On this episode of The Founder's Sandbox, Brenda McCabe sits down with Jen Apy, Area Managing Partner and Chief Marketing Officer at Chief Outsiders, to explore how scaling companies can unlock growth through fractional marketing leadership.
Jen shares insights from her 30+ years of marketing experience—spanning Mattel, Adobe, Intuit, and now Chief Outsiders—and introduces listeners to the Growth Gears framework: a strategic methodology designed to help small and mid-sized companies grow efficiently and sustainably.
Jen and Brenda also dive into key trends such as the rise of “flash teams,” how AI is transforming the marketing playbook, and the importance of being a learning organization in a fast-moving world.
00:04 So welcome back to the Founder's Sandbox. I am Brenda McCabe, the host of this monthly podcast where I am joined by business owners, founders, and professional service providers that are scaling businesses.
00:34 with great corporate governance. This podcast is now in its fourth season and very excited to have Jen Apy as my guest today. For those that are subscribed to the Founder Sandbox, you always know that we have a story that's going to be told about the origins of the company and the founder and the professional's experience as the introduction here. And we will always come back to the...
01:02 the sandbox where we're talking about resilience, purpose-driven and scalable growth. And when Jen, who I've known now for several years, we work in the same ecosystem, spoke to me about the growth gears, that is kind of the overarching framework of chief outsiders. I was fascinated and wanted to offer the platform of the podcast to get the message out to business owners that are
01:30 scaling and have not yet thought about using fractional marketing services. So welcome, Jen, to this fourth season. um Absolutely delighted to have you here. Oh, I'm delighted to be here. Excellent. So we did choose a title. We're gonna you're gonna hear the word growth gears throughout this podcast. So the title for the podcast today is growth gears for scaling. And
01:56 Jen and I kind of share a similar background in the sense that we've been out there over three decades. I um had my own consulting business. I worked in the McKinsey & Company and reinvented myself uh around really bringing the expertise that I had at multinationals into the ecosystem of growth stage companies. Jen, tell me you are multifaceted marketing professional over three decades.
02:26 of experience contributing to marketing excellence. Tell us a bit about your origin and your currently, I think since five years ago, the area managing partner and chief marketing officer of Chief Outsiders. So share a bit how your role has evolved and what's it like to be with this company that was once a startup itself. Well, thank you so much for having me, Brenda. It's been a wild ride.
02:56 I feel like I was so lucky early in my career to work with fabulous marketers at Mattel and Intuit and Adobe. And now to have the opportunity to apply those skills to help small to mid-sized companies grow. It's really been a fantastic experience. I feel like this is my purpose. Oh, beautiful. To share these enterprise little marketing skills with smaller companies that
03:25 are hungry for growth. you when I, when I meet founders or I meet CEOs, I'm always really curious about, know, what's working, what's not working. You know, how do we create this flywheel that can help them grow in scale? It really is, is something I enjoy. You know, you found your purpose and then I guess your purpose found you working with chief outsiders because you were also a solopreneur for years. What would be your
03:54 tagline if if anybody were to just listen to five minutes of the founder sandbox, what would be. Jen appease tagline such a good question. I think it would be be something like committed to growth. I feel like that is my purpose. That's what I enjoy. And you know now it's part of outsiders. I I now have 125 colleagues who feel the same way. They've all been fortune 1000.
04:23 and larger company marketers from a variety of different industries. think collectively we've probably covered over 80 industries, over 5,000 engagements. I mean, it's just incredible that the people at Cheap Outsiders that I get to work with every day. And I do feel like commitment to growth is almost a shared purpose for all of us. That's why we're here, because we love to make an impact, to see that impact on smaller companies and be a part.
04:52 of their leadership team. We say that we're outsiders, but we're really embedded as insiders and therefore we can have that impact on companies and watch them grow in scale. It's very gratifying as a marketer. m I also work in the small and medium sized enterprise area. And last month I actually wrote a blog on enterprise, forms of enterprise and the like.
05:18 Did some research on actually SMEs. How many SMEs in your estimation actually reach or go beyond $10 million in revenues? SMEs are 47%, I believe, for the number of enterprises in the United States. But how many actually scale beyond the $10 million revenue? You know, it's a surprisingly small number, like maybe less than 1%. But you know, that's why we're here.
05:47 We want to increase the chances that those companies can scale, you know, 10 million, 50 million, 100 million. We believe that by really applying the market insights, customer insights, competitive insights into, you know, the strategies around positioning and offers and target marketing will lead to the cost of
06:14 efficient and cost effective strategies and execution that will help companies scale. that really is the heart of the growth gears methodology and approach. Well, that's a great segue. You and I met at the recurring revenue conference, I guess, in the seventh year. And as you walk me through the growth gears, you also have an assessment tool. Would you like to share?
06:42 overarching what is what are the gears, the growth gears, what are the key aspects that one can be surveyed about and then and how to engage with the chief outsiders, because I found it fascinating. And I actually used it with one or two of my clients to kind of get the wheels, no pun intended, right to to start moving, right?
07:12 Yes, so the assessment that we use asks companies and leaders questions about the business, about how much do they know about their customers, their competitors, the company, they looked at market trends? And then starts to ask about, do they know where their revenue comes from, where their growth is gonna come from? they understand what channels are most efficient and are they measuring uh the effectiveness of the marketing?
07:41 programs that they have in motion. And it's not every single question that we could ask, but just enough to get them thinking about where growth is gonna come from. And so we use this assessment, usually around this time actually, we're getting close to Q4. And we use it about this time in order to help them think ahead in terms of what are the priorities that are needed for the following year in order to stimulate.
08:08 enable or actualize growth. So if anyone's interested in doing this assessment with me, it's free. Just, you know, reach out to me on LinkedIn, happy to provide you with the link and then have a conversation about what the answers mean. Absolutely. Jen, we'll put those, the survey or the assessment, pardon me, in the show notes. All right. Great. In addition to other areas. So talk to me a little bit about Chief Outsiders. You did say it was a startup at one time.
08:37 How long has it been around? What's the organization look like? And what are the challenges that you particularly are dealing with with the advent of AI? That's a very little question. That's a great question, though. But Chief Outsiders has been around for over 10 years. I think we've been around before the term fractional executive or fractional marketer was even a term. think
09:01 Maybe early on we might've been discussed as strategic business consultants, right? Because we're helping companies grow in scale. But we've been around for over 10 years. We've been on the Fortune 5000 for quite a few years. I think definitely 10 or more. the way that we've grown is by really focusing on what marketing leadership needs to do.
09:30 for companies, which at the end of the day, it's about knowing who your customers are, where to find them, and then how to grow the company based on that focus on finding and retaining customers, whether it's increasing market penetration within a certain target segment or finding new markets or launching new products, whatever that growth strategy is, how to harness that and help
10:00 a company, um, scale over time and marketing has changed so much. I know over the years, mean, I've seen that with your companies is overwhelming. I pardon. I will get back to the question, but I, many, many years ago, McKinsey, was a marketing expert research. We didn't have all these amazing tools we have today to conjoin analysis, you know, with your Excel sheets, right. And focus groups.
10:29 Right. So the sophistication, channel, you know, growth explosion is, you know, I threw my talent a long time ago. Well, you know, it used to be, you know, direct mail and then websites, right. And then e-commerce and, and then it was about social media and content marketing and then SEO. I mean, it's just daunting. And now we have to be thinking about AI in all facets of the
10:59 the marketing toolkit, right? It's impacting every aspect of what we do as marketers. And we have to be thinking about AEO, like answer engine optimization in addition to SEO. So it really is rather overwhelming. So I think that over the years, Chief Outsiders has recognized that the marketing tactics and strategies are going to change and we need to change with it. But that the focus on
11:27 growth is going to come from really the growth gears, right? The approach to understanding the market, understanding how to go to market, understanding how to execute cost effectively. So recently in the advent of AI, knowing that it was going to impact so much of the marketing mix, we actually started to develop an AI platform for us to use. Yes, for us to use internally. What it does is confidentially,
11:57 takes all of the insights for all of the engagements that we've done with companies so that when we are working with clients, we can benefit from that collective knowledge and be able to deliver better, deeper, faster insights from day one for our clients. So deeper insights, proven strategies, best practice execution. There isn't a workstream for marketing sales that isn't going to be impacted by AI.
12:25 So we've definitely thought about that and made sure that we can leverage all this knowledge in order to help us be better marketers for our clients. That's fascinating. It's kind of scary, right? So you've basically like in the healthcare industry, you've anonymized, right? The plethora of data, right? Within the walls of
12:54 chief outsiders of the 10 years of experience and I don't know how many clients, right? To then really document and have your own, for lack of another word, I guess, is it? The knowledge base. The knowledge base, but it's kind of an ocean, right? Data ocean. Yeah. And, you know, and this is how the AI tools work.
13:19 We figured we might as well have something that we can use on a proprietary basis and that can help us not only create our deliverables and have better deliverables, but also to help us manage processes. Because as we talked about with marketing, there's just so much going on, so much to consider, so much to do. This AI platform also helps us to manage those processes. And one of the things we haven't talked about yet is fractional resources.
13:47 I believe really are the future of work. And that's one of the reasons why I'm so excited to be a part of Chief Outsiders because we believe that as well. And that's also part of the reason why we built this platform. Right. So one thing that I want to highlight just from the last discussion here is
14:08 AEO rather than SEO or in addition to SEO that I mean, heard it here on the founder sandbox. Not only do we have to be looking to have our SEO optimization, it's AEO optimization. Yes. So answer engine optimization. And that's coming of course, from the AI tools. You know, I think the stat is something like 70, 71 % of searchers, anyone searching.
14:37 They're now using the AI engines instead of, or sometimes in addition to regular search. But it's the reason why Google is losing traffic share, right? Because people are going to these AI engines sometimes exclusively for certain things. And so this has had an impact on marketing in a couple of ways. One is we need to now optimize our content for answer engines, which it's not that much different from SEO. We still have to adopt the same good.
15:06 SEO practices, you keywords, relevance, backlinks, things like that. But now we call it LL or large language model optimization in 2025. uh In order to be able to rank in those answer engines, we need to also consider brand strength and authority, oh citations, quality of content, sentiment. You know, we really
15:35 PR from authoritative sources is really going to become more important. And so we do a lot of testing ourselves in terms of how Chief Outsiders ranks in these engines. I was going to ask you, have you done that? Yes. And that's how we know that it's not just the SEO good practices that's helping to rank in answer engines. um
16:02 It's also these other things, brand strength and authority. The content needs to answer questions. these engines are understanding when content is authoritatively answering a question. And there's so many factors involved in figuring that out. There are a number of tools we use to see how we're ranking. There are a number of tools we use to figure out how we're
16:33 uh how we're able to, uh I guess, for lack of better words, out the competition, right? And score, right? In our content. And we use this knowledge of how it's working for us to help our clients as well. And we've been doing this from the beginning because we were very aware of all the changes. um So you have your own growth gears operating system.
17:00 It's a remote working AI enabled platform, right? That also enables remote and hybrid teams that come together. Speak to me a little bit about that. GrowthGear's operating system is effectively your LM? Yeah, that's the, well, that's the AI platform that we developed is called the GrowthGear's operating system. And so not only does it leverage the best content, the best tools, but because of the way that we're designing it and it's really to support us, right? And how we work.
17:29 we are really enabling fractional resources and remote and hybrid teams to work together effectively on the projects, the marketing, the growth plans that companies need to scale. this is kind of the way, I mean, if we believe that fractional resources are of economic benefit to both companies because they don't have to hire
17:56 A lot, you know, heavy talent, right for long term. They can hire just what they need when they need it. And also as they evolve and grow, they might need different resources, right? So they can they can cycle through the skill sets they need, but but also because there's economic value because workers, if they want to be more flexible, if they want to leverage a specific skill set and not necessarily be tied to one company gives them the freedom and flexibility to. So I think for for both reasons, there's there's a lot of. uh
18:26 momentum toward this style of working. the platform that we have, you know, it can enable these operational fractional resources, not only marketing, but any part of the organization in the future. Let's go. Let's take that idea or what you're observing in the market and actual client work a little bit further. So how would a potential client
18:54 engage with chief outsiders. They're at, you know, 3 million AR, they have not yet hired a marketing full time, right? How, what would would walk us through a typical, for lack of another word, engagement, or how do they engage with chief outsiders? And particularly, the second part of that is, if you're talking about
19:21 Flash teams, I think is the term that you and I discussed, right? Yeah, it's actually the title of a book being launched by a professor from Stanford, Melissa Valentine. She's coined this phrase flash teams, which essentially is what cheap outsiders does, right? We pull together the resources that a company needs at that moment in time in order to solve their growth problems. we're essentially a flash team enabled by
19:51 the growth gears operating system. Cool. So I'm not I'm the CEO. I've got to hit some revenue milestones. I've interviewed some candidates. I'm not yet sold for you know, bringing in full time, full time chief marketing officer. Jen gives me a call. How do I how do you how do I engage with you? Yeah, well, the first thing I want to understand is, is what what keeps you up at night?
20:21 Right? What, what are some of your growth challenges that, you're struggling with? Because the first thing I want to do is really understand, you know, what resources do you need at this moment in time in order to get you from A to B? so oftentimes we'll look at this and say, is this, is this going to be solved by a marketing led team or sales led team? Sometimes that's the first thing that we're thinking about. And then how much do we know already about the situation in terms of.
20:49 customers, competitors, market insights, customer buying journey, channels that are working and not working. We're wanna know all of that so that we can figure out the most efficient way to approach solving those growth challenges and what work streams are needed. So we'll bring in a fractional executive that's a good fit for that company and then orchestrate the resources that are required to get to the next step. And then when that engagement is through,
21:18 we'll figure out what the next level is. Maybe the next level is bringing in full-time permanent resources to help execute and to help scale where we paid ourselves out of the picture. Or maybe it's just dialing back to more of an advisory role and then bringing in fractional resources from different places in order to be able to test and scale and see what's going to work, what's going to land before we orchestrate on a more.
21:48 So we're very flexible with what a company needs at any point in time. And no two companies are alike. You when you're a $3 million company, you might have talent and skills and gaps that are different from the last client that we had. And we know that. We can recognize those situations just because we've had so much experience working with so many different companies. We can very quickly figure out what's needed for the next step and just give a company exactly what it needs.
22:16 to it. You do tap into your, your network of your 125 professionals with them, know, goodness, the years of experience that you all have obtained while at fortune 1000 companies. Amazing. Oftentimes, I've seen you with as keynote speaker, you do give conference speak and you speak at conferences. What one of the most recent
22:42 conferences. I'm not uncertain where it was, but you the topic you spoke to, Jen, was winning website traffic in the age of AI, what CEOs need to know? Can you without sending us to you know, that I don't know whether it's on online, we can put that in the show notes. But what's the top, you know, line messages from that conference where you spoke about winning website traffic? Yeah.
23:10 Well, I did it with a couple of my colleagues who are very experienced in digital transformation and now how to win traffic with the answer engines. And so we talked about some of the uh tactics that we're finding work nowadays and how that's going to change how companies need to think about orchestrating their marketing mix. So Mike.
23:36 Colin Angela gave an example of a very specific example of an article that had been written for SEO that now needs to be written for AEO just so that people could see the difference. But I think the main message that we were trying to send uh to companies is uh marketing is not static. Just because you've figured out your marketing mix doesn't mean it's going to work two years down the line. It's constantly evolving. And so you need leadership.
24:04 who can be thinking about how are customer behaviors changing? How do I reach them differently? And the fact that 71 % of searchers are going to answer engines, that's a huge shift and marketers need to be ready to address that. So if you're a smaller company and you just don't have the resources to keep retraining your staff.
24:29 every year or so and you need that expertise in the know how do I compete now today? How do I set myself up for success? That's where we as Fractional Resources can come in and help you be that learning organization, that resilient organization that's going to survive through the next sea of change.
24:51 That is fascinating. Yeah, it's it's a living beast, right? marketing and it's moving so rapidly, it would be hard. I'm to actually have the inside resources, the talent inside unless they're constantly being retooled. So it is an opportunity to use fractional resources, depth of expertise that you have. Yeah. And that's one thing that I value about the chief outsiders culture is the fact that I think what's made us
25:21 so resilient is the fact that we're really a learning and sharing organization. We've recognized that change happens rapidly. To be resilient, we need to change and constantly be learning and retooling ourselves. And that is something we highly value. But to be able to do that quickly, no one person can do all this on their own. It's nearly impossible and very overwhelming. You can't do it in a silo. So we have a culture of sharing where
25:50 If we learn something new, um we'll share with the rest of the organization. So that, that, uh, that webinar that we did was just as much for us and our executives as it was for the clients that we, that we serve in this culture of sharing really creates resiliency in the sense that if, a company brings in one of our fractional executives and let's say they encounter a market challenge or a sales challenge that that particular
26:19 executive hasn't seen before, they can turn to the other 125 marketers and say, hey, let's get together. Let's put our best brains on this business and determine what things we might be able to try or what things we should put in place in order to benefit this organization. And I think there's no individual fractional out there that has access to that much talent and expertise.
26:49 on a moment's notice as we do. And that's part of what's going to create the resiliency that we need as an organization to survive in the next decade, because everything is just going to start to move faster and companies are going to just need that much more speed. So, but we also believe that's a value that we can bring in addition to being interim and not being full-time and bringing in the expertise they need to write at that moment. We can also draw on the collective expertise of the tribe. So the brain trust.
27:19 Well, that's a good term. love that. Right. Brain trust. I love that brain trust. One technical question of the 125 professionals within chief outsiders and interim roles. Is it solely in the marketing area or do you also offer maybe in the sales? there other interim roles? That's a really good question. So we do focus on marketing and sales primarily, but sometimes we're actually brought in as fractional COOs.
27:49 as well or division heads. And it's because of our broad leadership expertise. And some of our executives have been CEOs of their own companies. They founded companies, they've sold companies. So they do have that broader business perspective, but primarily it's marketing and sales. Excellent. We're going to switch gears, to the standby. No pun intended.
28:17 That's right. That's here in the founder sandbox. I'm passionate about building resilience, scalable and purpose-driven companies. And I like to ask my guests briefly, what is the meaning of resilience? What does that mean to you? Or does he chief outsiders? It's a fascinating part of the podcast for me become that you have very different definitions. And that's the beauty of asking this. Yeah. Well, I think that resilience, at least for for me, for us, a chief outsiders means
28:46 being able to survive and move forward and grow in the face of massive change. Right. It's not, it's not bending to the will of the market. It's, it's, it's basically saying, you know what? We know how we can add value at this moment in time. And we have the tools to address this change and add value. that, you know, it is one of the reasons why we constantly are thinking about
29:15 how do we bring more to the table for our clients? So in addition to the growth years operating system that we created, we also have an ecosystem called team outsiders of fractional marketing execution resources that we can draw on at any point in time and create our own flash teams for our clients. So let's say we've gone through the strategy and we've determined that we really need an e-commerce expert
29:45 that can optimize Amazon or we really need somebody who can take charge of developing the content that's going to address not only SEO and or but also AEO and we'll draw from our pool of team outsiders resources and we'll put together that fractional team for the client at a moment's notice. So we believe that that is going to make us a lot more agile.
30:13 for our clients because sometimes they just need to get started, but they don't have time to go higher or they don't have time to go evaluate a new agency. We can bring somebody in. We can, we can set the stage. We can get things going and then let them have the time to decide really who they want on a longer term basis. So, you know, agile teams, flash teams, it comes from our ability to be able to, draw on this network of.
30:42 team outsiders and to be resilient. How about purpose? What's purpose mean to you? Purpose. You know, I think that when I look back on my career and also what I'm doing here at Chief Outsiders, I get the most satisfaction from seeing smaller companies grow from helping founders make their dreams come true. You know, there are so many great companies out there.
31:12 that just need a shot at the big time, right? And we can do that because we've seen it. We know how to get a company from one to a hundred. We've seen it. We know what a company at one or a company at zero, what they're faced with from the standpoint of challenges, time, resources, focus, right? And so we can adjust what we do in order to adapt to that environment. But we know what an organization is going to need
31:41 to be competitive and to need to grow at 30, 50, 100. And we can keep our sights on what that needs to be and advise the companies we're working with on how they're gonna get there. So yes, we're implementing this today, but it's gonna look like this tomorrow, but we're not ready for that yet. We're just gonna do this here today because you don't have the time or the bandwidth or the money to do that many things. But this is, we've done the analysis, we've done the research, we've done the testing.
32:11 This is what you need to scale for right now. So, you know, being able to do that and then see these companies grow from 10 to 30 to 50 million, it's a thrill. it is very, very rewarding. So I think that, you know, I found my purpose and this is the, in speaking with my colleagues, they're all, we're all here for the same reason. So we really do have that shared.
32:39 purpose and we really enjoy what we do. Fantastic last one and then we'll move to how to contact you scalable growth. I'm certain you're going to talk about those the growth gears, but what's scalable right? What's that mean to you? Scalable growth to me means we figured out what works and we can replicate it cost efficiently and cost effectively. So that is
33:07 our focus when we're working within the growth gears methodology, we're looking for the way to scale most cost-efficiently effectively. I know that one of the things that you are really big on with your companies, the companies you invest in is governance. Yes. You're really big on governance. And when I think about governance, I think about responsibility and accountability. And what that means to me as a marketer,
33:35 And as a revenue leader is making sure that the spend that we commit to in marketing and sales is going to drive revenue and growth cost effectively. so by making sure that we've done the analysis, that we figured out what's going to work, that we've tested before we scale is that responsible governance approach, right? To marketing and so
34:05 You know, I think that there are some companies that are in situations where they have to scale no matter what. They just throw money at it, you know, scale no matter what. And there are situations where that needs to happen. But we find with the companies that we work with that the more responsible, prudent, accountable, you know, organic growth is what the founders are looking for. And we know how to do that.
34:35 Replicable, right? Replicable, yes. Amazing. So Jen, um last question before we listen to how to contact you. you have fun today in the Founder's Sandbox? Oh, it's always a pleasure to talk with you, Brenda. I really enjoy our conversations. We're of like minds. That's true. That's true. Avid readers and bringing the best to our clients. So thank you. How can my listeners
35:04 find you and best reach chief outsiders. Yes. So they can find me on Jenna, but they can also find me on the chief outsiders website on the leadership tab. And from the chief outsiders website, you can also learn about all of the things that we do. can meet all of the 125 executives that we have. You can learn more about growth gears, OS and team outsiders. Excellent. And
35:32 In the show notes, will provide the assessment so that you listeners that are actually considering, you know, what do I need to do at this last quarter of the year, right? To plan my marketing resources, just download the assessment. It's a very interesting tool. So thank you. Well, to my listeners, if you enjoyed this episode with Jen Appie of
35:56 chief outsiders. I'd encourage you to subscribe to this monthly podcast where we have founders, business owners, corporate board directors and professional service providers that are really building scalable, purpose driven and resilient companies with great corporate governance. Signing off for this month. Thank you for joining us here on the Founder's Sandbox.
Season 4, #2 - Sustainable Impact Through Family Play
Season 4 · Episode 2
Tuesday, September 23, 2025 • Duration 32:12
On this episode of The Founder's Sandbox, Brenda speaks with Anbern R. Guarrine: a partner of The Guarrine Group (tGG), a global training company based in Illinois. tGG has facilitated team building, leadership, and organizational development workshops around the world for over 30 years. tGG partners with excellent facilitators who help groups have FUN, which is a hallmark of tGG
Anbern R. Guarrine calls herself a "Facilitator of Family Play." By facilitating games, she helps participants gain insights about their strengths, their relationships with peers, and how they can use their skills to move forward in their professional and professional lives.
As a partner in tGG, Anbern enjoys challenging herself by taking on uninteresting topics and developing them into fun, game-based learning modules. She is Gallup trained in Strengths Coaching and has received the Family Firm Institute (FFI) Certificate in Family Business Advising. She enjoys sharing best practices with professionals of various disciplines and continually grows her understanding of the consulting space.
00:04 Welcome back to the Founder's Sandbox. I am Brenda McCabe, your host, now in this fourth season of the Founder's Sandbox podcast. This monthly podcast reaches entrepreneurs, business owners who learn about
00:33 building resilient, purpose-driven, and scalable businesses with great corporate governance. My guests also share this mission and actually working with entrepreneurs and um business owners to also work on those aspects, each in their own manner. My guests are founders, professional service providers, who like me want to use the power of the enterprise, be it small, medium, or large.
01:02 to make change for a better world. Through storytelling with a guest on topics that's gonna touch on their, you know, why they do what they do today. And we are recreating a fun sandbox environment where we can equip one business owner at a time to build a better world. Today, I'm absolutely delighted to have as my guest, Anberne Guarrine. Guarrine?
Season 4, # 1. Purpose: Ethos in Employee Benefits
Season 4 · Episode 1
Thursday, August 14, 2025 • Duration 39:25
On this episode of "The Founder's Sandbox", Brenda speaks with Donovan Ryckis; CEO of Ethos Benefits, the nation’s leading fiduciary benefits consultant in mid- -large market employers. Ethos Benefits was founded in 2016, after a chance request from a client of Donovan when he operated as a financial advisor--the client was faced with an increase in the companies’ health insurance bill for the companies’ employee plan that would have had a financial burden that threatened the sustainability of the company.
‘Ethos’ represents the guiding principle, character, or spirit of a person or organization. It’s the ‘why’ that drives decision-making and fuel’s purpose.
Through Donovan’s origin story we will have our eyes opened as business owners to the potential risks of employer sponsored healthcare plans and how to mitigate these risks.
00:04 Welcome back to the Founder's Sandbox. I am Brenda McCabe, your host on this monthly podcast. It reaches business owners and entrepreneurs who learn about building resilient, scalable, and
Season 3, #14 - Scaling the Co-founder Relationship
Season 3 · Episode 14
Thursday, July 10, 2025 • Duration 35:00
Tim He checks many boxes as a guest on the Founders Sandbox- a 3x founder, now advisor, professor, creator, writer and coffee snob. Tim’s newsletter, "Cherrytree", allowed him to keep teaching entrepreneurship while the pandemic closed the classroom. By providing a newsletter, Cherrytree now offers consulting and coaching to cofounders. In Tim's own words; "I want to actually change how people become cofounders. And then how they stay cofounders."
It is a tough decision to “divorce a co founder” and we find on this episode with Tim He sound advice on getting the pre nuptials in place for just in case scenarios and preventatively preserving the co founding team dynamics.
Listen to this month’s episode “Choosing the right Cofounder” on The Founder’s Sandbox with Tim He.
00:04 Good morning. Welcome back to the Founder's Sandbox. I am Brenda McCabe, your host on this monthly podcast now in its third season. The Founder's Sandbox is a podcast where my guests are
00:33 business owners, founders, professional service providers and corporate directors. And we all share a mission and we find ourselves speaking here on the Founder Sandbox. This mission is really to work through the power of the private enterprise, be it small, medium or large, to create change for a better world. And each of my guests tells a story, right? The origin story.
01:03 that touches on the topics that I'm so passionate about resilience, scalable, purpose-driven enterprise, all with good corporate governance. And we do this in a fun sandbox environment here in the Founder Sandbox. I am absolutely delighted to have as my guest today, Tim He. He is joining us from Dallas, Texas today. And Tim.
Season 3, #13- Scaling AI with Ruthless Compassion
Season 3 · Episode 13
Tuesday, June 24, 2025 • Duration 56:04
On this episode of The Founder's Sandbox, Brenda speaks with David Hirschfeld, owner of 18 year old business Tekyz, that boasts a hyperexceptional development team building high “ticket” products in the B2B space. They speak about ways in which AI is a gamechanger, how Tekyz backs their work for clients with relentless pursuit of quality, and how Tekyz practices ruthless compassion,to protect the company and enable it to grow
Having collaborated with over 90 startups, he developed the Launch 1st Method—a systematic approach that minimizes risks and accelerates software company success with reduced reliance on investor funding, after observing that many companies launch a product first and then fail at a later stage – With Tekyz approach of Launch 1st exceptional founders are in love with the problem not the product.
David's expertise bridges cutting-edge AI technologies, workflow optimization, and startup ecosystem dynamics. When not transforming business strategies, he enjoys woodworking, golfing, and drawing leadership insights from his experience raising four successful sons.
On this episode of The Founder's Sandbox, Brenda speaks with Alexa Steinberg – a corporate and transactional attorney for middle-market companies and entrepreneurs.
Acting as outside general counsel, Alexa represents privately held companies in a wide range of general corporate and transactional matters, including entity formation, structuring, and commercial transactions. With a focus on mergers and acquisitions, she offers clients guidance on structuring deals and ensuring compliance with relevant laws and regulations.
Brenda and Alexa discuss her journey from working at a small, all-female law firm to joining a full-service firm to better support her clients. Alexa shares how her parents—both deeply involved in business and community service—shaped her values around financial literacy, record-keeping, and the importance of building generational wealth. They speak about family-owned businesses and best practices in family governance, such as setting clear roles, regular meetings, and involving independent board members. Alexa also emphasizes the importance of building trust with clients and maintaining a purpose-driven, relational legal practice. Brenda and Alexa explore what "purpose-driven," "resilience," and "scalable" mean within the context of business and legal practice.
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
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.
Season 3, #11 - Purpose: Bridging Gaps for Better Governance
Season 3 · Episode 11
Tuesday, April 29, 2025 • Duration 50:09
On this episode of The Founder's Sandbox, Brenda speaks with Dr. Keith Dorsey – Keith is joining to announce the launch of his book on May 6, 2025 “The Boardroom Journey Practical Guidance for Women to Secure a Seat at the Table”.
Dr. Keith D. Dorsey is an internationally recognized governance expert and NACD Directorship 100™ honoree who equips senior leaders with proven strategies to secure and excel in board roles. With over 25 years of corporate leadership experience and active board service spanning private, municipal, university, and nonprofit sectors, he delivers engaging presentations that blend research-based insights with actionable guidance. Dr. Dorsey speaks on corporate governance, board effectiveness, and strategic leadership, helping organizations build stronger boards and executives navigate their path to the boardroom. His book, The Boardroom Journey, offers practical guidance for expanding boardroom impact and success. Read more about Keith’s experience.
You can find out more about Keith and his upcoming book at:
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
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.
Season 3, #10 - Resilience: Human Rights in Fashion and Entertainment
Season 3 · Episode 10
Thursday, March 13, 2025 • Duration 36:30
On this episode of The Founder's Sandbox, Brenda speaks with Shivani Honwad – founder of her own law firm, who specializes in immigration and business law for the creative industries. Shivani is a business and immigration lawyer, and trailblazer in supporting the Freelance and Free Act, as well as a professor at NYU LA campus teaching Entrepreneurship for creatives.
“I could not keep hearing it and not do anything about it” Shivani says, speaking about immigration as a major issue for freelance fashion workers. Shivani set out to get smarter. Ten 10 years later, The Law Firm of Shivani Honwad, LLC, focuses primarily on immigration and business law for companies in the fashion, tech, beauty and entertainment realms.
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
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.
Season 3, #9 - Resilience: Deeptech, Female, Veteran, Bipoc
Season 3 · Episode 9
Tuesday, February 11, 2025 • Duration 55:27
On this episode of The Founder's Sandbox, Brenda speaks with Chasity Lourde Wright. Chasity is inventor and founder of Infiltron Software Suite LLC. Infiltron operates in the cybersecurity space; a Service disabled-Veteran owned and women-owned small business. Infiltron offers quantum-resistant cybersecurity solutions for decentralized digital identity, digital assets, and AI governance, utilizing proprietary post-secure encryption. Its patented technology integrates AI, blockchain, and quantum-resistant encryption to provide advanced cyber resilience, compliance enforcement, and real-time threat mitigation across multiple industries, including aerospace & defense, fintech, smart cities, and EVs. Chasity, as inventor, speaks about her team and how creativity in the work place is necessary for enhancing innovation on really tough problems like Cybersecurity.
As the CEO of Infiltron, Chasity Lourde Wright is also a former USAF Aerospace Engineer, Intel Officer, and Cybersecurity Instructor with extensive experience in cybersecurity, AI governance, and national security. She was part of the team that developed reconfiguration capabilities for the USAF C-130 and contributed to the creation of the CMMC framework since its inception in 2019. Additionally, she has engaged in high-level cybersecurity and AI governance initiatives, including industry collaborations, government advisory roles, and proprietary innovations in quantum-resistant encryption, AI security, and blockchain-based compliance solutions.
Her expertise extends beyond participating in NIST challenges, encompassing leading-edge cybersecurity development, policy influence, and defense sector innovations.
You can find out more about Chasity and Infiltron at:
On this episode of The Founder's Sandbox, Brenda speaks with Salvador Badillo Rios. Salvador is Founder and CEO of EquiTech Innovate, a strategic consulting and advisory firm aimed at helping underserved and overlooked founders bring innovative and disruptive technologies to market. He is also Senior Associate and Portfolio Manager at National Security Innovation Capital (NSIC), a component of the Defense Innovation Unit (DIU), aimed at accelerating early-stage dual-use deep tech startups toward commercialization
At DIU and NSIC, Salvador supported 21 early-stage dual-use hardware startups across 12 states with ~$50M over three years leading to over $335M in total follow-on private capital (up to 20X funded amount at up to 11X prior to funding valuation).
They speak about Sal’s origin story; how despite being from a disadvantaged background, this has not deterred his purposefulness and positivity to make a difference particularly in underrepresented communities. Listen as Sal shares how he eventually settled on an engineering degree after choosing over music and English literature. What he does today as a senior portfolio manager in the DIU defense innovation unit’s National security innovation capital is a long way from Rancho Cucamonga.
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
01:31 Anberne Guarrine. Yes, Anberne Guarrine. um And she is, thank you, Anberne, for joining the podcast today as CEO and founder, the co-founder of the Guarine Group out of Illinois. As the founder sandbox host, Brenda McCabe and blogger, I often have guests who speak about playfulness and innovation.
01:59 And I write about the hidden value that playfulness brings to innovation and creativity in teams. When Anber was introduced to me by a fellow guest, um she truly brings uh the playfulness that is used in the business environment to a next level. As facilitator of family play, think listeners. We're team building.
02:27 rubber ducks and beach balls meet second and third generation family business owners. So I am absolutely delighted to have you here today. Thank you, Ann-Bern. Oh, thanks for having me. I'm so excited. Fantastic. So I would love you to share with uh my listeners the origin story. I mean, how did you use playfulness in the business environment in a very structured
02:56 manner now you're going on I believe 10 years with the Guarine group working with family owned businesses. What was the origin? What was that seed that you had in your mind? Thank you. Yeah, so when I was in college undergrad is psychology and I learned that I like working with groups. Okay. And so while I was
03:21 you know, doing my day job of whatever it was that I was doing, I knew that I always gravitated towards doing team buildings and leadership programs. And so at some point I said, you know what, I should start making this a business. And so the entrepreneurial spirit came in and I created a training company with a friend of mine. And so we were doing team buildings and leadership and communication programs.
03:51 We had corporate groups. We also had government contracts. And at some point, it was really all fun. I was doing what I wanted to do, but at some point there was just a tug in the heart, know, in my spirit. I was looking for something more. I was looking for sustainable impact because I was thinking as fun and as wonderful as our experience is with the groups that I was doing.
04:20 I just felt like there's gotta be something more. There's gotta be more sustainable impact. And around that time, my business partner's brother said, you know, I'm going into inheritance planning. I'm thinking maybe my clients need some team building. And you know, I know a whole lot about team building and groups.
04:46 I did not know a whole lot about families and especially families who own businesses together. That's a whole different dynamics. And so my, my business partner and I, you know, went through what resources can we get? And we found that there is a group that actually does this for a living. Yes. They do family business consulting. And so we both got our certificate for family business advising.
05:15 And then we hit the ground running. um But we cannot shake off our fun activities and our games. We can't shake it off. And so we took it with us in the family boardroom. And that's how I got started. And I still use rubber ducks and beach balls and whatnot. Right. And later on in the interview, you'll talk about what a typical engagement looks like, right, with the Guarani group.
05:45 in which uh you not only touch on the family use family play, right playfulness, but you also get into kind of the um Constitution of the family. So let's carry on. Let's carry on. You know, what have you found is unique about the family business experience? Unlike working for the corporates, right? What is that? I don't know secret sauce.
06:12 that are the uniqueness that you've had to kind of curate your business around? Yeah, so what I found out is that uh family businesses actually live in three ecosystems, okay, whether they're aware or not, there's the ecosystem of the family. There's the ecosystem of the business. And then there's the ecosystem of ownership.
06:41 And those three systems have different values. They protect those values differently and they have different goals. So let me explain this. If you think about your family, you think about your objective is to support the growth and development of everyone in the family. Your values are love, unconditional regard, you know, you want everybody to thrive. There's all of that social.
07:10 Connections. Yes. When you think about the business experience, you think about people, what are their contributions? How can they help this business grow? We're thinking of keeping the business for the long term. You know, you're making decisions for the long term. And so you're thinking of profit. You're thinking of growing the company. So those are the values and those are your mindsets, right? As an owner, oh
07:38 If you are investing in the business, you're thinking of what's my ROI? How can I get as much profit in a short period of time? And so those are the values and the objectives. Now, if you think of all these three circles as not just individual circles, but connected kind of like a Venn diagram. Yes, like a Venn diagram. A family business is right in the middle of it.
08:04 So you're making decisions, thinking about the family, thinking about ownership, thinking about the business. And whether you're aware of it or not, you're making the, you have different hats that you're wearing, right? And so what we do as family consultant or consultants to family businesses is we help you kind of untangle that and kind of understand this is my situation and these are my goals for the family, my goals for the business.
08:34 there could be some friction there, but there's also a unity there. And so just the awareness and the appreciation of your unique experience. So uh how do you, is it typically the CEO, the chairman? um Is it the general counsel? Again, because you're working on uh family wealth um creation, who is the typical
09:03 uh decision maker that would get engaged with a querying group? So sometimes the people, yeah, no, that's a great question. Sometimes the people that make the decision are actually not sometimes not always not the people that have the title.
09:26 So sometimes it is the people that are in the family ecosystem that are not necessarily part of the business or not necessarily owners, but they have a big say in terms of the family dynamics. Interesting. So a confidential mentor is it maybe general counsel, so an outside they're already an outside advisor to the family. It could be because sometimes when you're very close to the situation, you
09:54 don't know what you don't know, right? Right, right. Yes. um Sometimes on the rare occasion, there are family leaders who are very in tune to what their family needs and they're constantly looking out, right? But sometimes there have to be somebody else that is not currently involved in the day-to-day that says, hey, you might want to have a conversation with this person. Right.
10:24 That makes sense. Yeah. Particularly as some family companies evolved to bring in professional management, right? So there are probably many, many aspects or many entry points. All right, you're 10 years into uh the great chlorine group. uh I would love to ask, you know, what are some best practices, right, that you've identified without revealing the names of the businesses? But what have you found to be
10:55 best practices in, I guess, G2, G3, right? Yes. um Before I say anything, I want to preface it to say that you see one family business, you just see one family business, so they're not all the same. But there is a thread that is common. And I'd like to say three things. So first is, there is a clear
11:22 and conscious separation of the family ecosystem and the business ecosystem. And they have two separate government structures. Okay. So for the business, you have your board, have, you know, typically the board would have an independent non-family member that sits on the board. They have regular meetings that are prepared and scheduled.
11:50 And in the same manner, the family also has that type of family governance structure. So not as formal as the family board, but you do have what they call a family council. Yes. So it could be a council of cousins, a council of siblings, all branches are represented. And this is a way for the family to keep the business of being a family. Right. And so they talk about um
12:19 They talk about uh family gatherings. They talk about traditions. They talk about, you know, family fun, you know, what do we do, birthdays and all of that thing. um And so, yeah, so this is, so they're very conscious about keeping the two separate. Yes. So that's the first one. I think the next um best practice would be that they have a shared purpose.
12:50 They know why are we in business together? Or why are we hanging out together? What is our what is the legacy that we are leaving in the world? So they have they're very connected to that. And they're, they acknowledge it and they articulate it. And I think that's a great best practice that I've Yeah, I guess I would call that purpose, right? Purpose. Yes, driven. And it's shared purpose, or purpose.
13:18 And I think the third one would be that they have a sense of what their values are. Okay. guides them. And so where their purpose kind of helps them soar and go into the future, their values kind of keep them grounded. Oh, so that they don't just fly away where the wind blows. Does that make sense? It's it does. um I had never it doesn't the at the
13:48 I don't work with family businesses, right? So it's, I've seen this in very well run growth companies. They, right? um The shared practice or the leaving a legacy is typically the founding team, right? Whereas it's a family here. So I do see a lot of similarities. And I love your sharing that values, it keeps them grounded while the
14:17 shared purpose, right? Is kind of their long term vision soaring. Yes. Well, we'll get to meanings of purpose driven later. And I'm certain you'll come back to this. All right. Thank you for sharing that best practices. Now, what does a typical engagement look like? Are you playing all day long? Or how does play come into how right or more? um
14:47 Seriously, how would we've already talked about how you may be retained for an engagement, but what would be a typical engagement or typical engagements, right? Depending on the stage of uh evolution of that, family business. Thank you. Yeah. Yeah. So we start with finding out what the goals of the family is. So we talk to individual members. What is it that you want? What are you?
15:14 engaging us for? Are you engaging us for just one day of family fun, which is great? Are you trying to clarify your values or are you trying to go deeper dive and create a family constitution? Okay. And in all of those, I always lean on my experiential learning background where I take, you know, the the fun tools, the rubber ducks and the beach balls and the plastic balls.
15:43 sticks and we play and I get everybody to kind of break that ice and forget their hats, know, the CEO hat or the accounting hat or whatever hats you have to kind of shed that a little bit and be more human. And once we get to that level, then we can talk about, what are your goals? If your goal is trying to clarify your values,
16:13 what is it when you were playing earlier, how did your value show up? You know, or when we're talking about a family constitution, we talk about, you know, how do we pass on things from one generation to the next? So when you were passing on the beach ball, how what made it successful? Let's look at that. And are there ways that we can make sure that we do those similar things as we pass on the baton from one generation to the next? And, yeah, and so m
16:43 A typical engagement could be one day, we'll do fun and then we'll talk about why does that matter? Okay. Or it could be more deeper dive. And at the end of the day, we have a family constitution that everybody can sign and commit that we can then turn over to their legal counsel to make it more legally binding. Right, right. So it could be anywhere from three months to six.
17:11 to 12 months, right, depending on the level of engagement and the actual oh whether it's to G2 G3, right, the complexity. Yes. Oh, and these engagements by design are probably in person. Okay. Is that correct? They have to be right? Particularly?
17:38 Yeah, so we in the beginning, there's when we're trying to kind of get everybody on board, we could do it online, we could do zoom. But the actual engagement, it will have to be we all have to be breathing the same air. Right? Yes. Yeah, there's something to be said about sharing the space. There's something to be said about being in the same place.
18:06 being able to touch somebody, being able to hear their laughter real time in the same room. There's just something about that. Yes, that comes from a practitioner's experience and been worrying from the worrying group. And facilitating, I would say good governance and family businesses.
18:32 I just that just occurred to me while we're talking, right? I was so set on playfulness, but also it's really about achieving good corporate governance because you alluded to something here. Well, you know, what does a typical family constitution comprise? What is the comprised of family constitution? Yeah, that's a really good question. So, yeah, so we first off, we define what does family mean to everybody?
18:58 And then we talk about, you know, what are the family practices that we want to keep? So, um, so that's the, so again, when, when I was talking about the three ecosystems, the family constitution is meant to kind of set the stage for governance structures for each of the three ecosystems. Okay. So for the family, what are our values? What are the, what's our legacy? What is our history?
19:27 know, m what is our hopes and dreams for the family members? Do we have an educational program for, you know, understanding what our history is about? um If there are people that are coming in as married-ins or in-laws, how do we kind of educate them into our culture? And so that's the family piece. For the business piece, we talk about
19:54 What is our hiring process for family members? Do we hire straight out of college? Do they have to have so many years of experience? And then we talk about the tricky things like, okay, do they have job evaluation? Do they have an annual performance reviews? What happens if they don't quite meet the standard? um Can they work directly under their parents?
20:23 know, or their siblings, you know. So, one of these questions that are potential sticky spots, we talk about them ahead of time before you're actually in that situation and then all the emotions are wrapped up in both the brainstorming, trying to figure out the solution, and then you're also in the thick of it.
20:47 So I mentioned the family system, the business system, and then in the ownership system, we talk about things like, do you even have a shareholder's agreement? What happens if somebody wants to sell their shares? And how do we figure out what the value of the shares are? What's the process going to be like? How long will it take? we pay them immediately, or do we want to think about long term?
21:14 Do the other siblings or the other family members have the right of first refusal? Can they just share, you know, all these things. Right. So we talk about those things again, hopefully before you meet the situation, you already have systems in place that allows the family to say, Oh, you know what? We've talked about this. This is our process. This is what we're going to do. Or if we don't have a process.
21:39 then we say, this is our decision-making matrix. This is how we're going to come up with decisions. Because you can't potentially talk about everything. No. There are emotions involved. Yes. Possibly on a greater scale than in a private company, right? Yes. so we recognize that. And so we create systems. How do we make decisions together if we come up with or if we find ourselves in a situation that we haven't anticipated?
22:10 you know, preparing for your node. Yes, I wonder, you know, why do you continue to have the role of play in your toolkit? Right? Gosh, that's a wonderful question. I see it at the beginning, but do you use it throughout? Just? Yeah. Why is that part of your toolkit? Yes, because it's fun. And, and I, I now say fun, as in both
22:39 F-U-N and also F-U-N-N. So a friend and colleague of ours, the late Carl Runke, he is known, very well known and a key individual in creating adventure programming. He coined the term F-U-N-N, meaning functional understanding, not necessary. Sometimes we do fun things because we have to have fun.
23:09 know, we don't need that said, my husband in his career as an outdoor education um specialist and director, he took Carl's idea of FUNM and said, Okay, what if fun has an acronym? And he came up with fundamental universal need. Okay, and he said, it's very basic, as basic as food and water and shelter, the sense of I need to have fun. Like if you look at
23:39 children all over the world, you give them a stick and mud and they're clean, right? And so it's fundamental, it's universal and it's a need. And with neuro-psychology um and all these studies, we now know that FUN is actually a very good tool, not only for brain development for children, but also for neuroplasticity for grownups, right? So if we want to keep our brains fresh, m
24:09 we need to play and it's a need, right? Right, almost like biological. And we learn so much better and so much easier when we're in a state of play. So when we're talking about creating a family governance structure, if the family doesn't know what that is, if the family is not used to having a formal meeting talking about family matters, it's really hard to learn that unless you're in a state of
24:38 play. And so that's the reason why I use play because it brings down the boundaries. Take the hats off, you know, so you're not formal. You're engaged. You're engaged with your whole body, your whole mind and your soul. Okay, it's easier to learn about the other person and it's easier to learn new skills and new mindsets when you're in a state of play. So yeah, and uh
25:07 I like sharing this story. Einstein had said when he was, when he gets stuck in a problem, he steps away from it and he does something that's not related at all to the problem that he's doing. So sometimes he plays the violin or he tickers around and he says something about activating that different part of your brain. Helps him so that when he goes back,
25:36 and looks at the same problem that he was stuck in, it kind of changes his mindset and he finds different ways to solve that situation. And so if I'm thinking, you know what, if it works for Einstein, it should probably work for us, for ordinary people, right? You heard it here on the founder's sandbox. I love that. You know, I know that quite a few, like mathematicians, scientists,
26:05 even composers, Beethoven like walking, right? Being in nature is an area that foments their creativity. I hadn't thought of that or hadn't heard about the Einstein like stepping away, maybe playing violin, maybe just right doing another activity. Why not play? Why not plenty? Right? Yes. No shame adults. We can increase and improve our neuroplasticity.
26:35 Yes. Being playful. Yes. Thank you. Can I share with you a story? Yes. So one time I was doing, you know, the typical activities that I was doing. And one time a family member in the midst of all the laughter and the like really big shouts and all of that. And he just said, you know what? I don't remember the last time I played with my siblings. Oh.
27:03 And this was the time that they got to do that with their parents. Their parents were all in on the fun. it's like, that is such a gift. It is such a gift for them to have that experience, but it's a gift, a privilege that I got to see that. And so, yes, it is fun. Wow. Wow. I almost, okay. I got emotional.
27:33 Thank you. I would like you to have uh this opportunity to provide information on how to contact you, your group. This information will be in the show notes. So take it on that, please. Yeah. Yeah. So our website is the Guarrien group. That's G like George, U-A-R-R-I-N like Nancy.
28:02 Theguarriengroup.com and my email is Anbern, N like Nancy, B-E-R-N like Nancy at Theguarrienroup.com. That's the best way to get a hold of me.
28:19 But I like to bring my guests back to my sandbox so we can be playful. No, seriously, um I am passionate in my own work um with growth stage companies to provide uh good corporate governance practices while scaling, while finding or increasing the purpose, and um really
28:48 building that resiliency. And I like to ask each of my guests, you know, what does the term resilience mean to you and your own practice? Yeah. So to me, resilience is like, think of a river that's flowing. Okay. Even if you put a boulder in front of it, it's going to find its way. It's going to keep going to where it wants to go. Yeah. And to me, that's resilience. Wow. Beautiful.
29:19 and very visual, I can imagine a boulder and a river. How about purpose driven enterprise? What's purpose driven? ah Purpose driven, I feel like it's our ability to know that our time on this earth is limited. Okay, we have a role to play. And so what is my role? And that kind of gives me
29:48 a sense of direction. What am I in this world for? Wow.
29:59 And that goes for individuals, businesses, families, organizations. Yeah, I guess you could interchange role with legacy. Yes. Right. Oh, I like that. I like that. Well, you just said it here. And I'm just taking notes. uh And I listen. That's my gift is to my guests. Final. Well, second to last question, scalable growth. What's scalable? So how can you
30:28 scale those. I imagine you in your daily work, generation two, generation three, that's you think about this a lot. Yes. I think scalable is creating the right foundation. Okay. So that when as you grow, your if your foundation is strong, then you can build on top of it anyway, in any way, however big you want to build. So I feel like scalable growth has to be
30:58 on a good foundation. You know what you're about. You're rooted in your values. And so you can grow exponentially. Nice. Last question. Yes. Did you have fun in the sandbox today? Gosh, did talking with you savor or satisfy my fundamental universal need? Yes, it did. And we didn't have to revert to rubber ducks.
31:27 Right? No rubber ducks. No. Thank you. So to my listeners, if you like this episode with Anne-Bern Guarine, sign up for the monthly release where founders, professional service providers, and business owners share their experience on how to build with strong corporate governance, resilient, scalable, and purpose-driven companies to make profits for good.
31:55 Signing off for this month. Thank you again, Anne-Bern. It was a true pleasure to have you here. My gosh, I had so much fun. Thank you.
00:32 purpose-driven companies, all with great corporate governance. I am Brenda McCabe, and I am your host. And the guests that come to the podcast are not only those founders and business owners who are sharing their experiences, but also corporate directors, investors, 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.
01:00 Through storytelling here and a recreated sandbox, my goal is to equip one startup founder or one business owner at a time to build a better world through great corporate governance. Today, my guest is Donovan Rikas. He is joining the podcast as CEO of Ethos Benefits, the nation's leading fiduciary benefits consultant in the mid to large market employer space.
01:29 So I'm absolutely delighted to bring in a professional service provider in the employer benefits area, which we're going to unpeel this sector today in the podcast. it's fascinating. So thank you, Donovan, for joining me today. Thank you, Brenda. Thanks for having me. Excellent. So the company you and Chelsea, your wife and president of Ethos Benefits,
01:59 was founded in 2016, which wasn't that long ago. But it happened serendipitously. You got a chance request because at that time, you were a financial advisor, right? Yes. When your client was faced with an increase in the company's health insurance bill for their employee plan, pardon me, that would have had such a financial burden, it would have threatened the sustainability of
02:27 the company and that's your client. So what did you do Donovan? What was the origin of Ethos Benefits? Thank you. Yeah, so that's exactly right. I started as a financial advisor. So Ethos Benefits was formerly a registered investment advisory, which was Jay Donovan Financial. And one of the interesting things that are a little bit different on the security side versus the insurance world is
02:56 the ability to license and designate yourself as a fiduciary advisor to your clients. So that's really important and that's kind of where we started as financial advisors. So that essentially means that you're not gonna be commission-based with variable commissions based on what you wanna sell and the client doesn't really understand, right? You're gonna be transparent with how you earn any compensation.
03:23 and you're not gonna have any conflicts of interest that might change the recommendations or advice that you're giving them. So it's gonna be flat fee and you get to work with them directly instead of working for the financial institutions and the insurance companies kind of in the background that are actually the ones incentivizing. Cause it's this odd relationship where it's like you think the financial advisor is working for you but they're actually incentivized by the institutions that they're representing. Very important clarification because we do have a question
03:53 further on, which is, you know, what, what, how does the 401k management, right about employers 401 plan, mirror that of healthcare benefits? Yeah, for sure. You'll start to see some of those. So that's how we're working as financial advisors. And that's an important distinction as we get into an explanation of
04:22 the whole healthcare industry and how that works. So you're exactly right. I was working as a financial advisor, working with business owners because they had more kind of complicated planning and tax structures and things that I could do to really make a difference. And what I realized is when most of them had commission-based advisors, they'd rush to sell a product, mutual funds with upfront loads and REITs that had proprietary commissions and all this kind of stuff. And then they would leave without worrying about any of the
04:52 tax consequences, you know, islets or trusts or even wills, right? Like all these extra things that business owners needed to set up their own personal wealth, but also their company, their 401k, maybe combining a defined benefit plan. So that was kind of the niche I chose. And it was incredibly lucrative. I loved it. Was doing exactly what I wanted to do until that client kind of asked me for that help, like you alluded to.
05:21 And it was 40 % increase on his health insurance. He said, my broker says, this is it. There is nothing else. Can you help? And I didn't know any idea. Like I had no idea about health insurance or what I do. But yeah, just- No, no. problem.
05:39 And certainly as a financial advisor, it kind of seemed like going backwards and beneath me. didn't really want to do it, but I was like, I could hear the panic in his voice. And I was like, yeah, absolutely. Just send me everything you have. And after about three weeks, basically making as many connections in the industry and learning as much as I could and trying different things, we basically mitigated that increase entirely.
06:05 And he actually came three points under where he was currently today before that increase. And we didn't take away any benefits from employees. We didn't put them in smaller HMO networks. We didn't increase deductibles or increase their premiums. None of the usual tricks. So this was a like for like solution. We actually improved the plan a bit and came in under. And it really made me realize in that moment, it wasn't my experience or my education or my smarts that
06:34 may be able to do this, it was a lack of conflicts in compensation and incentives, right? Because his broker does about $7 billion a year annually. I didn't come in with more market knowledge, leverage, or experience. I just didn't have conflicts of interest and compensation. That's what started me down this path. And back then, you hadn't yet created Ethos Benefits with that name.
07:03 So when I did a little bit of research, I couldn't have been more delighted that you actually reached out to to be featured on the founder sandbox because of two reasons, you the word fiduciary, right? It was in your basically your call to action, right? Or your or the definition of company. So, you know, you are the governance of a company goes way beyond making a profit for shareholders.
07:32 the duty of care, the duty of loyalty and the duty of obedience is really the underpinning elements of fiduciary duty. And on your website, you say our ethos is simple fiduciary first. So we're going to appeal that in here in a minute here. So act in the best interest of those we serve, no matter the cost. You also on the website, you you had a purpose ethos represents the guiding principle.
08:01 character or spirit of an organization or a person is the why that drives decision making and feels purpose. So I, I looked like I was reading what next act advisors may consult a firm is about is just really finding those purpose driven. So with that, I wanted to just, you know, ask you, what was that you had that first client that first aha moment, and
08:29 How long did it take you and did when did you realize that this could be a a career change for you, right? Rather than a financial advisor, you were actually actually a health care benefits advisor, right? Yeah, I mean, I think I think the first moment is, you know, being being a financial advisor was very lucrative. And I like the people I was working with. I liked working with entrepreneurs and business owners and and, you know, just
08:58 I found them inspiring and I was curious about the things they're doing. And I think that kind of lifts everybody up when you keep a circle like that, right? Like you push yourself harder, you learn, educate and do different things. So I love the clients I was working with. Like I said, maybe working on personal wealth for individuals though, isn't the most rewarding thing you could be doing. seeing that...
09:25 Don't get me wrong, I was paid well enough. It would have took me a long time to figure out that it wasn't very personally fulfilling. But seeing that first case, mean, the first thing I did when I got that successful proposal back, before I presented it to the clients is I was looking at the math of what does this cost? What difference does this make per paycheck to all the individuals in this planet? And then I'd look at somebody, my God, this person's got a wife and two kids. Look at the difference in premium there.
09:54 I was calculating my work in return to the average American worker and realizing like me putting myself aside to proactively, strategically go after this problem instead of making a decision for my own personal commission, looking at how much that impacted everybody. And that was powerful.
10:20 I'm going on 20 years in financial services and every aspect of it, I've seen people who prioritize commissions over, you know, a better product, a better outcome for an individual. But the idea that that could be done on scale to where you're now making that decision for yourself over 200, 500, 2000, 3000 employees, like that's pretty disgusting, right? So seeing that that kind of impact could be made.
10:49 I mean, it was it was really not a question after that I knew I was transitioning my business. Excellent. Excellent. So my own path after 25 years in Europe was quite an eye opening experience when I came back to the United States, I am a US citizen, but I had to get you know, I've been working for myself and I had to get self insured. So I got back this is like
11:18 12 years ago, I got the Affordable Care Act for dummies from my local library. I had not yet transferred my tax certification to the United States takes quite a few years when you've been gone so long. So you because you do have to sub venture tax returns and all that. And then I ran into I met Marshall Allen, the author of never pay the first bill and the other ways to fight the healthcare system and when
11:46 Marshall Allen actually spoke at a graduate or alumni event of University Chicago. And I was, you know, reading these books. And you know, eventually, I got my own broker to help me get onto the exchange. But it every year has been an experience. I'm fortunate to be part of a membership organization through which for small and medium sized businesses and I get PPO through
12:14 I won't mention names, but I was blessed because just and I'm 12 years in the United States, you have to knock on a lot of doors to actually get health care when you are a small business owner and really understand what you are paying for, not only your premiums of what are the services that are provided. So can you talk about the average
12:44 premium for a family of four and some of the numbers that you discovered and believe we as a country could actually improve on the outcomes, healthcare outcomes with the actual spend we have today, right? Yeah, we're getting the numbers are pretty wild. mean, I feel like we're really kind of getting to a breaking point with it. You know,
13:12 For what I work on, employer-sponsored healthcare, 186 million Americans are covered under employer-sponsored healthcare plan. These plans can average increases anywhere from seven to 10 % annually. We see a lot of reports that come out that kind of measure these things. Kaiser Family Foundation does one, Milliman Index is another one. So there's a lot of studies that kind of measure this annually and changes for employers across the board.
13:41 What we saw this year for 2025 was the average cost for a family of four under employer sponsored health care plan is $35,119, which is just an astonishing number. That is unaffordable for an employer. That's unaffordable for an employee. And it's unaffordable for them to split that cost as well, which is how these, yeah, that's how they're structured in some way or another.
14:11 And another number to know that kind of governs this is the ACA affordability percentage, which is essentially where employers have to contribute, they have to contribute enough to keep the premium under this amount, which is 9.02 % this year. So premium for one of your employees cannot exceed 9.02 % of their take-home pay.
14:39 And this is updated on an annual basis, correct? Correct. Yeah, it fluctuates a little bit, but it's always right at 9, 8.5, 9.2, it's balanced up and down. But that's a pretty astonishing number too. And I see a lot of companies that are basically designing their contribution just to stay under that. it's, obviously they'd love to do more, but with the way these costs increase annually, sooner or later, they get to that point.
15:07 where they're kind of designing it just to be under 9 % of the employee's income. Okay, that's astonishing. And I'm happy that you are working nationwide now with employer benefits with companies that, what's the size of the companies that you typically sell to? So we only work with large employers these days. And if we have somebody come in a little bit under, we have some associate agencies that we can kind of refer them to.
15:36 I'd say our minimum is usually like 250 eligible employees all the way up to 5000. Yeah, so anywhere in that mix. Excellent. So when again, I first met you was unaware because you've basically become nationwide in the last what two, three years, right? I'd say around COVID. Yeah, I took off right. So when I was speaking with you spent some time on the website.
16:06 I was trying to understand the sales alignment. So how you reach customers, those employees that have 250 between 250 and 5,000 employees, right? My first reaction was, OK, Donovan, go in with either of these benefits. You do a cost down, right? You've done, you basically work yourself out of the job. You corrected me. So for my audience, so how?
16:32 does ethos benefits work for a company, right? What is that? Is it is it an annual engagement talk walk me through the work you Yeah, I mean, things are happening on a daily like when we break down our scope of services, we'll actually show them like, these are daily, these are weekly tasks, these are monthly, quarterly and annual because there's so much happening. So we're talking about the employee benefit space. Yes, it's the
17:01 kind of designing consulting for the annual premium for a 12 month period. I think that's what people first consider. But there's also a ton of compliance factors that have to happen throughout the year that that company has to fill out, right? Could be anything from section 125s, 5,500s, wrap documents, all kinds of notices and disclosures that need to be done. Also, you know, we deal with benefits administration. So that's...
17:29 How are the employees making elections, seeing premiums? Is that integrating into payroll? So functions like that with eligibility in and out of the company adjusting that. But also we kind of discussed and talked about the fact that health care is incredibly complex. So all the same market influences, where the market's at, interest rates, inflation, all that kind of stuff affects health care rates just like any other company in the market.
17:58 but it also gets as granular as new medical procedures, new drugs, new generic drugs that are now an option. It can even go down, you know, locally or regionally to where we get a new CFO in a hospital group and that starts changing the reimbursement rates that they're requesting from the insurance. So we see that where kind of a CFO comes in and they start flexing, making life difficult in a particular region or with a hospital group.
18:28 So all these things are kind of coming together and changing every single day. Also the fact of the sheer amount of bills, claims that come through. So what we see on average, this is a pretty crazy number, but what we see on average is 18 claims per employee per year. Okay, that's a lot. That's a lot. So if we had just a hundred employees, that'd be 1800.
18:56 basically accounts payable into the company. And that's part of our job too, because as you might imagine, hospitals make tons of mistakes on the bills, about 80 % of the bills have mistakes. And then we also have to make sure that those are coming in at fair reimbursement rates to the company, because what hospitals bill is a spectrum for the exact same procedure. And the only difference is the payer. It's not the patient, it's not the complexity, it's not the physician, like it's literally
19:25 just the insurance card that can affect that difference in reimbursement rates. So all these things kind of come together where, yes, it very much is a daily task for me and my team on different things that we're working on. And- Are you an advocate in any way for the employees? Yes, very much. So, you know, it's two, there's two complicated ecosystems at the same time that we're trying to navigate.
19:52 One is certainly the healthcare finance, which is what we're working with the company. But healthcare delivery for employees and members is just as complicated and confusing as far as where do I go? What is this gonna cost? What's the next step? Can I get a second opinion? How would that work? Right? And also helping navigate them to their highest cost or their lowest cost, highest quality and understanding what that is and giving them options to seek care at.
20:21 at lower prices if that's available. Excellent. So your delivery platform, is it like a customer success team that is assigned solely to that client? How does it work? Yeah, so it's kind of different. every employer is starting at a different place. They also have different ideas of where their end place or where their goal is.
20:49 healthcare delivery, kind of working on some things like that, there might be a couple of different ways we handle it. One might be having a direct primary care provider. So the idea of a direct primary care provider is basically same day, next day appointments with your primary care physician and 30 to 60 minute visit times, not the average, which is seven minutes with a PCP, which is what most people get across the country. And with that DPC provider, you can also do things like
21:18 stitches, blood work, get generic meds. So we're talking about more of a comprehensive service when you actually need it, not the 14, 18 day primary care. So that might be one of the ways we help with healthcare delivery. It might be a nurse concierge where they have a nurse that they can help find providers, navigate them. That might be a part of it. So it kind of depends. then also a lot of the times are
21:47 Our team will basically act as a care coach, where if they have anything going on, they can just call us. We'll help them set appointments, navigate them towards care, help them with their ID problems. Fantastic. Anything else you'd like to share or shed some light on the service offering of ETHOS benefits? So we're going to jump into a legal question in a minute here.
22:13 Yeah, I mean, it always just depends on the employer. what I would say is generally they find everything we do to be more comprehensive. And I think that's just the nature of the fact that we're not seeking compensation from the insurance providers or working with the client, because it's my belief that we don't have a single thing to sell to an employer. Employers have a health care problem. And we're here to solve that and work through that in any
22:42 way that they need at that given time. So we're not, you know, pushing those solutions are having those conflicts. It's an excellent segue down into current lawsuits that are popping up with respect to, first of all 401k, lawyer, and now healthcare benefits. So before we jump into that some specific cases, you know, for my listeners, what does fiduciary mean?
23:12 in your business model, right? Please. Yeah. So fiduciary for us is certainly always acting in the best interest of those that you represent. It's the highest standard of care. So you mentioned a couple of things earlier, loyalty, obedience. I think the biggest thing where companies may think they're acting as a fiduciary and they're not, because while we carry that duty to our employers and our clients,
23:40 Employers have that duty to all of their employees. And that's something that are kind of educating them because a lot of them don't realize it. But I think the big duty that is left out or misunderstood is the duty of prudence. Okay. So did they go far enough in investigating solutions and understanding the problem and working through it and having a committee within the company to kind of help go through that? Because what I mean, in a compensation package, there is nothing more important
24:10 than the cost of health care and the options in health care, right? And how those decisions are being made. So I see the duty of prudence being the kind of most
24:23 I, the duty with the most opportunity, let's say, maybe, maybe the most misunderstood because the employer sometimes think, well, you know, the broker came in and he showed me one or two other options. This is the least worst option. Therefore that's what we're doing. And I think that's enough. Right. And that is not the case. And it's only until there's a 40 % increase due, right. It doesn't employer say my business is not sustainable.
24:51 So actually healthcare is what not the number two or number three expense in the company's PNL today. Correct. Right. So walk me through some of these recent lawsuits. Yeah, I think we have companies like J &J and JP Morgan. Speak to me about that.
25:14 Yeah, J. J. J. P. Morgan, Wells Fargo. A lot of them are almost they're copied and in some parts of the complaint, because it's very much the same thing. the first one we saw was Lewandowski versus Johnson and Johnson. And this is for their health care plan. You know, they're a Fortune 50 company. I think they somewhere around 160,000 employees.
25:42 and they have a benefits committee and a benefits team of 16 or 18 people. So a big team of people to help make these decisions, understand them and vet them. And the lawsuit is basically for their decision of pharmacy benefit manager. So a pharmacy benefit manager essentially sets the price for any drugs that employees could get within the plan. And it lays out 35 or so specific examples of drugs
26:12 but basically they agreed to pay up to 13,000 times the cost of the drug that's available, just cash pay. employee and employer funds are agreeing to pay that kind of multiple on a drug that's available without insurance, much, much cheaper. And the lawsuit is brought by the plaintiffs, who are they?
26:40 am Lewandowski. So she's she's the plaintiff. And then I believe as it's developed, other employees have kind of came on. So 13,000 was it do you know, I know that you're not directly involved in this case. Nor should you speak to it if that is the case. But is the transparency of the data? Can you get that data if you were an employee to then understand the
27:09 multiples that your employer plan has agreed to pay to the pharmacy benefit. I'm aghast. 13, I think the number is 13,226. So when this came out last January, the first thing I did is I read through the whole complaint. It was like 130 pages went through all these. So for all the drugs that were mentioned, I ran
27:40 J &J's prices, again, Fortune 50, 150, 160,000 employees. So you would assume they're getting leveraged prices, they're making great decisions, all those kinds of things. I ran those prices against what my clients were paying. And in the smallest, like I think our smallest in my book of business, like 100 insured employees somewhere around there, they were paying 94 % less.
28:06 for the same, for one fill of all the same drugs. So the math worked out to be like 135,000 for J &J for one fill of each of those. And my clients were like 3000 or 4000, don't know, it's all my LinkedIn. posted the public letter as soon as it came out. But I basically price referenced them. So it's not a question of leverage or buying power, know, all the ridiculous things you hear.
28:34 when you're talking to an insurance broker for these types of decisions, it's literally, it comes down to that question of prudence. Like, how did you vet these decisions? Do you know how the pharmacy benefit manager is getting paid? Do you know what these drug benchmarks are against the cash price? And that's where I think this lawsuit is gonna be a slam dunk. Like, there is no reason for a company that size with that big of a benefits committee to hire such a conflicted PBM, is what they call it.
29:04 You heard it here on the founder sandbox. So stay tuned for any other lawsuits that are worthy of mention. Do all of them? Are they all related to the pharmacy benefit manager conundrum? There's there's all kinds of lawsuits. I think the PBMs are the lowest hanging fruit because it's so easy to benchmark. But certainly the same arguments exist with hospital reimbursement rates.
29:33 And we're starting to see those as well. Excellent. Well, thank you for sharing a bit more details on the recent, I guess, health care benefits in the news, right? Lawsuits. Going to get a little bit technical here.
29:57 because you allowed me to. the framework of the CAA of 2020 and 2021, that's the minimum set of standards for activities to benchmark health care plans. And so what are they? Because it then leads into some of the common sense strategies that employers can deploy immediately. So can you walk? Because this is just as yesterday, it's actually during the pandemic. What's the CAA?
30:27 of 2020, 2021. Thank you. Yeah. So that's the interesting part of this. So the reason I said a decade ago, over a decade ago, I was waiting for these health care lawsuits to happen. It's because Arissa has always stated that employers have this fiduciary responsibility, just like they had with 401k. The problem has been, and the reason these lawsuits didn't come sooner, is that health insurance companies make this data hard to access.
30:56 different carriers were released different amounts. And there was no set of compliance standards for employers to understand this is how I go about making it, making these decisions and benchmarking these decisions, right? Like it was all just too vague, too opaque. The data was too gagged and withheld from the employers. So the starting point of how do I know I'm being prudent or not, that's kind of what wasn't known prior to the CAA of 2021.
31:27 So the CAA basically defined a set of minimum standards that you have to do to even pretend like you're being a prudent fiduciary for your healthcare plan. So there's four things, but there's three main things. I'll mention the fourth thing as well, because there's funny stuff about that. So the first one should be the most obvious, and it's kind of our founding story, which is understanding
31:53 your broker compensation before you enter into any arrangement or agreement for your upcoming plan. So that should not only be how much, it should be when, what type of bonus is there. If you're looking at carrier A, B, and C, really what it says is you should know what is their compensation for carrier A, B, and C before you make an arrangement, because they will be different. And that will change the recommendation, the advice, the conversation that you're having with that broker.
32:23 is critical. That is so critical. And in reading these transparency commission disclosures from brokers, it is wild, the stuff that they put in there and how conflicted their advice is. One of them that I looked at last week said, broker acknowledges that their parent company has equity in the insurance carriers that they're recommending. Oh my gosh. So they're essentially saying,
32:52 We are an insurance company that's going to bias our recommendations to the own companies we have equity in. It's like, that's no longer a party you should take advice from, right?
33:07 Okay, so that's part one. Yeah, no, this is this is and you know, I without it's gonna get too technical because the gag clause and the prescription DC reporting so that you know, basically CAA has provided the set of benchmarks, right, which you need to at least checkmark right before you actually do.
33:35 engage or decide on your employer benefit plan. Yeah. To be in compliance with your fiduciary duty, particularly that of prudence. Yeah. Yeah. And I think companies shouldn't look at as a checkmark. I think if they apply it with a good faith effort, they'll see like, oh, it's not compliance. This is a framework for making better decisions. Right. And that's what it's meant to do. It's meant to say,
34:05 Know your compensation, know your drug benchmarks, and eliminate any gag clauses to your data because you need your data to make decisions. So I think if companies make a faith effort, they'll automatically get better outcomes. That's the way here. Excellent. Well, thank you, Donovan. I want to give me this time to actually speak about how to contact you, your company. But more importantly,
34:34 There is you're hosting a webinar on August 14, which is right around the corner. Can you give us some more details? The details will be in the show notes, but speak to the event that ethos benefits is hosting on August 14 2025. Thanks. Yeah, thank you. Yeah. So on the 14th, we're doing a fiduciary workshop masterclass, which is basically understanding what your
35:03 what your duties are, how to get through them, how to navigate them, how to have this framework for decision making and document that process as well. And it's all geared towards just achieving those better outcomes for your company, eliminating any of these risks and really creating positive results for your people. Excellent. And any information with respect to how to reach out to you beyond the- Yeah, sorry. the registration is on a banner on the top of our
35:33 on our homepage. So ethos benefits.com. If you connect with me on LinkedIn, LinkedIn, Donovan, ragas, you can find it there as well. Great. Well, I'm coming to the part of my podcast, which brings us back to the sandbox. In my work, I'm all about working with purpose driven, scalable, and resilient companies.
36:00 And so I ask my guest, what is the meaning of each of those terms? What does purpose mean to you?
36:08 Purpose, what does it mean to you? That's such a big question that you can go a lot away from. You know, I feel like purpose should be almost like a hidden driver. It's almost not like a well-considered thing. It's just kind of driving you forward. I think our purpose is progress, right? Like if something can be done better, it should be and just kind of moving forward with that.
36:35 We're trying to move one company at a time, but also the industry and better outcomes for the country.
36:43 And that good feel factor when you get up in the morning and know that you're doing good, right? Yeah, absolutely. Let's just sleep well at night. Right? Yes. Amazing. How about resilience? You did share with me off camera that yeah, while you abandoned the financials, advisory role, it took almost five years, right to really find product market fit, right and build this because it's a very unknown right industry.
37:12 unknown service within a very, very complex industry, right? Yeah. So resilience for you, what does that mean? Yeah, I think you're right. You know, it took us a while because we were sharing such a wildly different message than what people were hearing from their brokers. And sometimes they look at you and be like, well, you're small, they're big, that must mean they're right, right. So I think resilience is being able to go from
37:42 failure to failure without any loss in energy, right? So when something doesn't go your way and you have an obstacle, an outcome that is less than desired, it's about being able to push on still without losing any of your optimism or energy. And that's all we do. So. Thank you for what you do. And scalable. What does scalable mean?
38:07 Scalable is certainly about having an actual documented process. I think when you're getting into something new as a company or a new system or procedure process, if it's not something that everybody in the company could repeat in the same way that I do, just inherently the way I do it because of my background and education, if it's not repeatable for everybody and everybody doesn't understand the purpose for those steps,
38:36 the outcomes from those steps, like the end result, it's definitely not gonna be scalable. Thank you. Final question. Did you have fun on the sandbox today? I did. Thank you so much for having me. Thank you, Donovan. So to my listeners, if you liked this episode with Donovan Rikas from Ethos Benefits, sign up for the monthly release of founders, business owners, corporate directors, and professional service providers that share their experiences.
39:06 and how to build with strong governance a resilient, scalable, and purpose-driven company to make profits for good. Signing off for this month, thank you very much. Have a great day.
01:33 is he's going to be speaking to us. He checks a lot of boxes, but today he's going to be speaking from his experience as an advisor to pre-seed and seed companies. And we share a common kind of subject matter expertise. We work with a lot of founders that are seeking to find a co-founder or we're working with them to how to divorce a co-founder, which
02:01 Nobody likes to talk about this, but it happens more frequently than not. Matter of fact, Tim has chosen for this episode, the title of Scaling Your Co-Founder Relationship. So Tim, welcome to the Founder Sandbox and thank you for joining me today. Thanks for having me. This is gonna be a lot of fun because the thing with co-founder relationships is that when it's bad,
02:28 It's bad. You you think of divorce, arguments, sometimes even litigation, but when it's good, it's pretty magical. You build very valuable companies that change not just your lives, but the world. And it creates a type of team and culture and company that people want to root for. And when I get to see that, that's the best part of my job. And it's actually pretty magical. It's very fulfilling, isn't it? It is.
02:55 So you check a lot of boxes, but we're going to focus on that. You are a founder yourself, prior founder, advisor, creator, writer, and coffee snob. So we'll get to your love of coffee later in the podcast. When you reached out to me, it did kind of make me giggle because nobody likes to talk about divorce, right? Let alone your co-founder.
03:24 And you specifically reached out to me because the work you do and your platform at Cherry Tree is around co-founder, choosing the right co-founder and the like. I have experiences with my clients on making that tough decision to divorce a co-founder. And I read some of your blogs.
03:52 And you do provide sound advice on getting what I call the prenuptials in place. So kudos to you. And more in the podcast today. So I love what I do, right? And my consulting firm where I advise kind of scaling companies to work with them on purpose and resiliency.
04:21 advice to founders when working at Cherry Tree and finding the right co-founders, scaling it that, it doesn't crack under startup pressure. It's probably rot with your own origin story as founding a company. Can you share that with us here, Tim today? Of course. Yeah. I'd say almost 10 years ago now, I started a company with five other co-founders. So six of us in total.
04:51 which is pretty unconventional in the sort of software startup ecosystem, but it wasn't intentional on my part. I was in college at the time and I was thinking, you know, I want something to do other than homework. So I found a bunch of my friends and asked them if they wanted to start a company with me. And I didn't expect them all to say yes, but they all did. And so we were like, sure, let's just do something together. And that was sort of the beginning.
05:21 And you were six co founders. Yeah. And let's carry on. That's good. That's unconventional. It was a lot, but it was a lot of fun. You know, I was best friends with some of them. And then some of them were mutual friends or classmates that I met in school. And so they also had different relationships with each other. Not all of them knew each other in the beginning. All of them knew me.
05:49 but to varying degrees as well. And so I kind of got to see the entire spectrum of what a co-founder relationship can be. And at the same time, I was teaching entrepreneurship in Seattle and a lot of my students would ask me the same questions about co-founders. You know, the basics like how do you split equity? How do you choose titles and roles and responsibilities? How do you fight with each other productively?
06:18 All those things that me and my co-founders were going through at the same time. And so we made a decision to be very open and transparent about it. I shared with my class how I split equity with my team and the reasons behind it. And I shared with them what we debated about on the product side or the marketing side and how we came to a resolution. And so the students had a very behind the scenes look at what goes on with co-founders.
06:47 And then COVID hit. And so I started writing online for my students quite a bit. And then over time that became a book about co-founders. And then when I published the book, you know, more people started reaching out to me, but it wasn't just college students anymore. was people with venture backed companies, companies going through YC and all sorts of industries all over the world. And then somebody was like, Hey, I don't want to read a 200 page book. I want something quick.
07:16 something easy and actionable. And so that's how I got started with the Cherry Tree newsletter, which comes out every Monday and Friday. And it's nice and easy. It's very relatable and actionable. And then people started replying to the email asking for personalized advice because they said that, you know, 500 words is not enough to solve a tricky situation. And that's how I got started with co-founder coaching. And so now
07:46 the Cherry Tree Company as an umbrella, comprises of the newsletter, which is free. And for people who are maybe just starting out and want to build good habits, and then also the coaching component as well, for people who are either going through some high growth stage, like raising a fund or going through a major pivot, or they just want to talk about some concerns or curiosities they have about co-founder relationships. Let's go back to your
08:16 co-founder, your six co-founders. that company still exists today? What was the, so what was the outcome? Yeah. It was a software company in the real estate space. And so COVID kind of took us out, but it didn't take out the friendships. We are all still best friends and visit each other over the holidays. In fact, when I, when I move in a couple months, I'm moving to a city where two of them already live right now and
08:43 One of the things I looked for was an apartment that was close to them so we could all hang out together. COVID took out the company, but not the co-foundership. All right. You did speak about the newsletter. why did you choose that medium? And again, I think you said there are typically 500 words. I've read a few of them. I blog myself. And we shared a couple of our blogs back and forth.
09:12 reached out to me, said, oh, I've written about that, and how to split equity and the like. So what made you choose the medium of a newsletter?
09:25 Yeah, I mean, I've always liked writing. think it makes me, it forces me to think very hard and clearly about what I wanna articulate. Back when I was teaching, I found that I would have a topic or a concept in my head, but when I went to explain it to somebody, I couldn't quite articulate it the way that I felt, especially when they started asking very thought-provoking questions. I felt I was stumbling. I felt that I...
09:52 had an answer in my head, but I couldn't quite deliver it to them. But, you know, because we all went remote, I was writing for them and that was a forcing function to get everything crystal clear. And that became a really good habit for me. Plus I've always liked reading. I follow several other newsletters as a reader, as a customer of theirs. And so I've always been intrigued by it.
10:16 And then one of my friends who is at a private equity firm specifically focused on newsletters was telling me a little bit about the backend of newsletter businesses and the unit economics for it. And I realized it was a very viable and very scalable business opportunity. And so I thought I would do this practice because it's good for my own just thinking process.
10:42 And I get to update it every every week, twice a week with new information that I find. And so a newsletter kind of just made a lot of sense. Excellent. And then the show notes later, we'll put the the URL is it cherry tree dot v hi.com, right? We had to access your newsletter. So teaching
11:09 you're teaching in a university in Seattle, entrepreneurship, you're so young, it's amazing. How did you get into the teaching position? I got very lucky. on my first, sorry, on my second quarter of college, I was working retail in the mall selling glasses. And it was
11:38 at about 9 p.m. right before we were closing and a customer walks in and you know how it is. Nobody wants to deal with a customer two minutes before closing. I'm a new kid so the manager is like, you go talk to them, get your practice. So I go and I talk to the customer and we just make small talk. I'd tell him that I wanna get into business school. want to...
12:04 be a part of startups and all this exciting stuff. I was 18 or 19 at the time. And he was like, hey, you should talk to this professor. He teaches at the business school as an entrepreneurship professor. And I think you guys will really get along. So he wrote down this professor's phone number. that was it. He didn't buy any glasses. We closed the shop and I walked home. I didn't think much of it. I was trying to make a sale.
12:34 I had that note in my pocket and when I got home, this was maybe around 10 PM, I was changing out of my work clothes and I had that note and I thought, hey, maybe I should give this professor a call and his name is Alan. And so maybe I was naive or impulsive, but I called him at 10 PM with no forethought. I didn't think, hey, maybe I should email him or call him tomorrow morning. I just had the note in my hand and I was like, let me just call him and he picks up.
13:04 And we talked for about an hour and a half. Oh my goodness. About the, yeah, about the classes he's teaching, about how he became a professor and his alumni. And it was very clear to me that he loved teaching. He was in his late fifties, early sixties and independently wealthy from running his own companies. He had retired for a number of years and then come back to teach because he just loved teaching. And so.
13:34 I was like, hey, can I take your class? It sounds really cool. But the administration was not happy with that because I was a freshman and he only taught senior classes. And I was not only not in the business school, I had not taken any of the prerequisites and the class was already overbooked. Oh my gosh. So. We were all stacked against you. Exactly. But he said, just come to the classroom at this time and sit in the corner.
14:01 Like you might not get credits for the class, but just sit in the corner and pay attention. And so I did that and I started answering questions in class. Questions that some of the upperclassmen may not necessarily have been able to answer, which was very surprising to me because I had never done well in school. Throughout high school, I barely got into college. My parents were on me all the time, but this was the one class where I felt like I knew what I was talking about.
14:31 And so I went to all of his classes and eventually became his assistant. And that slowly changed. And I, was an assistant for about 30 courses and then later become a co-instructor at both campuses. And so I got really lucky. It was unconventional, but this, this mentor, Alan sort of gave me that opportunity. And I finally felt like I, I was doing something that I was good at.
14:59 Amazing. That's an amazing story, very unconventional, but I love that. You heard it here on the founder's sandbox. My guest, Tim He, got into teaching, and then eventually COVID hit. You started continuing to teach virtually and started providing your content through a newsletter and your regular postings two times a week. So bravo.
15:30 You also have time to run another business. I introduced you with many titles, but you are a coffee son of so what is it with the coffee, Tim? Yeah. All right. You taught up in Seattle, right? And we all know he's from Seattle. But what is it about the coffee and it's called dumbfound coffees? Yes, yes. It's a fun story. It's quirky. I
15:59 A couple of years ago, I helped this coffee founder a little bit with his business. was my friend and I helping this one man show. He was bagging the beans by himself, sealing it, weighing it, driving it in his truck to the post office, handwriting notes for everybody. And he also had a day job. So he was doing this on top of that. And he had a wife and four kids. And so he really needed some more extra hands. And so
16:29 We started with helping him literally just bag beans. And then we got to understand the coffee business and how to market coffee, how to optimize shipping and logistics to save on costs and sort of everything in between. It was really fun. And my friend and I always joked that we would start our own coffee company. And then right after working there, I went to work at a very large coffee chain, global chain, strategy team.
16:58 And that was very different because there are thousands of people at this company with billions of dollars in budget. And so I saw this industry from a completely different lens. Right. And it was very interesting because there are so many similarities between this, you know, global corporation and a one person coffee shop. And of course I love coffee. I've been drinking it for
17:25 as long as I can remember drinking a little bit, a little sip of my mom's coffee when I was a kid. I'm Canadian. So I grew up drinking Tim Hortons for those of you Canadians out there, know what it is. so I love Tim Hortons. It's so good. Tim Hortons. Yeah. And of course, you know, Tim and Tim, so I have to get it from them.
17:51 Uh, but yeah, fast forward, uh, three or four years now, my friend and I got in touch again and we said, Hey, let's start a coffee company. Uh, we've been wanting to do this for years. We've, we finally have the circumstances and sort of the, the, the personal financial, uh, privilege to do this now. Um, let's, let's get something up and running. And so we're thinking, how do we differentiate? There's a billion coffee companies out there. Um, there's coffee for, for veterans, for teachers, for
18:21 hippies for everybody, except for founders. And founders drink a lot of coffee. I'm a three time founder. My friend was also with founder and we drink a lot of coffee. My friends drink a lot of coffee. And there's something satisfying about having a cup of coffee and sitting down at your desk, getting ready to lock in and get a ton of work done. It's just a very satisfying feeling. And so I wanted to capture that feeling plus
18:51 just the fact that founders drink a lot of coffee, but also this idea that the best founders I've talked to take their work very, very seriously, but they don't take themselves seriously at all. And I think that's the one commonality between all the best founders that I've come across. And so the name dumbfound, you know, it starts with dumb, but it actually means amazed or in awe. And it's the founders journey.
19:21 Right? You start off dumb because you don't know what you're doing. Maybe you're taking a huge risk. are, you know, you're starting a company, you feel dumb a lot. And if you've been a founder, you know exactly what I'm talking about. But you keep grinding and you keep working at it. And little by little, it starts to become a really amazing journey. People looking on the outside, they're like, wow, how did you, like, how did you start a company? That's, that's amazing. That's crazy. And even more than that, you look at your progress.
19:50 Even though some days it feels like you're going backwards, it's really awe-inspiring. And so that's why I wanted to capture with Dumpfound. In the name of the company. Bravo. I will have to order some from you. You know, I use the term pre-naps. Tell me in your consulting practice now, because you are working full-time. This is your gig and the coffee.
20:19 What is it that you found the secret sauce to scaling a co founder relationship? Right? What is it? What's your secret sauce? Or what have you observed in high performing co founding teams? Yeah. Everybody asks me what they can do for their co-foundership so that it improves their company. That's the wrong question. That's backwards.
20:49 the best co-founderships I've seen all use the company as a means to improve their co-foundership. Tell me about that. that one more time. This is important for my listeners. Yeah. Instead of using your relationship as a means to improve your company, use your company as a means to improving your relationship. Okay. And I'll give you some examples. Back when I was teaching, I would, you know, make
21:18 groups of students and teams randomly. would draw stuff out of a hat randomly. And that didn't guarantee friendships. In fact, a lot of them ended up fighting with each other. And so I thought, okay, maybe they should pick their own teams. And that didn't guarantee friendships either. In fact, some of them ended up fighting even harder than randomly assigned teams. And then I thought,
21:47 Why is that? How can we create teams where everybody gets a pretty good experience out of the class? Because we all know group projects, our group projects, and there's always somebody who either pulls the team forward or drags it behind. And so I was looking at the best performing teams, the ones that blow my mind. And I found that all of them, regardless of whether they were friends before the class or they had met for the first time during the class,
22:18 they all saw the class, the course as an opportunity to hang out and have fun, joke around with each other, but also do something very interesting like building a company. And so that was always in the back of my head. And then when I talked to co-founders, I've talked to over, I believe like 300 co-founders already this year. The best ones, doesn't matter if they were friends before they started a company, but they use the company as a means.
22:46 to improve their friendship. So what does that look like? Well, it's easy for co-founders to silo and say, okay, you do the engineering, I do the marketing, and we come together and share progress. That works for clarity, but not so much for compatibility. The best co-founders kind of do everything together. Even if they're, you know, one person is not technical, they're still very involved in the product with...
23:13 talking to users or creating documentation or making wireframes or mock-ups. And for the non-technical co-founder, they're also very involved in the marketing and the sales and the pitching because a lot of people think, oh, it's not my strength. So I'm not gonna be involved in it. You're the expert on it. I'll let you handle it. But if you think about friendships, that's not really how we operate, is it? You don't divide responsibility so rigidly with your friends.
23:42 You do everything together because it's fun. Share responsibilities. Maybe somebody is better at it. Sure. But that's, that's part of the fun. And so when I realized that, and I, I communicated it to people who were asking me how to do the opposite, do it the wrong way. When I told them what I thought was the right way, all of them had a light bulb moment go off in their head.
24:10 And I would ask you how does friendship scale? If I'm going to pressure test your your your the, the, guess the empirical data, right? You've taught many, many classes, you've worked with co founders, you've worked with co founding teams, let's say. How do you scale that?
24:40 If you can imagine like a staircase model at each step of a co-foundership, there are different levels of sacrifices that you have to make. So for example, when you choose co-founders, you sacrifice the ability to become co-founders with anybody else. And then you start working on your product and you sacrifice maybe some nights and weekends. Maybe you're sacrificing some Netflix time.
25:09 And then you go up a step, maybe your company has some traction and you've got some users and you sacrifice having a day job or having a stable income, or maybe you sacrifice some sleep some nights. And so the sacrifices become more demanding. And if you translate that to a friendship, it's kind of the same. you become friends with someone, you're not necessarily eliminating all other friendships.
25:36 but you are eliminating some options for how you spend your time. Now let's say you have families or you move to different cities depending on your stage of life. The sacrifice is the effort that you need to stay in touch. Now, how many friends have we had in high school that we don't talk to anymore because we just never stayed in touch because we didn't make that sacrifice. And so back to the co-foundership, a lot of times the company might be progressing.
26:05 You have your product and then some users and then some funding and then some more users. one co-founder decides that the next level of sacrifice is not worth it. Maybe they cannot quit their day job. Maybe they have kids that they have to spend time with and want to spend time with. they have, you know, whatever the situation is, it might not be malicious. It might just be circumstantial, but for one reason or another.
26:32 they decide that the sacrifice to move to the next level is not worth it anymore. But that usually doesn't mean that they quit. That usually means that they stay at their current level of sacrifice and they keep doing that. And so the other co-founder or the other people are continuing to do that. And that's a case where it doesn't scale. And so to be able to scale, I'm not saying you have to sell your house and free a personal runway or never spend time with their kids.
27:01 The important thing is to understand where each co-founder is on which step and where the company is at which step and to recognize what are the milestones and the sort of achievements and the effort needed to unlock the next step. And so when you're very clear about that, it becomes very simple and apparent what you need to scale the co-founder show. Excellent.
27:30 And I'm certain that not not all relationships have happy endings. And that's when we get to splitting the equity, right. And hopefully, with your advice, there were there's been, you know, a stakeholder agreement, a priori, and there's cordial negotiations. And that's for another episode. So Tim, how
27:58 Can my listeners contact you? I'm pretty active on LinkedIn. You can find me by searching my name, Tim He. Yes. I also have the newsletter, the Cherry Tree newsletter. I read every reply to that myself. And it's really fun to see what people are saying. So if you want to email me or reach out on LinkedIn, I'm available on both. So that's Cherry Tree. And the coffee.
28:27 coffee company? What is it again? It's dumbfoundcoffee.com. Excellent. Excellent. Is it dark roast or you do that? Do you have several roasts? It's a so it's a medium roast from Costa Rica. Costa Rica. It's delicious. I've tested over a dozen different coffees for this. My girlfriend and I we were way over caffeinated many days to find perfect bean and I think we did.
28:55 All right. I'm more of Guatemala and darkerist than we have, but willing to try. Thank you. Thank you. You know, I do like to bring all my guests back to the sandbox to touch on the three cornerstones of the work that I do, which is around resilience, purpose driven, and scalable growth, and ask each of you to describe
29:25 what does the meaning what is the meaning of that word for you? And here's to you, Tim, what does resilience mean to you? That's a good question. I've been thinking about that a lot lately. And by default, you know, we all think of the get knocked down seven times, give back up eight, or keep going when it's hard. And those are really inspirational when you feel like being inspired.
29:54 but on the days that you don't feel like you're being inspired, on the days that you're knocked down and everything sucks, I think it can be frustrating to hear stuff like that, you know, because you're like, just go away, give me a minute and just leave me alone. And I think that's also a sign of resilience, just taking the time and the space you need. You don't need to be motivated every day. You don't need to grind every day, despite what startup culture tells you.
30:22 sometimes being resilient is just recharging. And I've been doing a lot of that lately myself, and it's been helping me stay on this path.
30:32 I'm an entrepreneur and working with entrepreneurs. I like it recharging. How about purpose driven enterprise? Yeah, very purposeful. I'm a bit unconventional, but purpose. I, I like this company, my company, because you're right, I am purposeful. There's, there's a magic that happens when I do my job, right? And co-founders have the relationship that they want.
31:02 and the company that they want to build. And I think if you do your job right, and you're genuinely happy because of a magical feeling, and I use the word magic because there's really no way to describe it. It's not the pay, it's not the hours, it's not the freedom, it's not any of that. It's a magical feeling. And if you have that, I think the purpose is good. And no other...
31:31 purpose-driven company that I've talked to denies the magic that happens when they do their work, right? I often, you describe it as magic, right? It's the flow, you're working with your clients and just seeing that your inputs valued, right? I call that joy, right? So when you discover or feel joyful,
31:59 in what you're doing with your clients that is resonated and purpose. Thank you. That's an amazing description of magic. What about scalable? The title of this episode that we chose together once I understood your practice is scaling your co-founder relationship. So what does scaling mean to you?
32:30 I mean, change is inevitable and scaling is just adapting to those changes. And in the startup world, we think of scale as growth, as more users, more money, more funding, more profit. And that is a type of scale when you're getting out more than you put in and it's leveraged and that's all great as a technical term. But I think scale doesn't have to be confined to that. It can be if that's the context in which
32:59 We want to look at it, but scale is just adapting to changes and hopefully that change is good because you can also scale down depending on your priorities. know a lot of founders who'd rather build a million dollar company than a billion dollar company. They're much happier that way. And so everybody is obsessed with growth for the sake of growth and scale gets a bad rep because of that. But if it's just changing and creating the circumstances that gives you purpose, then
33:28 It's, yeah, it's all good. Fantastic. Very refreshing perspective, Tim. Thank you. Last question. Did you have fun in the sandbox today? Yes, I did. Thank you for asking. And that's just where I find joy. Thank you for spending time here in the Founder's Sandbox. To my listeners, if you liked this episode with Tim Heat, sign up for the monthly release.
33:58 of the Founder's Sandbox, where business owners, corporate directors, professional service providers provide their stories so that you learn how to build your company with strong governance as a resilient, scalable, and purpose-driven company to make profits for good. Signing off for today, thank you for joining us. Thanks, Tim.
00:04 Welcome back to the Founders Sandbox. I am Brenda McCabe, the host here on this monthly podcast, now in its third season. This podcast reaches entrepreneurs, business owners that are scaling.
00:31 professional service providers that provide services to these entrepreneurs, and corporate board directors who, like me, are building resilient, purpose-driven, and scalable businesses with great corporate governance. My guests to this podcast are business owners themselves, professional service providers, and corporate directors who, like me, want to use the power of the private company to build a better
01:01 world through storytelling with each of my guests in the sandbox. My goal is to provide a fun sandbox environment where we can equip one founder at a time to build a better world through great corporate governance. So today I'm absolutely delighted to have as my guest, David Hirschfeld. David is the owner and CEO of Techies, 17 or 18 year old business now that boasts
01:29 a hyper exceptional development team that are building high ticket products in the B2B space. Welcome David to the Founder Sandbox. Hi Brenda and thanks for having me. Great. So I'm delighted that we actually did a dry run in February. We've known each other for some time and AI, we're going to be touching on AI. And I think that the world of AI
01:58 particularly in software development, has changed significantly since we last spoke in February. So we're going to be getting into some, I think, novel concepts for the listeners of the Founder Sandbox. So I wanted to, you I always talk about how I like to work with growth stage companies that typically are bootstrapped and
02:26 It's only at a later stage do they seek institutional investment by building great corporate governance and reducing the reliance on investor funding until such a time that they choose the right type of investors that can help them scale. So when I found out what you do at Techies with Launch First and the type of work you do in B2B businesses, I absolutely wanted to have you here on the founder sandbox.
02:56 So let's jump right in, right? I think I'm eager to learn more about how to scale your bespoke development at Techies, right? To scale my own business? Okay. So there's a lot of different aspects to scaling my business and I bootstrapped for the last 18 years.
03:25 I've never taken any investment with techies. And I've done that very specifically because it gives me a lot of freedom. I don't have a reporting structure that I have to worry about. That doesn't mean that I can be lazy with my team. To grow my team, I have a philosophy
03:52 that I only hire people that are smarter than I am. And the ones that are in a position to hire, they can only hire people that are smarter than them. And by really sticking to this philosophy, even though sometimes it makes us grow a little slower than we would like, it means that when we bring in people, those people contribute immediately and contribute in a way
04:21 that it's our job to get the impediments out of their way and to facilitate them so that they can contribute and help us grow the company. So I call it the ball rolls uphill here because my job is to support everybody that is above me, which is everybody. And then the people that I support directly, their job is to support the people that are above them.
04:51 Because if we're hiring correctly, then people that we bring in can contribute in the area that we're bringing them in way more than the person that's hiring them. Okay. Thank you for that. So before you launched Techies, you had a career in companies like, I believe, Computer Associates, right? Texas Experiments and TelaMotorola.
05:19 There was a period of time between your experience in these large corporations before your launch tech is where you actually had your own startup and you sold it in 2000, right? And I believe you also learned perhaps with the second startup about how hard it is to find product market fit. Can you talk to that for my listeners, please?
05:46 I don't know that it's that hard to find product market fit. It depends if that's your focus or not. If your focus is to nail down product market fit, then it's not that hard to determine whether you can achieve that or not fairly quickly. You can do that by selling your product to potential customers. That sounds strange. Of course, we all want to sell our products, but
06:14 What I'm suggesting is you start selling your product before you have a product, before you have a full product. And I don't mean an MVP, but a design prototype. You go out to the market and you start to sell it. If you have product market fit and you've identified the early adopter in your market and you know that they have a very high need from a perception perspective and there's a big cost to the problem that you're solving.
06:45 then you can offer them a big enough value upfront that they'll buy your product early and you can prove that there's a market for your product and they'll buy it in enough numbers that you can achieve a measurable metric, which I kind of call the golden ratio, which is three to one in terms of what is the lifetime value of a customer versus what does it cost to acquire that customer? And you can get to that three to one ratio.
07:13 in a prelaunch sale model before you ever started developing your product as a way of proving product market fit. Or you pivot quickly and cheaply because you're not having to rebuild a product that you've built in the wrong way. Or you fail fast and cheap. And every entrepreneur's first goal should be to fail fast and cheap. know that sounds backwards, but that should be your goal is that you can fail fast and cheap or if you
07:42 If you fail to fail fast and cheap, that means you've found a path to revenue and product market fit. And now you know you have a viable business. making the investment to build the product is a no brainer. And you came upon this methodology, right? Yes. because you did yourself when you had your first company, you did not understand the funding part, right? Can you talk?
08:12 a bit about your specific example and then how that's informed now 17 years of techies and over 90 projects with startups. Okay. So my first company was Bootstrap. Okay. And that one was successful and we grew it despite me, it was me and a partner. And despite ourselves, we grew it over eight years.
08:39 where he ended up with 800 customers in 22 countries and sold it to a publicly traded firm out of Toronto. That was in the product food, snack food distribution business because that was what our product was focused on. So I started another company about five years later, not realizing the things that I did the first time.
09:08 that made it so successful, which really fit the launch first model to a large degree. But the second time I built a product that would have been successful had I followed my first model, but I didn't. So I went the route of building an MVP and getting customers on a free version of it, and then going out and trying to raise money, which is the very classic approach that the SaaS products
09:38 take now. And the problem is with that approach is that you end up digging a really deep hole in terms of the investment that you make to build the product with enough functionality that you can convince people it's worth putting an investment in and you're not generating any revenue at the time. And I should have just started selling the product and generating subscription revenue right from the beginning. First of all, I would have been able to raise money much more easily.
10:08 Secondly, I would have not needed to raise money as much if I'd focused on sales. The problem with a lot of founders is they fall in love with their product. They believe that people will buy it at enough numbers and that investors will see the potential. they're afraid of sales. I've fallen into this trap before too. I've done it both ways. And I can tell you selling early
10:38 and staying focused on the customer and the problem are the way to be successful. So founders who I find are consistently successful, they are focused on the problem, they love the problem. The product is just the natural conclusion to solving the problem, not something to be in love with. They spend their time talking to customers about the problems. So how does a potential customer find you and work with you?
11:08 Oh, they can find me at Techies or they can find me at LaunchFirst, was spelled launch1st.com. And they can find me on LinkedIn. And then to work with me, it's just give me a call, send me an email, we'll set up a Zoom. I'll start to learn about what you're trying to accomplish and what your requirements are. And I'll typically spend quite a bit of time with any potential clients.
11:39 in one to usually multiple calls or Zooms, learning and creating estimates and doing a lot of work in advance with the idea that there'll be a natural conclusion at the end of this that they'll wanna start working with me in a paid fashion. So there's a lot of value that my clients get from me whether they end up contracting me or not. And how, again, back to, thank you for that and that.
12:08 how to contact you will be in the show notes. But what types of sectors do you work in? You know, in your introduction, I talk about high ticket B2B, right? who are the, so what founder that's has some idea today? What would be their call to action to find techies? And what would you, is it launch first before you go down?
12:35 No, it's not necessarily. It may be an existing company that is trying to implement AI or implement workflow automation, or they have a project and they don't have the IT team or capacity to handle it. We love those types of projects. It might be an existing startup that is struggling with their software development team and they're not
13:04 getting to the end goal that they're expecting and the product's buggy, it's taking too long, there's constant delays, they're way over budget and they need to get this thing done. And I call those recovery projects, they're probably my favorite because people recognize very quickly the difference that we bring.
13:33 and they really, really appreciate us. As far as what sectors, business sectors, healthcare, law enforcement, prop tech, real estate, finance, entertainment, I mean, we work in many, many different sectors over the last 18 years. So regardless in B2B, B2B2C, not so much e-commerce unless there's some
14:03 complex workflow associated with your particular e-commerce, but there's lots of really good solutions for e-commerce that don't require developers to be involved. But mobile, web, IoT, definitely everything is AI now. Absolutely. And in fact, when we last spoke, I'd like to say that you started to drink your own Kool-Aid at Techies.
14:33 you're starting to actually use AI automation for internal functions as well as projects at Techies. So can you walk my listeners through how you're using AI automation and what's the latest with agentic AI? So let's do the first. Yeah, okay. So there are a bunch of questions there. So let me start with
15:02 that we're building products internally at Techies to help us with our own workflows. These products though are applicable to almost any development company or any company with a development team. Some of them are, and some of them are applicable to companies that are, well, so one product is putting voice capability in front of project management tool.
15:32 and we use JIRA and JIRA is an incredibly technical tool for project managers and development teams to use to their projects, requirements, their track bugs, all of that. And so your relationship with what I call relationship with project management is very technical one. If you're a client, some clients are willing to go through the learning curve so that they can enter their own...
15:59 bugs and feature requests and things like that directly into JIRA. Most don't. They want to send us emails, which is fine, and just give us a list of what's going on and the problems that they're finding or the things that they need for a future version and the planning and the documentation, everything else. This is a real technical thing. We're going to make it a very natural personal relationship by adding voice in front of all this so that you can
16:29 be sharing your screen with your little voice app and say, just found a problem on the screen. And the voice app can see the screen. It knows your project. It knows your requirements. And it can identify problems on the screen that you may not have even noticed. And it can also prevent you from reporting bugs that have already been reported and tell you when they're planned to be built. And all of this just with a verbal discussion with the app.
16:58 that basically knows your project. Kind of like talking to a project manager in real time, but they don't have to write down notes and they can instantly look up anything about your project in terms of what's been reported in terms of bugs or feature requests and update them or create new ones for you or just report them to you and tell you when things are planned to be built and released or.
17:24 where they've already been released and maybe you need to clear your cache so you can see the change, whatever. Yeah. So it be like an avatar, but it's trained and it's specific to Jira in your case? In the first version, it's actually being built architected so that we'll be able to add other project management tools to it besides Jira in the future. to begin with, because we use Jira, it's going to work directly with Jira to start.
17:54 And this, by the way, you asked about agentic workflows, right? So we're building an agentic workflow in this tool where we have more different agents that work together to resolve these issues. so we have an agent that reads and writes documentation to JIRA. We have an agent that communicates with the user and the user might be the programmer
18:23 might be a person in QA, it might be a client for a lot of different things. And we have an analyst agent that when the person talks, the voice agent says to the analyst agent, here's what I understand. Here's the information I just got. Go do your work and come back and get me the answer. And it'll speak to the JIRA agent to get the information. It will also speak directly to us.
18:52 a vector database, which is a database where all the documentation from that project is ingested into our own separate AI model so that the context of all the communication is about their project and doesn't go off into other directions. And then can get back. So this is an agentic workflow. The idea of
19:20 agents is like everybody keeps talking about agents. Not everybody is really clear on what that even means. Can you define that? an agent is an AI model that you can interact with that is focused on one specific area of expertise. So if it's a travel agent, the word agent fits very well there, then their expertise would be on everything related to
19:49 travel and booking travel and looking up options and comparing prices. And that would be an AI travel agent. So that's very different from an AI project management agent, very different from an AI financial analyst agent. So each agent specializes in its own area of expertise and may draw from specific
20:18 repositories of information that are specific to that particular agent's area of expertise. And they actually look from the perspective of that type of person, if it was a person. So, and so they'll respond in a way that is consistent with how somebody who is a project manager would respond to you when you're talking to them, asking you questions about your requirements, knows what
20:46 information it needs to be able to assess it properly, things like that. wouldn't be very good about travel because that's not its area of expertise. Right. So is it common to have companies that are creating with their own large language model, right? Or their workflow processes internally to the company to create their own agent AI?
21:14 Or is there a marketplace now where you can say, want this type of agent to get in. This is a very basic question, but do build it? Right. Or do you buy it? Or is it something in between? It's something in between. So there are tools that allow you to basically collect agents out there. And there's a difference between an agent and a context. Cause you hear a lot about model context switching and things like, don't know.
21:44 if your audience knows these things. Or model context protocol. A context is not an agent, but it has some agent capabilities because it's kind of specializing your model in a certain area. But you would use this, but you're not, if it's a true agent, then it's probably tied to its own vector database.
22:12 that gets trained with specific information. It might be company's information. It might be information, let's say if I'm a security agent, then I'm going to be trained on the entire NIST system as well as all of my security architecture that's currently in place. And that so that it could monitor and
22:41 assess instantly whether there's security vulnerabilities, which you wouldn't ask Chet GPT to do that. No. Right? Because it couldn't. Because it doesn't know anything about your organization or environment. And it really also doesn't know how to prioritize what matters and what doesn't at any given moment. Whereas a security agent, that would be what it does.
23:10 I don't know if I answered that question. Oh, bad thing about building or buying. there are- Or something in between, Yeah. So there are tools that you can use to build workflows and bring in different agents that already exist. And you can use something like OpenAI or Claude and use it to create an agent and give it some intelligence and-
23:37 give it a specific, in this case, you're giving it a specific context. You could even tie a special machine learning database to it and make it even more agentic in that way. And then build these workflows where you're like, let's say a marketing workflow, where you're saying you first go out and research all the people who are your ideal customer profile.
24:07 I was going to say ICP, but I'm trying not to use acronyms because not everybody knows every acronym. Ideal customer profile. And then it finds all these people that fit your ideal customer profile. Then it says, well, which of these people are in the countries that I do business? And then it illuminates the ones that aren't. then which ones, and it may be using the same agent or different agents to do this. Then once it's nailed it down to the very discrete
24:37 set of customers. Now the next step in the workflow is, okay, now enrich their data of these people to find their email and other ways of contacting them as well as other information about them so that I have a really full picture of what kind of activity are they active socially? they speak? Do they post? What are they speaking about? What are they posting about? What events are they going to? Things like that.
25:07 So that would be the next step and that'd be an agent that's doing all the enriching. And then after that, the next step would be to call basically call a writing agent to go do, am I writing an email? Am I writing a LinkedIn connection post? Am I doing both? Set up a drip campaign and start reaching out to these people one at a time with very customized specific language, right? That is in your voice.
25:34 It doesn't sound like it's written by a typical AI outreach thing. All right, so these would be steps in a workflow that you could use with several different tools to build the workflows and then calling these different agents.
25:48 Let's go back to the launched first. What would be a typical engagement with a company? you know, they, um, the founders that have the greatest success in your experiences are the ones that love the problem space and not the product. All right. So walk my listeners through.
26:17 What a typical engagement. it's staff augmentation. it full out outsourcing? it tech? because it's very complex. I can touch so many. can touch high tech and high ticket B2B products, sector agnostic. what, put some legs on this for my listeners, please. Sure, sure. We're not.
26:46 so much a staff augmentation company, although we'll do that if asked to, but that's not the kind of business that we look for. We look for project type work. So a typical engagement for launch first would be somebody wants to launch a product, they're in the concept phase. We help refine the concept and we build out, help that we do the design and then we build a high fidelity prototype, which is a design prototype.
27:16 When I demo a design prototype to somebody, they think that they're looking at a finished product, but it's not. It doesn't actually do anything. It just looks like it does everything. So it's very animated set of mock-ups is another way to look at it. And it's important because you can build out the big vision of the product this way in a couple of months, whereas
27:46 it takes instead of, you so you're looking at the two year roadmap when we're done of the product. If we were to build an MVP, then you're going to see a very limited view of the product and it's going to cost a lot more to build that MVP than it takes to build this design prototype. Now we're in the process of doing this. We're also nailing down who that early adopter is. And there's a, there's a very,
28:14 metrics driven methodology for doing this. your launch first. Within launch first, right. Okay. All right. And then we'll help the client build a marketing funnel and help them start to generate sales. We're not doing the selling, they're doing the selling. And it's important that founders do the selling because they need to hear what customers are saying about the thing they're demoing, why they want it, why they don't.
28:43 So that if we need to pivot, which we can do easily and quickly with a design prototype, then we can pivot and then go and test the model again, two or three or four times in the space of a couple of months. And we'll either find a path to revenue or accept the fact that this probably isn't the right product for the right time. But in the process of doing this, you're learning a lot about the market and about the potential customer.
29:13 I want to be clear about something. Almost every founder that comes to that I meet with, they love the product, not the problem. They started out with a problem that they realized they had a good solution for and they forgot all about the problem at that point. And so I spend a lot of time with founders reminding them why the problem is all that matters and what that means and how to approach customers, potential customers so that
29:41 you're syncing with their problems, not telling them about this product that you're building because nobody cares about your product. All they care about is what they're struggling with. And if they believe that you really understand that, then they care about whether you can solve that problem for them or
30:01 And can I be audacious and ask you what a typical engagement duration is like? So this would be for launch first. Yes. If it's a, and our hope is that they'll find a path to revenue and start building the product and engage us for the development. Cause that's really our business is building the products. So, but it's not a requirement. And, and our typical engagement with our clients are several years.
30:32 Not all of them, but most of them, would say. Once they start working with us, they just continue to work with us until they decide to bring in their own in-house team or they fail eventually, which many of our clients do, which is why I created Launch First. Right. You often talk about your hyper exceptional team at Techies. What is it that's so highly exceptional? Talk to me about your team. Where are they? Yeah.
31:02 And if you go to my website, which is tekyz.com, you'll see at the very top of it in the header above the fold, it says hyper exceptional development team. And I don't expect people to believe me because I write that down or I tell them that I expect them to ask me, well, what does that mean? Do you have evidence? And that's the question I want to get because I do. Because when you work in an exceptional manner,
31:31 as a natural consequence of working that way, you produce certain artifacts that the typical development teams don't produce. And I'm not saying there aren't other exceptional teams, but they're really few and far between. And what makes a team exceptional is a constant need to improve their ability to deliver and the level of quality that they deliver as well and the speed at which they develop. It's all of these things.
31:59 So, and, you know, after 18 years, we've done a lot of improving and a lot of automation internally, because that allows our team to work in a really disciplined protocol manner without having to feel like they're under the strict discipline and protocol of, you know, a difficult environment to work in. And so we create automation everywhere we can. The voice...
32:27 tool is one of those automations. The way we do status reports, it's very clear at the level of detail that we provide every week to every client in terms of status reports where we're showing here's what we estimated, here's the actual, here's our percent variance on how much time we spent and how much it's costing. We want to always be within 10 % above or below.
32:56 Either being above or below is not, know, the fact that we're ahead of that doesn't necessarily mean that's a good thing, right? So we want to be accurate with our estimates. And we are typically within 10%. In fact, our largest customer last year, we did a retrospective and we were within six and a half percent of what our estimates were for the whole year. and that's a, we're pretty happy with that number.
33:24 I think most teams are looking at many, many times that in terms of variance. it's not that uncommon for teams to be double or triple what they're or even higher what the actual estimate was. So when we do invoicing, we invoice for each person at their rate.
33:50 based on their level of expertise, which is all part of our agreement upfront. So the client is very transparent every month for the hours that they work. And we attach the daily time sheets to every invoice. I'm the only company I know of right now that does that. I know there are others. I've seen monthly, but I've never seen daily. Yeah. Yeah. Because for me, if I could ask, well,
34:18 why did this person ask a work that many hours that last month? What did they do? I hate that feeling that I get when somebody asks that question. I know they're only asking because they have to justify it to somebody else or whatever the reason, but I don't like the way it feels because it feels like my integrity is being questioned. I don't get upset at people for asking me that. I just feel like I'm not giving them enough information if they have to ask me that question. So we started about eight years ago.
34:47 providing the daily time sheets because I don't like that question. And we never get questioned on our invoices ever anymore. I bet you it's informed you as well in future projects, maybe on including workflow automation in your own internal processes, right? When you see people's time sheets, right? And you've gone over budget. So it informs you internally. So it's not only for the client.
35:16 I suspect, right? No, it's not. Right. And we use it ourselves to also, because it also helps us looking at our overhead costs because not everything gets built to the client. And so we track all our own times, you know, what we're spending doing what. And we don't get to, it's not like a developer has to spend a lot of time or a QA person or whatever, putting in a lot of detail. We just need a couple of bullets, you know, every day in the time sheet with the, whatever they spend.
35:45 If they spent four hours on one thing and three on another, they'll just break it into two entries just to make it easy. And that's important for us, or they may be working on two different projects and each project. So when we do the timesheets also every month, we give our clients a breakdown by project. So if we're working on four different projects for a client or even one project, but it has four different really
36:15 functional elements that are very clearly different. Like let's say a mobile app and a web app and a particular client implementation. Each one of those gets assigned its own project and we break down summaries of the time spent on each of those every month and who spent the time on those, along with the daily time sheets, along with the invoice. And nobody else does that because it takes a lot of discipline and protocol and you have to have lot of systems in place
36:45 to do that without literally getting everybody to quit, right? That works for you. And nobody minds doing it because it's easy because of all the systems we put in place to do that. That's the whole point, right? Right. were not particularly happy of getting asked that question oftentimes. So eight years ago, you set out to provide the information on a daily basis, which is incredible. We started that with blended rates like a lot of companies do.
37:14 And then I didn't like that because at the end of a project when most of it's QA, people would start to get frustrated that they're still getting billed the same blended rate, even though for the more expensive period at the beginning of the project, I thought, okay, forget this. Well, just bill based on individual. And then I didn't get those questions anymore, but then I would get questions about individuals on the month. And that's when I started doing the time sheets.
37:43 And like I said, I'm sure there's other companies that do it, but I haven't run into one or somebody that works with one. So that's an exceptional thing that we do. But it also allows us to do really, really good reporting to the client on status on what we've spent our time on, what we're expecting to spend our time on next week, what we just spent our time on this week, where we are.
38:12 in terms of our plan for the month, things like that. So let's switch gears, David. Yeah. Back to actually the podcast and some of my guests and listeners are corporate board directors. So they're sitting on either advisory boards or fiduciary corporate boards. And with all the hype around AI.
38:39 it's not uncommon for them to be asking, what are we doing, right? For existing companies, right? And I'd like you to walk my listeners through while it's in the, you know, in the imaginary realm, what is it? I think any founder today that's actually scaling, right? Has to have some AI element. At least I've even heard you need to have it.
39:08 an AI officer in the company. So what's your take on that? What would you respond to either to your board of advisors, your advisory board, or your board of directors? So, and of course, a lot of it depends on the type of company you are. Absolutely. Right. If you're making alternative material I-beams, for example, for skyscraper construction, then
39:37 AI, other than maybe in the design process of these specialized materials, AI may not be as big a critical factor, although for invoice reconciliation and distribution and scheduling and all that, AI could be a huge value to you if you don't have super efficient systems already. For most everybody else though, if you have not embraced the need to
40:06 leverage AI and everything you're doing, then you're way behind already. That doesn't mean you have to be in a race to do this. just, because I'm of the belief that you have to slow down to speed up. But you do need to make it a priority. And in a lot of different ways. Number one is,
40:36 The most obvious is workflow automation. You should be probably tackling workflow automation as just a part of your constant improvement program to become more efficient, whether it's with AI or not. But AI is particularly good at workflow automation because it can tackle steps in that workflow that couldn't be tackled without AI. So the first thing
41:06 the companies should be doing if they're not doing it is documenting all of their processes, all of their tribal knowledge into playbooks. So when you have somebody who's an expert in something in your company and they're the person who's the only one that knows how to do it and so we can't live without them, that's a bottleneck for scaling. Because if you bring somebody else in to expand their capacity, they're going to...
41:32 put a big dependency on that person with all the expertise, which is going to cause problems. So anybody in a position like that should be documenting all of their procedures and protocols and especially all the nuances and all the edge cases into playbooks. And there should be some centralized playbook repository for the company. And this becomes part of your intellectual property and part of your value if you ever
42:02 you're trying to raise money or you're trying to sell your company. So it increases your value. So you do that, then AI, you start to look at automating those workflows because now they're documented. So now what can be automated in them from just a workflow automation perspective. And then how much can you implement AI in there? Because now AI can learn to make the same kinds of decisions that this person is making.
42:31 And this is like the low hanging fruit that I'm talking about right now. Right. Exactly. Right. Because the bigger stuff is if we implement AI in here, what workflows would we totally throw away and start from scratch? Because we can think of way more sophisticated ways of addressing this now that we have intelligence involved in all these steps. But that's later.
42:57 worry about that once you get your arms around implementing AI, automated workflows and then- So workflow automation. So playbooks, workflows and AI in your automated workflows. That's sort of the stepped wise process. Excellent. You heard it here on the founder sandbox. Thank you, David. And if you're not sure how to do all that,
43:25 ask AI, okay, here's my company. What should I be focusing on if I wanna implement playbooks, workflow automation and AI? And AI will help you figure this all out. Right. That's a jewel here. So what'd you do? Chat GBT, co-pilot, what's your complexity? Where would you go to? All right. Well, it just depends on the flavor of the day. Right now.
43:53 I was using chat GPT primarily for this stuff just because it was a first and I'm very comfortable with the apps. have them everywhere. And Claude's recently come out with a new version and it's in some ways I'm just finding the output way more organized and smarter. And so I've been using Claude more in the last couple of weeks, but that'll change in another week or two. Any one of them will do a pretty decent job.
44:21 I'm not using perplexity because it's built on top of the other ones. But perplexity is a great tool if you're newer with this because it makes some of the... It's a little bit more accessible for somebody who doesn't know how to use AI. Gemini is also really good, but that's more of a technical... And there's so many things you can do.
44:49 with AI that you wouldn't even think about. And I'll give you an example, more as a brain opening exercise for everybody than anything else. Because this is something I did about seven weeks ago. I, chat GPT had just come out a week or two before with their vision capability in the mobile app. And for those of you who don't know it, with chat GPT, there's a talk
45:19 button. It's not the microphone. It's the one that looks like a sound wave in the mobile app. You tap that, and now you have a voice conversation with chat, which I use this constantly. Even when I'm working with, I've got some contractors at my house whose English isn't very good, so I ask it to do real-time translation for me. And it does matter the language. And I start talking, and it translates to their language. And they respond
45:49 in their language and it translates to English and it's doing it perfectly. And so I can have a very natural conversation with anybody just holding my phone up in front of them now. Right? But it has this vision capability where when you go into that voice mode, you tap the camera next to it, and now it's looking out the front of your screen while you're talking to it. And so I'll give you a couple of examples where I've used it six weeks ago and again, like
46:18 weeks later and I now used it many times like this. I was in Lowe's, which is a store for home improvement. And for some project I was on, my wife calls me and says, I need fertilizer for a hibiscus. And I say, well, what do I get? She says, anything that says hibiscus on it, it'll be fine. I said, okay, fine. And if anybody that knows these big box stores, there's like hundreds of bags of fertilizer of different brands.
46:48 And I couldn't find one that said hibiscus. This is a typical thing with my wife. Oh, just look for this. And of course, there isn't that. So I asked Chess GPT, okay, I'm in Lowe's and I'm looking for a fertilizer for hibiscus. What would you suggest? And it said, oh, there's a number of brands that are high acid. And I said, we'll recommend a brand. Tonal is a really good brand. And I said, okay. So I'm looking and I can't find it.
47:18 So I walked 30 feet back and I'm talking, right? I'm having this, know, people are looking at me like, what the hell is he doing? And I walked 30 feet back because there's many, many shelves, you know, columns of shelves with fertilizer. I walked back and I turned on the vision and I say, okay, there's all the fertilizers. And I'm moving my phone across all these shelves. say, do you see tonal here? And it says, yes, look for the one in the red and white bag.
47:48 And I see it on the shelf. So I walk straight forward. see a red and white bag. That's not tonal. said, this isn't it. And she, cause it's a woman's voice that I have, she says, it's two shelves to the left, second from the top. I walk over there and it's right where she said it was. Crazy. And you're not a beta user. So this is available today. This is available. It's been available for a couple of months. And then
48:18 My daughter-in-law asked me to get something from the pharmacy, from CVS, another big box pharmacy store, right? And this is something I don't even know if I'm in the right aisle because it's something I've never bought. So I ask it, I say, I'm looking for this brand and I'm not sure if I'm in the right aisle or not, but I'm going to walk down the aisle and tell me if you see it. As I'm walking down the aisle, holding it straight forward so it can see both sides. And it says, well,
48:45 Yes, I'm familiar with the brand. You should look for it in a green and white box. then she goes like this. Oh, I see it. It's down there on the right on the bottom shelf. And I turn and I look and it's right by my right foot.
48:58 You heard it here. This is crazy. think it's a bit creepy. How many times have you been looking for something on a shelf? You know, and you're like, oh, how long, how many hours is this going to take me to spot it? Good internet connection and all that. So, oh my goodness. It's creepy and it's wonderful. So same time. the same time. Yeah. Yeah. For quality of life and even for, um, yeah. So
49:25 That's a mind opening thing is all the reason I bring that up. Excellent. Hey, let's go. Let's continue on in the founder sandbox. I'd like to ask each of my guests to share with me. I'm all about working with resilient, purpose driven and scalable companies in the growth phase. So what does resilience mean to you? You can either answer, you know, what's the first thing that comes out of your, you cannot use chat, GBT. I'm not fancy. No hands.
49:55 No hands, and I don't have the voice version going because you'd hear it. Podcast we could do it. And we are real. We're not. Yeah, we are real. We're not. So I think that's, I don't think that's a difficult question to answer. Resilience means opportunity. So no matter what happens, even if it seems terrible, what opportunity does that create? Excellent. If you ask that.
50:22 keep reframing everything from that perspective, it creates resilience. Right. Thank you. What about purpose-driven? Purpose-driven means having a clear long-term path and goal and asking yourself if the things you're doing keep you on purpose to that.
50:56 Scalable. What's scalable mean for you? Scalable for me means eliminating tribal knowledge or not eliminating it, but documenting tribal knowledge. First of all, figuring out how you generate revenue and then how you expand your ability to generate revenue, which means growing your
51:25 growing your team, growing your capacity and identifying the bottlenecks and focusing all your energy on the bottlenecks. And usually the bottlenecks have to do with tribal knowledge or with lack of workflow automation. Wow, you know, it's easier said than done though, that tribal knowledge, it is resistant, right? Oh yeah, because it's career, what's the word I'm trying to think of?
51:55 It keeps you in your job forever if you're the only one that knows how to do the thing. Absolutely. That's for another podcast, David. My final question today is, did you have fun in the Founder Sandbox? Oh, yes. I had a lot of fun. Thanks. That's a great question too. Thank you, Brenda. Did you have fun?
52:20 Did you? I had had fun. And particularly in this last part, right? Cause we're talking about some heavy duty, you know, uses of, um, agentic AI, right. And scalable, you know, LTV, CAC and all that. And then we get to hear these real life, you know, kind of creepy, um, uh, uses of, um, on our phones today with, um, with AI, which is, which is quite amazing. But I also know that in your world of techies,
52:50 your team, which is distributed, have a lot of fun events too. So you probably- have one more thing on the whole scalable thing. You have to be compassionately ruthless or ruthlessly compassionate, however you want to say it. Okay. So that the people, every, and the ruthless is anything that's going to get in the way of you growing your company, which benefits everybody in the company.
53:19 it needs to be addressed in a ruthless way. But if you build a culture of ruthlessly compassionate, then all the people that work for you feel that same level of ruthlessness to protect the company and make it grow. And you practice what you preach, I suspect, at Techies. Yes. Yes. It took me a while, but if we accidentally hire the wrong person, either because
53:45 we made a mistake in the process or they faked us out and we recognize they're not smart enough. Literally, that's usually the problem. They're not smart enough to carry their weight. We fire them immediately. We don't try to bring them along because you can't improve somebody's IQ. You can improve any other aspect, but their IQ is their IQ. And that will be a bottleneck forever.
54:13 in our team and it'll require other people to carry that person. And it sends the wrong message to the team that I don't value them enough to make sure that we only surround them with people that are going to inspire them and help them grow. Excellent. And I suspect they are not fungible by AI, your employees, not techies. I mean, we've gotten better and better.
54:40 at not making those mistakes over the years. So that doesn't typically happen. takes us, we're much more careful about how we hire. AI gives us the ability to recruit faster, more broadly, along with workflow automation. But what I mean by real, this is the compassionate. Once my team understood this, now they embody that and they will get rid of somebody if they made a mistake. I don't have to force the issue ever anymore because
55:10 they recognize how much, important it is to protect their teams. So to my listeners, if you liked this episode today with the CEO and founder of Techies, sign up for the monthly release of founders, business owners, corporate directors, and professional service providers who provide their examples of how they're building companies or consulting with companies to make them more resilient, scalable, and purpose-driven.
55:40 to make profits for good. Signing off for today. See you next month in the Founder Sandbox. Thank you.
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 Welcome back to the Founders Sandbox. I am Brenda McCabe, your host of this monthly podcast where I have guests that are either founders, professional service providers, corporate board directors that actually share a mission with me, which is bringing change to the world through great corporate governance, but building resilient, scalable and purpose-driven companies. On a monthly basis, my guests are going to tell their origin stories and kind of how I've met them.
01:48 through the work they do. And I've recreated a fun sandbox environment in which we do storytelling. And ultimately we will touch upon resilience, purpose-driven and scalable or sustainable growth in the businesses that they are working in or owners of.
02:17 l I'm absolutely delighted to have as my guest today, Alexa Steinberg, Alexa is counsel at Greenberg, Glasgow. And before that, she was actually practicing in a smaller law firm and where her story today is going to kind of have some some
02:47 lessons learned on why she chose to leave the firm and move into Greenberg, the Greenberg Lasker. But more importantly, you and I go back a couple years. are part of an informal group of women. We call ourselves Women and Wealth. We meet periodically to really refer business to each other for those women business owners that
03:16 are seeking perhaps an exit in the next three to five years. And through our skillset, some of us are CPAs, strategy advisors, yourself as counsel. A lot of these businesses are family owned. And so you and I and another, know, seven other ladies get to meet each other over lunch and discuss these opportunities. And we're all very passionate about helping women business owners. Aren't we,
03:44 We are Brenda, thank you so much for having me on the Founder's Sandbox. I am an avid listener, so I'm very excited that I get to be a guest. Thank you, thank you. you know, we've had many, conversations, obviously, but I wanted for my listeners to really dive into what you do today, right? Which is really purpose.
04:12 driven and it's preserving family wealth, right? And I know that you actually come from a background where your father owned his business. So tell us a bit, us down memory lane and that first story that you told me. Well, you know, growing up, I watched both of my parents. My mother was a career woman. My father, a financial planner.
04:38 running his own book. My mother, a buyer and then in fashion and then into real estate. I watched they were both very involved in the community. My mother sat on the Studio City Council, the Neighborhood Council. She was on many boards involved with the temple. My father as well sat on many boards involved with the
05:07 Boys and Girls Club, and involved with the Jewish Federation. So I watched as my parents really instilled the importance of being involved in community, being involved in family, being involved in the greater good and in purposeful and meaningful organizations. And I...
05:35 sort of learned a lot about that watching them both in their respective arenas being involved. And you know, they've, they've truly inspired me, not only in my career path, but in how I treat my clients in the arenas that I've become involved in. There's a specific story that I think I've shared with you, Brenda, about my father and how he sort of taught me
06:05 the value of wealth, the value of money, because as his career, that was what he did. He focused mainly on planning for retirement and financially setting yourself up and your family up to have generational wealth and what that looked like and how you could prepare for it when you were 10, 15, 20, 25 years old, preparing for family, preparing for children.
06:35 So when I turned 16, my father went into our QuickBooks. We had a family QuickBooks. Oh, wow. That was before it was actually. It was probably a hard disk, right? Not even on the internet. Oh, yeah. It was like a hard disk. had a full set up, massive computers, the whole thing, in our family office. And he went into his QuickBooks. And he took.
07:03 what he spent on me in a year. And he divided it by 12. And this included insurance. Mind you, I just turned 16. So my car insurance, my car lease, medical, entertainment, my tennis lessons, all of these things that were spent on me, what it cost for me to function. Children are expensive, you know.
07:32 I was very expensive because I will tell you that check was large that he cut me every month. And he laid out, these are the things that are monthly expenses for you that you need to pay with this money. And the rest you can use on entertainment, gifts, shopping, which I loved. But I had to learn to balance my checkbook and balance
08:01 this amount of money, because I wasn't able to get any more until the next month. And that really taught me how that money was never something that was readily expendable to me. even if I went to Starbucks and I bought a drink with my father's credit card, he'd ask me for the receipt. He'd want to know where the receipt was, always.
08:28 I was very meticulous in his record keeping which I am now very much meticulous in my record keeping and I enforce with my clients and make sure that record keeping is so important in your business as well. You know and so when I when I graduated high school my father said to me okay the checks are done. And you need to go get a job in college.
08:56 And what I will do is I will subsidize the paycheck that you bring home. So if you bring home $600, I will pay you 50 cents on the dollar for what you bring home, but only up to $300. So I could get a max of $300 every paycheck that he would subsidize. And then that was how I had money to live and to function. my parents, I was lucky enough that my parents would pay for my college.
09:24 in my housing, in my dorms, but it was still really teaching me the value of money. And my father required that a certain portion of those funds get put away in savings and invested. And he would tell me how to do that. And he would guide me. because my father was a financial planner, he would call me like a client and say, listen,
09:53 You're 70 % stocks, 30 % cash. I think you need to swap it. Let's talk about what that means. And of course, I'm like, you're my dad. Just do it. Why are we having this conversation? But it was so valuable because he wanted me to understand what he was doing and why he was doing it and how it really functioned. that I've also taken into how I guide and advise my clients.
10:22 I don't just do for them. understand, I want them to understand how we're doing it, why we're doing it, what the alternatives are and what it means if we do it this way or that way. You know, a lot of my discussions with my clients are about strategy and about structure and so they can make an informed decision. You know, I think that that's extremely important, especially in a family business. Working with your family is tough. So,
10:52 The way that you can make it that much easier is communication and understanding and knowledge. And I try to arm my clients with that. And that's something that my father really taught me. my mother as well, because my father managed our money and my mother would bring it home and hand my father a check and be like, here, I don't know what you do with it, but do something with it.
11:21 She also would, he would say, hold on a second. Like, I know you just sold a house and here's your commission check, but let me show you what we do with this and how we create generational wealth and how we invest it and what the best benefit for these funds are and how to use debt to our advantage. Um, you know, and that's all of these things were such a value add that I
11:51 I obtained understanding about and that I've now turned this value add to my clients and how they run their business. I'm not a financial advisor, I'm not a tax attorney. These are just really sort of general understandings and general guidance points for my clients to go out and have knowledgeable conversations with the appropriate
12:21 guidance, appropriate people, and the appropriate service providers that are going to help them accomplish those things. really, this is very loaded, but I really like the methods your father used. very, well, first of all, intentional and bespoke. And that's really, and he did communicate to your mother, right? To instill also in her an understanding
12:52 of although she's bringing the check home because many, many women business owners today oftentimes do not own a majority of their companies. Right. And that is a shocking statistic that I run into time and time again that women actually don't know how much equity they have in their own business. Right. So just the informing and, and you've translated that bespoke, you know, communicating
13:22 helping your clients understand, pardon me, and providing options as well as access to other professional service providers as your own bespoke offering to your clients. But it wasn't always like, yeah, go. That's sort of the benefit of the group that you and I met in and all of the networking opportunities that I've been involved in. Of course, networking is about building
13:51 um, your brand and your book and, um, but a majority of it and the real value there is meeting and learning and understanding, um, and really coming to know people that can help your clients where you can't, um, and having trustworthy referral sources to do that, because I'm not just going to tell my client, Oh,
14:18 this individual can help you with wealth management, call them without knowing how this person functions, without knowing how they run their clientele, how they do business. Those are really important things and to have trustworthy referral sources is really important. And that's sort of what our group is all about. That's right. And it wasn't always like this.
14:46 Right, you graduated from law school and started with a small, it was a, I think a female-led law firm. all female attorneys. Yeah, so what was your, this is right out of college, what were you doing and what then informed your decision at a very tender age to leave? So right out of law school,
15:17 had worked my way through law school. I worked in family law for about five or six years. during the day, I was at a law firm. And in the evening, I took classes from 5 to 10 PM, four days a week for four years. took me four years to get through law school. And when I graduated, unfortunately, I wasn't afforded
15:47 All of the opportunities in law school that most law students take advantage of, externships, fellowships, things like that, because I was working my way through. I had already been financially independent and I wanted to stay that way. So I didn't want to quit my job to go to school. I wanted to be able to do it all.
16:15 So as a result, I really didn't have the summer clerkships that turn into job offers. And I was a little lost because I had taken the bar exam and I was like, OK, I'm not an attorney yet. But in three months, if I pass the bar exam, I could be. Am I applying for law clerk positions? Am I applying for associate positions? Like, know, I was so lost. And I went on Craigslist. Oh my goodness.
16:44 And I found law firms that were hiring because I figured those people, you know, they're they're looking to hire somebody now, which is what I'm looking for. and hopefully those people, you know, will transition me into an associate role. If I pass the bar exam in a few months. And that was that was like my first sort of in. And I joined a very boutique law firm in West Hollywood. It was
17:13 By the time I left, we were three female attorneys. were all female for my entire tenure there. I was there for six and a half years. And it was in late 2019, early 2020 that I really decided I wanted more for my career and for my book of business. And I wanted to be able to provide my clients with a well-rounded
17:43 advice and guidance. I can't do it all, nor should I. I'm pretty sure my malpractice of insurance wouldn't like that. Not at all. But more and more, had clients that were asking me to help with litigation matters or employment matters. And those are arenas that I know just enough about to be dangerous. But I'm not going to run a full litigation.
18:13 I can't willfully and knowledgeably advise on employment matters. You know, especially to do justice by my client, do well by them. I'd like to be able to have somebody for them that they can speak to and trust and get the advice and counsel that they need. And that really stemmed my yearning to branch out.
18:42 and go to a firm where I had all of those resources at my fingertips. I wanted more for my career, but my biggest drive was I wanted more for my clients. I wanted really to be able to provide them with well-rounded, multidisciplinary counsel. And so I sought out full-service law firms.
19:11 I found my home at Greenberg Gloucester, which is a fantastic place to be. I'm very happy there and everybody is so fantastic and everybody is so good at what they do. We've got employment and tax and IP and litigation, environmental, entertainment, you name it. And it's been such a benefit not only to my career,
19:41 to my clients, but I've learned so much. And is it true? How would you characterize the typical clients without revealing, you know, confidential matters? Is it also a firm that's very oriented towards family owned businesses? Would you say that? Yeah, I would. You know, I'm a counsel in the corporate and tax department.
20:08 And you we don't have a ton of institutional clients. A lot of our clients are family owned businesses, mostly held entities, you know, which I love on a daily basis. I am working with two sisters that own a business together or a multi-generational company where, you know, senior is working with G2 and G3 or
20:37 were actually this morning I was working on assigning interests and reorganizing and restructuring a bunch of entities that own a bunch of real estate for clients. And that's also the kind of benefit that I get that I get to be pulled into real estate matters with my corporate expertise to help a family office restructure their ownership.
21:04 You know, and I love that stuff. We're extremely, the way that Greenberg provides advice and counsel is on a very personal level. The way that the firm and myself, especially, we're a lifestyle firm. You know, we understand that attorneys are people outside of
21:33 the walls of the office and that we all have lives. And we, you know, I translate that to my clients. My clients have lives. My clients have other things going on than their business. And especially when you deal with family offices and family businesses, there's a whole different dynamic of family interaction. Yes. You know, and, and I have now experienced that not only with my clients and sometimes I become
22:03 therapist in that regard, although I'm a very expensive therapist. I'm sure there people that are less per hour. But I'm experiencing it firsthand because my husband has his own business with his brother and I have become advice and counsel for them as well. And so I'm seeing it sort of from a different angle too, but I think that my clients truly appreciate
22:32 that when I talk to them, I talk to them as a person. It's not just as a business owner. It's not just as I'm guiding you with this legal advice. It has to make sense. And it has to be actually applicable. And sometimes what my advice and guidance would be in sort of this like legal box is not the best.
23:00 for my client and how their business is operating. And you've got to be sort of fluid with that. And bespoke. Yeah, so it's really beyond, it's not a transactional relationship. It is a trustworthy relationship based on the values of the family businesses that and their goals in preserving wealth or continuing to generate family wealth. Yeah, absolutely. This is a great segue because you know, I also
23:29 passionate and have often guests that are sitting on corporate boards. As counsel, have you observed any best practices and family governance structure? You talk about G1, G2, G3, Have you observed any best practices? We don't have to talk about bad practices, right? But any best practices that you would like to share here? Yeah, you know, I think that I've observed that
23:59 Some of the most effective family governance structures prioritize clear communication, well-defined roles, professionalized decision-making. I use this in a very loose sense of the word, but you could establish a family constitution. Creating a board of advisors is always really important.
24:28 having independent members in your board of advisors is so incredibly valuable to have a knowledgeable, independent person that can help through disputes. business disputes are one thing, but when you include a family dynamic in these disputes, emotions can get high and heated. And so having an independent third board
24:57 Third party board is extremely valuable. Somebody that can guide you, something that your family trusts. Those are some big things that I've seen as best practices. And I think that lastly, holding dedicated, regular meetings.
25:23 You'll talk about business, you know, at the dinner table or, you know, out and about you're at a kid, one of your niece's birthday parties and everyone's there and you're like, Hey, did you see that email from XYZ? We got to figure out how to handle that. But those are not the time and place and you're not going to have a productive conversation. And so you need to set aside and create boundaries between your family life and your business life and set aside regular times.
25:53 weekly, bi-weekly, to have an hour conversation about what's going on, any disputes that need to be discussed, any decisions that need to be made. And that's your time to solely be in your business mode. Because having these conversation piece meals, dinner on a Saturday night, or a family's birthday party, or a holiday party,
26:22 It's not effective for your business. And one of the biggest, best practices and the most, one of the most important goals is to preserve your family relationships. Beautiful. You heard it here on the founder's sandbox to preserve family. Absolutely. Cause if you don't have family, do you have? That's right.
26:52 Family first. really important. It's really important. And sometimes business can get in the middle of family relationships. And it hurts to see that. It hurts to see business tear between brothers, tear between father and son. And I've seen those things in it. There needs to be just a second to breathe. Yes.
27:21 and realize that there are bigger things than business and that they need to be resolved, but they can only be resolved if you have a good relationship with your business partner slash your family. They're your biggest support.
27:37 This has been immensely actionable in terms of governance, the best practice you've seen in family offices. So thank you. Thank you for that. It's not often that I do have a lawyer that works in this arena. Although family businesses just in the LA ecosystem is
28:05 It's very predominant. very, very, you know, third, actually third and fourth generation now. So very relevant to your business and mine. Let's switch gears. You are, I believe, sitting on the board of directors or one of the committees of the Association of Corporate Growth. Yes. And tell us a bit what why what is the Association of Corporate Growth and what committees do you serve on?
28:35 And how do you further your business there? Thank you. The Association of Corporate Growth or ACG is a national organization for professionals in the M &A sphere. So you've got members that are VCs, investment bankers, M &A attorneys, wealth managers, insurance specialists. You sort of name it. Anybody that's
29:03 has some sort of involvement in the purchase or sale of a business or just surround sort of just general business governance that either prepare for an exit. You know, those are the kind of people that are members of ACG. And I got involved a few years ago. And I think three years now, I've been sitting on the Women's Committee, which is a
29:31 Fantastic. We schedule and create women-focused programming within the confines of the ACG organization and really promote networking amongst women. More and more, I have had clients that have requested that they only work with women.
29:58 You know, and this sort of goes back to what I was talking about earlier about being able to provide trustworthy referrals. And I've met some incredible, incredible women in connection with ACJ. In fact, our group kind of came out of ACJ. This is how I met you, Brenda. And so it's been a fantastic, fantastic network to be a part of. You know, I love planning the programming, our programming.
30:28 ranges everywhere from talking about the state of the market to balancing family and career and what that looks like and mental health. I think I hate calling out a distinction that we are women in business because I think a
30:57 A business person is a business person. I don't think it needs to be defined as such, but there is something to be said about the fact that women have a different set of challenges in the workplace than men do. And a lot of those stem from family life. And that needs to be balanced. And so there's a lot of programming that the women's committee puts on that sort of
31:26 talks about that and gears us in that direction and gives us tools to be successful and to strive in the face of everything else that women just have to deal with and take care of. That's for another episode here. Yes, very much so. Very much so, yes, as we all have balanced our careers and family priorities, right?
31:56 Let's switch gears. How do my listeners contact you? How's the best way? Well, so I'm at again, I'm at Greenberg Gloucester. We're in Century City. They can email me. It's a Steinberg at gg firm.com. And on our Greenberg Gloucester website, if you search people, I've got my whole bio and all of my contact information as well. Excellent.
32:25 Well, that will appear in the show notes. All right. So we're coming into the final part of this podcast in which I actually enjoy asking my guests what the meaning is of certain terms that I actually practice with my clients. I'm working with purpose-driven companies, resilience. We work on resilience tactics and scalable business is sustainable. So I always love the opportunity to hear
32:55 firsthand from my guess. What does purpose-driven mean to you, Purpose-driven means a mission that goes beyond profit. It taps into creating meaningful value for your customers, for your employees, for the community that you operate in. It's sort of about building a company that
33:25 that stands for something. And I'm very pleased to say that we have seen so many more companies start out of a purpose-driven goal. There's a bunch of old companies and new companies. There's a lot of companies that have this sort of one-for-one model. You buy one, we donate one.
33:52 There are socks companies, there are eyeglass companies, there are shoe companies, there are cleaning product companies that sort of have this as their motto. And then you see additionally, know, products and companies that are committed to the environment or sustainability and cleanup efforts. You know, that's really what purpose-driven
34:21 means to me is that these companies have a goal. They want to accomplish something more than what they can show on their balance sheet. consumers of that product are helping them achieve that. Excellent. Excellent. You've touched on even other aspects like sustainable growth, right? Yeah. Right. What is resilience? You've been particularly resilient.
34:49 You having a father like your father, building life skills early. would resilience, what's the meaning to you?
35:00 Resilience is about navigating challenges with adaptability and with determination. It's about learning from your setbacks instead of being defined by them, having them be a fire to your growth and having them be the galvanization of your progress forward.
35:30 You know, and in business, it also can be about the ability to pivot while staying aligned with your long-term goals, about the ability to, you know, okay, there's a new regulatory, new regulation that's gonna affect the way we operate. Okay, how are we gonna pivot to continue doing what we do, but still can stay in compliance? You know, that's really,
35:59 what it's all beyond your toes. Excellent. And you're scalable. I'd like you to kind of share the meaning within the context of scaling the legal practice. What have you found to be particularly challenging or easy to do? Right. And scaling, right. Because it's a very bespoke practice. Is there any important, right? Scaling is absolutely important. Okay.
36:28 In my practice and in my business, number one goal and the biggest galvanization point of scaling my practice are my clients, my current clients. If you do a good job for them, they'll continue to come back.
36:59 and they'll continue to give you more business. Creating a network. I watched my parents in their, both of their practices. All of our family friends at this point have at one point or another been a client of my mother's or of my father's. They've swapped clients, referred to each other. And these individuals either started as friends and became clients.
37:29 or became friends because they were clients. And that is the way that both of my parents have built their practice and their brands. And that's how I want to do it too. It's a value add when, attorneys are scary to begin with. Nobody wants to talk to an attorney. It's expensive. Half the time you have no idea what they're talking about. It's language.
37:57 You know, but if you create this relationship of trust and of loyalty and friendship and when you feel like your attorney sees beyond just you as a dollar figure or you as a business, it goes such a long way. And that's my main value add to my clients. And in turn, they help me scale.
38:22 my business, clients continue to come back to me and I'm able to continue to grow that because I can satisfy all of their needs with the network that I'm creating through places like ACG. You know, so that's, that's what I see is as scalable in my industry. It's extremely important. And it goes to the heart of how I practice law and how, how I guide and advise my clients. Beautiful.
38:52 Thank you. heard it here on the Founder's Sandbox. Last question, Alexa. Did you have fun in the sandbox today? Oh, it was so fun. Brenda, thank you so much for having me. This was fantastic. Thank you. So to my listeners, if you've enjoyed this monthly episode with Alexa Steinberg, counsel at Greenberg, Greenberg Gloucester, right? Greenberg Gloucester. Yep. I encourage you to
39:22 sign up, subscribe either on Apple Podcasts or Spotify. I'm on all main podcasts streaming services where my guests talk about how they felt resilient, scalable and purpose driven practices informed by their origin stories. You can find it here on the founder sandbox. Thank you and signing off for this month. Thank you, Alexa. Thank you. This was fantastic.
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.
01:20 So welcome back to the Founder's Sandbox. I am Brenda McCabe, your host and this monthly podcast. We're now in our third season and my podcast, the Founder's Sandbox, reaches entrepreneurs, business owners with guests. And these guests teach us about building resilient, scalable and purpose-driven enterprises, all with great corporate governance. My mission is simple.
01:49 with this podcast as I really want to assist through my content and my guests, those entrepreneurs and business owners and building the scalable, well-governed and resilient businesses. And I like to have in my guests, corporate directors, primarily to speak about their own experience sitting on corporate boards and building with great corporate governance. I like to think that we can use the
02:16 power of the private enterprise, be it small, medium, or large, to create change for a better world. And we do some of the storytelling in a fictitious sandbox on the founders or the corporate directors' origin story. I am absolutely delighted that this month I have Dr. Keith Dorsey as my guest. So welcome, Keith. It's great to be here. Thank you, Brenda. Thank you so much.
02:45 While you check many boxes, you're joining today because you have authored a book. It has a launch date of May 6, 2025, so just around the corner. And the title of your book is The Boardroom Journey, Practical Guidance for Women to Secure a Seat at the Table. So kudos to you. Thank you. For, wow, you're a busy person. We'll get to that later.
03:13 you know, where did you find the time and the courage to publish a book, launch it in today's environment? And we'll get to those questions later. So for my guest, Dr. Keith Dorsey and I go back many years, actually prior to you being a doctor, right? You check many boxes as a guest. You are a seasoned board member, executive advisor,
03:44 informal coach, and researcher. I love that. And it was in preparing your doctoral dissertation that you discovered that, I'm going to quote here, I was reading a compelling study on the effects of gender diversity on corporate governance. And you basically repurposed your original dissertation to provide actionable guidance on increasing boardroom diversity.
04:14 And when you switched your dissertation, that topic that you had to defend, otherwise you wouldn't be a doctor today, right? Was the idea for the book that is launching on May 6th. So again, welcome to the podcast and thank you for joining me. So we chose as a, my guests know, we chose a title because I at Next Act Advisors am about building purpose, purpose driven companies. The title
04:43 that Keith and I came up with is, you know, bridging gaps for better governance. So Keith, share with us kind of your origin story. Go back all the way, although I'm gonna encourage my listeners to purchase your book, but go back to your origin story. You nailed it in like one page in the book, but tell us where your origins and what was your, not only your boardroom journey, but your journey to where you are today.
05:12 Thank you. I often tell people, Brenda, that this is my third chapter. You know, the first chapter was the US military. actually enlisted in the military in between my junior year of high school that summer and my senior year of high school. I knew before I started my first day of my senior year of high school when I was leaving for basic training in the Air Force. so my first
05:38 chapter was the Air Force for a number of years. was stationed in Florida, the Republic of Panama, and the United Kingdom for a number of years. And then I got impatient and decided I wanted to get out. I had a successful early career in the Air Force. And I said, if I can be this successful in the US Air Force, which is like a large corporation, imagine what I can do in an actual corporation.
06:05 I set out on this journey to explore sales. And that led me to my second chapter, which was corporate America. And I worked for almost 30 years in corporate America, primarily as a turnaround specialist in the area of sales. I would take over the toughest sales organizations within these large companies and really lift the hood up and figure out
06:35 were they having a people product or process problem within the organization and then begin to tweak the areas. And I worked for two large companies, Fortune 500 or Fortune 1000 for almost 17 years and then a Fortune 500 for almost 12 years. And I was just a strategic growth expert. I turn around teams and I would also start teams within the organization.
07:04 to come up with ways for double digit growth and oftentimes triple digit growth. And so that's what I did for almost 30 years. And then in January of 2019, I entered my third chapter, which was supposed to be semi-retirement in this portfolio career. unfortunately, I failed miserably at retirement and what I've been doing for the past six years in this almost seven years and this
07:33 portfolio environment as executive advisory work. I also started serving on boards in which today I served on five boards, two private, one municipality, one university, and one nonprofit. And then I decided to go back to school to get my doctorate. And so I went back to school at the University of Southern California and
08:01 pursued my doctorate in organizational change and leadership. all my research was in the, you know, at this point, at that point, all my research was in the lack of gender and ethnic diversity on corporate boards. And so- So, and that's fascinating that you chose your doctoral kind of dissertation and then focus around organizational-
08:31 strategy, right? Yes. Was that based at all on your 30 years of sales strategy? Were there any analogs? I wonder. There was. Part of what I would do whenever I would take over a situation that required me to turn it around, like I said before, was to really look at the organization. To look at many components of the organization, people, product, processes.
09:00 artifacts that are going on, the subcultures, the cultures. And so I've always been fascinated about it. And I did things innately and I wanted to learn the science behind many of the things that I innately did. And after really diving into research and studies around organizational change and leadership, I wish I would have known many of those things that I figured out the science behind back when I was.
09:28 and an actual executive doing it. But nevertheless, by learning it now and using that in my governance roles, I still have the opportunity to put the science behind what I'm doing as a board member. And I tell people, whether it's as a board member or my researcher or my writing roles that I have today, that I'm bilingual. I speak business.
09:56 And I speak academia. And boardroom lingo, right? Which combines a bit of the two. I like how you use the word science. You know, we were chatting before actually getting on air today. We've known each other primarily because we're both members of the National Association of Group Directors, right? And I've been a member since, I don't know, 2016.
10:26 I don't know how long you've been a member, I, your book is truly a kind of a North star. wish I would have had it when I began my board journey. I actually started my board journey while in Europe and I got onto public board and I went, Holy cow, I better get trained and went to the local equivalent of the NACD in Spain called Instituto de Consejeros Administradores, ICA.
10:56 So for my listeners, I do want to do a shout out if you are intentional and want to learn more about what the journey is to getting on first or subsequent boards. The book that Keith has authored is launching on the sixth. And there is a third section. And specifically, it's around your capital that you need to
11:25 kind of package. It's called commitment capital. It's trademarked. We're going to get into that but it's truly unique because I've read a lot of board books over my 12, 13 years and I have not seen anything as unique as this. So shout out to you. Thank you. Okay. I wanted to also, you know, ask you what made you
11:53 decide to turn that dissertation into a book? What was the, because writing a book is not for the faint of heart. So it was not on my bucket list. So what happened? You know, this is kind of inspirational for me. You know, what made you go, all right, I've got to get a book out there. Well, I, this has been a serendipitous journey, you know, just even going to get my doctorate was something that I kind of stumbled into.
12:23 I was dealing with a tiny bit of imposter syndrome and in dealing with that, I assigned something to myself to get rid of my imposter syndrome. And I said, it's hard to get into a doctorate program. I just want to see what I, if I can even get in. And so in Keith Dorsey fashion, I probably went a little overboard and I applied to seven different universities and eight different doctoral programs. And
12:53 But I didn't realize in filling out all those applications, which was crazy, was that I needed a lot of former executives that I worked with and other CEOs and, like I said, other executives to serve as a reference for me. So I collected 15 people that I would use for all those applications, two or three at a time. And they wrote.
13:22 I guess great things about me because I got into all seven universities, all eight programs, but I really just wanted to boost my ego. I didn't really want to go back to get my doctorate. I needed to solve for my little bit of imposter syndrome that I was dealing with. And, but when I did enough for were 15 accountability partners saying, which one are you getting in? Which one are you going to choose? I wrote you a great reference. hope you choose the one that I wrote the reference for.
13:52 And I said, oh no, now what? I gotta get in. Now I really have to do it. have to get my doctorate. So I really didn't have a strong enough why to do this to begin with. But what made me, once I got in and I chose this problem of practice, which was my second problem of practice. My first was around shareholder primacy on corporate boards. And I stumbled into
14:21 this problem of practice, which was around the lack of gender and ethnic diversity on corporate boards. But I ended up going down this path of corporate board diversity. And I just told you this wonderful story and forgot your question. But you know what made you decide to publish a book? So as I was going through this program,
14:50 and right beginning all this research and I really got into my research probably a little too much and I was sitting with my dissertation chair and she said, Keith, there's something you need to know. I said, what's that? She said, a good dissertation is a done dissertation. And my friend, you have way too much research out there and you've written so much, you have to narrow your focus.
15:19 And I said, give me some examples. She said, you know, pick an industry, pick an ethnicity group, pick a gender, do something. You have to narrow this down. And I really pushed back a lot. And one of the sayings at the University of Southern California in this program, organizational change and leadership doctoral program was trust the process. And so she said, Keith, I know you're pushing back. I know you believe in all this research you uncovered.
15:49 but you have to trust the process. You have to narrow it down. I said, okay, if I narrow it down, what do I do with all this research over here and all this research over there? She said, write a book. And that's how I ended up getting to this point where I actually wrote a book with all this rich research before my dissertation. And then I successfully completed my dissertation. had all this information.
16:17 And I did something most people wouldn't do immediately after getting my doctorate. I dove into more research studies. You're kidding. interviewed formally and informally hundreds of women directors who have made that career shift into corporate, into being an independent director. And I got so much rich, even more information on their barriers, their enablers, their career.
16:47 and how they were able to make that shift and successfully get on corporate boards. And many of these women have been on boards for decades. that's how I ended up where I am today with this rich data. And I would ask you to describe the four characters that are in your book.
17:14 and their names and where were they in the career, right? I wanted to share. I wanted to take a unique approach, know, any books out there and many board readiness programs out there that will share a lot of theory with you a lot of information that is rich that we need to know if you're going to be a student of your profession. As you mentioned before, I highly recommend everyone interested in being a board director to
17:43 go to some sort of board readiness organization and get your education and then get your certification if you can as well. And so in really diving into all the women that have successfully made this transition and the hundreds of interviews, informal and both formal interviews that I conducted, I started to see themes.
18:12 in their career at certain ages and certain sections of their careers. And I took a lot of that data and I created these four fictitious women that I would use and talk about as a part of a case study and examples so that when you read a chapter and all this theory and all this information, you could then listen to how they took the information from that chapter and executed on it. And so
18:42 The four women that I created, the first one is Lauren. She's 25 and she's a brand new manager in a corporation. She's actually been with the corporation for three years as a sales executive and got promoted into our very first sales management position, entry level sales management position. That's Lauren. Then I have Denise, who is a brand new senior manager in a firm.
19:10 And then I have Michelle who, and Denise is 40 and a brand new senior manager. And then I have Michelle who's a 55 year old executive in a fortune 500 corporation. And, and she has said that she wants to retire in the next three to five years. And then lastly, I have Sharon who is a 62 year old CEO of
19:39 her family business and it's a set. She's the second generation of the family business. She's been the CEO for the past 12 years and she's going to turn the business over to her much younger brother and who will take over as the CEO. All four women said at some point they're going to want to serve on a private or a public corporate board. So what should the 25, 40 year old, 55 year old and 62 year old
20:08 do at this point of their career to best prepare themselves for board service? How should a 25-year-old really execute her career? And instead of taking, like many of us have done, a promotion for the sake of a promotion because they want me and because it pays more, instead of just doing that but really looking at
20:34 beginning with the end in mind. I ultimately want to be an independent director. So how should I orchestrate my career? How should the 40 year old make a few more tweaks before she is at that level where she wants to serve as an independent director? And then this person who is actually thinking about retiring in the next three to five years, what tweaks?
20:58 Should she make over the next three to five years the be most attractive and most prepared and known in the industry to be an independent director? And lastly, someone who has served on her own board as an executive director and CEO for the past 12 years, but never has been an independent director. What are the things she should be doing right before she turns the business over?
21:27 to really show up perfectly as an independent director versus an executive director moving forward. Thank you. While the characters are women and the book has a tagline, what is that again? The guidance? The guidance for women to secure a seat at the table by no means is this a book that solely can be read by women.
21:56 I think it speaks to the other gender. And what I found really unique is that you had characters at different times and moments and section moments and their careers and how to really be intentional. My favorite chapter, I will tell you, is chapter three. Why? Find your why. That's the name of the chapter.
22:24 Yes. And it is in alignment with the work I do with business owners and founders. It's like, what is your North Star? Oftentimes they created the business, they're purpose driven, but articulating the why, you know, why did you go out and, you know, work these hours and put your, you know, re-mortgage your house to build this business. Finding that chapter, you know, find your why. And then you're probably the research you did with the over a hundred interviews.
22:54 You ideated this, but I'd love to for you to share. And I think it's very important of all your chapters. This is for me. I think if I were an aspiring director, independent director, this would be the one that most resonates with me. Find your way. Tell me a bit more about that chapter. It did for me, Brenda, as well for two reasons. One, because of the research that I uncovered and the qualitative interviews that I conducted.
23:22 I found out that those that were successful at making that transition from being an executive or a high-powered government official to actually being a board member, they did find their why. And I also, you know, in this chapter, this third chapter that I'm in, I became a managing partner and a practice leader of CEO and board services at a global executive search firm.
23:50 And I would have meetings with many executives who will actually say, Keith, I want to serve on corporate boards. And I will ask them why. And they really couldn't answer. And I would ask them specific questions about what type of board, private or public. And they would say, Keith, I don't care. Just get me on a paid board. And that's not going to work. And it doesn't work.
24:16 And so I dedicated a whole chapter to finding your why, because as aspiring board members or board members seeking their second or third board, and they kind of found their first board because someone tapped them on the shoulders and said, we want you, but they don't know how to replicate getting on their next board because no one's tapping them on their shoulders right now. I found that by getting people to reflect on
24:46 Number one, what brings them joy? What brings them joy in this world? Life's too short. And when you're interviewing for a board role, when you're interviewing for something that brings you joy versus the person who is equally as qualified as interviewing against you for that role, when you show up for something that brings you joy, you light up the room.
25:16 And that energy, that person interviewing you picks up on it and you end up having this banter and they understand that, you know, this seems to be more important to this person versus that executive. You all are exceptional executives. Your CVs are outstanding, but sometimes just the fact that you're interviewing some for something that brings you joy could be the differentiator. The other thing is the reflect on
25:44 on your why and when you are successful, understanding why you're successful. When you do fail and you feel miserable, understanding why you failed and why you felt miserable. And by spending that time reflecting on that, you'll begin to figure out your secret sauce. You'll begin to figure out your superpowers. You'll begin to figure out
26:10 the value that you actually bring to organizations because you uncover when you are successful, why you're successful, and when you fail, why you fail, and when you feel miserable, why you feel miserable. Most people don't take the time to reflect. And then as executives, we have conducted many of these vision, mission, and value exercises for our companies. We've met them, we've written them.
26:38 And we've done all these things for our companies, but how often do we actually bring that home and transfer those skills to figure out our own personal vision, mission, and values? And when you take the time to do that in this find your why period of time, you can begin to figure that out and run every single situation through those funnels. And that will help you really find your sweet spot.
27:08 And then you're only interviewing in areas where you can truly bring value. And so that's why I wrote this section. Wow. It sounds like a lot of work. All right. So your book, think, almost it's a guidebook. So again, we have the four characters. You can pick up the book and read chapters that don't need to be read from the sequencer order. Talk to me.
27:36 I think was really unique about commitment capital. There are five types you've identified. And I never read or thought of a concept like this when kind of packaging my board credentials or others. Speak to me about the commitment capital. Thanks. You don't mind, Brenna. I'll touch briefly on the other four, you know, and then I'll spend more time on commitment capital. But
28:01 The two capitals that you typically hear about when you go through any board readiness program, as one is human capital and that talks about your education, your expertise, your experience throughout your career. That's the human capital side of things. And then you'll, we talk often about the social capital. That's your network, the people you know that, and boards are interested in your human capital and your social capital.
28:29 The social capital side, they want your contacts. They want your connections. They want your help with the M &A and finding funding and different things like that, finding the right talent. Your social capital is a big part of it. And your social capital can help you get on a board as well. But those are the two that you often hear about. The other three that I wrote about, one is director capital.
28:58 You don't hear much about that one. And that's similar to human capital. All these skills that you accumulated in education, you accumulated throughout your career that helped you along your career. Director capital is more narrow. And what are the experiences and education like board readiness training that you need specifically to become a director? And so that's director capital.
29:25 Then I dove into cultural capital, which you don't hear much about. And cultural capital really looks at from the back when you were five years old in elementary school, middle school, high school, college, and the experiences and the people you were surrounded by that you mirrored, you emulated, and the obstacles that you innately had to overcome back in those early years.
29:54 that you called upon either innately or on purpose intentionally throughout your career to get you through some rough times through your education period and through your career. People that can call back and understand their cultural capital can use that to get on boards. That's cultural capital. And then the fifth capital was the missing link. And that's about commitment.
30:21 the ability to do the things you need to do in order to get something done and call upon that. And I can give you an example. I have two different groups of women and directors and executives that have very similar outstanding CVs.
30:44 And they all have gone through a board readiness program and they all have completed some sort of certification. This group found their way on corporate boards. This group have been really trying to get on boards for up to five years to no avail. But when you look at them on paper, education experience and success wise, they look similar.
31:11 And the missing ingredient that I found via research was those who got on boards did something differently than those who didn't. And the majority of the ones who haven't found their way on boards, when they completed their programs, they were proud of themselves. They took copious notes throughout the program. And they said, done. Let those board positions begin to come my direction.
31:39 And those who actually ended up getting on boards, who also took copious notes, they were studious throughout the process, but then they went back home and they executed. They started to make trade-offs in their lives and they started to do things differently. Some of them gave up TV on Wednesday nights and they no longer watch the three Chicago shows.
32:03 You know, traded that in so they could begin to do things differently and find the time to do that reflection work and find the time to network differently and find the time. And so they started to hold themselves accountable via their commitment capital to get things done. To this date, I still have people that will say, Keith, I want to get on a private or a public board.
32:32 And I would look at their background and I said, you know what you really need right now? You really need to serve on a nonprofit board to get some human capital experience while surrounding yourself with some incredible social capital that will see you in action. And they said, Keith, I don't have time for a nonprofit board. Now, the NACD says the average board member, independent director, spends 250 hours a year on each board.
33:01 You're telling me you want me to help you find a private or public board and you don't have time to serve on a nonprofit. Let me tell you, you don't have time to be on a for-profit board and you need to find your commitment capital to make the necessary trade-offs so you do have the times to dot your I's and cross your T's. That's what commitment capital is all about. And that was the missing ingredient. I love it. So you coin it the missing link.
33:31 the analog with business owners and founders is grit. Yes. Right. Thunder, but I get I get it. So I, I encourage those that are aspiring for a first or subsequent board positions to take a look at that. Now, I'm going to ask a question that potentially has in the current climate. And again, this is April of
34:01 2025. There's been a lot of backlash in our current administration to remove anything with the acronym DEI, diversity, equity, inclusion, remove it from position, hiring, anything that actually is receiving federal funding. I'm curious, you also have in your book coined a term called
34:30 optimal diversity. while I think you had this term in all the research, right, in your original writing of this book, could optimal diversity be that analog to the downfall of DEI? I think so. And unfortunately, what's going on in today's society, mostly in the US, but even several other places in the world,
34:59 is that organizations, in my opinion, have confused the confused. And they are saying we need to move away from diversity and move towards meritocracy. And that we need to get away from checking the box and move to bringing merit back. And the unfortunate part is diversity, equity, and
35:28 has always had merit as the prerequisite. It's never been about checking the box or just bringing in an unqualified individual so that we can look from an observable diversity standpoint differently. It's really been about one, the prerequisite and the table stakes.
35:58 is merit. And then two, to be able to fish in different ponds, to bring in different people. So ultimately, we can have that cognitive diversity or diversity of thought brought into the room. And unfortunately, because of this reason for bringing parody and make certain that your boards and your C suites and your companies
36:26 resembled the stakeholders that you were going after for all obvious reasons. Unfortunately, the message has gotten lost as to why we want to do this. And it's really about mitigating risk, disruption, finding blue oceans, and you mitigate your risk by having a representation of that diversity of thought to protect your business and to understand all the stakeholders that you're trying to serve.
36:56 And, the prerequisite was always merit. And so I share with people that meritocracy and diversity truly can and does coexist, do coexist. And so optimal diversity is the combination of observable or demographic diversity coupled with diversity of thought is optimal diversity. And that applies to every human being.
37:26 when they begin to reflect and to peel back their cultural, human, social, all those capitals I mentioned before, they can begin to present themselves in such a way that they can demonstrate their optimal diversity. As a managing partner and a practice leader, a CEO in board services, I will spend time with executives one-on-one from all walks of life and coach them.
37:55 And I remember when I typically would sit down with a white male executive during this period of time, and I would tell them my story and what my background was on and my research around my doctorate. They will start off because they're now interviewing with a search professional that can help them get on boards. And they will start to interview off like this. And then as I begin to tell them my background and my research,
38:23 they would end up like this and angry. And then I would talk to them about optimal diversity and they would start to loosen up and then they go right back to this. And I remember in one of my conversations with a Fortune 500 executive, a white male, and I talked to him about optimal diversity and he said, wait a second. He said, Keith, I grew up on a farm and I went to this sort of school and he jumped out of the car.
38:53 like that. he said, I do bring diversity to the table. And I said, yes, you do. But I've never had to present myself that way before. And what you just did was you taught me to reach into myself and figure out how I differentiate myself from any other type of executive. And I never had to do that before. And that's optimal diversity.
39:20 Absolutely. So if you heard it here on the founder sandbox, optional diversity refers to ensuring that observable demographic diversity is coupled with diversity of thought. And meritocracy and diversity are not opposing aims, but instead are symbiotic and share a common goal. So thank you, Keith, for developing the concept of optimal diversity. And I must read.
39:50 coming out on May 6. I would like you to have your time on air to provide my listeners with how they may contact you because not only are you launching your book on May 6, the boardroom journey. I do believe you have one on one coaching as well as you do speaking opportunities.
40:19 Keith, how's it best to contact you? Well, you can find me on my website, is boardroomjourney.com. Okay. And my email is keith at boardroomjourney.com. You can also find me on LinkedIn under Dr. Keith D. Dorsey. And so those are, you know, several different ways you could find me. And when you go to boardroomjourney.com,
40:47 I'm really attacking this approach of making certain that we take board governance very seriously and helping to equip individuals at various stages of their career to be best prepared for board service. I want everyone, as I mentioned before, to go through some sort of board readiness program with the many different type of board readiness programs out there.
41:16 But then once you've done that, I focus on three areas. One is with, I'm sorry, Brenda, you want to ask me a question? No, that's okay, one. One is with the boards themselves. I'm gonna challenge via their consulting offerings, challenge boards to really take a look at their board members they have today. And really, many boards will have skilled matrices.
41:42 Yes. And so they will look at the skills matrix and maybe highlight 12 different functional skills. And then they want to outline their board members and how they rate those different skills. And then they stop there. And I consider the skills matrix to be the top 10 % of a iceberg. OK. And that's the part you can see. The bottom 90 % below the surface is around their competencies.
42:12 And in our consulting, I challenge boards to actually measure the competencies of their board members as well. And those are the things below the surface, their behavioral traits and things like that, because you wanna have the right mix of independent directors on your board. And then look at where they have a redundancy of experiences in their functional areas, skill sets, as well as competencies.
42:41 and think about their strategy moving forward and where do they have gaps? And so that's one half of what, you know, Boardroom Journey does. The other part is with individuals. And what I have uncovered is that many people will go through a program, but they don't execute, as I mentioned before, a commitment capital. So one of the offerings we have is you get an accountability partner. And with the...
43:10 the accountability side of things, the accountability partner will meet up with you and have 30 minute one-on-ones with you, almost unlimited one-on-ones throughout the year, the numbers so high. But you cannot get the next meeting with your accountability partner until you have proven you've done the things that we talked about in the prior meeting. And so that's an offering. And then the other offering,
43:40 is six months of one-on-one coaching, two times for one hour each time, twice a month. And that one-on-one coaching is taking a lot of the principles and action items from the book, The Boardroom Journey. And instead of doing it in asynchronous sort of fashion, we're going through it together one-on-one to make certain that you begin to do the things
44:06 differently to get different results. The saying is successful people do what unsuccessful people don't do. And the goal there with the one-on-one coaching is to have you do the things that you need to do in order to get to where you would like to go. And so that's what the boardroom journey as a company and a practice actually does for individuals. Thank you for sharing that. This will be in the show notes, And I'm very excited to.
44:35 provide some exposure and my listeners, particularly those that are considering your own boardroom journey. I'm going to switch gears back to the founder sandbox. I am passionate about resilience, purpose-driven and scalable growth. And I love to do a round the round with my guests and what does that meaning of resilience mean to you? Each of my guests has a different...
45:04 Yeah. So please. me, resilience comes down to when you truly have a true north and you believe in your true north, having the intestinal fortitude to do things that you need to do in order to get it done and not giving up right when you're at that point where things can actually turn around. That's to me what resilience is about. But you first got to know your true north.
45:33 have the intestinal fortitude, encourage to stick with it until you hit them. Thank you. How about purpose driven? The title of your episode is purpose, Yes. Bridging gaps for better governance. But beyond that, what is purpose driven? What has made you be so purposeful? That's a great question, Brenda. I would have to say
46:00 right back to that true north, know, finding your why and really spending the time to think about where are there unmet needs in the marketplace. And, you know, I've worked with some incredible organizations and sometimes we are too insular and we come up with some great things.
46:25 that we created that we think the market should be interested in. And the market says, you know what, that was cute, but no. And so I feel when you start with from the client's perspective and you uncover where there are unmet needs, then and only then can you truly be purposeful in meeting those unmet needs. And that feels good here and you're solving something that's needed in the
46:55 I get it. You heard it here. Q. Dorsey's definition of purposefulness. Scalable. So I think that what you have done here by publishing what was originally your dissertation and then building consulting a practice around is actually scalable. What's scalable for you? You know, something that can have a process.
47:24 Okay, repeatable process around it. I've watched businesses succeed and then fail because they built something that was needed for in the marketplace, but they allowed themselves to get off the beaten track because they're trying to be all things for everybody. And for me,
47:52 when a business is truly scalable, they found something, they met an unmet need and they know their sweet spot and they stay in their sweet spot. Now, do they disrupt themselves to stay ahead on the bell shaped curve? Absolutely. But they build something that has a repeatable process and they can keep their margins down because they're not just being there for everybody. To me, that's what scalable is all about. Find in their sweet spot and execute it.
48:22 Excellent.
48:25 Fantastic. question. Did you have fun in the sandbox today, Keith? I actually did. The problem here, Brenda, is I just enjoy having conversations with you. so we did that via podcast. We did what we normally do, but via podcast. That's excellent. So I had a blast. Thank you. And what about you? I always have fun. I love the fact that my guests
48:55 can tell their stories. They're very authentic. You're very authentic. You live your purpose. actually, that's why my guests come to me, right? And say, is the podcast right now, a growing channel. And I do have a large fellowship now. You can also follow me on YouTube. to my guests, I hope you enjoyed this month's.
49:24 podcast. Actually, this month is a lot I published a lot about corporate governance the month of April. So if you like this episode with Dr. Keith Dorsey, sign up for the monthly release of this podcast, the founder sandbox where my guests are founders, business owners, corporate board directors, authors. And you'll learn about how to build strong governance for resilient, scalable and purpose driven companies to make profits for good.
49:54 So thank you for joining me again, Keith. It was a pleasure. Thank you.
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 Welcome back to the Founder's Sandbox. I am Brenda McCabe, your host. This is a monthly podcast in which I reach entrepreneurs, business owners, who are going to learn about building resilient, purpose-driven, and sustainable businesses with great corporate governance.
01:38 I like to assist the entrepreneurs in building these scalable, well-governed and resilient business. And what I do with my guests is they tell their origin story about how they've built their own practices. And we'll get to the origin story of my guest this month, Shivani Honwad. Shivani and I have known each other for many years. She was bi-coastal in New York and Los Angeles. We met actually in the Los Angeles.
02:06 Los Angeles Venture Association, LAVA. It has a women affinity group. And she was eagerly contributing to some of the material and programs that we put on for women business owners, actually startups in the LA ecosystem. So I wanna thank you Shivani for joining me this month and the founder Sandbox. Thank you, Brenda. Thank you. So.
02:35 You own your own law firm, the law firm of Shivani Honwad. And it was originally based in New York. I don't know whether you operate nationally, but I'd love you to kind of repeat your origin story when I met you the first time in one of the women in lava. It was a small gathering. And it struck me your story was fascinating, because you were
03:04 working for a law firm in New York, but it was in your social life. You were, you know, out for drinks in the evenings and you would often be approached by women who were in the fashion industry, so models, and inevitably over a drink or maybe not a drink, they would end up using some of your free services. What was that? What were they asking your advice on, Shivani? And with that, we're going to get started on your origin story.
03:32 Thank you. Yeah, sure. So, you know, I was in my twenties in New York City and as one does in New York City, I would often go out. So I, at the time, was working in criminal law with a firm and civil litigation. But so I would go out with my friends. You know, I went to NYU, so I had a lot of friends in the city. And, you know, these models kept approaching me and they were like, hey, I heard you're a lawyer. I need help.
04:00 And I was like, oh, did you get arrested or did something happen like that? And they were like, no. And I kept hearing stories of how they were working for these modeling agencies. Most of the people that approached me were international models and their passports or their visas or something like their paperwork was being withheld so that they didn't really have freedom to travel and then not only that, they wouldn't be paid out. So.
04:25 they would model for days, weeks, sometimes months at a time, and be paid $0. And the agencies were just, there was just a lot of abuse in the industry. And so they kept asking for help. And at the time, I didn't really understand enough about the industry to know how pervasive this was. But I started looking into it because it wasn't just one model approaching me. It was like dozens of models over the course of a few weeks, if not maybe a few months.
04:54 that kept asking me for help. And it got to a point. I imagine your name got around, right? Well, because I wasn't doing anything yet. It was just that I was the only lawyer at all of these events, right? And I mean, this is also pre-Me too. So the other part of it was, is the lawyers they were going to, some of the male lawyers unfortunately, were also taking advantage of them and being like, hey, I'll help you, but you have to be my date to this event like Saturday night.
05:20 So they would see me in my 20s and a woman and woman of color, and they would just be like, oh, OK, so she won't sexually harass me or she won't threaten me in any way. So I think I was seen as a safer space for that. So I think that's why people approach me at parties. And then it got to a point where I just I couldn't really keep hearing it and not do anything about it.
05:46 And so I did some research into it. And then I found lawyers. I knew some in my network that knew how to help them. And the biggest issue, it seemed, was the immigration part, where it was like, if models come into the US under what's called an O-1 visa, and typically it's tied to whoever their agent or employer is if they come in under that route. But if they do it, there's other ways they can do it to have a little more freedom, or they can get their green cards so they have freedom. And that's the EB1A route.
06:16 And so I figured out an attorney who did that and he had agreed to like train me in how to do that. So eventually like I started my own law firm focusing on that. And it was just to help these models get some freedom. And then, you know, I expanded from there to doing some IP and contracts because once I helped them and get got them more stable, they were like, okay, well now I'm doing these ventures and I want you to negotiate these contracts and I want you to be my lawyer for this. Like you were great. So that's how my law firm kind of came to be.
06:44 And it was just 10 years actually, since I've opened it this past August. Oh my goodness. Yeah. It was just, it started out at this crazy need of just people needing help and to be in a safe space. And the irony of it is that I originally went to law school to kind of work on human trafficking issues. Oh my goodness. And I never thought I would see it. Like I never thought I'd work in fashion, but I mean, the work I was doing was tied to that because a lot of the models were essentially held in debt bondage.
07:14 of being tied to these agencies not being paid out and saying like, you owe us this much money so we're not gonna pay you or what have you. So I think that's how it's still, I got to do what I went to law school for, but in a different way than I had initially thought. Like I thought I would work for the UN or something like, but it was so hard to get into the UN. I applied nonstop originally, but like I got to do this. And like we changed some laws around in this space. Like,
07:43 The Boston Globe did like the Spotlight team did a piece on this and like some of my clients that I was also interviewed for. And then, you know, we met with officials in city hall. And so the freelances and free act, which got passed in New York also applies to models. So if an agency, you know, gets payment from a client to the agency and they don't pay the model within 30 days, the state of New York will actually fine the agency.
08:10 So the models now have recourse to collect payment faster. Excellent. So I would ask you later to give me this law, and we'll put it in the show notes. Because this is amazing. You have been a trailblazer in a serendipitous way. You started out, or while you're studying law, you thought you would work in sexual traffic, and you did not, or human trafficking. And you were doing criminal law.
08:38 ended up actually representing fashion models, immigration issues, as well as eventually venturing into assisting them in their contract management and IP. So amazing story. And I loved one thing that you did say. You said, I couldn't not do anything, right? I researched it and I just could not just let this go. So.
09:08 Very, very resilient, Shivani. How did that experience or others inform you to actually move all the way out here to Los Angeles and set up practice? And tell us a little bit about that. So I don't think you and I have actually talked about this before. But originally, what brought me out to LA was some of the work that I did here for the models. I was recruited by some organizations in the e-sports area.
09:38 Um, you know, e-sports is actually pretty big out here in California. And, um, there was some e-sports organizations that wanted me to help implement essentially policies and basic human rights for the gamers, because, um, kind of what we had done for the models in New York, um, there was really no regulations a couple of years ago. It's still pretty bare minimum, but.
10:02 for the e-sports gamers. And you have all these essentially mostly teenage boys, there are female gamers as well, but in the e-sports tournaments, and they were just taking a ton of speed or drinking nonstop Monster Energy drinks, and they were just dying, quite frankly, they were under all this pressure to perform. And again, there was really no regulation around it. And their contracts were devoid of like...
10:28 just basic human rights of like, okay, you can get a bathroom break, you get time to eat, you get time to sleep. So originally I was recruited out here to kind of work on those issues. And I will say, if you've never been to an e-sports tournament and like in a stadium, I advise going, it's an experience. Wow. This is like a trillion dollar industry and it like traverses all socioeconomic, like really like it.
10:56 It just transcends all lines. It's just an incredible scene to experience, just the fandom of it all. So I was in that space for a little bit originally and it just, it was a very chaotic environment that I just didn't really want to be in anymore. Right. And then, yeah, I just- And you were doing this from
11:26 from your own practice? At that time, you'd set up your practice, so you just recently celebrated 10 years of your law firm, Shivani Hanwad. Yeah. You were actually serving the e-sports from your law firm. Yeah, so I was doing some contract stuff. I was doing visas for the gamers, things like that. So I was getting more familiar with it. But it was because the issues paralleled.
11:53 basically what was happening with models in New York with the sports gamers in California. So that's kind of how the whole thing started. And then, like I said, it wasn't really for me, but then I had made some inroads here. I got connected to Lava and some other organizations. And then I got offered the position to teach at NYU's LA campus. So that's kind of anchored me here in Los Angeles now. But yeah, so I still do kind of the same stuff and I work.
12:22 you know, same. The thing with immigration law is it's federal. So my clients are all over the world and a lot of my clients also in the fashion, creative industries, their contracts are mostly like for New York and California based things. And like I'm admitted to practice law in both New York and California. So they just email me, like we do Zooms or, you know, calls and stuff and go through stuff. So yeah, I serve clients all over the world basically.
12:51 position you have with New York Stern's LA campus? It's not Stern. So it's New York University. Okay. I went to Stern undergrad. Yes. And then, but New York University's Los Angeles campus is just a general campus. It's not a specific school. Okay. So we serve students from all schools. And actually we have multiple global campuses. So we have two other degree granting campuses. One is NYU Abu Dhabi.
13:21 and one is NYU Shanghai. So this is what come to our LA program. It's an undergrad study abroad only program. So it's one semester and they come mainly from our New York campus. Some are, we also do have a lot of students that come from our Abu Dhabi campus and our Shanghai campus. And then they might be as part of other programs too. And so they come out here, they spend a semester, they, we work on getting them internships.
13:48 And they just kind of see, like most of them want to go into the entertainment industries in, you know, whether it's media, like screenwriting, directing, producing, or music. So they're just trying to see if they like the LA environment, make some inroads for if they want to like pursue their career in LA or New York or what's better for them. So that's the program that we have out here right now. And like we're growing actively because the campus opened in fall of 2019.
14:15 closed promptly in spring of 2020. And then just reopened fully again last year. All right. And do you teach a specific subject? Well, yeah. So the course that I teach, it's basically structured around like entrepreneurship or creatives. So I bring in kind of my business and my legal backgrounds. My, the director of the NYU LA program is amazing. And she gave me carte blanche to kind of design a course.
14:44 She was like, think of them as your future clients. What do you wish they knew? So that's kind of what we designed. So we like include like how to pitch, how to develop a deck and then how to pitch that deck. I also do a negotiation simulation because oftentimes these students have never like negotiated a deal before. So I go over, you know, what are basic deal terms that you should at least understand and if nothing else have these in a contract. And then I design a whole simulation and like put them in groups.
15:13 and give them mock contracts and they have to negotiate it out. And it's really fun because every single time we do it, they all start with the same contract, the same roles, and everything. And then they all present at the end of class what their deal terms were. And no group has ever had the same deal terms. And the reason for that is because it's also to show them that you all come in with your own biases and preferences and experiences and values.
15:41 Yes. It doesn't really matter what the other people are doing. It's just like, what makes sense to you? What do you feel comfortable with? Because if you feel comfortable with the deal and you're okay performing for this rate or with these terms or whatever, then you're going to be fine. And so, because then I always ask them, did you want someone else's deal? And they might say that they wanted parts of it. They're like, oh, I didn't know I could add that. Sometimes if we're doing an artist contract negotiation,
16:10 my female students will always be like, they'll add in hair and makeup budget. And then the male students didn't know like, oh, that's a thing or like, how much is hair and mica? And like women know that it should be expensive. So they're like, oh, I could do that. So like, it's things like that that come up cause I'm like, you can add in, if it's not written there, you can add stuff in. Like I give you flexibility. And they're like, okay, I'll think about that next time. But because they negotiated out, they felt heard.
16:40 So they're comfortable with the deal that they agreed to because they felt like they were heard, they felt valued. And so they were fine with their deal overall. So again, although they may have picked up some things that they would like for next time, no one's really been outright like, my deal was terrible. Like everyone's kind of felt like kind of comfortable because they get time to talk it through. And I think that's like the biggest takeaway is like, as long as like the other side feels heard,
17:09 you can agree to a situation where all parties kind of essentially win and can work together well. And thank you, this is fascinating. So you have an entrepreneurship program at the New York University's Los Angeles campus. There's another campus in Abu Dhabi and Shanghai. And so it's a year abroad. So is it cross-cultural mix and what students? Yes, but.
17:38 Sorry, I'm just gonna clarify. So it's not a year abroad for Abu Dhabi and Shanghai. They're actually degree granting campuses. Okay. So the Abu Dhabi campus is actually a really incredible program. It's a four year program. Okay. And it only has like a 2% admission rate cause tuition is free at that campus. So they're completely separate programs but they're all under the NYU umbrella. But I'm just saying that students come to our LA campus for a semester. It's a semester, right? Yeah, for a semester just to kind of do a semester abroad essentially.
18:09 And how many entrepreneurs have gone through your program? So, okay, so let me also clarify, sorry. I teach the Entrepreneurship for Creatives course, but like our entire curriculum here is centered around the entertainment industry. So there's a movie marketing class, there's a screenwriting class, there's pitching your project class, there's a history of film class. So it's all centered around entertainment. There's music courses, there's stuff like that.
18:38 The entrepreneur part is just kind of what I do because like, that's my background. And also like if you're a creative, you are an entrepreneur in the industry, like you are your brand. So mine's the only one, my course is the only one focused on that. So it's not that we have entrepreneurs here. They all want to be in the entertainment industry, but it's part of being in the entertainment industry, you are an entrepreneur. So just to clarify that a little bit, that it's not a separate program. Excellent. And thank you for that, you know, clarifying.
19:08 And I would like you to speak about your own new venture. So not only do you have your own law practice, you have recently started an initiative that is the South Asian Creator Collective. Tell us a little bit more about this. Yeah, so we launched that out of the NYU LA campus. Okay. Because I just found out like that my South Asian students
19:38 They, you know, we have only a few, usually every semester, but they just didn't have the community that some of the other creative communities had because typically South Asian families, your parents want you to be a doctor or an engineer and not really like, okay, you can have a music hobby or be a dancer as a hobby, but not have that as a career. So there was a lot of lack of support. And then I represent some South Asian artists.
20:06 whether they're writers or dancers or creators, producers, things like that in New York and LA. And so they also obviously would say the same thing. So I kind of wanted to bring everyone together to not only create a community for like my clients, my friends who are in the industry, but also to help build that bridge for my South Asian students to have like, you know, mentors in the industry. So we had our first meeting earlier this, a couple of months ago.
20:32 What came out of that was really cool that I brought together my friends and clients. They've already started collabing together on stuff. And then Brenda through you and Ty, I met people who are possibly interested in investing in South Asian creators projects. So we're looking at doing a possible pitch event in the spring to have our creators pitch projects and then to have investors possibly invest in them. So I like the idea of just bringing people together to kind of create this community
21:01 and to help each other kind of, you know, use everyone's skill sets just to create a better whole together. I love it. And I was absolutely thrilled that you were at the Thai So Cal's recent event with the preview and a screening of Show Her the Money, as well as we had our final.
21:22 competition for five women-owned businesses. So thank you for joining us there. We did that at the Noah House in Hollywood, of which I'm a member, and look forward to hearing more about the PitchFest that is probably gonna be in the spring of next year. Hopefully. Noah's crazy though about that, show her the money screening. I didn't realize how many people I knew in the film. Like I knew...
21:48 Liz, like from this organization that we were part of in New York, Dreamers and Doors, were like mainly female entrepreneurs. Like I knew her when she was starting Sogal. And so it was so crazy to see how far they've come. And then like I knew so many other people in the film. And I was like, wait, I knew them back then. I didn't know they were in this film. And like Naseem was in there. Like there was just so many people that I was saw in the film that I was like, wait, I know these people personally. So it was just a really cool screening to see. And to see so many.
22:18 people that I've known over the years, just in how far they've come over the years too. Was really cool. Yeah, initially it's a movement now. So initially Show Her the Money was gonna be shown in 50 US cities. It's gone viral. I think we're up in to the 200s and yeah, it's a movement. So thank you for being, and it's a small world, right? Oh, completely. We all end up, yes, there are no borders. So yeah, thank you.
22:45 And I look forward to that launch and I would be happy to promote it here in the founder sandbox as well as on my YouTube channel. You know, this switch gears. I want to I initially I've known you for years, but I really wanted you to come on to the founder sandbox because not only your story of not resiliency, but to the move across from the from LA to from New York to LA. But
23:14 you're passionate clearly about resilience. And I am also passionate. And it's the type of work I do with with founders as they're scaling their businesses just working on this resiliency, I say muscles. You recently hosted during LA's tech week, about two weeks back, a session on resiliency. Tell us a little bit about it and why you wanted to spearhead that.
23:42 Um, so I did my first LA tech week event last year, and that was a great learning experience. We did it all about pivoting and we had like 400 RSVPs for like 75 spots because I did at NYU's LA campus and we're small. So we had a fire martial capacity of 75. So it was just like overwhelming. But the original reason I launched that event was because
24:09 Um, when I looked at the original LA tech week calendar, all I saw were men on that calendar. And I only, if I saw a panel with a woman, it was like one woman and like five men. And I was like, I have so many incredible friends and clients that are women doing incredible things in the tech space and they never get the platform to talk about this. So I wanted a female forward event. Um, so I did that one and then that one went really well. So then everyone was like,
24:37 Okay, what are you doing for tech week this year? So that's how I was like, okay, so everyone really liked the pivoting one because they said they learned something from it and it was something everyone could relate to. So then, you know, as we're coming out of COVID, a lot of people have felt burnout and have felt the need to kind of just like reinvent themselves or just kind of rise from the ashes to a degree. So then this year's theme, I was like, I feel like I wanna do something around resilience.
25:04 because it's about like weathering the storm and coming out and like, you know, thriving again. And so again, I did it female forward. But what was really incredible is a lot of my male clients and friends also came and like others that I didn't know. And like all of them just like loved the event. And they're like, this has been the most informative event I've ever been to. And I said that at the beginning of my event, I was like, you know, this is like, yes, I, you know, my panel is all women, but
25:33 we can't change the ratio of where only 2% of women receive VC funding if we don't have men in the room, because you need everyone at the table to help change that statistic. And so by sharing the stories of like, again, they were my clients and friends, but they all run like incredible organizations. Like Steph Rizal was one of our speakers. She's an incredible singer songwriter. She just wrote a book for creatives and self-care.
26:00 I had Jazzy Collins, who's the first black person to win an Emmy for casting. And she has a production house called Force Perspective. I had Mickey Reynolds, who used to be the CEO, co-founder of Grid 110, and is now head of programs at Slosnikov, a VC fund. And then I had May Muna, who is amazing. She's a refugee. And she started two organizations, one called the Tia Foundation to help refugees in the US. And then she started this...
26:28 restaurant called Flavors From Afar where refugee chefs essentially have their menus every month featured at the restaurant. So like I got to feature these incredible stories and founders and you know, just how they like, May Muna, her Flavors From Afar restaurant is now Michelin like rated, but she was fired from a Carl's Jr. That's like her story. She's like, yeah, I was fired from Carl's Jr. and now I have a Michelin restaurant.
26:54 So where you start and kind of what happens, it's like you just have to keep going. And all of them kind of had stories like that of being like, you know, dismissed somewhere early in their career and just like, keep like, just keep going. And like, Jazzy too, like, you know, she was just like dismissed for being usually the only black female in any room. And now she's the first black person to win an Emmy earlier this year. And it's just like how, you know, yes, in casting, sorry. But yeah, and how that like just
27:23 those stories of how that rises. And I think a lot of people learn from that because a lot of them were just like, you just have to keep trying, or you just have to try something. And if it doesn't work, you know, go a different direction, but fail faster was kind of the message that they were putting out there that like you'll still figure it out and you just have to like have a really supportive community around you. And as long as you have that, like you can just like find the strength to keep going.
27:50 Tudos to you. This is a podcast that is absolutely filled with lots of nuggets, your own story in New York, coming out to LA, you're teaching your own entrepreneurship journey and your passion with respect to the underrepresented, right? And actually putting on events.
28:16 and Female Forward as well as last year in pivoting is thank you for being part of the ecosystem here in Los Angeles and next year I wonder what you're going to do in LA Tech Week. I know this week was pretty burned out still so we'll see. We have time. So you know I'd like to give you the opportunity to provide how my listeners can contact you or how's it best to contact you.
28:46 Um, yeah, I'm on LinkedIn. I'm on Instagram. My Instagram is just my name, Shivani Hanwad. Um, my email is just shivani at shivanilaw.com. So I guess any of those are kind of the best ways to find me or connect with me.
29:01 Okay, and we're going to shift gears back to this sandbox. You are a guest here to the founder sandbox. And again, my mission is to build resilient, scalable, and purpose-driven companies. So I always like to ask each of my guests what the word means, resilience, purpose-driven, and scalable, sustainable businesses. Each of my guests has a different meaning. And it's
29:30 actually one of the highlights of my podcast for me. Okay, so am I doing all three? Yes, you will. Okay. You already talked a little bit about resilience, but what does it mean to you? What does resilience mean to you? Shivani Ha. I think resilience just means to me, it's just like to persevere, to keep going. And I think all of us have our own challenges, obstacles and hardships. And I think finding the strength to just kind of get through those.
29:59 Because you don't always get over everything that you kind of maybe get through in your life, but getting through it is, I guess, the way to look at it in my mind. And then just kind of still making stuff happen, even if it's hard, is the way I look at resilience. To persevere, still making it happen. Thank you. Purpose-driven. You're very purpose-driven. How many back? If we were to scale you.
30:28 Well, purpose-driven, I just find it like, you know, just quick tangent, but like what originally drew me into law school and like wanting to work in the human trafficking space was like, you know, I was caught in these monsoon floods in India when I was working in Bollywood. And I learned about human trafficking and that's kind of what I wanted to work on. And I have worked on it in different ways, like, you know, changing that law in Delaware and then my work on the TVPGA as part of the New York State Trafficking Coalition.
30:58 So I have worked on that. And I just think that's always been kind of my, I guess, anchor point in a way of like a lot of the work or the pro bono work even that I do through my law firm. And part of why I've kept my law firm is because now no one tells me how I get to spend my time or money. I wanna work on representing children that have been trafficked and do those cases pro bono. I can do that. No one's like, no, you need more billable hours. Like it's up to me.
31:26 So I have a couple of nonprofits that I work with that I represent kids that have been trafficked to get them either status here or just like to a safer spot. And I really love that work. So the work I do with the creatives and everything, it kind of funds and provides me the ability to do this other work. So I think purpose-driven is just like figuring out what it is that you're passionate about and what your anchor point is. Like, why are you doing this? Like, what is it that's getting you through and what gets you out of bed?
31:55 Like I get really excited to like work on my clients' cases because I think they're doing really incredible things. Yes. So I think purpose-driven is just like that, like finding what you're passionate about and like how you can have a positive impact in the community. I have goosebumps. I had, you went off on a little tangent. That was a very important tangent and as it is your anchor point. So thank you for sharing, Shivani. Sustainable growth.
32:23 Okay, what's sustainable? So this is something I'm working on now. Yes. I think, you know, for me, I was an accidental law firm founder, you know, that like I kept meeting these people and like that needed help and like I, I never really thought I would start my own law firm. And so I think it's been a journey of figuring out how to like run a law firm and grow it and all of this and like.
32:48 I'm getting to that point where it's like, okay, what am I doing? Am I still doing this? Am I merging it with something else or someone else? And I'm very fortunate to have really great partners. I'm really fortunate to have the opportunity to these couple of law firms have offered for me to merge my law firm with theirs, join them, all of that. So it's figuring that part of it out. But I think, you know, to be sustainable or scalable, I think one thing, especially people who are type A like me,
33:17 that we struggle with is delegating. And that like finding, you know, you're not good at everything. You're not like, the first thing I did was hire a tax guy. Cause I was like, I don't do this. Like I don't know how to do anything tax wise, but it's just like figuring out like, you know, what you're good at and what you're not good at instead of trying to learn everything, figuring out how to delegate or finding team members to help you with the stuff you're not good at. Because I think a lot of people, especially founders try and hold on to everything.
33:46 And that's kind of what leads to burnout because if you're trying to do stuff that you're just not great at, you just always are gonna feel defeated. But if you have other people that are good at that stuff, supporting you in that, and you get to focus on the stuff you're really good at, then that's gonna energize you because then you're being more successful because you're doing the things you're great at. And then you're being supported still by other people. So you have that mental bandwidth to keep doing and keep running in the right direction.
34:14 what the stuff that you're passionate about, you're good at, what you're trying to grow. So I think to be sustainable or scalable, learning how to delegate is a really important skillset that it takes some time and emotional bandwidth to be able to be okay with letting go of something. Cause like most founders, like their companies are their babies. Like they're growing it. And you know, it's just so hard. It's like saying like,
34:44 It's like you're finding a nanny for your child. Like, okay, I'm okay with letting this person do this part of my business. So. Excellent analogy. And it also probably has to do with your own awareness, right? And the maturity of recognizing there are certain things that I just don't wanna do, but I don't like it or I'm not good at it. And the maturity and awareness that it's better done by someone else, right?
35:13 Yes. And I'm also self-employed and, you know, pushing through. And I have also delegated many things. I'm having a fantastic team, the producer of my podcast, and I let them do and tell, I follow their orders to tell you the truth. But you need that sometimes. Sometimes it's easier if someone just tells you what you need to do and then they're just handling the rest.
35:42 Um, and thank you for joining me in the, the, um, founder sandbox podcast this month, you know, um, to my listeners, if you liked this episode with Shivani Han what sign up for the monthly release, um, where founders, business owners, corporate directors and professional service providers provide their own origin stories. And they tell their stories about resilience purpose driven and scalable.
36:11 Thank you again. You can listen to these episodes on any major podcast streaming service. Signing off for this month. Thank you. Thanks, Brenda.
Transcript:
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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.
01:19 Welcome back to the Founder's Sandbox. I am Brenda McCabe, your host of this monthly podcast in which I bring entrepreneurs, founders, corporate directors, and professional service providers who, like me, want to effectuate change in the world by building resilient, scalable, and purpose-driven companies. I like to recreate a fun sandbox environment with my guests. And we will touch on not only their purpose,
01:47 and what has driven them to create their own businesses. But also we're going to touch upon topics such as resilience, purpose-driven, and scalable sustainable growth. Today, I am absolutely delighted to have as my guest Chasity Wright. Welcome, Chasity. Hey. Thank you for having me.
02:13 Super excited to talk about how Infiltron has evolved and the lessons learned and how we're preparing to relaunch in 2025. Excellent. And it's perfect timing because I've known you for a couple of years now. Yeah. Right. So Chasity is CEO and founder of Infiltron Software Suite, a company that's headquartered out of Atlanta.
02:40 She is oftentimes in Los Angeles because she's working largely in the defense market and cyber security. So I wanted to have you on my podcast because you have gone further in building your business. So you and I met, I want to say back in 2022, you came out of the Women Founders Network cohort.
03:08 kind of very early stage. One of the events that I was a host of was the Thai So Cal Women's Fund. And you weren't yet ready for investing, but we struck up, I would say a friendship and I admire many things about you as, and we'll get into it in the podcast here, but you touch.
03:35 quite a few or check of quite a few boxes for my podcast. You says, so you are a woman owned veteran and women owned business. You are a veteran of the Air Force. You're in deep tech and you're by park and queer. And so there's many many boxes that you check and it was difficult to kind of hone in on what I really wanted to bring into the podcast today, but we're going to we're going to start from here.
04:05 I always like to ask my guests to start with kind of their origin story. I, when I first met you, right, in private conversations, got to hear your origin story and why you do what you do, what your firsthand experience while on missions, right, that really informed your aha moments to create infiltrant.
04:33 as a cybersecurity company. So tell us a bit about your origin story, Chasity. So, I mean, my origin story has, if you can imagine all of these different paths kind of streamlining into one path. So one of those paths would be a little black girl born in Georgia, still seeing dirt roads and...
05:01 being able to go to the country and work on a farm and, you know, just still having that connection to the past, you know, and not necessarily the past in a bad way. So athletic, played ball in college, went to Clark Atlanta University, you know, the HBCUs are a big hurrah right now, but they've always been one.
05:29 I grew up with one in my backyard, Fort Valley State, which is in Fort Valley, Georgia. So, you know, roughed it with the boys, played in the backyard with the boys, always been a boys girl, cousins, neighbor. We're all still close. We all still play sports when we meet. So it's like an adult play date, so to speak. But also, you know,
05:58 raised religiously, you know, I'm in Southern Baptist Church, two parent household, maybe lower middle class, but middle school was very transformative for me because they decided to mix in everybody. So it was my first time, you know, being in a more diverse population in school.
06:25 And, you know, music is a big thing for me as well. I DJ, I make music. That's the creative part of me. And I found a lot of people in deep tech to do something with music. So, yeah, so, you know, that's my like early years background. And then coming through, I decided to go into the Air Force. I actually took off between my junior and senior year at Clark Atlanta.
06:52 Um, there I was majoring in global leadership and management. Okay. And went in and I was in for eight years. I was an aerospace engineer, uh, got deployed several times, uh, to different places, and that kind of brings us to why Infiltron exists and, um, on one of those deployments, I was a part of a network takedown.
07:21 And it was, whoo. I mean, I don't mean to quote the pitch deck story, but it is what it is. I wrote it because that's the way it felt. It was catastrophic. So just imagine the city of Los Angeles losing power out of nowhere. The rail stops working, Sinai has no power, so all of the medical equipment is no longer working.
07:49 The internet's completely gone and not rebooting like it normally would. Your energy grid is down. That is what I experienced in one of those deployments. And I was a part of Iraqi freedom and Afghanistan. I was a part of both of those wars. And when we came, you know, we got everything back. Thank God we were smart enough to ship.
08:19 brand new equipment. Okay, you know, so you know, we weren't able to get there. Yeah. I mean, I mean, that's part of our job. We're engineers. And when you're in the middle of nowhere, there's no calling HP. There's no calling Cisco. Like you got to know how to do what needs to be done. There was there was a lot of makeshifting. I can be I came out of Air Force, I could be a mechanical engineer to
08:45 because we had to figure out how to make components on the fly. It was just so many things. Innovation, right? Like you had to be innovative. You had to be adapt quickly while keeping the mission as a focus. So just imagine something that catastrophic and something similar has happened. I feel like Colonial Pipeline was something that is known now in the US for sure.
09:15 that had similar elements of what we experienced in being deployed. Yeah, and that was two years back. And SolarWinds is another one. I generally refer to those because people generally gasp, even non-technical people, because they know how damaging it was. So we can reuse. Normally, when the equipment goes down,
09:44 Unplug, right? Plug back in. Reboot. Yeah, reboot. But that was not happening. And what we found out in the debrief was that quantum was used. So quantum simplistically is about frequencies in this context. It's about frequencies. And frequencies matter in so many aspects of life, from spirituality all the way through tech like what Infotron has. So...
10:14 What they did was they basically zeroed out the frequencies of our satellite communications. And I believe that they created some frequencies that damaged other equipment. So these are things that again we found out in the debrief. And I wasn't really able to talk to that probably when we met because I wasn't sure if it was unclassified yet.
10:42 But as soon as Biden started talking about quantum initiative, which was back in 2022, when we were in, I was like, everything's hitting it the right time because we were literally in Techstars LA space. And Biden pushed the quantum initiative. And I'm like, see, told you, because a lot of people, a lot of people doubted what I was saying because of the year that I said it had happened. And as.
11:09 we started to grow out our team. There are other veterans on our team from different branches. And of course we war story swap all the time. And those other two people work for like NSA and they did kind of the same thing, telecommunications. And I'm telling the pitch desk story and they're sitting there like, yep, yep. That happened to us too. And I'm like, when?
11:38 And they're saying different years. So at that point, we understood it. It happened more than once. So that's why Infiltronic. So what's Infiltronic? So let's bring it back to, Yeah. So you leave, you leave service after eight years after also experiencing that. I still feel like I'm a part of it because I do consult them still. Right. So it'd be great. So.
12:08 And once in the Air Force forever? Always. Well, I really would have been in Space Force. Yes. Yeah. Well, you heard that here on the Founder Sandbox. The next, yes. So for my listeners, again, you check a lot of boxes. Deep tech, women in STEM. What is it exactly that?
12:37 your suite of services. All right. So Info-Trans software, right, has two patents now. And on your landing page, it says, our patented solutions, solutions utilize adaptive artificial intelligence, advanced quantum encryption and blockchain technology to deliver real-time cybersecurity for a wide array of applications. Later on, we'll get into smart cities, but
13:06 including the internet of things, smart devices, legacy systems, hybrid data, signals and devices. All pretty, pretty understandable, but what is it that Infiltrion software is able to do that others are not? So we're able to create a easier way for businesses to migrate their devices.
13:36 and their software, so their applications that they use, maybe they've developed them themselves, we provide a way for them to easily migrate those entities over into a more quantum-proofed infrastructure. So we created what we've trademarked as quantum encapsulation. So just imagine something being encapsulated. And basically we've created,
14:05 a brand new method of leveraging quantum, the AI, we leverage it for the pro-activeness. So in lieu of just waiting for threats to happen to our clients, we go look for the threat. So we want to go be where the bad guys are and find out and bring that information back and update the solution in real time to provide protection for all of our clients in real time.
14:33 That's how we leverage the AI. The blockchain is kind of leveraged to kind of make sure that people, things like devices, aren't on networks that shouldn't be. So it's kind of, I mean, we use it for what blockchain was pretty much basically developed for, and that's a ledger. So keeping up with the transactions of what's happening.
15:03 in a client's infrastructure. Fantastic. So it's largely a B2B business, yours, right? We do. We have B2B, but we've been approached several times here recently by consumers. Because now, because of the biometric protection aspect of our solution using the quantum encapsulation, we can protect, say,
15:32 Halle Berry from deep fake, being deep faked, or, you know, protecting her likeness from being used without her knowledge in movies, CGI'd into movies. So it's kind of getting a little bit more consumerish as we iterate, right? Yeah, and we were briefly speaking before the podcast recording, Chasity and I, and...
15:59 I've known her for years. She's a very private person, would not allow photographs. So I told my producer, I'm certain Whitney Chastity's not going to be sending us a picture, but you said yes, that you might, because you do have biometric, artificial intelligence, safeguards that can actually discover deep fakes, right? Yes, yes. Yep, if it didn't come from us, if it wasn't checked back from us,
16:29 It wasn't approved by the person. So it's kind of pretty much that simple. Amazing. Well, later on in the show notes, we will have how to contact you at Enfield Tron. So you are in the startup ecosystem. Again, you travel a lot. You're between Washington DC, Atlanta, Los Angeles, and actually the Bay Area. Yeah, the Bay Area. Right. So.
16:58 Revenue can be elusive, right? How? Especially in tech, and especially in these really large markets that I call deep tech. Deep tech and leading edge, bleeding edge, right? People don't know what they're actually buying, right? Or what they don't even, they probably don't even know that they have a need, right? What's been your strategy at Infiltron to keep the revenue flowing while maintaining also a pretty playful, innovative culture?
17:27 You talked about your team and so talk, that's kind of two questions. So how have you kept revenue coming, right? While not going out for dilutive funding yet, but tell us a little bit about how, what's your business model? So the business model in itself is set up for B2B and we also have a licensing element there. So if they, for instance,
17:56 a Fortune 500 company who has a cyber team, right? They have an internal cyber team. If they want to license out the patents that we have and kind of customize it or create or build off of those, use it as a baseline for what they need for their systems, we offer that as well. But let me just put it out there. But back to your question, how do we keep it fun? So the team...
18:25 The original team members, should I say. So we met about seven years ago at a place called the Gathering Spot in Atlanta. So the Gathering Spot is a community and they just opened one in LA and I do go to the one in LA too when I'm there. But it's a community of people, creatives from creative people to deep tech people like myself and everything in between.
18:55 We went to a black tech event at the gathering spot and found ourselves not being able to get into the actual room. So we ended up, because they have a bar and everything at the gathering spot. It's a social club too. It has a club aspect to it too, but you can network there, have meetings there, meet all types of people. I mean known people, I mean it's a great
19:25 great concept, shout out to Ryan. But we found ourselves at the bar, and we're looking at each other. We knew each other because we had been introduced by the Hellbrella person, Tracy. Yes, yes. Because they had done some things for her with a previous startup that she had, development-wise. So we're all sitting at the bar, and we're looking at each other like, but we're the real tech people.
19:55 We do it. It's like we don't really take people. Um, we can't even get in there. We like, we know the organizers and personally and everything. So let's start a company. Well, what we did was we launched, um, what we launched kit labs. And it was literally right down the street from the
20:23 and connect to the community. So we had, it's not far from the AUC and the AUC is where Morris Brown, Morehouse, Spelman and Clark Atlanta are. Got it. So a lot of times you would come in there and find some of the founders, cause this was founded by myself and like six or seven other black tech founders. The ones that were outside. Drinking like, you know.
20:53 That's where we had that conversation. You know, the conversation started at the bar, being outside of that first Black Tech meetup, so to speak, with Joey Womack, who is a part of Goody Nation, who we did get a 50K grant from back in 2020 through Google for Startups. Let me just say this so much. We were so interconnected. I mean, Atlanta is Wakanda. Don't let anybody tell you anything different.
21:21 It's definitely Wakanda. But literally, not even a mile away from the Gathering Spot, we opened up Kit Labs. It's a smart lab where we can tinker with stuff. We're engineers. We're tech people. We need something. We need a makerspace. We don't necessarily need a space that is compared. The Gathering Spot was a little bit more buttoned up.
21:46 And then what we needed, we needed to be able to throw things and make things. We had everything from like 3d printers to, um, VR, AR headsets. I mean, you, anything in tech. Innovative fun. It was in, is in that lab. Um, but that's where around today. So we dissolved it. So it's been dissolved. What one of, one of the founders, he unfortunately transitioned. Um,
22:15 So, you know, and he was kind of like the pillar of it. And it kept going for a while, but it was just a lot of people like myself, it was two female founders, Dr. Nashley Cephas, who herself is from Jackson, Mississippi. I'm shouting out everybody, right? She's from Jackson, Mississippi, and she bought 10 acres in downtown Jackson, Mississippi and started a nonprofit called Bean Pad. And he basically took the concept of what we were doing at Kit Labs and brought it to our hometown. So.
22:44 Um, and it's so funny. She actually founded it on my birthday. So I was like, okay, I can dig that. Um, uh, but, but no, but we're still connected. Everybody still works with each other. You know, if I have to come in and do some things around cyber for a contract or, you know, commercial or whatever client that they have, I do like we, we all kind of still work together on each other's things. So that has allowed you to bring in some revenues, right?
23:14 through its service context. Yeah. Oh, for sure. For sure. Consultant wise, cause they're like, I think people may look at Infotron and think that there's not a human touch piece there, but if you're dealing with me, there's always gonna be a human touch point there because we have to consult the client. We can't assume, you know, we cannot assume.
23:41 what you need, we have to actually have a conversation with our clients throughout the process, even after we possibly have set up the platform for you, trained your people on it, there still needs to be an element of communication, human communication, right? But the team, we've been working together for about seven years. Yes.
24:10 Infiltron has been around for five, going on six years now. So, you know, I mean, respect, mutual respect, we're still kids at heart. I mean, we grew up wanting to be engineers. So, you really can't take the light of innovation out of an engineer unless they're just at the point of not wanting to do it anymore. So we're always, what I've found is most people in any engineering discipline are very,
24:39 curious and forward thinking. So we, and we kind of, we're kind of like a community. We are community and not kind of like, but we are community of folks that contribute to each other's, you know, projects. Yeah. Mm-hmm. And not just, not just business-wise, but personally, like we, I mean, we've been around each other for almost a decade, so.
25:04 there's been kids born and like I just said, one of our founders transitioned, like we've been through some things together that have brought us closer together. And you can, I believe when you have a team like that, and we're all diverse, you know, we have a team like that that cultivates innovation, for sure. You know, I've had a few guests to my podcast and I also write about this,
25:35 Creativity is only possible or it's greatly possible when you create a fun environment and make games out of things and have, right? And set up teams. So I think a shout out to you and what you've set up at Infiltron and in its earlier rendering at Kit Labs, just creating an environment that allows for what ifs, right? Is key. There are a lot of what ifs in cyber.
26:04 I bet you there. So I have a boatload of questions here. One is, before we get into your fundraising path, again, I mentioned earlier you have two patents that have been issued. What is post-quantum encryption technology in layman language? Post.
26:32 Quantum encryption technology. So there is definitely confusion out there that has been addressed. And because there is a difference between post secure quantum and encryption. There's a difference. So. Excellent.
27:02 Post quantum encryption, it is designed to protect data from quantum computers. So. And that's done through the encapsulation? For us, that is how we provide the protection, the encryption. That is the quantum encapsulation is a method of encryption with Involtron. So the current encryption. So you have things like RSA.
27:32 elliptical curve, which elliptical curve is more widely used and kind of being marketed as quantum encryption. It is, it is, it's on the list of quantum protections, right, or quantum methods of encryption protection. So companies like Okta use ECC a lot. But what's happening is that quantum computers are being built now. Yes. Like right now, there's no... Yeah, the cost is going down.
28:02 Yeah, there's no waiting five years from now. Like I urge anyone under the sound of my voice to prepare now for quantum computer attacks. The same thing that I describe happening to us when we were deployed, it's gonna happen. And again, I alluded to feeling like
28:33 situations like Colonial Pipeline and SolarWinds were, I feel like they were tests because there were so many different elements of what we saw in the deployment that happened in those two cases. Yeah, because I'm sitting there and think it's like 2020, 2021, 2019 actually, it started. I think this didn't know, but.
28:59 And it's still going like 20, SolarWinds was still going, the last time I checked SolarWinds was still unraveling. Like it's still, still going. But back to the question. So for us, quantum encapsulation for us is breakthrough. So NIST has had these challenges, right? Where they put out bidding for companies,
29:27 researchers, because a lot of people that are in the quantum space, whether it's physics, mechanics, are generally found in academia. They're not at Infiltron. They're not at QED. They're just not there, right? It's very far in between, and we generally have to lure them. Or we have to do something like partner with them on...
29:53 grants, like the STTR grants. Like that's the only way, generally the only way that we can probably connect with the academia or pierce them and have them work with us. And they usually through that take all the funding, but it's, you're still. Exposed, right? You're exposed, but you're also getting the expertise that you possibly need and can't rightly find in the freelancing world. Yeah. So it generally works out in the long run.
30:23 Um, but so our encapsulation is a, is a breakthrough method because I look at it like this, NIST is holding these challenges and nothing against NIST. We're connected. I contribute to NIST and everything, but they are holding these challenges. And basically they're telling the hackers what people are going to the framework.
30:49 what people are gonna have to adhere to when they create their quantum algorithms to protect their devices and data. You know, you're giving away the secret ingredients. So like, even if they don't know specifically your algorithm, they know what you've based it off of. And that gives it like a tiny thread can unravel a whole t-shirt, right? So I look at it like that. So...
31:15 And even before, you know, we were already developing things before NIST put out these challenges. We are in alignment. We can adhere and do it here to the framework that they're putting out because, you know, you have the DOD space who definitely follows their framework, especially when it comes to the risk management framework. So they're going to follow NIST regardless. They're going to follow their framework, whatever they put out about cybersecurity protection.
31:44 The DOD space and all of its agencies are gonna follow that. However, being in the cybersecurity space every day, seeing what is happening and knowing that you've given some clues, some contextual clues to the malicious hackers about what you're using as a baseline to build your algorithms will, guess what? What we have is not that. Like we are...
32:12 One of the things that differentiates us right now, because I'm sure as quantum cybersecurity continues to grow legs, so to speak, people are gonna start using the more, less susceptible to hacks by quantum computers method. So you have things like multivariate hash code. So these are some of the
32:40 quantum properties that you can use that are not generally hackable by a quantum computer. They won't be hackable by a quantum computer. So we leveraged some of that. It was like, if I'm built, I looked at it like this, I've been in cyber, I've been in tech for almost 20 years. I know I don't look it. I get it all the time. You don't have to say it. I've been in tech for almost 20 years. I've been, and when I was in the air force, we call it InfoSec. It's the same thing. And that dates me.
33:08 If I say, if you hear somebody say InfoSec, trust me, they've been in cybersecurity for at least 20 plus years. So, but it's cybersecurity, that's what it is. And I've seen the changes and I've paid my dues too. Like I didn't, when I got out of the Air Force, I was just, side note, like I cut grass and loved it. I would go back and do it if I can make these results. So then like, it's very, it's very fulfilling. Don't let anybody fool you. Like I love, but I like being outside, but.
33:38 Um, my first tech job though, I literally went through the phone book. Cause this is like still, you know, internet was not quite what it is now, of course, but it was like still growing. And I went through the yellow pages and went through the aerospace companies and called all of them and was like, Hey, let's just get out of the air force, look for a job. I don't care if it's an intern or co-op and L3 L3 before they merged with Harris. Uh,
34:08 they created me a co-op. And, but again, still in touch with, cause you know, L3 is a huge government contracting company, right? And in the satellite communication space, cause they're in line with my background. And so I've seen it all. I've seen the changes of InfoSec into cybersecurity. And now we're entering a new frontier with quantum cybersecurity. So I've been here,
34:37 maybe at the latter part of the info set, but definitely through the cybersecurity and here for and to forge some guidelines and pathways in the quantum cybersecurity space with Inflotron. So when you know Inflotron was founded in 2019, I was like, okay, if I'm gonna start
35:03 something new in cyber and we hadn't even gotten to the quantum piece yet. They hadn't even gotten to me yet. Like it started like I was getting downloads. Yeah. Because I'm, I always, I'm a reader. I wake up looking at cyber news and just staying in the know because I need to know what's going on so I can protect my clients, whether that was me in a government contracting position or me as a consultant in my businesses. So.
35:33 I need to know what's going on. And if I'm going to build something new, why am I going to build it with compromised parts? Right. That's a great way to describe it. Yeah. Forget the tech. It didn't make logical sense. If I'm going to build something new, a SaaS product that's going to integrate and be flexible and adaptable and proactive.
36:01 Why would I use RSA encryption when I know what's coming? Got it. That will be one of the snippets that I share in my YouTube channel as well as the podcast. That is excellent. Why build something with compromised parts? Frontier technology, quantum cybersecurity is what Epfiltron is about.
36:30 Next generation. Talk to me a little bit more for us, less tech savvy listeners about the use of Infiltron in a SelleGov's program for smart cities. That kind of brings it more home and more tangible. How is technology used for smart cities? So first, SelleGov through leading cities. Yes.
36:59 It connects companies like ours with municipalities to tackle urban challenges. So for us, it's infrastructure, security, and sustainability. So we were a finalist in leading cities global competition back in 2021. And we've worked through them. You know, we've been able to work with city leaders to secure IOT systems and critical infrastructure.
37:28 And quick shout out to Michael Lake. Okay. He's the founder of Leading Cities, amazing guy. Another keep in touch, answer the email quickly person. He's based in Boston, but he's built a very supportive ecosystem. So shout out to Michael Lake. But as a part of this program,
37:56 We're offering smart cities our enhanced quantum vulnerability assessment. And this is to help the smart city leaders identify areas that need better quantum protections now. We've just had a session on November the 11th, Veterans Day. And the second one is coming up December the 5th. So you.
38:24 If you're a smart city leader or see so small, medium, large enterprise, no matter what market you in, you're in, definitely tap in. You can register for it on the leading city's website or on our website at Infotron.net. Yeah, that's on December 9, 2024 at 1pm. Is that Eastern? December 5th. December 5th? No, it's the 9th, because I have it here. And that's my cousin's birthday. So yeah, it's December 9th.
38:53 Did you get to influence those dates? Yeah. So let's jump into your startup. You've taken in very little dilutive funding. How much money have you raised to date? And how have you, what is the next phase, right? In terms of outreach for fundraising. So we've raised 120K and that was through Techstars, LA Space.
39:23 Still counting. I do not take a salary. I could take one, but I'm just, it's the long game for me. And I still consult. Don't let these people tell you not to quit your job and be an entrepreneur. Don't let people do that. Especially if you have a family. Don't let these people, don't let these people try to guilt you or shame you because you still have a job while you're building your startup. Don't let, don't do it.
39:53 Because I do have a company that I started called Right Tech Solutions and we still, that's why I said I still feel like I'm in the Air Force because I still consult them. So I can, you know, the revenue that we do and we've hit 500K in revenue. So you know, I could easily take a salary, right? But I just, it's the long game for me. It's the global expansion.
40:22 um, you know, more IP and patents, uh, protections, right? Because we do have global count clients. And, um, one of the things that I wanted to make sure of before we even took on the clients was that we had legal backing there. So IP trademarks, um, at least patent, at least the application is pending, but you know, like I want to, I want to, I want it to at least have that. And we have great attorneys. Um, shout out to Malika Tyson.
40:52 and Matthew and Dorian who have, they took over because I had a, I had an attorney, IP attorney that would, had her own boutique firm and then she had to go back, you know, she just couldn't do the entrepreneurship, it's not for everybody, but we still stay in contact as well. But she introduced me to McAndrews, they're based out of Chicago.
41:20 And they are the legal team for Impletron. I always tell them that when we're on calls, like you are the legal team. Like, yeah, anything that I need from them legal, legal wise, they do it. I literally just sent a partnership NDA over to Malekka this morning and she just sent it back to me. So like, that's not IP and trademark, right? But they do, they do it. And I always tell them how much I appreciate them because...
41:49 IP and trademarks are not free and they're not inexpensive. So, and then imagine, you know, we have one pending now in Japan. We just got one in Canada. So yeah, like it's expensive, you know, it's expensive. So a lot of the funding that we get now is going to be allocated to pay them, you know, even though they work with us. But it's going to be paying them.
42:18 doing some iterations, we have a partnership where there's some hardware that's gonna be involved. We're definitely tapping into the hardware. So we'll be forging our way there because people like things they can touch. SaaS isn't necessarily something that you can touch, although put it into a platform makes it a little bit more tangible for people, visual at least. So in the-
42:48 Yeah, I mean, hardware has always been a part of the vision. FBGAs, we have another colleague of mine, he has developed a cryptocurrency mining machine, and it leverages quantum. So it's mining at exponential speeds, right? Because generally what quantum does is speeds things up. It speeds exactly, in simplified terms.
43:18 Definitely still going after Sivers traditional government contracts globally. We participated in Fintech down in the Bahamas last October. Cause we are in the Fintech space and there's a lot of similarities between Fintech and Space Tech. Because when you're talking about fault zeros and being able to detect anomalies.
43:46 both of those markets need that and they need it quick. So we've been able to, yeah, like we've been able to leverage some of the things that we're learning in both of those for each other. So we've been able to participate in some conferences. We actually getting ready to go to Barbados in January for Fintech Islands, I'll be speaking about
44:14 the kind of the intersection of the quantum age and what's coming in respect to the fintech space, cryptocurrency, web three, traditional finance and AI, because we do leverage AI. And we've been in the AI space, Impletron has been in the AI space from the beginning. One of our advisors is an AI evangelist at AWS. I did say her name earlier on this podcast, but.
44:42 She's amazing. She's a Georgia Tech grad. We do have a few Georgia Tech people on the team, but she's amazing. And I'm able to tap her. I've been able to tap her because she was one of the Kit founders. So I've been able to tap her about AI and machine learning very early on. So all of the LLMs and the SLMs that everybody's kind of talking about, we've been doing.
45:11 Like even as small as we are, we've been.
45:16 Yeah, so, Chasity, how can my listeners contact or get information about Infotron? So, yeah, of course the website. So, infiltron.net. You can follow us on all of our socials at Infotron Software Suite. It might be, I think on Twitter is Infotron app. We wanted to keep it short.
45:41 And then, or you can email us at mfultronapp at gmail.com. And I know people are gonna be like, why you use Gmail? That's another filter. And that's an email that everybody on the team can look at and not be bombarded with, cause spam and it's just, everybody has their own email address, but. So you probably, it's a test environment for all of you.
46:09 beautiful quantum encryption that you're working on. Yes. And that's it all. One better way to start. Yeah, Gmail, right? Google knows a lot more about us than we'd like them to. Oh, Google knows everything. That's tough. Even when you turn location off. Oh, Instagram. I just posted something about Instagram. So Instagram's new. They just updated their policy maybe a month ago, maybe.
46:38 Okay. Whether you want to or not, they now have access to your photos, your GPS location, everything even if you say no, even if you turn it off, they still contract.
47:00 Just putting it out there guys. Yeah. So if you do platform. So there's cause to the platform. Right? Yes. Thank you. All right. We're coming down to the section of the podcast where I like to ask each of my guests what the following three words mean to you. Because this is what I do with my consulting business.
47:24 In addition to my podcast, I work with founders that are really building resilient, purpose-driven and scalable businesses. What's resilience mean to you, Chasity? Man, that's a word that I use. Uh, I mean, I'm, I mean, you gotta think about it. I'm black trying to raise money. It's hard for black people to raise money on top of that. I've been, you know, um, I've come face to face with people that didn't believe that I wrote my own patents. Like.
47:53 you know, as if black people didn't invent a lot of things, like that we still use today. Like, come on. I mean, it's just the truth. Resilience. Resilience for me is bending, but never breaking. Bending, but never breaking. Yeah. It's about, you know, adapting to challenges. I just mentioned some and facing them. Like you can't, you can't, and I'm about to sound
48:23 run from the pain, you gotta run towards it. So you can come out stronger on the other side. And it's not necessarily about survival, it's transformation. That's transformation. It's transformation. And that transformation is preparing you for what's next. And you'll be standing taller than you were before. Amazing, thank you. Purpose-driven, what's a purpose-driven?
48:53 Enterprises or? Yeah. I'm a visionary. So like, there's a lot of founders that I've met. If I have the opportunity to get close to them or kind of hear them speak about what they're building to include myself, because I do talk to myself about the things that I'm building. I counsel myself. I'm sure my ancestors are around me.
49:23 Purpose is, it should be intentional. I think that it's kind of interchangeable for me. But in the context of the question that you asked on purpose driven enterprise, so it's the heartbeat in what we build here at Infotron. I can definitely say that. It's creating meaningful solutions that solve real problems. And in solving those real problems,
49:52 you're still staying true to the mission. I still bring the aspect of the military into Infiltron. We are mission focused. We have fun. We do all the fun things, right? Because again, that cultivates innovation too. And it keeps it spicy. You need to let things be spicy because in a regular deglar cybersecurity job, you're probably bored. Like.
50:19 I mean, let's just be real. Like you're probably bored. You're probably looking at Excel spreadsheets and creating a report by hand from that. Like it's boring. Like, but you know, it's also making moves that matter. And it's solving problems that for me leave a legacy and just never losing sight of why we started in the first place.
50:48 So never lives in sight. Excellent. What about scalable? So how does- That's one of those BC's favorite words. That's right. Because that's what they want to see. How will you scale? That's right. I mean, I'm an investor too guys. Don't get it twisted. Like, I think that was a question that I did ask with one of the investors I had. Like, how are you going to get over that challenge? Like, before I give you this money.
51:18 Scalable. So growth, like we can think about growth in so many different ways, like growth, personal growth, because if you embark on the entrepreneur trick, you are going to be, and need to be open to growth. To me, entrepreneurship is a spiritual journey. Beautiful.
51:45 about the Southern Baptist roots, but I'm not spiritual. I'm a yoga, meditating, put my feet in the sand, grass grounding person nowadays, but still bringing that element of praying. And it's all the same to me. They just changed the name of God, right? Just that's my perspective, but growth isn't just about getting.
52:14 bigger. It's about getting better. And me speaking about the personal aspect, that is what growth is. It might not feel good, you know, while it's happening. But, you know, once you get through it and you can get in a reflective mindset and look back with what you just came through and be grateful, like find gratitude in it, you know.
52:43 That's how I look at growth. It's expanding mindfully and staying grounded in your values and making sure that every step that you take going forward strengthens the foundation that you've already built. And it's...
53:11 Like I said, it's moving with intention. And while you're moving with intention, you're also preserving the quality and the vision that define you. Which goes back to purpose-driven. Yes, thank you. Last question, Chasity. Did you have fun in the sandbox? Oh yeah, I mean, it's you. You know, we already have a great rapport.
53:38 I'll say this, one of my favorite memories of you is when you brought Ty to the table to kind of see if they were, could invest in Infiltron and it was too early. But we had to sign an NDA, it was some type of contract, but it was during Mercury retrograde. You said it before I said it, I was like, I wonder if she's onto this type.
54:05 Cause I wasn't going to sign it. I was going to try to delay it as much as possible, but you're like, no, let's wait, let's wait. So after Mercer, that's your great. Well, I was like, oh, these are this. She's my people. And I was like, and I think I responded like, let's wait five days. So it is no, it's like clear. So, um, that's a little fighter for me with you. Oh, I love it. I love it. Generally hear that in business. No, no.
54:32 And the Founder Sandbox again is a pretty eclectic podcast, bringing in deep tech founders like Chasity Wright that are on the frontier, bringing in what the future, will, it's the future's here. It's here. That's right. So to my listeners, if you like this episode with Chasity Wright, CEO and founder of Infiltron, sign up for the monthly release of
55:01 this podcast where founders, business owners, corporate directors, and professional service providers share their own experiences on building with strong governance, a resilient, scalable, and purpose-driven company to make profits for good. So signing off for this month, thank you, Chasity. Thank you, Brenda, so much. I hope to see you soon.
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01:19 Welcome back to the Founders Sandbox. I am Brenda McCabe, your host to this monthly podcast that reaches entrepreneurs and business owners who learn about building resilient, purpose-driven and scalable businesses with great corporate governance. Guests to this podcast are founders themselves, professional service providers, corporate board directors and investors.
01:47 who like me want to use the power of the enterprise, be it small, medium, and large, to create change for a better world. And I do storytelling with each one of my guests that starts with their origin story. And then we'll get into the contents of the podcast with each of my guests, and we touch upon topics around resilience, scalability, and purpose-driven.
02:15 initiatives or what drives the guest. So thank you for joining me. And I am absolutely delighted this month to have Salvador Badillo Rios, Sal, as my guest. So thank you for joining me, Sal. Thank you, Brenda. I'm very excited to be here. Excellent. So we met not too long ago. I am a member of Angel Capital Association and attended their national
02:44 Summit in Columbus, Ohio. And I'm from Columbus, Ohio. So I kind of killed two birds with one stone. And I was blown away. So I've been a member for three years. And this year they had for the first time a breakout session on deep tech and dual technologies. And Sal, you were one of the panel members. And I myself
03:11 love to work with deep tech companies. So we had a lot of synchronicities. And that's when I asked you to join me eventually here in the podcast. Yeah, yeah, no. Yeah, that's where we met. And I think it was an amazing opportunity to really connect with the angel community. I think oftentimes, you know, there's a lot of focus on VCs, but angels really drive that early start to these companies and to these technologies. And so
03:37 I wanted to make an effort to reach out to the angel community, educate, inform, you know, angels about deep tech and a lot of the DOD opportunities that there are for startups and potential collaborations and synergies. So yeah, I'm happy to have met you. So we're going to touch on a couple of those points because you do have a multifaceted career and background and diverse founder yourself of your own.
04:05 strategic consulting and advisory firm. So you are founder and CEO of Equitech Innovate. And it's really working towards serving underserved and overlooked founders that bring innovative and disruptive technologies to market. So kudos to you. That's amazing. Thank you. Thank you, yeah. And another hat you wear, and I don't know where you find the time in the day. Frankly.
04:33 And this was your speaking capacity when I met you earlier this year, your senior associate and portfolio manager at the national security innovation capital, a component of the defense innovation unit, DIU. So lots of acronyms in our department defense. So INSEC and DIU. And I was fascinated because that particular area, what you're involved in is it's accelerating early stage
05:02 dual use later on, you're going to tell us what dual use is. Yeah. Deep tech startups toward commercial commercialization. So, um, again, thank you, um, for joining me. We're going to talk about deep tech. We're going to get into also your own work that you're doing with, um, underserved founders. And I always like to have a title of our episodes. Um, and this one, I really think we're going to talk about scalable businesses. So what you're doing.
05:31 particularly with NSIC and the DIU is scaling, identifying early stage companies that truly have the promise of scaling. So scalable businesses. And you know, in a short period of time, you have scaled and then we'll get into the questions, but I was also very impressed with the focus of the work at the DIU and NSIC, you've used yourself have supported 21 early stage
06:00 dual use hardware, all right, not software, hardware startups across 12 states with over $50 million over the last three years. And that's led on to lead on it investments of 335 million of private capital and up to 20 times funded amount at up to 11 times prior to fund evaluation. Amazing, amazing, amazing. Thank you, yeah. All right. So can you...
06:30 describe for my, let's get into your origin story. Your PhD aerospace engineering, first generation Latino. LGBT, tell me what would be your tagline if anything. What I mean, this mashup of deep, tell me your origin story. How did you know what you're doing today? Yeah, thank you, yeah.
06:55 I mean, yeah, I mean, I was thinking through the tagline and I was like, well, I think maybe one could be, you know, life through punches, but I turned them into power and purpose. And so I think, you know, everyone, I'm sure has their own set of struggles, right? Everyone has dealt a different set of cards, right, in life. And it's really what you make of that, right? That really defines you. So for me, right, I grew up,
07:24 Here in Southern California. So I grew up in Rancho Cucamonga, about an hour East of LA without traffic. And so yeah, I grew up, my background is Mexican. So my parents are from Mexico. They met here and I'm the oldest of three. So I have two younger siblings. One is a year younger and then the youngest, seven years younger, but he has
07:53 down syndrome pretty severely. So I grew up in a disadvantaged background in a community where really I didn't know anyone that went to a four-year college, no one that went into any STEM field, right? And so, and my parents also, right, had never gone to college. So a lot of it was just learning and figuring things out along the way.
08:20 But I was lucky to have teachers that believed in me, that saw sort of something in me in school. And they would say, oh, yeah, you need to go to college. Or they would say, oh, you're good at math and science, things like that. And so they would reaffirm those things. But even once I got to high school, I really hadn't really planned for the future. I didn't really have thought about what major I wanted to go into or what college I wanted to go.
08:49 And so it was around being around other students that had thought about that a little bit better or had parents who were engineers or doctors that when they started asking me about it, I was like, oh, I don't know, but let me start thinking about it a little bit more. And so, yeah, so in my classroom, one of my teachers said, oh, the UC applications opened up. And so that's how I found out.
09:17 you know, that I should apply to college. There were several interests that I had, write music, English literature, and then STEM, right? And so I decided to go and try engineering and initially started with civil engineering, transitioned into mechanical and then added aerospace, just as, you know, being in college and taking different courses and being involved in different projects and clubs.
09:47 That's sort of how my interest kind of evolved. But even then, right, I didn't know about what a PhD was, or venture capital, or the field that I'm in now. So a lot of it has been a bit of a learning process. And I'm lucky to have had different organizations along the way geared towards underserved communities in STEM.
10:15 you know, PhD or things like that, that help create awareness for me about the different opportunities. My thing is you can't really go after something that you don't even know exists, right? So the more you're aware about different opportunities, the more you can sort of start to pave your path based on your own interests, so yeah. So you're a lifetime learner, although you're very young still.
10:41 Thank you for the interest in that. It's interesting because yesterday I was on a webinar with the National Association of Corporate Directors. It was about AI and workers, right? And interesting enough, the current generation, the largest generation that composes the workforce in the United States are Gen Xers. No, Gen Zers.
11:11 And the average retention, so the average period of time that they're in is 2.4 years. The next generation is the alpha, right? They're like 13, 14. They will have up to 17 careers, is what they're saying. And so the young, yes. You have so many opportunities. And again, I think people in your early
11:39 childhood, your neighborhood, your school, this professors that saw the, the, the ability for you with STEM related topics, they geared you those opportunities. So yeah, it's amazing the future of workforce and opportunities. So you yourself are going to get into in this podcast. Yeah. Some of that so you get out of college and what is your first gig? What'd you do?
12:08 Yeah, well, again, I went all the way to the PhD route. So one thing that was unique and what plugged me into DOD was, you know, going into my PhD, I had the opportunity to go to UCLA, but having a unique opportunity to work with the Department of Defense. And so whereas most students conduct research on campus, in my case, I had the opportunity to, after I take
12:37 a few of my, you know, some of my course requirements go to Edwards Air Force Research Lab, which is called the Rocket Lab, and really conduct research there. And so one, you get a lot more resources, right? Just because you're within DoD. And so you're able to really run, you know, and create projects and do these things that are at a higher level, right? This research is able to conduct at a higher level, and working on also
13:07 important problems to national security, you know, to the DOD that are more applicable than simply something that's just in a lab, right, that may be cool and interesting, but maybe there's not, you know, a huge focus on the application area. And so, yeah, I got to work alongside other military members and other researchers at DOD and really start to look things from a national security perspective.
13:34 And so how is certain technologies, whether more fundamental, more applied, how is that important to DOD and national security in general? As well as, you know, I got to see a lot of also the issues within traditional DOD and obstacles and sort of inefficiencies as well. And so it gave me sort of this unique perspective that
14:03 I would say most PhD students typically don't get, so I was very fortunate to have that. And so while being there, I also got interested in an entrepreneurship program. I was like, I wanted to get myself out of my comfort zone, out of the box and really interact with people from different backgrounds, not just from the STEM background. And...
14:28 And I loved it. I didn't know that I was going to love it. And I just decided to try it one day. And I just really loved speaking with customers. I got to be part of a student led startup. And so speaking to customers and that customer discovery phase, pitching to VCs, brainstorming with people from different backgrounds. I was like, this is where I want to be at. And so I thought I wanted to go into product development.
14:57 at a startup. And so that's what I was gearing towards. And so taking business courses online. And again, this is when the pandemic started to hit. So taking business courses online, learning more about emerging technologies like quantum and AI, that just interested me. And then DoD found me. And so they were like, okay, you have this unique
15:26 you know, technical background, background with DoD and some knowledge, right, regarding DoD and then interest in this startup and business, you know, business world. And so DoD was really starting, wanted to stand up and say National Security Innovation Capital, which, you know, focuses on early stage hardware technology. So as you may know, a lot of funding tends to go.
15:54 towards VC funding tends to go towards software and not enough towards hardware. And often hardware companies will resort to getting foreign capital, which at times may be considered adversarial and may compromise national security. And so DoD wanted to sort of get a hold of this a bit. And so stand up this program. And so, yeah, a few of my team members and I, we basically were hired on board to really stand up this program.
16:24 And this really involved developing the funding thesis, establishing the processes, eventually me running operations. Then because of my background, right? I got to do a lot more and help source these startups, evaluate these startups and help fund them and then support them. So I think naturally I just like wearing a lot of hats. It was very, it's been a very startup culture.
16:52 in a way just because we're a very small but mighty team. And so it's allowed me to do a lot as well as have a seat at the table and really sort of see things from that perspective. I love the that you were in the early stage of standing up the is it pronounced in sick. We usually refer it to as an insect. So what are
17:21 you know, these will be in the show notes, the we have a kind of infographic on NSIC. What are the I think there's seven key areas of investment within the DOD? Yeah. Yeah. So again, we're a component of the Defense Innovation Unit. And so
17:50 companies that are a little bit more mature that have some VC funding, that have commercial product. And the goal there is for them to find sort of the use cases and sort of pair those gaps with and look for specific solutions to address those gaps and transition that technology into DoD.
18:17 Again, we focus on the earlier stage, pre-seat to seat stage companies. And so, however, our technology areas are aligned with DIU's portfolios. So, you know, our technology areas are autonomy. And then sensors is weaved into that now. So advanced sensing would fall into autonomy. Energy technology. So this can involve energy storage. Advanced battery chemistries is a big thing under that one.
18:47 space technology. And so this is satellite stuff, as well as satellite communications, things like that. Telecommunications, so advanced communications technologies. And again, there's a lot of synergies with these different technologies. And then we have an emerging technologies area, which under that we've we've been edge computing hardware.
19:15 electronics, photonics, as well as hypersonics platforms.
19:25 Interesting. It's fascinating. Yeah. And then within that we have sort of funded as well companies that are in the sort of advanced manufacturing, advanced materials, but they usually align with one of the technology areas that I mentioned.
19:43 So for my listeners, I would absolutely love you to define deep tech and dual technologies, all right? Yeah. Because many, you know, I have quite a large audience now and it's a concept that we don't run into. You don't go to the grocery store and buy. Right, yeah. Yeah, I even had a friend, you know, just a close personal friend that is not in this field at all.
20:11 asked me about that too. So yeah, it's constantly educating, right, the audience, just because it is a crucial part of our society nowadays. So yeah, so I would say I would describe deep tech startups as sort of being distinguished by their intensive focus on sort of cutting edge technologies and scientific achievements. So they operate at the frontier of innovation. And so
20:40 I would say they're characterized by sort of novel solutions that are rooted in scientific breakthroughs or, you know, significant technological or scientific breakthroughs. And you know, I think where a lot of technologies, a lot of conventional startups leverage existing technologies to solve market needs, deep tech startups.
21:06 can often create entirely new markets or radically transform existing ones with their disruptive innovations. And so the reason I think there's probably a name for this set of technologies is because they also face unique challenges in commercializing their innovation. So one characteristic thing and challenge is long development cycles.
21:34 So, you know, they often require years, if not even decades, right, for research and development before you even have some viable prototype, right, that may become a product. High R&D costs, right, so, you know, very capital intensive, you know, and securing funding can be challenging, especially in the early stages for these sets of technologies that
22:01 are often unproven or the market potential is not quite fully understood. And so when it comes to going to market, it may be a little bit more challenging because it's not just a matter of finding product market fit, but it's also about educating potential customers about.
22:28 you know, educating the market right about your technology. Right. And the dual purpose? Yeah, so the dual use purpose really involves having both commercial and defense applications. So defense tech, you know, is sort of a focus on these DOD critical needs for national security to enhance military capabilities.
22:55 And so the dual use aspect means really developing a product or technology that can serve both, civilian and military purposes. And so I will say there are challenges with this though, just because the DOD aspect is mission focused, right? And so you have to worry about finding product mission fit in that sense. Whereas on the commercial side, you have to worry about finding
23:25 product market fit. And so, it can be competing at times, right? Where, the startups and VCs are naturally focused on revenue and increasing sort of their investment and DOD may be focused on the mission, right? And so, it's a matter of really finding where you can overlap both of those missions, right? To really make progress in society.
23:54 And then it's also as you're developing a technology, it's a matter of balancing as well, the different requirements and applications. So, yeah. So the startups that you have been involved with, have they come like a spin out as a technology transfer from a university or not? I mean, where did you? Yeah.
24:22 Where did these companies come from? Their original ideas. Yeah. Yeah, so a lot of the companies that we fund, some of the technologies have begun in a university research lab setting. However, they're usually a little bit further along before we see them and we fund them. So we have partnerships with different programs, including National Security Innovation Network, which is a part of DIU.
24:51 that really focuses more on really helping spin out these technologies out of a research setting and finding those DOD use cases. And again, we also look at companies from all over the US. So, our meetings are usually virtual, which makes it easy for companies to reach us. But yeah, they come from all sorts of settings, right? Some of them have spin out from the lab.
25:20 others from another company. But like I mentioned, by the time we see them and we fund them, they've already had some preliminary traction on the DOD side, whether that means some funding spoken to and, you know, DOD users to really develop the requirements, as well as some commercial preliminary traction, like obtaining letters of support and things like that. Yeah.
25:47 So about the time I met you, I'd also been working in deep tech. And I have heard that perhaps private investment VC money had been crowding out the traditional investment of Nandaluda funding that was under either the DOD or SBIR.
26:16 Right. And for like the last 20 years or so. And the Department of Defense, and actually under, I think it was the Obama administration, Ash Carter kind of flipped the model and said that we can actually do dilutive as well as non-dilutive funding in order to attract again, I don't know whether you're losing the game, but to really get back into the pipeline.
26:44 of potential new businesses and new technologies. Is that, and that's kind of what I've, you know, you perceive it. I also saw that SBIR grants, VCs were no longer allowed to participate probably about eight years ago. So what have your observations been on the public versus private investment in the strategic mission-driven
27:13 sectors is, is it true? What I'm saying is that I mean, there's no probably it's not black or white, right? So what is the transition between public and private investment in these strategic sectors evolve? Yeah, yeah. Yeah. So the way I would see it is, you know, a while back, there was really a lack of communication between sort of these public and private entities.
27:42 And so there wasn't much of a collaboration going on. And so, for example, with the establishment of DIU, the purpose was to really establish those public and private partnerships to really further innovation and especially deep tech innovation. And so that was just the first goal, right? Let's improve and establish these public and private partnerships and show that we can work together to fund companies.
28:11 that was a little bit rocky and figuring out, okay, how does that work and who does what? But I think over time, right, those relationships have really become established in some way and have been fortified. And now, DIU and NSIC and all these other DOD entities, we have strong relationships with different BCs and accelerators and other types of organizations.
28:41 they are aware of us and are interested in really knowing what our priorities are. And we are trying to always better communicate that to them. And we're going on funding companies together. So I would say that was sort of the first phase over time. Then, you know, I think you focused on, OK, let's let's let's see if we can if this model works, right? If we can fund companies.
29:10 using OTAs, for example, these prototype contracts, and helps to transition some of this technology into DoD. And I would say now where we're at is now we're really hyper-focused on the, you know, because we already proved we can do this, so now it's, okay, let's focus on the most impact for an urgent technologies to DoD, especially given
29:39 the current geopolitical climate. And so now we've sort of shifted into really a focus on these high impact, high, you know, at large scale and in high urgency technologies and startups. So it's a journey, right? It's an evolution. It's been a journey, yeah. And then on the hardware side, right, again, it's been a little bit different, but again, similar where, you know, there wasn't a lot of, I would say,
30:06 VC interests to really fund, especially hardware, early stage technologies. VCs were typically repelled by that, right, in some sense. And naturally so, right? But I think with standing up NSIC and these other organizations, there's been actually several VCs now in this pre-seed to seed stage, funding.
30:35 hardware companies. And so I would say now the hurdle is probably as we funded these companies, now they go on to series A, series B and now they need BCs at that stage, right? To really help them along and further their scaling, right? And so I would say more work is probably needed on that end now. Very exciting times.
31:05 Let's switch gears and let's go back to your consulting firm. Equitech innovate. Again, I don't know where you find the time, but I, you know, so can you showcase here what it is that you do in serving the underrepresented founders that are in these disruptive technologies? What was it that made you go out on your own?
31:32 Yeah, yeah, so just being in the deep tech space that I'm at, and, you know, dual use as well, you know, one thing that I started noticing, and it's something that I've noticed even from just my own background, right, in STEM, right, sort of one, a lack of diversity and representation, right, of, you know, different backgrounds, especially my backgrounds, right, whether it's
32:02 And so again, this is naturally found in a lot of the, deep tech spaces, right? Finding leadership and innovators in that space. And that, that's a whole nother conversation, right? But there's a lot of hurdles, just even for people getting to that space, right? And so naturally you find sort of a lack of talent there.
32:31 And then the other thing is, you know, once, you know, you have underserved communities in deep tech, right, then you have less of them that are aware or become deep tech founders, right? And so then once you are a deep tech founder, right, then you have these VC funding gaps, right, that you find, right, where
32:56 out of all the VC funding, 136 billion, only 1% goes to Black founders or even smaller to Latinx or Indigenous or to women. And especially being in the field that I am in, I would see very few, again, founders from understaffed communities even applying to our program. But then unfortunately, even those that did apply, sometimes the quality was just not up to par.
33:25 Okay. And so it does tear me a bit, you know, in the sense that, you know, I have compassion, but at the same time, there's a level of quality that we need to maintain and things like that. And that is because they often lack some of the resources and guidance, right? And so even to get to where they're at now has been such a huge feat. And so that's where I saw the opportunity
33:55 strategic consulting and advisory firm to really help underserved founders and give them a little bit more guidance and really help them get their technologies to market. Bringing in my DOD expertise, my deep tech expertise, and also in working with underserved communities throughout my career with different nonprofits and whatnot. All right. Yeah.
34:24 Yeah, being that person that looks like them, right? In the room, right? And you also have, you're a mentor for the Stanford Latino Business Action Network. And you're serving on the board of directors for Science is Elementary. And tell me, is that also part of kind of mission-driven? Speak to me a bit about those collaborations. Yeah, yeah, it is, yeah. So...
34:52 Again, just because I'm interested in helping underserved founders, you know, I must have gone, I think to an event at Stanford, and then that's how I got plugged in to that nonprofit organization. Okay. Yeah, so I became a mentor, that this was before starting Ecotech Innovate. And so again, that's where I also just got to focus on helping underserved founders and really guiding them, get them through that process.
35:22 And then in terms of the nonprofits that I'm a board of directors for, yeah, so one of them is Science is Elementary. And so that nonprofit, we focus on really providing inspiring, innovative, high quality science experiences to preschool and elementary school children from underserved communities. And.
35:48 you know, that involves, you know, teaching students, right, training teachers as well, to really build sustainable and quality sort of curriculum, and then engaging as well with different scientists and STEM professionals, and some of them may serve as role models and mentors and things like that. So again, I didn't have any sort of exposure to this. I wish I did when I was, you know, a young kid. But, you know, I think providing that
36:17 for the industry communities is very important because that's where it begins, right? Yes, but you get exposed to it. Yeah, you get exposed, so you learn about opportunities. And so you can dream to be a scientist or things like that. And also you get rid of those fears, right? That may intimidate you from going into STEM, right? Because now there's familiar. And then also it's important to know that
36:43 going to STEM doesn't necessarily mean you need to be a scientist, right? I've transitioned into this role, which is more business, right? But my science background, I'm able to leverage that and it's sort of a value add. So in the show notes, I would like to call out different ways by which my listeners can contact you. Can you speak to...
37:10 what you would like to have in the show notes? Is that your LinkedIn profile? Tell me a little bit about that. Yeah, so yeah, people can reach me on LinkedIn. I'm on there. Also, www.ancik.mil, you can find my LinkedIn there. And also, equi You can find my, you know.
37:37 LinkedIn information there as well as my email, salvador at equi Excellent. So that will be in the show notes as well as the infographic of NSIC. Thank you. So I am gonna move into the part of the podcast that I repeat with every single guest. I have my own consulting firm, NextAct Advisors, and I really work with
38:06 growth stage companies on being purpose driven, scalable and resilient. And I'd like to ask you, I guess, what does purpose driven mean to you? Yeah, I think to me, I've actually always been drawn to purpose driven work. And so for me, it's the so what, right? So there's a lot of cool things you can do, cool technologies. But to me, it's the why, right? And the so what behind it, that really
38:35 pushes me and motivates me to really do the work that I do because I know I'm making a difference in people's lives in one way or another, in a positive way. So whether it's through the nonprofits that I've been involved with, both at a volunteering level and then now on the board leadership or through NSIC and DIU, right? Helping the war fighter and helping with national security.
39:04 or now with my consulting firm and really focusing on helping underserved founders, I think that I'm just drawn to really purpose-driven work that creates a positive impact in people at scale, right? And maybe lead on to your next question, but that does it in a meaningful way. So that moves the needle. I love it. So you've chosen really in alignment with your own
39:33 Origin story. So scalable growth. What does that mean to you? And maybe wearing your INSEC hat or what was scalable? Yeah. So I think, you know, first in terms of like, you know, deep tech startups and going that route, the focus is first on finding product market fit and really getting there. But once you do,
40:02 I think scaling is really about growing, right? Growing not only your team, but expanding your product and really doing it in an impactful way. And I think along with that comes many challenges, right? That you have to make sure your manufacturing processes are in order and that can...
40:28 really accommodate for the volume and speed at which you need to do that. And so I think before scaling needs to come preparedness, right? Being prepared to grow before you do grow because one thing I find often is, you know, sometimes people are focused on growing and then as you're growing, you're really finding all these things that you can't keep up with, right? And then unfortunately, sometimes that's where startups fail, right?
40:55 And so, and it's sad because you've gone so far right along. And so, since you've worked so hard to get there, it's important to just take a beat and really prepare for the growth because I think that will set you up for success. You know, I'm gonna divert a little bit from the third question. I mean, product market fit. Yeah. And software, right?
41:23 Deep tech technologies, it's really about around technology readiness level, TRLs, right? Scaling right to that level where you are scalable, right? Can you for my listeners again, indulge us in technology readiness levels? Yeah. So, yeah. So there are different, you know, technology readiness levels that really describe sort of.
41:52 where your technology is in its development. With NSIC, for example, we have a minimum TRL three. And so that involves at least having sort of analytical and experimental critical function and or characteristic proof of concept. So we don't fund, you know, sort of paper studies or science projects. And so, that's a TRL level that we focus on.
42:21 And as that TRL advances, then you get into the testing phase and in-field environment testing and things like that. So then you can further refine your technology until it's really ready for a proper use case. And then I would say one thing we focus on now is also
42:48 just on the level of advancement in that TRL, right? So, you know, the more you can advance with the funding, the better and so that involves really having a very strong product development plan, right, in place. So that you get more bang for your buck in a way. Right, right. So the product roadmap. Yeah. Thank you. Let's get back to the sandbox and its resilience.
43:17 What does resilience mean to you? Yeah, thank you. Yeah. Yeah, it's one thing that someone told me, you know, they said, you're very resilient. And I was like, oh, really? Thank you. And so, yeah, reflecting back in my life, right? Again, as I mentioned before, you know, you'll be dealt different cards in life, you know, punches, right? And sometimes that will be things that you have no control over. And sometimes there'll be consequences because, you know, you're human and you're young and you make mistakes. And...
43:46 you're stubborn at times or things like that. And so I think resilience is, for me it involves a few things. One is not allowing that to define you. And so it means getting back up, but it also means getting back up stronger and wiser, at least for me, right? There's, I think something you can learn about yourself.
44:11 and about the situation and about others, right? In whatever circumstance you're in. And so it's really making sure you learn the most you can about that particular situation so that when you do stand up and move forward, you're able to do so in a more intentional and successful way, hopefully. Thank you. So last question, did you have fun in the sandbox today? Oh, I had a lot of fun. Yeah, thank you so much. Yeah.
44:41 It's been a unique experience. And so, I had a great time speaking to you when we first met and so today as well. So thank you so much for inviting me. Thank you, Sal. To my listeners, if you liked this episode with Sal Badiyurios, CEO and founder of Equitech Innovate, as well as advisor with Insic of the DIU, that's the Defense Innovation Unit. Please.
45:11 sign up for the Founder's Sandbox. It's released monthly. And business owners, corporate directors, and professional service providers are my guests and they help us learn about how to build with strong governance, resilient, scalable, and purpose-driven companies to make profits for good. So signing off for this month, thank you. And again, Sal, thank you for joining me. Thank you.
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