, you chose to go to law school, although you were considering doing an MBA. So why did you choose pursuing illegal background? Well, I was I was a little confused at the time, because I thought that if I went to law school, I would not have to sell myself. That if I went to MBA school, I would have to sell myself. So I also had

04:20
a grandfather who had acquired some real estate in his lifetime and I was his first grandchild. And he told me in no uncertain terms that I would eventually need to be responsible for taking care of this real estate. And I did not want to be taken advantage of in the market. I wanted to learn my way around. So for those reasons, I went to law school. I then discovered that you have to sell yourself if you want to have a law practice. So that was where I got that wrong.

04:49
I guess I did graduate to running marketing and communications for the NACD chapter. So somewhere along the way, I figured out how to make rain as they say. Fantastic. So in addition to running the family real estate business and lawyering, you often describe your own entrepreneurial experience, right? So you, after law school, worked for a large law firm. You were on the East coast and eventually came here to the West coast. And at one point,

05:19
stage you decided to go out on your own. Tell us about your entrepreneurial experience. You know, it was fantastic. I really, I can relate to these founders and founders were among my most favorite clients along the way. I was in a big law firm and I've been, I was practicing for long enough that back when I was getting started, it was still quote unquote

05:48
women attorneys. And at the time it was okay for a client to tell a senior partner in a law firm he didn't want a woman working on his case or working on his account or something like that. So for me, I decided to sort of jump off the diving board out of the large firm environment and practice on my own for a little while and see how that would go. And it was eye opening because the clients that came with me did not discriminate against women. They wanted me for my

06:16
experience and expertise. So I ended up practicing on my own and building a boutique law firm over a long period of time before eventually merging back into a large national firm for a new entrepreneurial opportunity to open a Los Angeles, California office for a national law firm that had no presence there and to become the managing partner there. So the entrepreneurial bug can be in you whether you're in a small environment or a big environment. I guess that's what you call

06:45
And I know that you talked about when making that decision to actually go to a larger national firm and bring it to the West Coast because it didn't have a presence, you did that also to create opportunities for partners, right? So it was building a structure for those members of the practice to have a career path, which is, I think, a sign of purpose-driven organization.

07:15
back to Oh, that's well put. Yes, amazing. Amazing what you did. Well, while you were lawyering and the managing partner for personnel here in Los Angeles, you got the urge and the interest to develop your own path for board positions, starting with nonprofits. And then you

07:43
joined and participated in the National Association of Corporate Directors opportunities for education as well as giving back. Today you're sitting on the board of the National Association of Corporate Directors, Pacific Southwest. How did you share yourself or share, how did you position yourself? Because oftentimes general counsels or lawyers just aren't present as full board members, right?

08:09
Oftentimes you're the general counsel, you are the secretary of the board, but how did you position yourself for full board membership?

08:21
There's a preconception in some quarters about lawyers on boards. Okay, don't put a lawyer on the board, the lawyer on the board is going to interfere with the work of the corporate counselor, the general counselor, second guess, the general counsel. Okay, or another another myth is the lawyer on the board is going to poo poo every good idea, won't take any risks at all has no entrepreneurial spirit. So in my case,

08:49
And I learned this through one of your other podcast guests. In fact, be sure to highlight your business experience and your business acumen and demonstrate that you can build a business. So in my case, I had run the law firms. I had been running the real estate business. And so I attempted to highlight that experience as an example of the business building expertise that I could bring into the boardroom.

09:19
layered with the acumen that you get from being a lawyer. And guess what? On all the boards where I serve, they're thrilled to have a lawyer in the boardroom now. And they obviously are not the ones who said we can't have one. And you see more and more people with legal expertise in boardrooms now because they understand not eliminating risk, but managing risk.

09:45
You know, many of my listeners are founders, right? So I love that shout out you made that you actually some of your favorite clients are founders and business owners. They have an early stage advisory boards, right? And they use professional service firms, legal firms. I published a post in LinkedIn and on my website, www.

10:15
Why good governance starts early. And I provide there five crucial steps to board formation. How can you make that a bit, I guess I provide a real case scenario of some of your activity in the boardroom, right? To show not only the legal expertise, but looking for strategic opportunities, with some of the regulation and the like.

10:43
You're highlighting a very important issue. And I just want to reinforce what you said about the post that you did on LinkedIn. I read it and I thought it's really a must read for founders because you're covering so many important issues. And in my case, because as you mentioned, I retired out of law practice. I particularly liked...

11:05
your statement that silver haired people can be founders silver bullets. So let's, let's keep that as a tagline for as long as we can, even though my hair, I don't know, you can look here. It's a podcast, but it's not that silver yet, but we're trying. So in my LinkedIn article, among the five crucial steps, I talk about legal documents, can you embellish beyond the legal documents for a founder?

11:33
other areas of expertise that founders need to look at? Well, you highlighted some legal documents that founders wouldn't necessarily think about, and lawyers might not necessarily think about. So I really do commend your listeners to listen to your sandbox all the time and to read that particular LinkedIn post. The expertise that you wanna bring into your boardroom, I think should be varied.

12:03
fantastic because of what we talked about in terms of a knowledge of a regulatory landscape and so forth. But the entrepreneurial side, the finance side, the business side, the marketing side, try to populate that early boardroom with all of that expertise. And I think you can then build a strong foundation for growth. Thank you. You know, what else? So what other guidance?

12:33
Could you provide when a company has moved from early stage to growth stage and they're into a potential eventual transaction? I loved your term. I think you called it legal fluff and fold. Can you provide some examples of the holistic view of corporate governance when you're working towards an eventual transaction? What have you seen in boardrooms? And what have you seen actually with clients of your own?

13:05
I saw loyalty to the, for example, the attorneys who helped incorporate a business and may not have grown with the business so that when the company came to a transaction stage, some big funding or M&A merger and acquisition activity, those attorneys weren't necessarily

13:34
attorneys who practice in that arena all the time. So be loyal to your advisors, but also be open-minded to what the business really needs and see if you can get folks to work well together. I used to really enjoy, especially once I was a big firm partner again, working with the smaller law firms, collaborating for the best result for these founders.

14:03
but also bringing in the specialized expertise that becomes necessary. You need ERISA people, you need labor people, you need all kinds of specialty help sometimes, Foreign Corrupt Practices Act, if you're selling overseas, all kinds of things like that, that the smaller professional advisors might not provide. So I think that is an important component for the strong foundation that you need before these transactions. The other is to anticipate

14:32
the due diligence requirements of your investors or of the company across the table. Be ready for that. The legal fluff and fold that I referenced is really just a matter of, it's not a complete, you know, strip all the sheets off and start over and buy new bedding. It's really just make sure that things are in order. Take a look with the eye of the investor. What are they going to want? Ask your advisors.

15:02
What is the due diligence checklist? What will I need to be ready for? How do I prepare my staff? How best to communicate with the staff about what these people are gonna want? And you'll be shocked to find that, oops, somebody forgot to do a filing with the secretary of state. Let's get that cleaned up. Let's talk through this lawsuit. What is our real exposure? How do we communicate effectively about this so that we're not concealing information, et cetera. So,

15:32
anticipating and being ready and having dry runs. I love it. Those are a lot of nuggets, nuts and bolts on good legal expertise, right? Even in a small and growing company. You know, I like to give an opportunity to my guests to let my listeners know how to contact you or follow you. You're very active in LinkedIn.

16:00
And you had a recent interview that I actually enjoyed reading. And the directors and boards.com, they had a, the board journey of lease agree equipment. So it's another resource for my listeners to get to know lease agree equipment and what you're doing to bring legal expertise into the corporate boardroom. So how do my listeners contact you?

16:28
your LinkedIn? What is your LinkedIn profile? Oh, it's it's just my name. So that's the hard part is spelling the name, right? Or they can get to me on Gmail. It's Lisa Quateman, L Quateman, Q, U, A, T, E, M, A, N. Excellent. So before we go, Lisa, I do like to bring my guests back to what I do at NextAct Advisors. I work with

16:57
founders and company owners on topics around resilience, on purpose driven enterprises and sustainable growth. And it always is delightful for me because I ask my guests, like I'm gonna ask you, what does resilience mean to you? Because nobody has the same perception. It's amazing because there's nuggets to, for the founders on what is resilience for you as a lawyer. I think.

17:24
I think resilience is building long term staying power, by being flexible and by being willing to be a lifelong learner. Thank you. And what does purpose driven enterprise mean to you?

17:40
I think a purpose driven enterprise has developed its mission and identified its goals and tactics for achieving those goals. And it's defined its mission by evaluating the needs, honestly, of its stakeholders, since a company's purpose is to meet those needs. What about sustainable growth? What does that mean to you? Well, I'm a back to basics person on sustainable growth. And for me, that means disciplined cash management.

18:10
and the avoidance of over leveraging or fancy accounting or revenue recognition tricks. Okay, last and final question, Lisa, did you have fun in the sandbox today? Well, I did pretty much but I see sand in my toes and I think it's kind of wrecking my pedicure. I love it because I think through having fun.

18:36
one becomes very creative and in the founder story and the founder journey, you do need to have your creativity. And I want to thank you for joining me today and bringing in your legal expertise and why it's important to have legal expertise in the boardroom at any stage in a founder's journey. Thank you and have a wonderful rest of your day. Thank you for those.

19:05
nuggets today. I want to also do a shout out this month of March is actually Women History Month. Lisa and three other women are featured in the founders sandbox as well as on my website, there are blogs around women leadership. And today, the day we're recording is actually Women's International Day. So thank you for joining me.

19:33
And I encourage my listeners to read this article in LinkedIn on Lisa Greer Quatman's single board journey. The podcast, Enhancing Resilience and Supporting Good Governance by Tapping Legal Expertise will be available on wherever you listen to your podcast. Thank you and signing off for today.
- Lyssna Lyssna igen Fortsätt Lyssnar...
- Lyssna senare Lyssna senare
A Woman in Transition: How I Found my Purpose
28 mar 2023· The Founders Sandbox
For our third Women's History Month special podcast, Brenda McCabe speaks with Martha Gamboa; CEO and Founder of Frendii. Martha shares how a personal journey of health and wellness led to building Frendii- a technology startup developing a solution for women over 50 to build community and facilitate frequent social and human connections.

You can find out more about Martha and Frendii at:

https://frendii.com

linkedin.com/in/martha-gamboa

Transcript:

00:04
Welcome back to the Founder's Sandbox. I am Brenda McCabe. I own and operate a consulting firm, Next Act Advisors, where I have a very simple mission.

00:32
I want to assist entrepreneurs and entrepreneurs in building scalable, well-governed, and resilient businesses. The Founder's Sandbox podcast, which you're listening to today, is an additional channel to feature founders, business owners, corporate directors, and professional service providers who like me want to use the power of the private enterprise, be it small,

01:02
medium or large to create change for a better world. Through storytelling with a guest on topics that cover resilience, purpose-driven enterprises and sustainable growth, my goal is to provide a fun sandbox environment where we can equip one startup founder at a time to build a better world through great corporate governance.

01:28
Today, I'm absolutely delighted to have as my guest, Martha Gamboa. Welcome, Martha.

01:37
Hi, Brenda. Thank you so much for having me. I was delighted that you wanted to join me in the sandbox this month of March. March is an important month as it's Women History Month, and I'm featuring quite a few women leaders in the founder sandbox. So thank you for joining me. You're founder and CEO of Frendi. You're a second time founder and first generation Latina entrepreneur.

02:08
You spent over 20 plus years in corporate America working for Fortune 500 companies like Allstate and AIG. You're passionate and very driven and you care deeply about real, in-person, social and human connection. And with your company, Frendi, you are on a path to make that possible. In the community of women over 50, in...

02:37
and around our country. So Martha and I today are going to talk about her personal story that led her to found Friendi during the pandemic. A woman in transition, how I found purpose and community. So again, thank you for joining me. You founded Friendi during the pandemic, but it wasn't your first entrepreneurial experience. Your story is one of resilience.

03:07
And I think because I have among my listeners, many, many entrepreneurs, they're gonna appreciate your own story of building a solution around a pain point of our modern society, loneliness in women over 50 years of age. Many founders are lonely too. So stay tuned for this up and coming podcast in which Martha speaks about Frendi. So.

03:36
You and I met through the business association of the Thai SoCal, which is the Indus Entrepreneurs SoCal chapter. And it was in an event in which an angel fund, the Thai SoCal Women's Fund for Women-owned Companies was being launched. And you came to that event because you are starting your journey on raising, seeking outside investment for friendly.

04:06
that it's timely to actually talk about one of the social ills that you're trying to address, and that is loneliness. And you often in our early conversations, Martha, talked about frequent social connection. And I got curious, and I thought, what is friendly about, right? You know, what is the social club? What is this? What is Martha working on? And you often quoted a Harvard study.

04:36
that scientists began tracking the health of 268 Harvard sophomores starting back in 1938. You and I weren't even around then. So this is during the depression. And they started a longitudinal study that would reveal clues to leading healthy and happy lives. And your business, Frendi, has kind of, through the technology platform, addressed

05:06
one of the illnesses of our society is a society and working for better health outcomes, how to facilitate social connections. So how did you come up with the idea of a prescription free, affordable way to make friends and with your business, Frendi? Where did it all begin, Martha? Well, the idea for Frendi,

05:35
goes back to my experience working as a personal trainer. After leaving corporate America, I decided to pursue a new career in health and wellness. And I wanted to be a health coach. In order to be a health coach, I needed to become a personal trainer or a group instructor. And I said, okay, so I started to become a personal trainer.

06:04
And my, you know, I, first I did some research, you know, is the fitness industry growing? Is it something that, where I can make a living? And my research showed that women over 40 and baby boomers were investing in their health. So I decided to work the target market that I was going to work with as a personal trainer was going to be women.

06:34
And my research also showed that we impose barriers. You know, we don't want to go to the gym because we're gonna sweat or perhaps because we don't know how to use equipment. So there's a lot of barriers that we impose on ourselves. So therefore we don't exercise and as much as we know we should. So I decided to make my personal training journey.

07:01
which I call my business Yaya Fitness. Yaya means woman or grandma in Greek. And even though I'm Hispanic, I chose that as the name, but I decided to make it mobile and go to women to remove that barrier. So during my journey as a trainer, someone hired me to walk with them. A female hired me to walk with her. And because the doctor,

07:30
did not clear her for exercise for various reasons that we won't go into. But she asked me, if I pay you, will you walk with me? And I was very surprised. And it turns out that I was already in the area. I was already working with a client twice a week in that area. She was only five minutes away. So I said, sure, if you can meet me during this time, on these two days, I can stop by and walk for 30 minutes.

07:59
Well, that led to three days a week. But then pretty soon we were walking four days a week and for an hour. And we did that for about six months. It was during my interaction with her, because my approach with the clients that I work with is very client centered. It's all about you. I'm not gonna go in there and tell you about my dog and my problems. It's about you. And I listened.

08:25
And she shared with me her life story, her career as a teacher, her divorce, her battle with cancer, the life of her two grown children. And I realized that we have a need to connect, that we have a need to share, that we want to feel like we matter, and we do, and we do. But life gets in the way. And so.

08:52
That is, you know, it was that experience with this client that inspired the idea for friendly. I went back and started to read and research about, you know, are we not spending enough time with others, you know, and why are we not spending enough time with others as friends or family and, and he just, I decided that this was a solution.

09:16
or this is something that I wanted to go ahead and work on. And so the idea for Friendly came about. At first I called it Go Do Social, Go Do Social, because it's about being out and being social. And then that name, I received a lot of feedback. It was not resonating well. So I went back to the drawing board and rebranded it as Friendly. And you know, the,

09:44
Frequent and regular walks with that client is something that you've also brought into the business model of Friendly. There are regular events that people look forward to. We're going to get into that a bit later in this podcast. But I wanted to go back to your initial research ideas. How have you addressed Friendly at scale?

10:14
And how is the business replicable? We're gonna talk a little bit about the actual, the app itself and the events that you have curated. So how have you addressed that? How's Friendly gonna be scalable? Walk us through that. That's a great question, Brenda, because as it is, I have attended, I am at every event that we schedule right now, because I wanna make sure that

10:42
every member who becomes a friendly member, that they feel welcome, that they feel that this is a safe space for them, a safe group where they can come in, remove their anxiety, because women share with me that they feel anxious when they're going to one of the meetings for the first time, what if I'm not accepted or what if I don't get along with other women? So I wanna make sure that they feel safe, I wanna make sure that they feel welcome and that this is a space for them.

11:12
And so obviously I'm only one person. And so I thought, okay, what, how can I make sure that I replicate this experience in different local communities? And I've come up with the idea of having community coordinators so that we can go ahead and have the same events, for example, in Irvine or in Long Beach, just as events that we have here in the San Diego Valley.

11:43
By having a community coordinator who welcomes the members, who is the face of Frendi at every event, that is my vision for scaling Frendi. And some of the core events that happen every month and are available on the scheduling, on the app itself are around food. Yes, yes. We have a monthly breakfast and it's always the same Wednesday at the same time.

12:13
And we have a dinner and it's always the same Friday at the same time. And I chose that to be the main events. Each month. And obviously we schedule a lot of events like museum outings and walks and, um, but those two events are very, very important because we are social beings and we bond, you know, and we use as, you know, as a society, we use food.

12:42
to build community. And matter of fact, there's another story that we haven't talked about and it was actually done by Oxford University that talks specifically about that, about the fact that food builds community and research shows that when we spend time eating with others, when we share meals with others, we feel happier about ourselves and more confident. And we, so.

13:10
the and it's obviously in a study from the UK right so it just makes sense you know to have those two main events be the core events at each chapter the breakfast and the dinner. You know Martha thanks I always like to bring my guest's experience back to the Founder Sandbox and

13:35
inevitably while raising money and while building your business, you've clearly looked at how large is the addressable market. Can you walk my listeners through the addressable market for Frendi? Well, you know, one of the first studies that I came across was the Cigna study from 2018. It's the loneliness study. And it talks about the fact that

14:04
one in three women, age 45 and older, report feeling lonely and isolated. So obviously friendlies for women over 50. So that inspired me to go in and look at the census data and just see, okay, so one in three women, age 45 and older, feel lonely. How many, what is the size of this group that report feeling lonely and isolated? So I decided to just focus specifically on women over 50.

14:33
And it turns out that there are 59 million women aged 50 and older living in the United States. So that gives you a sense as to the fact that this is a real issue that needs to be addressed because loneliness and isolation was deemed the health crisis of our time before COVID. And obviously COVID brought it to the forefront.

15:03
we realized that we are not spending enough time face to face interacting with others. So I decided to build friendlies specifically for women over 50 because I am of that age and I know other women in that age group that because you know as they're going through different transitions in life our social networks change you know you go from work to retirement

15:33
and you may be retired but your friends may still be working. So now you may not have someone to go out there and do the, they may not have the freedom that you have to go out there and enjoy things. Or you may be married and you are now divorced. Sometimes you lose friends, you know, as a result of that. So I wanted to go ahead and create a solution of a...

16:02
social club for women over 50 where they can feel you know what it's okay to say I need friends it's okay to join this group because I need friends because there's a stigma around that I think that many of us don't talk about the fact that we want to connect or we don't have the friends that we would like to have in our circle or the friends that we need but we don't want to we don't talk about that we don't say it out loud

16:32
And I wanted Frendi to be that one safe space where you can go and feel completely comfortable because you're there, because you want to make friends. And how do people find Frendi when they're doing a search? Well, many of the women that I've sat down and talked to, they found us on Facebook.

17:01
I actually decided to run ads on Facebook to promote friendly, because a lot of our demographic are heavy Facebook users. And, and I make sure that I sat down with the women who reached out and asked them, you know, how did you find us? You know, what was it that you were looking for? And they're very, very nice. And they're like, well, I was just typing in, you know, women, social groups, women, friends, and you came up.

17:32
I was very happy that Frendi came up. Either very effective SEO or you had the key to the one of the solutions for loneliness in today's society. And I want to bring it back to the study by the Harvard study of adult development. The punchline is, you know, the number of social connections is the single most relevant.

18:00
factor influencing one's quality of life. And friend is poised to be that one of those social connection that multiplies the number of friendships, right? Of women over 50. So what's the typical size of your of your groups, your clubs and and how many do you want to be opening in the next 18 to 24 months?

18:25
We would like to open at least nine chapters in the Los Angeles area Los Angeles county area and.

18:34
An ideal size would be maybe 20 to 30 members. However, even though a chapter can have 20 to 30 members, keep in mind that not all the members attend every single event because with friendly you pick and choose an event. You may have the availability to go to the breakfast or you may have the availability to go to dinner. So what I've seen is that having small groups, you know, 10 or 11 at a dinner

19:02
It really facilitates for conversation and really engaging. I'm not to say that we cannot have a dinner with 25 people or 25 women, but it definitely lends itself for a more intimate setting where you can actually have a conversation with a lady to your right or in front of you or to the left. And I feel like you're missing out way down at the end of the table over there. Right, right. So. And what are some of the most popular events?

19:30
because you've been at this for over a year now. So what actually the breakfast, the breakfast and the dinners. And again, we go back to sharing meals. Right. So those are the events that are the most well attended. And in the ladies also tell me that they enjoy that that they look forward to the breakfast or the dinners. Excellent. So March is women history month, as I mentioned, kicking off the podcast.

20:00
For those women who are listening in from the audience, would you like to share with them your aha moments in finding your purpose in founding Frendi way back when? That's a very, very deep question because I found my purpose when I didn't realize that I was looking for purpose.

20:29
I, when I realized that when I was still an employee at corporate, I was still working in corporate America, I was doing a health assessment. Okay. You know, a lot of corporations when you're doing your open enrollment and you're selecting your benefits, like your medical insurance and dental, they do health assessments. They ask you a bunch of questions, you know, about your lifestyle. Do you smoke? Do you eat vegetables? Do you exercise? Do you have a lot of stress in your life?

20:59
And after I answer all those questions, my results were all red. I was a walking, I referred to it as a walking time bomb. Because of my age, because of my gender, because of my ethnicity and my lifestyle, at that time I was in sales, highly stressful. And obviously I was not exercising or eating enough greens. I was predisposed to heart disease, diabetes, high blood pressure and premature death. So talk about a not.

21:28
Oh, we shouldn't laugh. No, no, you know, no. And for me, it was it was a very.

21:37
It was a moment for me to pause and I'm thinking, wow, there's only two things that I can do here that are within my control. Eating better and exercising. So I joined a running club. It just so happened that here in my community, right here, down this two miles from me, they were opening a running shoe store and they had a running academy. And I

22:05
I mean, Googled up the, Googled the name of the store and found that they had a director for the Running Academy, reached out to Bob and he said, come and join us. We get together three days a week and we run and we train for a race. And you don't have to join, but just come and check it out. So I went and you know, they would meet Mondays at 6 p.m., Wednesdays at 6 p.m. and Saturdays at 7.30. Now mine, now I used to run in high school.

22:34
But that was a long time ago. And I was afraid. I was like, oh my goodness, I'm gonna go run. And I showed up at 6 p.m. and it was a group of men and women, different ages, and very welcoming. And we just started running. Yeah, of course, it was interval. You were doing intervals to train for a race, right? So you run for a minute.

23:03
You walk for two minutes, you run for a minute. And, uh, I decided I would go ahead and stick with the club. I joined the club. So I trained to run my first 5k in South Pasadena. And after that, Bob said, okay, Martha, are you going to join us? We're going to train for a 10 K. I'm like, that's double the mileage. And I decided to sign up and I trained for my first 10 K.

23:34
And after that we completed that, trained for my first half marathon.

23:42
After I completed that, I transferred my first Los Angeles Marathon. Now, that was the moment that I realized that I was changing. I love the feel of the community. I love showing up to run with the group because, but again, just like we do when you go to these friendly events and you see the members over and over again, you build bond, you trust, and you become friends.

24:12
that happens when you're running or I'm sure I'm sure with any other activity that you you partake on a regular basis. And I love how I was feeling I love how strong I was feeling I love how happy I was feeling. And that was my moment I decided, I want to help women, you know, I just women feel like I do.

24:42
I wanted to share that feeling with other women and community and it goes back to community. And social connection. Wow. And you do have a love of books, right? And you've mentioned quite a few during the podcast today and they will be available in the podcast show notes. So I'll be getting those authors and names of books.

25:11
But I particularly like one that had a little girl. You found it in a bookstore down in San Clemente. And again, you find the things that speak to you when you need them most, but you don't know that you're looking for them. So I was in San Clemente, in what I think is this little shop, and there was a book. It's a small little book with illustrations that looks like a child would have created them.

25:41
It is a little girl with a pink dress, black hair.

25:48
And the title of the book is You Went Out on a Limb, The Limb Broke, and You Learned You Could Fly. Beautiful. So that also inspired me because many times we're afraid of failing and that keeps us from trying new ventures, going out for promotions or doing different things.

26:16
And to me, what that meant that, you know, but even if you fail, if you fall off, if the branch breaks and you fall off.

26:26
you are going to discover that you are stronger than you think and you're going to be able to fly. And so for me, I decided that this is that, that's the message that I took from that. And so I decided not to be afraid. It is a failure, it's a great opportunity to learn. And you created a second entrepreneur opportunity with Frendi.

26:52
and shared with my listeners, a woman in transition, how you found purpose and community. So I like to allow my guests to provide some contact details and how can my listeners find more information about Frendy and about you, Martha? Well, you can find me on LinkedIn, Martha Gamboa, it's look slash Frendy, but you can also log into the website

27:21
www.friendly.com and it is spelled F-R-E-N-D-I-I. So a little bit different. And there's two I's for a reason, because it takes more than one I to be friends. I love it, friendly.com. And a final round of questions. I'm gonna bring it back to the founder sandbox. I like to ask my guests about the meaning of the

27:50
following three words, resilience, sustainability, and purpose. So what does resilience mean to you, Martha?

28:01
To me, resilience means being able to adapt to the stressors that come to us, that we're faced with. Could be a loss. It could be a loss of employment. It could be a divorce. Life is going to happen in many, in many different ways. And when you least expect it, and just being able to find the support that you need at that time, and not be afraid to ask for help.

28:30
not to be afraid to be vulnerable and build strength from that. To me that is resilience, we have to find strength and we've got to be able to get up and keep going. I love it. What does purpose-driven enterprise mean to you?

28:52
Purpose-driven means that you care more than just about profits, that you're addressing a bigger issue. So, for example, friend is addressing lack of social connection.

29:09
It's important to, profits are important, but I think the impact that you have in a society is also very important. Great. What about sustainable growth, Martha? What's that mean to you?

29:26
To me, it means that we care about the footprint that we live on the earth. Try not to impact negatively the space that we're in. If you're, you know, Trendy is not an environmental enterprise, but to me, that's what it means. Just be mindful of the impact that you're making around you.

29:57
Thank you. I wanna thank you. Oh, there's one more question. And so final question. Did you have fun in the sandbox today? Oh my goodness. All right. Well, I want to thank you again, Martha, for joining me here in Founder's Sandbox and sharing your story, not only your personal story of resilience, but also the creation of Frendi.

30:25
and addressing a huge pain point in our society today that has only become larger, which is loneliness. And Frendi is all about creating a platform for women over 50 to create social connections. And thank you to my listeners. You can access this podcast on any of your platforms

30:55
Apple Podcasts, Spotify and others. Signing off today, see you next week. Thank you.
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Veronica Parmar- In Movement: Resilience through Pilates
16 mar 2023· The Founders Sandbox
On this episode of The Founder's Sandbox, Brenda speaks with Veronica Parmar. Veronica manages and teaches at a Pilates studio in the greater Los Angeles area, where her diverse client list includes professional athletes, entertainment personalities, seniors, and those recovering from injuries.

With her deep understanding and passion of the Pilates work, she is able to inspire her clients to gain flexibility, strength and body awareness. Veronica wants to expand her instruction to other aspects including guest teaching, workshops and Pilates retreats.

You can find out more about Veronica or contact her at:

www.pilateswithveronica.com

https://www.linkedin.com/in/veronica-parmar/

[email protected]

transcript:

00:04
Welcome back to the Founder's Sandbox. I'm Brenda McCabe. I own and operate a consulting firm, NextAct Advisors. I have a simple mission. I want to assist entrepreneurs and entrepreneurs in building scalable

00:33
well-governed and resilient businesses. The Founder's Sandbox podcast that you're listening in today is just an additional channel in which I feature founders, business owners, corporate directors and professional service providers who like me want to use the power of the private enterprise, small, medium and large to create change for a better world.

01:01
Through storytelling with a guest on topics that include resilience, purpose-driven growth, and sustainable growth, my goal is to provide a fun environment and a sandbox where we can equip one startup founder at a time to build a better world through great corporate governance. Today, my guest is Veronica Parmar, Pilates instructor and owner of Pilates with Veronica.

01:30
Veronica and I are going to talk about in movement, resilience through pilates. I've been a practitioner and a student of Veronica for too many years. Now I love going back. She's really built resilience in my body. And I was thrilled when Veronica agreed to join me in the founder sandbox today. So thank you, Veronica.

01:57
Well, Brenda, thank you so much for having me. I really appreciate you considering me for your show. So thank you so much. Right. Well, I'm going to give a little bit of background on you. Okay. And your business. So Veronica is owner of Pilates with Veronica. She has been an instructor at Yoga Works after studying under Jill Cassidy, a second generation instructor to Joseph Pilates, the original Joseph Pilates.

02:24
She grew up as a dancer and performed for more than three decades. Veronica's diverse client list includes professional athletes, entertainment personalities, seniors, and those recovering from injuries. Veronica, like many professionals in the fitness world during the peak of the COVID pandemic, had to pivot professionally. The story of her newly found professional identity.

02:53
is one of managing oneself. And if you've listened to my podcast before, or work with me in Next Act Advisors, I often go back to Peter Drucker's seminal piece on managing oneself. And when I asked Veronica to join me, it just was a really incredible aha moment for me, because

03:16
She used the words or words managing oneself several times in a spontaneous way. So we're gonna hear a bit more of Veronica's pivoting and creating a new professional identity. And she's done this through movement, resilient through Pilates. So Veronica, where did it all begin? You were a dancer for most of your life and now you're- Yes, so I was a dancer, very serious dancer.

03:46
competition dancer as a younger child and young adult and then was a dance major in college. When I got to college, I had also come, let me rephrase it, I had come from a small town as well as, you know, a small dance studio. So I had some dance technique issues that I didn't really realize that I had, some alignment issues, some...

04:13
body issues in terms of structural things and things of that nature. So I was basically instructed, we were very lucky in the dance department that I was in, I went to Cal State Long Beach, that we had a physical therapy department and we also had a, we had Pilates equipment. So I started, I took the first class and once we took the first semester, we were able to then use the equipment on our own.

04:42
And I noticed how drastically it changed my dance technique. Wow. It changed it incredibly. And I loved it. And it was something that was very, for me, there was a movement quality to it. I enjoyed that. I was getting stronger. And as I had mentioned, my dance technique changed immensely. And from there, I was working after I finished

05:13
I was in the dance, LA dance scene, working, doing all of that. There was no way with the two jobs that I had and auditioning that I wasn't ever going to be able to do any Pilates at that time. But I always kept it in my mind. I mean, I would take a class here and there, but really didn't have the means to do that as well. So.

05:37
I just, you know, that was something that I had kind of kept with me and wanted to sort of engage in that again, at some point, if I, the opportunity sort of arose. And then through your dance career, you did sustain injuries and you made a choice to not undergo surgery. Yeah, I had a herniated disc in my back sciatica three times.

06:07
and was encouraged or told basically at 26 years old that I should have low back surgery. And I still wanted to dance and I kind of rehabbed. I went through PT and I rehabbed myself and got back into taking class and back into that whole scene, which the more you're out of it and the more you're not practicing the skills that you need to audition, the longer it takes for you to get back.

06:36
to where you were prior to injuring yourself. But I, yes, so I sustained, I have a lot of injuries, unfortunately, and it just sort of is what it is when you are constantly pushing your body to limits that are not normal. And you do movement that's not normal, and it happens. There's a lot of injured ex-dancers out there. Right, but you chose not to abandon.

07:04
entirely. You did another first pivot in your career, right? You were with the Mobile Dance Company? Yes. So I was while I was still auditioning, I worked for a mobile dance company as office manager for a franchisee. It was a franchised company and basically stayed working with them for about 10 years.

07:32
I worked for the franchisee and then eventually worked for the owner. There was some absorbing of different franchises from other owners. Owners. And so I was doing that. I was still teaching dance. I was teaching also at a dance studio a couple nights a week and doing competition choreography with that. And then as working for the mobile dance company,

08:03
And I enjoyed what I did. I was involved in putting up 350 children's shows and dealing with parents and making sure letters are out and emails are out and we were receiving all the costumes and the costume orders correct. And how does this dance look? Do I need to go and intervene and see what's happening with the teacher? Right. So it kind of was a lot of different stuff that I did. I mean, it was all across the board from teaching myself.

08:32
to managing these teachers, managing just the whole thing. So I got really good at what I was doing and I enjoyed what I was doing, but I felt like I needed, I wanted to do something else. There was nothing wrong with what I was doing, but I felt like I think I could have easily just been doing that forever, unless I bought one of the franchises myself. And I didn't really particularly at that point.

09:02
have interest in doing so. So I decided to do my Pilates certification, as I said, with Jill Cassidy. Right. And I did that while I worked full-time. It was, you know, looking into different programs. It was one that I thought was very, I'll use the word serious.

09:28
there's a lot of bad programs out there. And I think it's hard to find something that is really well done. And she is an amazing instructor. She actually did not train under Joseph. She trained with Romana who trained with Joseph. So my error, she was third generation, but an amazing person. And I'm so happy that I learned the way that I did. It was a very classical based program. Okay.

09:57
So we were basically learning all of the exercises, the order of the exercises, all the equipment set up. And it was a rigorous program. It was something that I wanted, but I wanted to do it. And I liked that rigor because it reminded me of the dance world. We're used to that, at least in my time of dancing, might be a little different now. You know, part of it was that

10:26
little bit of scare tactic. And I was used to that. And I kind of liked it. Right. And it was very regimented, the safety measures from get go. Right. Because you are teaching on on equipment with lots of springs and weights. And it is quite, I would say, a complex system that benefits as you

10:55
professional athletes that have sustained injuries, the elderly, et cetera. So from there, so you finish your certification, you soon were off working at Yoga Works and moved into different positions as you build out the entire Pilates program at one particular Yoga Works store, our store fitness center.

11:25
And you brought in your program management, even back from the mobile dance time, you brought in your management skills as well as teaching. And at the time you were kind of what into your third or fourth year at Yoga Works, you were considering getting out of teaching. We opened, I opened, so I was part of the staff that opened the studio was March of 2016.

11:53
Wow. Ironically, it was March when we have 2020 when everything went askew. However, yeah, it was March of 2016. And yes, I had had sort of different roles at the time I started off as Pilates manager, then there were some shifts in regards to the company. But I was always teaching as well.

12:21
So I became the assistant manager and that was in December of 2019. So at that time I had just started as assistant manager. I was teaching, now I was teaching quite a bit group classes at the studio as well as all my private clients. Now I'd been there since 2016 so.

12:46
you know, with anybody that does what I do, it takes a long time to build a serious client base. And you get the people that come in and try, or maybe stick with it for a little bit, or maybe you don't really vibe with them, and they kind of filter out on their own. But at that point in time, I felt like I was at my best place ever work-wise. I had all the clients, the private clients,

13:16
They were all people that I loved working with. I loved them as people. I loved working with them. I had so much fun. The classes I had, I still liked, but I was starting to kind of phase those out a little bit and wanted to kind of get off of some of those. And then I was spending the rest of the time dealing with our front desk staff. So I was selling studio memberships. I was still selling Pilates packages. I was still

13:43
getting new Pilates clients now for other instructors that I had hired. And I was really enjoying doing a lot of different things for me. That's something that's I enjoy. I like to be able to have sort of different aspects of my job that I do. Right. And the pandemic sets in March 2020. Sure does. So

14:11
Talk us through the timeline and this is yet another pivot and back to Pilates with Veronica. Yeah, so I hadn't been in that position very long and it was going really well and then it started getting weird that week before everything shut down and I remember that last week at the studio was the strangest week.

14:42
It was just getting stranger and stranger with like, now we can't use props. Now we can't touch anybody. Now we have to make sure that, you know, all our members that come in see us frantically cleaning. And I remember my last day at work, that Saturday before the world shut down on Monday. And I was with my last client in the afternoon on Saturday and we both were like, this is so weird.

15:10
And I said to him, it's kind of like the last day of school or something. That's what it feels like. It's just like, there's some energy to it. That's weird, creepy and not right. And he's like, yeah, I just like, it seems like we're not going to. And we both kind of said, I feel like we're not going to be back here for a while. And that was what happened. And we shut down and like the rest of the world, which we thought was going

15:39
months and it turned out to be two years. And throughout this time, there's nothing like hindsight and thank you for your grace and sharing your personal experience. You managed yourself. You said, you know what, the only thing I have is I manage myself. So there was a furlough, right? And you

16:09
set out to create what you called very legitimate business, right? Walk us through, you know, what you wanted professionally in a world where you couldn't practice in a studio and how you recreated that into your current business.

16:37
you know, prior, you know, the few months leading up to that, it was we were going to close down some studios, you know, kind of consolidate studios. And then they just decided in that September, 2020 that they were going to lay everybody off. And then they decided then they filed chapter 11 bankruptcy and closed all studios completely. So I had to figure out what to do.

17:07
I didn't know, because I felt like I was sort of, the carrot was still being dangled, that we were going back to work and not maybe knowing how it would look. It probably wasn't gonna be like how it was, but going back to my beautiful Pilati studio that I worked in, which was, Brenda, I'm sure you could say, was a very lovely space. It was. So...

17:36
Strangely enough, about a month prior to that happening, a friend of mine reached out to me and said, hey, the gal that owns my duplex is looking to convert one of her garages into a little Pilate studio where can you, do you know where she could get her reformer? No. So I gave her all the information for this. There's a...

18:05
a guy called the Pilates guy that sells used equipment. So she ended up getting a reformer. She had other pieces already and was really looking for this space to be a place where she could do Pilates. She had done a certification of her own as well. Okay. I met with them. Again, this was before the full layoff and you know, they...

18:34
Adriana is her name and that's the wonderful person that I was connected with who is the owner of this home and little converted garage. And they basically said, Hey, you know, you could start teaching clients in here if you'd like. And I was like, Oh, okay, well, thank you. I don't you know, I'm still like, thinking it's like, you know, the ex boyfriend, you're gonna get back to

19:00
I think I have one more chance. And so, you know, once we were completely laid off, you know, like the studios are being cleared out, it's done. The breakup is official. I reached back out to Adriana and I said, you know, I would really like to start to use a space for my, I'm going to have, I'm starting my own business. Basically.

19:32
I just did it right away. I knew somebody who was able to do my website. We started that right away. I reached out to Adriana to see and Bobette to see if I could actually use that space. And we came across a rental sort of agreement. And that's what it was. I had to get this website up. I had to figure out a booking platform.

20:02
Right. Because I didn't want it to be, you know, I knew people, other people, teachers, it just kind of fly by night stuff or, you know, like it's a joke. And I didn't want that to be, I wanted to still function like I did when I was at Yoga Works. Like I had a schedule in the computer and I, you know, have packages that I was selling and things of that nature. So, you know, I had to find software that

20:31
was agreeable for me with the price point that I could. And pairing that with the website and making sure everything kind of works together. And then it was just kind of all hands on deck and trying to get emails out and reaching out to people and hoping that they would want to feel comfortable teaching or still being taught privately. But now, I mean, luckily the space

21:01
was the best space for Corona. It was the three walls space that was so important at that time. Right. And your own resilience and agility, I think you'd actually before being, when you were furloughed, Yoga Works did provide a lot of online classes and you were an instructor at time. So you had that kind of nailed down, right? Yeah. And then you rounded out.

21:31
Yeah, I started figuring out how to teach online, which was a different, different thing. And then I even, you know, I started teaching. They wanted us to try to see if our clients would basically use the rest of their packages through, you know, sessions online. So I got pretty good at teaching online and dialing that in. And so yes, I was doing that with them for, for a while.

21:59
And today you continue to offer some online, right? Yes. I was teaching for a while, really kind of in the heart of COVID was math classes online, but I sort of have kind of stepped away from that. It wasn't really didn't turn into what I was anticipating. So I just have a few private clients I still teach. And that's basically it. Duet online, not too much.

22:28
So two and a half years later, almost in half, you're operating Pilates with Veronica. If you look back, we've gone through two of your professional pivots, right? Long dance career, injuries, certifying with Pilates, and with a mobile dance company. At that moment, prior to the furlough, you were considering to move to management and less teaching.

22:54
What is it that you do today? And this is for those listeners to the founder sandbox, right? We're all business owners, founders, small, medium and large companies. What is it that you do today that mimics the assistant manager? I mean, you're not only the instructor, but you manage the whole gamut. So what, take a, you know, a hindsight look and what would you say that you continue to embody in the future?

23:23
your business. Pilates with Veronica.

23:28
I continue to kind of embody the way that I would conduct my day. So I would teach in the morning. Usually I'd have kind of this afternoon, lull time where I would do my work. So there's my managing of myself. So I continue to do my work. I do whatever reports I need to run, booking sessions, emails.

23:58
Um.

24:02
you know, charging credit cards. Yeah, good thing. But important things like that. You know, client relations basically, because sometimes, you know, the week might look one certain way. I mean, this happens often in the industry that I'm in, it's, then it turns into something else. And we're rebooking this person into this time slot. Now this person doesn't want to come here. So

24:31
I'm still kind of doing what I did. It's just on a very smaller scale. And I've been practicing with you for, I think, probably eight years off and on. I mean, during the pandemic, there was a lull there and I was unable to go. But one of I have had other instructors.

24:57
of the Pilates tradition, Miguelangelo in Spain, the original method. We speak about him often. He and Joseph. In reverence. That's right. But unlike Miguelangelo, truly your dance background, you bring it to the individual classes. And I would say that this is a distinctive way that you have found to

25:27
You know, by through movement, you find resilience. So speak to, you know, the creative element that you bring into our classes, because I never know what to expect when I get there. Which is what I want. I don't want... I learned the method in a very classical manner, which I think was very important, maybe not for every instructor, but for me.

25:55
It was the rote, it was the order, it was the things that were very parallel to dance. So yeah, I know you go to a ballet class, you go, please, Tandu's taking it. You know how it's gonna go. So you always know the sort of rote to it. And there is a lot of rote to Pilates, and especially in regards to being classically trained. For me, as I really started teaching,

26:23
a lot more. So I had been teaching prior to YogaWorks. I was teaching at a studio like two nights a week. But when I got to YogaWorks, I really had to teach a lot. And I had to make it fun for myself. Because I feel like there, and you know, you hear this all the time with instructors, there's just burnout quality of like, you're doing the same thing over and over again. And it's the same thing. It's the same thing. And there's this burnout element of it.

26:52
And I didn't want to be like that. And I wanted to make it interesting for me. And for me, it was, how can I, I know all these exercises so well. How can I maybe make this into this, but still it's still the quality that the integrity of Pilates is always there. But.

27:20
I'm making it fun and I'm making it creative that I enjoy. And therefore I hope comes across to the client that yeah, like you said, you're not sure what you're gonna do. You know, you're always gonna do certain exercises. That's for sure. But maybe sprinkled in between is something else that is not perhaps what you were expecting. And for me, that's just.

27:49
kind of grown into that as sort of being my personal style. Because I want, you know, to me, I find the biggest compliment that somebody can tell me is, oh my gosh, that went by so fast. Yes. Because if you are, if it's going by slow, you got a problem. So for me, it's like when anybody says to me,

28:18
Oh my gosh, that was so great. It went by, I can't believe the class is over or my session's over or whatever. That's a compliment to me in the greatest way because that meant they were being challenged. They were really, you know, in the moment. They weren't thinking about a grocery list and like, when is this over? So yeah, I just, I wanna do that because I want it fun for them. I want it.

28:46
but mainly also fun for me if I have to do this every day. And this is what I have. And this was, luckily this is what I had during the pandemic and now after. I was able to teach and in whatever capacity that was going to be at the time and as it's continuously evolved. So I'm happy that I have that. So I wanna make it good and fun. And I want it to be fun.

29:15
and I want you to be challenged and I want you to be surprised. And that makes me happy. Well, for my listeners, you heard it here. Pilates with Veronica. You know, you're all about flexibility, strength and body awareness, building that for your clients. How can my listeners contact you? Well, you can first, I have a website. So it's Pilates with Veronica.

29:44
So that's a great place you can send email inquiries through that. I also have a Facebook page. It's the same thing Pilates with Veronica. Okay. As well as an Instagram page. That's thank you. This information. Right. Simple. Now this information will be available on the show notes. Before we close the interview, I want to thank you again, Veronica. Thank you. I like to always

30:14
what I do with the founders I work with and it's building resilience and every company's different. Also, we talk about the purpose driven, right? Today, we've talked a bit about managing yourself and then sustainable growth, how to kind of scale. And I like to ask my guests and there's no right or wrong answer. It's just amazing. This is the funnest part of the podcast for me is what my guests

30:42
perceive what is the meaning of these three words to them. So what does resilience mean to you? For me, resilience means making it work, figuring it out, how to adapt to something that is different. I didn't want to have to adapt to something different, but I had no option. So how can I make it work?

31:11
have a work life that exists in general, and it may not be how it used to be, and that's okay. And maybe this is what it's supposed to be, but I have to try to make it work. I love it. How about purpose driven business? What's the purpose that's driven you?

31:33
I would say I'm a people person. I like being around people. I always held great integrity in any job I've had no matter what it was. And I take great integrity, I have great integrity and take great pride as well, I should say in my Pilates instructing. And...

32:01
I felt like just because I am in a space that's not the fancy studio, you're still getting the quality, you're still getting the session that you should. And I want to make people feel comfortable in that space wherever it is and challenge them. And I know they...

32:31
When clients come to you, they are putting themselves out in a manner that makes them vulnerable. I mean, it's just, you know, there's something about what we do working so closely with someone. They have to really expose themselves. And if they want to kind of move forward with their practice and it can be kind of scary. So I always want to make people feel

33:00
comfortable in that situation. Make it fun, keep it light, and make them feel like they are safe and that they can start to move in different ways that they're not used to. Cause a lot of times I see new clients, they're almost like you're asking them to do something that seems simplistic, but it's rather hard for them. So you can see almost this, like the vulnerability coming out and the like,

33:30
almost like tears in your eyes getting upset with themselves. Like, how did I get to this point that I can't even do this thing that she's asking me to do? So you have to make people feel comfortable. And I think that's how I conduct myself and want to have my purpose be moving forward. Thank you. That's beautiful.

33:59
And what does sustainable growth mean to you?

34:04
Currently, I'm just sustaining my own self. And with what I do as well, it ebbs and flows. I lose clients that it just happens sometimes. And I've had many, many that have stuck with me through thick and thin, but if finances become a little bit more tight, this is something that unfortunately is the first to go. Not necessarily because they want to or they need to, but...

34:34
you do. So I'm just at this point, sort of trying to sustain my business, understanding that I will lose clients, I gain clients and hopefully we get to a point where I'm, you're gaining and gaining and gaining. And who knows, maybe at some point I will have to hire an instructor or have to get a bigger space where they're so, you know, just continuing to.

35:01
uh, you know, move forward and try to grow in all aspects, grow myself as a person and, you know, deal with what life kind of puts forth to you, whatever that may be. And then seeing how my own business, uh, grows in its own. And it is a very people oriented business and high quality, high touch. And you do change people's lives.

35:32
I'm one of those. So there's one more question. Veronica, did you have fun in the sandbox today? I sure did Brenda. Not as much as I have. You have when you're teaching me pilates. Even, you know, I had so much fun. Even as so much fun, I should say, you reminded me even when you get mad at me, give me the stinker when I ask you to do something you don't want.

36:02
True. So free-fall. So to my listeners, thank you for tuning in today. My guest is Vrani Parmar. She's owner and actually instructor in the Pilates original methodology. We've talked today about in movement, resilience through Pilates. Thank you for listening to my podcast. Signing off until next month. Thank you.

36:31
Thank you so much. Thank you for having me, Brenda. It's been a really fun time. I've enjoyed it. Thank you.
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Betsy Berkhemer Credaire “How to get on Corporate Boards: Resilience and Intentionality”
2 mar 2023· The Founders Sandbox
Today our host, Brenda McCabe, speaks with Betsy Berkhemer Credaire. Betsy is an advocate, author, and search professional, CEO and President.

Her retained executive seach firm, Berkhemer Clayton Inc., has celebrated 28 years in business. The retained executive search firm specializes in senior-level national and regional searches with diversity focus for Corporate Boards, Communications & Marketing, Finance & Investor Relations, for client corporations, universities and large nonprofit organizations.

Additionally, 50/50 Women on Boards is the only national campaign to educate and enable more women to serve on corporate boards of directors, and encourage companies to seek and select women.
She's also author of two books, "Winning the Board Game" and "The Board Game--How Smart Women Become Corporate Directors"

You can find out more about betsy at

www.berkhemerclayton.com.

and her book "Winning the Board Game"

or find her on linkedin https://www.linkedin.com/in/betsyberkhemercredaire/

transcript:

00:04
Welcome back to the Founder's Sandbox. I'm Brenda McCabe. I own and operate a consulting firm, Nextac Advisors, where I have a simple mission. I want to assist entrepreneurs and entrepreneurs in building scalable, well-governed

00:34
and resilient businesses. The Founder Sandbox is a recent podcast. It's an additional channel to feature founders, company owners, corporate directors that are current and aspiring and professional service providers who like me want to use the power of the private enterprise, small, medium and large, to create change for a better world. Through storytelling with my guests.

01:01
on topics that include resilience, purpose-driven enterprises, and sustainable growth. My goal is to provide a fun sandbox environment where we can equip one startup founder at a time to build a better world through great corporate governance. Today, my guest is Betsy Berkimer-Crader. She's CEO and co-founder of Berkimer Clayton, a retained executive search firm

01:31
and CEO of 50 50 Women On Boards. Betsy and I are going to talk about how to get on corporate boards, resilience and intentionality. Thank you, Betsy and welcome to the Founder's Sandbox. I'm delighted to be here, Brenda. Thank you for asking me. And your consulting firm is called Next Act Advisors? Yes, ma'am. It's my next act rather than my last act. Right, it's an excellent title. And

02:00
Just wanted to emphasize that for your listeners, Next Act Advisors has a breadth of meaning that your audience certainly could take advantage of. Thank you. So you and I go back to about the time I landed in Los Angeles. I was making LA my new home. And at that time we coincided, you were president of the Los Angeles Orange County Chapter of Women Corporate Directors. And I actually got my first offer.

02:29
to join a corporate board of a US company. And I never negotiated a contract with a board in the US. And I sought out your help and you helped me negotiate my first board opportunity for a US company. And we became fast friends since, it was eight years ago. So I wanted to share with my listeners

02:56
that you not only are a trailblazer, but you're an advocate for diversity. You are a business owner. And the podcast today is about your story, about where you started. You had an advertising firm, a public relations firm. And you sold that many years ago and started a new career. And I wanted

03:26
start an executive search firm with diverse candidates. Can you tell us your story and how that began? Well, it's a long story. I'll try to make short Brenda, but it's such a pleasure to talk with you and with your listeners and to talk about entrepreneurship. Sometimes...

03:47
My favorite term is accidental entrepreneur, because oftentimes, especially women business owners start out not really thinking that they are going to own and build a business. Sometimes that sounds just too daunting, but start out with their job and then starting their job as an independent consultant and then growing it and building it. And that's sort of what happened with me with when I first started my public relations agency.

04:17
And because frankly, I couldn't find a job that I wanted. So I just started doing PR for companies and as a consultant. And suddenly it turned into many projects. And then I hired individual to work with me and therefore, well, a business. And I took on partners and we grew it to be the largest PR firm on the West Coast in a matter of 10 years. And then sold it to Golan, which is a global.

04:44
communications firm based in Chicago. I begin that I'm just a normal person who just, I didn't have any money to start a business, but I started the PR firm with a goal in mind that I wanted to do good work for companies and help companies really improve their brand and their visibility and their reputation management, which is what PR firms do.

05:13
And it just worked. And an overarching theme is always be optimistic like you are and just have confidence that things will work out. And if it doesn't work out, you can always go back and get a job somewhere. So that's how I grew the PR firm. And then when I sold it, I was able to stay on for five years. And then I launched the executive search firm, Berkhamer Clayton.

05:41
which does emphasize diversity and started it back in 1994, when diversity and focus on DE&I wasn't even heard of in those days. But what prompted me to start it was that I was involved in the marketing task force for Rebuild LA, which happened right after the riots, the civil unrest in Los Angeles back in 1992. That's right.

06:08
right, the king beating and what that led to in terms of civil unrest. And I realized that most of my corporate client companies did not have diversity in their senior ranks. And so I thought this was an opportunity perhaps to launch a retained executive search firm, a boutique, although providing the same services, corn ferry or hydrogen struggle, some of the big search firm names that your audience will have heard of.

06:35
They probably have never heard of Berkham or Clayton. We started as a boutique, we're still a boutique. But we've been able to over these last almost now 30 years, next year will be our 30th anniversary. We've been able to play senior executives at corporations and 62% of them have been women and people of color. And I'm very proud of that. It's a better statistic than any other search firm. And that's looking at hundreds of executive searches

07:05
we've handled. So pretty proud, Brenda. Thank you. I particularly like the story of getting involved with the task force and rebuilding LA. And there's currently a lot of preparations along LA for the Olympics that are just around the corner. So there's going to be additional opportunities to continue to build Los Angeles. Well, if I could add to that, that I've always been involved like you have with nonprofit organizations, I was on the board of March of Dimes when I was in my early 30s.

07:35
And building contacts, I didn't even know the value of being on nonprofit boards, but the primary value of besides being committed to a mission and helping with executing that mission. It's a great way to make business contacts other individuals who serve on the board with you. So I always recommend that for women and men.

08:00
in their mid-careers, even their early careers, to be on nonprofit boards, get to know business people, get to know the community really well. And to your point, the Olympics are coming up, but also there's a brand new mayor, Karen Bass here in Los Angeles and in other cities and states, new office holders, where your listeners can become involved as commissioners or as involved on the...

08:29
efforts, the agencies that those new legislators appoint people to. So there are several ways to become known, become visible and learn along the way, ultimately then years later leading to corporate board positions, which we'll talk about. Yeah, it's a great segue to your being an author. So a lot of the teachings you have provided to largely women,

08:58
on how to get on your first corporate board. You published your first book, Women on Board, Insider Secrets, which this book will be available in the show notes. The second book you authored, The Board Game, and actually I will do a little publicity. I was featured in one of the chapters here on my international, The Board Game, How Smart Women Become Corporate Directors.

09:23
Right. And then if I could add the third, Winning the Board Game, which is the name of the website where you can find these books, winn And the reason I did the books, the first was in 2012 and then Winning the Board Game was 2019, very recent. And the reason that I did the books was because there were very few women on corporate boards back in 2012.

09:52
In fact, the statistic was of all Russell 3000 public company boards in the US, the statistic was about 10%. 10% meaning of the board seats of those companies held by women. That's of thousands and thousands of board seats, 10% was not very many. So the books feature

10:17
the total of them, 110 women who serve on corporate boards and how they got their first board seat. As you know, since you serve on boards, it is hard to get the first board seat, but then subsequent board seats might happen because people know you in the board world, if you will. And so that story, these stories of the women and how they got their first board seats are really helpful. And it's a very quick read.

10:47
So for those of you in your audience who are looking to be on corporate boards someday, even then these stories will help you figure out how to do it. Bottom line is it's all strategic networking with the people you already know, people you've met through your nonprofit boards or through your business career, people you already know who serve on boards or they know people who serve on boards. And then they recommend you because they know you and they've seen you in action in business. So.

11:17
It's good to know how the system really works. It is. And if it hadn't been for your leadership and really gathering those stories together, it's very readable. But it's by the sectors where these women came from. I actually read your first book when I was between Europe and the United States.

11:43
the United States. And I actually reached out to quite a few of the women that were featured in your book and they've become friends and part of my network. And certainly my name has been cast come up for nomination committees as a result of some of the women you featured in those books. So thank you. In addition to being an author, you're not on Capitol Hill, but you get up to Sacramento quite a bit. You've been an advocate for a lot of the legislation in the state of

12:12
to increase the diversity in corporate boards. What's going on with initiative SB826? Well, that's the name of the law, Brenda, standing for Senate Bill 826. And we named it for August 26th, interestingly enough, International Women's Equality Day, August 26th, the 100th anniversary of when women got the right to vote in the United States.

12:41
and that was in the year 1920. Now that's the 102nd anniversary, 103rd anniversary will be this August, but that's the significance of SB 826. And the law was the first in the nation and the first one to stand up to require companies in the state of California publicly held companies, those are

13:11
stock exchanges to require that there would be at least one the first year and then two and then three women on their corporate boards no matter how many women or how many board members they have on the board and requiring just three even if your board is 15, 15 members requiring just three is not requiring a quota it is requiring enough women to have a voice because research says

13:40
whenever you have a group of three among a larger group, at least that minority group has a voice. So that's what the law says. And how it came about, I have never done a law before, never even approached Sacramento on a law. I only had made some contacts in Sacramento because I also in the nonprofit effort and became...

14:07
president of the National Association of Women Business Owners for California, because I had been the president of the Los Angeles chapter, there are 11 chapters of the Mabo. And so I became statewide president. As a result, I would visit Sacramento once a year and get to know some of the legislators. So I thought, well, why don't we try a law? This is back in 2012, a law that nobody else has saying that

14:36
We want to require three women on every corporate board. And what an adventure that turned out to be because whenever you get involved in politics, it's all your own expense traveling up to Sacramento and bringing in other friends who will travel up there with you and testify to the need for such a law. But I really learned a great deal. I had no idea how long it was gonna take or how difficult. It took seven years to get the law passed.

15:04
but it went into effect in January of 2019. Yes. And as a result, that year alone, 1200 women got on boards in California, 1200 women. And since then, I don't know the total number of individuals, but I do know that we have gone from 16% of board seats in California held by women to 34%, over a third of the board seats in California held by women.

15:33
More than any other state. And the national level is 28% of all public company board seats are held by women. So California is way ahead. I'm very proud of that. But it's an example for your listeners of just having an idea that may have legs. I had no idea, neither did my other Nobbel member friends, no idea if it would work or not, but we just proposed it. And then it's upon a life, a slow life.

16:01
but a life of its own. And then we finally got it, finally got it passed thanks to Senator Hannah Beth Jackson who was really the champion behind it. And she's from Santa Barbara and she's now retired but it's the proudest accomplishment of my life. It truly is. And it's a true testament of one of the parts of the title of your episode which is around resilience and intentionality. And it brings us back to

16:30
one of your current professional activities. I don't know how you do it all, quite frankly. In 2018, you were asked to become CEO of 50 50 Women on Boards. And five years later, you have taken this organization to over six continents with major activities in 19 cities. And because of the pandemic, a lot of this went on to a virtual environment.

17:00
your footprint is actually larger. Can you tell my audience or share with my audience, you know, what that journey has been like? I think it's largely around the metrics of just putting limelight on the number of women that are sitting on boards. And what's the program for 2023 looking like for 5050?

17:28
Other organizations also taking up the torch and saying, hey, it's not a matter of equal rights by any means, but it's a business issue to have more women on boards. And research, McKinsey research and many other independent reports say that when women are on the corporate board, the companies do better. They're more profitable by significant numbers and more productive.

17:58
and the workforce is better engaged, just because, as we know, women tend to focus on the details. That's a very general statement, but women get things done. Yes. So shining the light on the issue that more women were needed is for business purposes. That's what really propelled this

18:26
the role of CEO of 50 50 women on boards, which I'd like everybody to look up 5050wob.com in order to track the research. 50 50 women on boards tracks the research following how many women are on boards and how many are added every year and what it took to get them there. So it's a great service that 50 50 women on boards provides plus

18:55
educational workshops and events in those 19 cities you mentioned. So it's an example of helping to propel the momentum of something that was really needed, but nobody was paying any attention to 20 years ago. And it's a little anecdote. Back when I first started the PR agency, women could not get loans.

19:25
from a bank in their own name. I know. And I had to have a male, didn't have to be a husband, it could, in fact, it was a boyfriend off the street. No relation, had to co-sign a loan for a tiny little amount of 2,500 bucks to get started with some expenses for equipment that I needed. And it was just appalling. And it was the National Association of Women Business Owners way back in 75.

19:53
that took on that issue federally and got the women's credit bill passed in order to have women have their own checking accounts and women to be able to get loans. So I only point out that example that in 2020, I mean, in the year, the millennium, the year 20, 2000, yes, very few women were on corporate boards and starting to notice the issue, starting to notice that this needed attention.

20:22
and then gathering steam behind it with books, with the law, with other support systems and other organizations saying, yeah, that is a problem. That's how we've been able to build this incredible issue to what it is today. And just last month, it is a global issue. Just last month, the FCA, which is like the SEC in the US, but the FCA in London,

20:52
in the UK require that 40% of all board members be women in the UK. And so, you know, we're on to something big, women. It's a sea change. It is a sea change. It is. And you asked me what the program is for this year. It is continuing the city events for educating women where directors, corporate directors, men and women,

21:20
do one-on-one coaching with the women in, who attend the events and the same with our workshops. So we're continuing what is really working, educating women about how to use their own networks in a very strategic way to get themselves onto corporate boards. And with the goal of 50% By 2050? Or more.

21:45
So look at what happened with the, some of you may know that the Los Angeles Board of Supervisors now all five seats are held by women. And just in Arizona, which previously was a very conservative state, they've got now a woman governor and all of their top officers are women, same in Michigan. So we- And the new mayor of Los Angeles. And the mayor of Los Angeles, thank you.

22:11
You know, Betsy, I always like to give an opportunity to my guests to provide some information about how to get contact you and your firm. And these the information you provide here will also be in the show notes. So it's over to you. Well, thanks so much, Brenda, our, our executive search firm, which I also still own and run in parallel with 5050 is Berkamer Clayton. That's B-E-R-K-H like my name.

22:38
Clayton, my business partner's name, Fred Clayton, Brenda's knows well, and we're at berkamerclayton.com. And then I mentioned 5050 women on boards 5050 w OB.com. And I think you'll enjoy traveling around those those websites. On the 5050 women on boards website, we have the research you may filter by city.

23:06
not by city, sorry, by state or by industry to find out and, and overall, of course, nationwide to find out how many women are on the boards and what specific companies have how many women on their boards. And it's just eye opening. And great, great, great fun, but also a little bit, you know, disturbing to look at some of the statistics and say, well, why don't some of these companies have more women on their boards?

23:36
The needle's going in the right direction. Yes, it is going in the right direction. So I always like to bring us back to finalize to the founder sandbox. Next Act Advisors, my consulting firm, is all about working with founders and business owners on resilience, sustainable growth, and purpose for organizations or purpose for corporations.

24:06
What does the meaning to you in your own words of resilience? Well, I think about it occasionally because I like to remind myself to be resilient. And I just think through all my years of being an entrepreneur that you're gonna get no, the answer no a lot. You propose a certain project or something, you get the answer is no or not at this time.

24:34
Just don't accept that as something that's going to stop you. I think the key to being an entrepreneur or an entrepreneur inside a company is to be always optimistic. And so this one didn't work out, but the next one will. And it's a good sales technique to remind yourself that every no you get is closer yet to yes. I love it. That's resilience to me. In the entrepreneur world. I love it.

25:03
What about purpose-driven enterprises? I think what you've done with the businesses you have founded have been extremely purpose-driven. What's that meaning for you? Well, it sort of just happened for me in that when I was in the public relations business, I was doing good PR for companies without much purpose other than providing good service. And then when I...

25:29
stumbled upon and because I've always been an advocate for women and women in business. Clearly I was president of women business owners and as I mentioned, a novel and always advocating for women. It was quite logical that I would notice that there were a few women on boards and therefore that purpose really is the driving force of my life now. It's the fuel behind me.

25:57
continually until I kick the bucket, to put it in a nice word. I don't plan to ever retire. I don't believe in retirement. I believe, and sadly, some people might retire from a job, but then I believe you should pick up and become an entrepreneur right away. Because the kiss of death really is just sitting around and doing nothing. Even some people retire.

26:24
and from a regular job and take a year off, that's okay. But I'd say come back to work right away. Don't stop and don't stop until the day you- And consider sitting on a board of a nonprofit, right? Yes, yeah, absolutely. Boards of nonprofits and boards of corporations. Always, I do advise though, if you're interested in getting on a corporate board,

26:53
to think about that in your 50s, because most corporate boards ask their board members to step down at 72 or 75, and on public company boards, that's sort of a given. Therefore you wanna get on your first corporate board, certainly in your 50s, and enjoy a runway of 15 or 20 years before you step down.

27:21
But interestingly enough, even after 75, you can serve on private company boards, just not on public company boards. And many people do and continue serving until they can't serve anymore. Like, you know, many famous names, you know. What about sustainable growth? What meaning does sustainable growth have for you?

27:46
Well, I think related to the environment is what anything, any of us always need to be thinking about and what we are doing, are we helping the environment or are we hurting it? And therefore that's one definition of sustainable. The other is sustainable, can you keep the business going? Yes. Or can you scale it larger? Me, I don't need to scale to growth. My search firm is a great size

28:16
a great number of employees and I don't want it to grow anymore. I like the way it is. So I'm not trying to grow for growth's sake. And I don't think that growth has to be an ultimate goal. But getting to the point where you can all make a nice living in your own company, that's the goal. And enjoying what you're doing. And it's very purpose to come up with new ideas.

28:43
that your business can accomplish. That's, that's always important. So everybody stays interested in what you're doing. So it's, it's, it's fun to be an entrepreneur, everybody. I'd love to see a show of hands, Brenda. We'll have to do this. Or intend to be right. Well, I have one last question, Betsy. Okay. Did you have fun in the sandbox today?

29:10
I love the name of your podcast, the Founders Sandbox. And it does remind me of a little bit of building something and playing at something. And sometimes the sandcastle falls down or the waves roll over it, but you just got to keep going and build another one. Is that what was the thinking behind your name?

29:33
Um, thank you for asking. It was around, I had actually three ideas, uh, did a poll, went out and did some market research. And what I found is that I work with such early stage of, um, company. They use a lot of agile methodology. They always talk about sandbox, right? It's a test environment. Um, and biotech it's, it's the bench, but there's this sandbox terminology and it actually won in a poll.

30:02
The other alternative name was you don't know what you don't know. Again, the gift I give to or the professional advice I give to my clients is all around the 25 years of corporate experience I've had. And to know what barriers you may run into and how to leverage my experience and running a very well corporate from a corporate governance point of view, a very well.

30:31
govern business. So the Founder Sandbox is fun. And it allows me to have guests and we discover how to you know, our personal stories, professional stories, and bring it back always to resilience. Well, you certainly optimistic and, and goal oriented. So eight years now in Los Angeles, and you have been one of the

31:00
greatest assets in my life. So thank you very much. Thank you, Brenda. So to my audience, this podcast with Betsy Berkamer-Crader, CEO and founder of Berkamer Clayton, retained executive search firm, as well as CEO of 5050 Women on Sports.

31:26
We talked about corporate boards, how to get on them resilience and intentionality. This will be released in the month of March, which happens to be the month of International Women. International Women's Month. That's right. Fantastic timing. Thank you, Betsy. And thank you listeners too, for listening to the Founder Sandbox. Have a great day.
- Lyssna Lyssna igen Fortsätt Lyssnar...
- Lyssna senare Lyssna senare
Brian MacMahon: Bold Growth in the Founder's Journey
9 feb 2023· The Founders Sandbox
On this episode of The Founder's Sandbox, Brenda McCabe speaks to Brian MacMahon of Expert DOJO. Brian specializes in helping entrepreneurs become more successful in their business by using all the tools available as owner of the largest peer to peer peak performance academy in the world. Expert DOJO improves the success rate of early-stage entrepreneurs with investment, foundation, showcasing, influence, and community.

You can reach Brian at :

[email protected]

https://expertdojo.com/

Transcription:

00:15
All right. Welcome back to the Founder's Sandbox. I am Brenda McCabe. I own and operate the consulting firm NextAct Advisors. I have a really simple mission.

00:44
I want to assist entrepreneurs and entrepreneurs in building scalable, well-governed, and resilient businesses. The Founders Sandbox, which you're visiting today, is an additional channel to feature founders, business owners, corporate directors, and professional service providers who, like me, want to use the power of private enterprises, be they...

01:13
small, medium, or large to create change for a better world. Through storytelling with a guest on topics that will include resilience for purpose-driven enterprises and sustainable growth, my goal is to provide a really fun sandbox environment where we can equip one startup founder at a time to build a better world through great corporate governance.

01:42
Today, my guest is Brian McNeha, who has an alias of the head honcho of Expert Dojo. And I want to thank you for joining me today. My pleasure. Can't think of anywhere I'd rather be than hanging out with my buddy, Brenda. You know, we did some practice for this. I've known for you for about seven years now. Because I'm so passionate about sustainable growth and I've seen the work you've done.

02:09
with a couple of my clients that have gone through the Expert Dojo Accelerator Program. I think the topic that we're going to kind of kick around here in the sandbox is bold growth in the founder's journey. I've observed the Expert Dojo, and particularly Brian, at the Santa Monica-based Accelerator Program that is now celebrating its seventh anniversary. Congratulations, Brian. Did you ever think you'd make seven years?

02:39
Gosh, I didn't even know. Listen, you know me. What were the chances, right? What were the chances? Never good, but we're here. We're still alive. We're still going. Yeah. So in addition to my brief introduction, let me tell you a little bit about Expert Dojo. So Brian within Expert Dojo specializes unlike other accelerators in not only a four-week

03:09
become more successful in their business by using all the tools available as owner of the largest peer-to-peer peak performance academy in the world. Expert Dojo improves the success rate of early stage entrepreneurs with investment foundation showcasing, influencing, and community building. It truly is quite unique. And we're not going to...

03:38
um, hide that I've known you at first. I met you about the time you were founding expert dojo seven years ago. I was then in the angel community. I was more in orange County and you would often be a panelist Brian. And there was this undeniable Irish accent. So my last name, the cave is that all right. I like Irishman, but also your son Liam was always in tow. And I thought.

04:08
your insights as well in the panel panels in which you participated were very unconventional to what I had been exposed to. And I, um, I still think so today and wanted you to be a guest on the founder sandbox because of your unconventional approach to helping entrepreneurs in their bold

04:37
broader audience. So I want you to kick off with where did it all begin Brian seven years ago. Oh my gosh, you're asking an Irish man to tell a story. How long is your podcast? I think we need some extra time. We can always we can go forever and then I'll have cut it out. All right. Yeah, you can cut me down. That's fine. So so look, I'm a lover of life.

05:04
I just love life. Life is great and the world is great and there's so many fabulous places to go and live. And I've been really fortunate in that I have made sure that I did as much of that as I possibly could and spent many, many years traveling around with different businesses just enjoying the world. Right. And so my conclusion is everybody's awesome. We all pretty much have the same wants and needs and desires. And if we really search for good things, then amazing things can happen.

05:33
while most people never really go on that journey. And that's what's so nice about early stage startup. They go on that journey, like they grab that journey by the short and curlies and they just stay with it all the way through. So it's incredibly brave and it's a beautiful thing to watch. And if you're really lucky, you get to be like the Linda McCartney, right? You get to be around while the Rolling Stones are there and you gotta be around while you've got the Beatles and you got the whole thing and you get a photograph at all and be immersed in it all.

06:02
And I think that's the real joy that you and I have, is that we're in the most creative place in the world, in Southern California, with people who have the largest dreams and aspirations, being very, very close to what tomorrow is gonna look like every single day. So who else can get that, right? So I found myself here about eight years ago. I had been in New York beforehand. I love New York, it's just a fantastic place, and just very aligned with my personality. Got down here.

06:32
realized there was a ton of incredible, creative, phenomenal folk in the early stage space, but also noticed that there was a tremendous amount of failure. And that's okay, you know, from success, success should come from failure in some ways, if that needs to happen. But I noticed that the failure was all happening with a very specific group of people who are all the really good entrepreneurs who are not connected, and the success was all happening with a very specific group of people.

06:57
who are all generally young boys who went to high schools who mommy and daddy gave them a unicorn for their birthday. And I just, and so I'm fine with a bit of unfairness. I think it's okay. When you know, if I work harder than the guy or gal next door, then, you know, my kid and family and me and stuff we should be get a little bit more unfairness because we work hard, right? But it should just be a small amount. And if it's not, if it's a huge amount what happens is people just become useless. And so

07:24
I looked and sometimes these things are easier to see from the outside, but I looked at what was happening within venture capital in the United States. And I genuinely was worried. I felt that in many ways it's turning into a cancer, which is spreading. And the early stage startups, the really wonderful creators were not being given an opportunity to do so. So we took this wonderful location here in Santa Monica, which if anybody looked from the outside would say, why are they in a refurbished restaurant?

07:52
which hasn't even really been refurbished. It's still kind of the same restaurant it was eight years ago. And I can tell you because it was the only thing that was offered to us. And we set up our incubator stroke, accelerator stroke. We just want to get involved in the community. And then we just set about learning and, and, you know, that learning turned into learning and focusing on growth as the main thing that can compete with the bias and overcome it.

08:19
And because growth ties into greed and greed and aligned greed will always be out bias of which there's a tremendous amount. And then our learning and learning and then learning and growth turned into learning and growth and investment. And that took us to where we are today. Now we have like 220 investments in early stage companies. We invest in companies all over the world from Africa to India to South America to the US. We love the early stage space. And we use growth as our.

08:48
absolute weapon and all of the people around us who are experts at growth to be able to help those founders get to places they would genuinely find it difficult to get to themselves. You know, that was eloquent. It was also fun. I was accompanying you along that journey. I didn't realize you started out in New York. I also spent a lot of my time years ago in New York and when I found LA, I decided to settle here.

09:16
to your point, very creative economy. A lot of things are happening, particularly down in SoCal now. So why did you choose a four week program that's really turns into a three year program? I think that's truly unique among accelerators that I've been exposed to. Talk us through that. You know, one of the advantages, one of the advantages I think we have in venture is that we started out not having a clue what we were doing.

09:46
And we embrace that because the moment you feel you know what you're doing, you're doomed, right? That's the day you sit back, you send out manuals, you put processes out and you tell people that you got this and you don't because the world keeps on evolving and it keeps on changing. So we knew at the beginning, we knew there was something terribly wrong in venture and we knew that

10:11
We didn't have the answers, but there were thousands of entrepreneurs every single day in Santa Monica starting out on the journey. And within their journey would be the answers. So we spent all of our time studying, watching, learning, adapting, executing based on what we saw, learning from what we executed, and then just getting better and better and better. And I genuinely don't feel a single bit different today than I felt eight years ago. I still feel we haven't got a clue.

10:41
I feel that most other folks, I think it's a real pleasure and it's a gift to move from unconscious incompetent to conscious incompetent. It's a really beautiful place to be because then you can really strive to move forward to the conscious competent, right? Which is when you're on your bike and you're cycling, but you know you could fall off to unconsciously competent, right? But you have to make it through that journey. And most people never make it away from unconsciously incompetent. They just think they're awesome.

11:10
and everything is great and it's working. So we started off with the four week, we started off actually with a eight week program. We started off actually with a physical eight week program. And we would say to like some random person in Africa, hey, you should jump on a plane, take this money that we're gonna give you, invest in you, jump on a plane, travel over to Santa Monica, find the most expensive hotels on the planet, which is what we have in Santa Monica.

11:36
eat in the most expensive places. Like even ramen is going to take most of the investment that we're going to be given to you. And then you're going to come through a program and you're going to be so wowed by just the mesmerizing fact of being in the same room as us, that you're going to think this is a great idea, right? And so we thought that was awesome until the pandemic came. And then we're like, no, that was stupid. Like, why are we doing this? It makes no sense. And then we thought, oh, we should do something for a 12 week program until we realized

12:03
We're just wasting entrepreneurs times for 12 weeks and they have way better things to do than sitting classes with us. So then we started to bring it down to like five weeks, four weeks, and then we started to do longer demo days with investors. And then people would come through the programs and we have amazing trainers, like folks that you know really well, like John McDonald and Ryan Fowland. And we've got Ryan and Francis from Camino5 who train on branding. It's all focused on growth.

12:31
So people would come into the training and they would say, wow, that was incredible. I feel great. I feel fabulous. The world is gonna be different. And then it would be Monday and they would go back to what they were doing before. So we realized it wasn't good enough just to move away from the standard accelerator model of passing on mentors who are next to useless because they don't know enough about the company and investors who are no more than a commodity. So again, next to useless because

12:58
they're just looking at every deal that's out there anyway. It wasn't enough to just move to growth. We actually have to become the growth resource. And I would say in those early days, maybe our product market fit was 5% in that we knew that there needed to be one and that we started with the growth. And I'd say today it's probably 12%.

13:22
So you have some numbers on that. What I was struck by also is from get go, because there are Friday pitch events. So you pitch until you're blue in the face, right? As a founder. And that truly is unique. And it starts building from week one through the two or three years, right? And money comes along the way. So. Yeah.

13:50
You have to, Brenda. I'll just say on that. I think what's totally wrong with how venture is done is that the emphasis is 80% on being an incredible picture to investors. And look, having a great relationship with money is something that does need to be learned. And the better founders are the ones that have better relationships with money. And what I mean by better relationships are they're not afraid of money. Too many people are afraid of what money will do to them. And what we try and encourage is that you think of money as a tool. However.

14:20
It still shouldn't be 80% of the job of building a business. It should be 30%, right? And the other 70% should be, I am gonna build the biggest badass business the world has ever seen. I'm gonna kick the heck out of all of my competitors. And then as I'm doing that, then I get lots of investment, get more fuel, I get more people around me, then more people kick the Badoobies out of our competitors and so on and so on, the cycle goes on.

14:49
So really, I actually think when we look at kind of what we achieve most, it really is focusing the founders on that necessity to grow on a really strong foundation and then build this process that allows them to continue to execute, learn, optimize and scale. Yeah, and also one thing that I'd add again, two of my clients have gone through the Accelerator program. I was so impressed. I actually did hire.

15:18
one of your collaborators, Ryan Follin, to help me work on my podcast, quite frankly. But you work with a lot of, you have different cohorts. You also are invested in quite a few women-led companies, but you have a lot of technical founders. And I was struck, you know, you start out with, it's about the story, it's not about the features. And by week two, or by week...

15:45
three, those technical founders, I've seen them in med tech, I've seen them in enterprise SaaS, I've seen them across the board. They stopped talking about the features and they start talking about story. And again, that's thanks to you and the mentors that you bring to train and really go through those arduous weeks. And look, Brenda, on that point, look, all of us.

16:13
are led by stories. We love stories. We did stories by the campfire. Like before there was any, can you imagine a world before there was like HBO and CNN and Fox News and stuff? And that's why we have a sandbox. It existed back then. And back then there's little old fire going on. Even before they'd worked out the whole fire thing, which was a startup, by the way, before that they're like sitting around a cold something and they're like, hey, you know what? It's so damn cold.

16:41
And I'm sitting in this place and nobody's invented clothes yet. Nobody's invented a fire. Why don't we tell a story? Cause that's all we got. Right. So we, since the very beginning of time, the only thing that has stayed consistent is the greatest storytellers are the ones that always win. Always. So Nike killer storytellers, they don't sell sneakers. They sell the feeling of victory and participation. Right. Patagonia.

17:07
You want to compete with Patagonia if you're American Apparel? I don't think so. They don't sell t-shirts in Patagonia. They sell a better human being. Apple. Forget about it. They get to sell their computers for three times more. I have an Apple computer. You think I need an Apple computer? Seriously, I could work with a Dell computer, no problem. Save a thousand bucks, go to Cancun and have a very nice holiday. But why don't I do it?

17:32
Because genuinely I am convinced I'm not only more successful with an Apple computer, but I'm better looking. Right? I'm convinced of it. So they don't sell computers. They sell how these things make us feel. So we have to move people off features. We have to move them to a place where their consumers really understand what the enemy is that they're facing and they understand how to overcome that enemy and that this product

18:00
is seen as the enabler of doing that. Wow. If you haven't heard about Expert Dojo until my podcast, you've got to look it up. In the show notes, you'll get the URL. This is the last question before we get into some fun questions. Although these are fun questions up until now. So, you know, I sat in on an interview process that you kicked off with one of my clients who was considering an investment by Expert Dojo.

18:31
And something about how you discover talent, right? Your cohorts are relatively small, right? In size. Can you talk to me about what is it that you look for? Right? Spoiler alert. What is it that you look for in those founders in their intake interviews that really clinches the deal to make that investment? Ooh. So that's hard because

19:00
It's not really one thing. Now, if I take your clients, your founder, and by the way, I look at the companies we invest in as our clients, right? I don't look at them as investing companies. I look at what I'm bringing them in. We are a sales organization, right? And when we have them in there, we are a service organization, which means we're working for them. And I think that's also a very big difference with venture capitalists. Too many people get carried away with the fact that they think the money is valuable and it's not.

19:29
It's just a commodity to get into a place. But I do realize that to go on this journey that we go on, you have to be, it's not just crazy. Crazy is just too basic. You have to be selfish, right? You have to be so selfish. Like to the extent that you believe that what you're doing is so incredibly important, that there is literally nothing else in the world that compares to it.

19:53
that different people believe this to varying facts. I'm kind of far down on this scale, but like you don't need to be like as far as me, you can be in the middle, but you have to be at a place where you are going to be questioned and you are going to be tested. And when you are, then you are worthy, right? And most folks are not. Most folks, they look at a decent Netflix documentary and they're like, oh, you know, I had that idea. I had that idea like so long ago, I know that.

20:22
are somebody else like, oh, I've got this great idea. We're going to do it. It's not the idea. And it's not even the implementation. And it's not even the execution of the implementation. All those things are table stakes. Right. It is the character that remains when things go, go, go, go left field. And they will, everything will happen. You'll have your partner will suddenly do bad things to you.

20:48
The partner won't see it that way. Your partner will see it that you did bad things to that person, but it will go wrong. Your process, your perfect, wonderful process, whether you're an accelerator or whether you're selling something else will go wrong. It won't be as perfect as you thought it was. A competitor will come in. They'll hit you at lower prices, better service. People will steal your people. Unfair things will happen like the pandemic. Like seriously, can you imagine if you were a bar in Ireland and somebody said to you,

21:17
I predict the future. Here's what's going to happen. You're going to close down for a year and a half because nobody's going to be allowed into a bar. You'd be like, get out of here. You've had too much to drink. Like it's literally impossible, unfair. So who makes it through? It's not just that like the great people who own bars make it through. They dominate after that because 80% of the people cannot believe that God is that unfair to them, right? Because they got to blame someone.

21:45
right? So something terrible happens. So it's that character and you look into their eyes. Now, they need to have a product that the customer wants. So there needs to be a customer truth. So I call it customer truth meets character. That's it. Right? You either have the only truth in the world. It's not your mom. It's not your friends. It's not the people who like took it at the beginning because they owe you something. It is your customers and what are they telling you about what you have built? And it's not your customers on the first day. It's your customers over a period of time.

22:15
Now, we don't need the customers to be saying, you're the best entrepreneur in the world. You've got the best product in the world. But we need them to be saying something that we can have as a baseline. Then we layer in the character. So your company, I'll take the first company who's just like most awesome person in the world. And I remember when we first met and I was like, oh, my gosh, I'm going to have to sell this because this guy, I knew you, but you weren't going to be easy either.

22:42
Because both of you are like, I don't even know that we need an accelerator. We're doing pretty well. And the, my whole basis on that whole interaction was I am going to help you crash into the wall at a higher velocity than you're going to do on your own. That was the whole principle of what we were selling. That's all. And we're not saying that the crash is not going to hurt. We're not actually even saying you're going to survive the crash. What we're just saying is.

23:10
You gotta go faster and you gotta go harder and you gotta be braver because the objective is not for this business to last forever. The objective is for this business to go in either a ball of flames or for it to break through the wall and get there in like half or a quarter of the time and he is on fire right now. On fire together with his amazing advisor, the lady Brenda.

23:40
Thank you. Thank you. And it's always a pleasure to spend time with you, Brian. And before you, we close on this interview. I do want my listeners to know how to contact you. Can you give a brief, you know, how to contact you? Is it the website, your email? Anybody can contact me. Anybody can contact me on my email and I reply to everybody. It's

24:09
And the type of folks that we love contacting us are early stage entrepreneurs looking for investment. We like you if you're focused on growth, if you're not focused on growth, then we can refer you over to other accelerators who will like you just as much. And if you are a mentor, are you someone who likes and supports and helps the startup community? Wonderful. Come on in. We've got startups that could do with your help and would love to get any advice that you can provide to them.

24:35
And really any providers of growth services, just growth. Look, you can tell, growth, growth, growth, growth, growth. Anybody in growth, we like you. Anybody else, just you can come to our events and parties. But if you're in growth, we like you very much. Thank you. So you know, the Founder Sandbox is a podcast. I also do publish quite a bit thought pieces on the work I do with, I will only work with growth.

25:04
companies as well. And it's around purpose driven enterprises, it's around resilience, and it's around sustainable growth. So I'd like you to tell me what the meaning, what meaning does sustainable growth have for you?

25:19
You're on. Right. I layer in purpose driven enterprises as well. Because I like that. Right. So, you know, look, anybody can get growth for a period of time. Anyone. Like you just throw enough money and you can get growth for a period of time. But you need your customers. You need your customers approval and validation to be able to get sustainable growth. And to get that approval and validation, you have to have a solid platform.

25:47
to be building that growth from. Like you gotta give value. If you're not giving value, your customers won't give you that approval and they won't give you that validation. And that platform has to be over a long period of time without ever losing focus on who you serve. We serve the people we invest in. We don't sit like they're a bank account waiting for it to come through. I fret if we're not providing a good enough service to people and want my people to fix it if we're not doing it well enough.

26:16
Your customer is your God and Godess, and you gotta make sure that you adore those people every single day, and you can only do that by finding out their problems and their enemies and dealing with them. Now, purpose builds is really awesome, because that's when you can take it to a new level. So I mentioned American Apparel earlier on. They just provided all those things that I said in there, R. Dell computers, right? They provided all those things I just said in there all the way through.

26:43
great customer service, really good equipment, the equipment works, it does what it's supposed to do. You wanna take it to the next level, you gotta make people feel. And there are wonderful people. Like I love Patagonia, my favorite brand in the whole world. I love him. I just think he's amazing, they're amazing. Every single thing they do is really say to their customers and non-customers, if you do not buy your stuff here, you are probably not as good a person as the folks who do.

27:12
And they would only say probably because they're trying to be polite because they're nice people. But pretty much in their heart of hearts, they know that you're a worse person. Right. Because everything that they do is about making the planet and humanity better. So if you were aligned with that, you're buying your stuff there. You're not buying it in America at Apparel, no matter how good a service you're giving to your customers. So for founders, for everyone, for us.

27:40
You've got to have your why built into your storytelling and your brand. And if you are awesome, like Patagonia, like Thomas Shoes, even like Nike, in many ways, or like Apple, you take that a level further whereby you build a purpose into what you're doing so people understand your vision of a better world. And they just want to be a part of it. Oh, no. You're not going to get off with yet another one. What about resilience? Is that a character?

28:09
Is that a character that you find? I have tremendous resilience and I find it very, very close to like stupidity. Cause I think, you know, sometimes I used to think I was really brave until somebody said to me, it's not brave if you don't realize how dangerous it is while you're doing it. Right. And it's totally true. I'm an idiot, but I'm very happy with my current status. So I think that entrepreneurs, we live in this world of

28:37
of denial of the absolute insanity of what we're doing on a daily basis in the very vivid search of something that is so much greater that could be created if we went down a logical path. Beautiful. One last question. Did you have fun, Brian, in the founder sandbox? Did you have fun? Always.

29:03
You're my buddy. We're building this community together. And by the way, let me finish with this one thing is nobody does anything alone. Like we may invest in companies, but it's we and like our partner, who's our financial partner who committed into this. Like we may be supporting companies, but it's we and you in helping make this community like an incredibly awesome place. Like...

29:26
There's a we in everything here. And for folks that are not aware of what's happening in Santa Monica and LA and so-called proper, then watch out because there's a force coming through. And it is different than anything that you're gonna see in a far more superficial San Francisco, or Valley or anywhere else, because you've got folks like Brenda and myself in homage to her and other folks out there who are just building an incredible community. So I'm proud and happy to be your friend and to be on these podcasts.

29:56
support you in the same way that you have done me all.

30:02
Thank you. Thank you. A toast to you, Brian. Seven years with Expert Dojo and helping over 200 founders build resilience and high growth companies. So thank you again. And I'm signing off from the sandbox.

30:23
Until next time, take care.
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