The Founders Sandbox – Details, episodes & analysis

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.

You can find out more at https://www.chiefoutsiders.com 

 

 

 

transcript: 

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.

 

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.

You can find out more at: https://www.theguarrinegroup.com/

 

 

 

Transcript: 

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?

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.

 

 

On this episode of The Founder's Sandbox, Brenda speaks with Jane Zhang, CEO and Founder of Remmie Health about Scalable AI in Pediatrics. Jane progressed through her professional career as Biomedical Engineer, PhD Adjunct Professor, Big Pharma and it was upon living a very personal situation that she wanted be become a “builder": entrepreneurship was calling her. 

Listen to Jane’s podcast, as she shares where this whole idea of building something for the people at home to be able to examine, share, and, in the future - get assistance in identifying ENT diseases- became very important to her. Jane shares how she has built a product and services for at home examinations of the ear, nose, and throat and her real experience of developing a FDA approved Class 1 device, now in clinical trials. 

Remmie 3 is a FDA-registered and CE Marked next generation intelligent otoscope designed for patients of all ages.

You can find out more about Jane and Remmie Health at:

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

https://medium.com/@janeyqz/my-experience-with-my-sons-recurring-ear-infections-a-3-part-story-fdbc4ea0016e

https://remmiehealth.com/  

https://www.linkedin.com/company/remmiehealth/

Remmie was present at MEDICA 2024, the most important international fair dedicated to medicine and hospital technology. The event will took place in Düsseldorf, Germany, from 11 to 14 November 2024.

https://www.ca-mi.eu/en/germany/01/2024/medica-dusseldorf-11-14-november-2024/

and at the American Speech-Language-Hearing Association 2024 ASHA Convention from December 5-7 in Seattle, Washington.

https://convention.asha.org/

 

 

 

Transcript: 

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

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

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

01:18
Welcome back to the Founders Sandbox. I am Brenda McCabe, your host. This is a monthly podcast in which I reach entrepreneurs, business owners, and I have as my guest, entrepreneurs and business owners, professional service providers, and corporate board directors who bring their own stories about building resilient, purpose-driven, and sustainable businesses with great corporate governance.

01:47
I want to assist entrepreneurs and entrepreneurs in building those scalable, well-governed and resilient businesses. And by bringing my guests to the podcast, they too want to use the power of the enterprise, small, medium and large to create change for a better world. We're going to tell stories in this podcast today. And my guest is Jane Zhang. She's CEO of Remmie and she's joining us here from the state of Washington.

02:17
Jane and I go back almost, I don't know, four or five years now. Jane was at the UCLA MedTech competition. She had just founded Remmie in 2018 and then actually put some bones around it and financing into 2020 was actually seeking external investment dilutive type. And I couldn't help.

02:46
but remember Jane's origin story of why she started Remmie. And we're gonna start with that. So Jane, I would love for you to walk down memory lane with me and go back to when we met in the campus at the UCLA MedTech. And what was your origin story? Yeah, Brenda, I really appreciate this opportunity and thank you for the great intro. It was.

03:14
It was unforgettable why I, every day I'm reminded of why I'm on this mission because my own son, who was a preschooler back then, had recurring ear, nose and throat issues, especially ear infections. It was basically nonstop. A lot of the weekends, my colleagues would ask me, what are you doing on the weekend? I'd be like,

03:43
My son is having a fever I'm taking next week off. So it happened four times. In the first year he went to childcare. And one of the times he had a high fever, we went to the ER and it took us four hours sitting there nonstop with his crying and screaming. And the other times we were referred to an ENT specialist who was about to put in ear tubes in his ears. And other times we were

04:12
misdiagnosed because he had air nose and hands with mouse disease where we were given antibiotics. I give him 10 days and he's still spiking a fever. It keeps on coming back. And the doctor said there was a it was a moment of revelation where this physician, my pediatrician told me, come, come take a look by yourself. I was like, what? Why? And he said the throat or the back of his throat was all white blisters. So this was not an air infection.

04:43
um who gave you antibiotics that was the question he asked me he said you should be able to look by yourself and why weren't you doing that i was like what really i'm a bio medical engineer by training by the way um especially in low resource setting diagnostics or like basically home home diagnostic kits um he asked me why aren't you looking by yourself i was like what am i supposed to look uh and with what

05:11
So that's where this whole idea of building something for the people at home to be able to examine, share, and in the future getting assistance in identifying ENT diseases became very important to me. Wow. So you had at that time been working

05:36
for a large pharmaceutical company. As you said, you are a biomedical engineer by training, and you just completed your executive MBA, I think at UCLA. So what made you make the jump? One thing is going to the emergency room with your child time and time again. You talked about your aha moment and how can I in a low resource, right? At home.

06:03
be able to actually diagnose and actually treat my child. What happened that made you want to actually become an entrepreneur, Jane? One thing is working on the research side, but becoming an entrepreneur, what made you do that? It was very, so it was like everything kind of lined up in a way, and it just, my background, I was an engineer by training.

06:32
I worked as a scientist, you know, like in all the way up to postdoctoral level research. And then I took a turn into getting more into product development, business development, and commercial operations, because I thought that was really going to help me broaden my vision of the my view of how things work, you know, that I'm basically a curiosity driven person.

06:57
And at that point, while I was working in a big corporate, in a pharmaceutical company, I was sort of getting more experienced in a commercial side of things. I figured I had two choices, probably one, two, actually three choices I was considering, right? Like one is to go back to research and become a faculty member. In fact, I did, you know, that was kind of my way of rethinking my whole, reorienting my whole career path.

07:25
Um, the other one was going to become an investor. Um, the third was to fund my own company and just go on this path of building things. Um, I, I thought, uh, this issue of my child's problem just really was hitting at home that this is, because it's after I talked to many people, I was not alone. I'm not the only person who's going through this. Everyone I talked to said, Oh my gosh, that was me. Um,

07:54
I was like, this is a big deal. It not only impacts your child's health, it impacts your productivity at the prime time of your life when you just had the child. And it was just like really hitting a home. I had to do this after a couple of years of hiatus in academics, in academia, as a faculty member of engineering in University of Washington. After completing my MBA, in the meantime, I decided being a builder.

08:24
an entrepreneur is the calling for me. Is the path, is the path to shift. Amazing. Talk to me about the number of ENT cases that you are addressing with Remy today. Talk to me about that. I guess a striking number was 70 million in the US, both adults and children. A year, right? And it's really fast. A year. Yeah.

08:53
suffering from some ENT diseases. And this is not just specialty disease that I'm talking about, it's every day. Like anything that you have when you have a sore throat, a painful nose or ear infection or cold and flu, it impacts these organs. The first line organs being impacted are your ENT, but it doesn't stop there, right? For children, it is very highly occurring. Like if you look at the number of children who go see ENT issues, ear infections alone is...

09:22
about 24 million a year, that's 80% of any children before the age of eight or three, they've already had one ear infection, not to mention 30% have more than three a year. And adults, like when you're thinking about, sinusitis, sore throat, strapped throat, how all these impact the overall population quite a bit. So what is the solution at that?

09:50
Remy provides. You're going to walk us through kind of the, it's AI powered ENT, so ear, nose and throat health platform. It has many components. What's the patient experience today that you're attacking and how is it going to look in the future? Walk us through the product, please. Yeah. I love that way of thinking and thinking as a patient or a user of any anything that we are providing.

10:20
So you already kind of heard my journey of nonstop sort of rotation in like a spinning wheel among pediatrics office, urgent care, ENT's office, and ER, right? And then over again for another episode, if it's recurring or chronic. The experience that we're trying to provide is along the line of how the disease progresses and how physicians examine.

10:50
a quadrant or like a progression lifetime along that line. What I mean is when you first have a pain or some sort of discomfort, you would want to, you know, a doctor when they examine you, they would check, they would look, they would look with a, right now they look with an otoscope, which is a glorified flashlight plus magnifier, obviously very, very high fidelity.

11:20
That's the first step. They look, they examine. And then the second thing they do is, well, obviously you have to be in person first with the physician, right? So there's no sharing per se, which we're trying to build towards is you can look, you know, if a doctor is using an otoscope, why can't the patient be taught how to use it? It's very similar to a thermometer in a way, except it's a camera. So, you know, if a physician is looking with their eye.

11:48
we can make it digitized as a camera for patients to use at home. And if you have to be in person today, you should be able to transmit this, whatever you're looking at or collecting over the internet in terms of sharing. And then the third step of the whole diagnosis journey is basically analyze. The physician kind of asks you how you feel, they aggregate a lot of information about you, who you are, what you're going through and your physical presentation of the symptoms.

12:19
that should also be partly supported by AI. So that's kind of what I'm working towards is, it's like a million doctors supporting every single physician, every, you know, one doctor being supported by a million in terms of the insights that's used to go into their diagnosis. And did I mention that the misdiagnosis rate is about 40% on any day? Misdiagnosis meaning either, you know,

12:49
you're prescribed antibiotics where you're not, you should not have been, or you're referred to a specialist where you should not have been, or you went to the ER, because you did not receive the care in time. I guess that's a broader sense of misdiagnosis, which means you missed the opportunity for diagnosis in the proper setting. So, but that's very prevalent in terms of misdiagnosis. So we like to support anyone who's

13:17
first examining the condition with AI tools, being a patient or a primary care physician. Before we get into the AI question that I have for you, talk to me about some of the communities that can benefit from the use of an AI-powered ENT device. Yeah. I.

13:46
The first thing that comes to my mind is home users, any general lay person at home who may not have the resources to see a physician in person. It could be someone who's lack of access in a way that they are in a remote area, lack of resources to pay for healthcare, or even lack of time. Someone who is working, who has a job but just doesn't have the time to.

14:15
to see a doctor. So I would think under underserved communities, population who are at lack of resources such as time, money, or you know, driving. You know, driving is a hassle for a lot of families and just anywhere at home. Anyone who is, you know, even I was talking to a bunch of undergrad, you know, college students are like, we're so used to just sitting on our couch and see a doctor.

14:45
That's possible. And that was really the key moment when I was sitting as a judge. The first time I actually was exposed to you, Jane, met you and heard about Remy, it was the possibility that digital health, right? I'm not having to go into a doctor's office. And the digital health to use preventatively, right? To prevent disease.

15:13
diseases to progress. I think, and then, you know, AI is just an added layer on top, so that truly was a moment when I thought everybody, well, at least there's 70 million cases a year of ear, nose, and throat, what this platform may offer for other disease areas where we don't have necessarily to go into the doctor's office. So it was fascinating. That's what brought us into this relationship.

15:41
So talk to me about, we've talked about the platform, where you're going, how it's offered. What has been your founder experience? All right, you decided you took a head issue and went back to the academic world. You really wanted to become an entrepreneur, started the company. You won a competition out of UCLA, I think business case. That's about the time I met you, right? Talk to me about how the journey has been in terms of

16:10
resources, the resources that you have received, non-dilutive funding, where are you on that path, and how many healthcare systems are currently either testing or looking into the use of Remy? That's a loaded question. So talk to me about the journey of financing and where the product is being used today. Absolutely. The journey is long and very,

16:40
full of support, you know, like that's, that's a very upfront, you know, support from my very early days where my MBA classmates kind of joined force on this project, you know, as in its infancy, the UCLA, which, you know, venture accelerator, which was my, you know, first founder, basically, we, we came out of the incubator, equipped to talk to the world about our business case. And we got

17:09
$33,000 overnight from the business plan competition, NAP business plan competition, and the early UCLA founders who just showing overwhelming support. And we, in fact, we sold our product, first 25 units of our, you know, the digital otoscope in the early days before we graduated and gotten our first 100K of investor check before we graduated. So,

17:39
That was when we had to fund the company because we need to find a place to park the money as students part-time. So this was all full-time working, you know, professionals part-time on a weekend going to MBA. And then I, the past just went really interesting because of the pandemic. There was an overwhelming uptake of virtual care.

18:07
telehealth services, institutions who are looking at this new modality of care. And all of a sudden it was like, there were like 800 telehealth companies in the US at some point and they were all of our potential customers. We started co-calling them and we're getting quite a bit of feedback. In fact, many of them were working today. We are working with Rocket Doctor, for example. They've gotten, they've taken over half a million costs in the past couple of years.

18:35
in terms of virtual care services. They have sites at pharmacies and enabled stations of remote care for people who are not accessing an office in person. We are working with five school districts in five different states and these are school districts which leverage Remy for all of their nursing rooms and introducing it to their students and parents. And we are working

19:05
So we got very strong non-dilutive funding. Actually early days we had seed funding from Platinum Play, we have seed funding from United Healthcare Accelerator powered by Techstars. We had in-kind support from CTIP, which is consortium for technology and innovation in pediatrics, which is a large innovation, hospital innovation consortia of, I would say that's growing, you know,

19:34
at least children's hospitals in the West and Midwest. They are providing enormous support, including clinical collaborations, partnerships, granting services, regulatory guardrail, they're FDA-funded. So now we're working with them in terms of a clinical study site in Lowery Children's in Chicago, which is one of our primary sites

20:04
testing out not only REMI, Otoscopes, but REMI-AI, funded by the NIH, which is National Institute of Health under the Small Business Innovation and Research Grant at 3.5 million so far. So overall, there was overwhelming support also from my state, I'm from Washington. So the Life Science Institute of Washington also kind of invested. And last but not least,

20:32
I have to mention TIE, T-I-E, which is an angel funding investor group that has given us enormous support in terms of networking, in terms of fine tuning the business plans, mentorship sessions. It just goes on. There are a few other investors that we've been working with and overall we've raised about...

20:56
4.75 million in non-delutive funding, non-delutive, and then about another a million in the deletive. So this has gone into a clinical study phase where we're looking at success outcomes in terms of technology readiness, validation of performance of AI clearance through FDA as a class two device in a couple of years. And then commercially.

21:22
being able to facilitate telehealth services already. In addition to allowing the patients to see and examine, we're enabling physicians remotely examine and prescribe. And in the future, assisting both the physician and the patients in terms of prescription and receiving the accurate diagnosis. I'm looking at the, heading the all, I guess,

21:52
health care or the goals of health care today, the five aims, I believe, at least, you know, cutting costs, improving quality, increasing access. Yeah, all of that. Amazing. And as of today, so you've raised about 4.75 non dilutive, you're no longer raising dilutive funding until you get through the clinical trials. When will that be happening?

22:22
The study with Children's Hospital, Lurie Children's is happening now actually, so it's underway. And we are looking at in a year that we will have some tangible, really good results in terms of both the patient satisfaction, physicians demand and performance of the technology.

22:50
And what is the desired outcome? Because I got really excited too, because this will be maybe not the first, but one of the earliest FDA approved Class II devices jointly with AI, correct?

23:08
Yes, that's a very hot topic right now in terms of the use of AI, the governance of AI, who benefits from it and who pays for it. Ultimately, the AI that we are developing would be augmenting the physician's decision making.

23:33
in the meantime, directly benefiting the patients because they can potentially receive pre-screening alerts and results faster and earlier before they go or even while they're waiting for the physician's appointments. So I would say that the outcome, first and foremost, is the satisfaction of the patient and the physicians. We would like to work alongside with, you know, really

24:00
key influencer in the medical field, medically validating the performance and understanding the bias of the data. What would it be if we manipulate bias at one way or the other in terms of the algorithm development, right? Whether or not we're collecting comprehensive population-based data, have we looked at cases of

24:28
one way or the other, you know, like in general, understanding the algorithm development and the AI readout. I think there's a lot of misunderstanding about AI these days, right? People generalize it to be generative. But AI has been a concept that is, you know, it was a different name back then. It was data analysis, it was imaging analysis, it was big data. For a while, the algorithm is evolving, the capability is evolving.

24:57
Um, the, I guess before one investor was asking me, what, how do you handle data hallucination or AI hallucination, which basically means the AI is starting to give out fake results, um, based on ungrounded, um, facts or cheating or lying to you. Um, and there's also another different kind of AI, which was data driven or validated. Uh, it won't tell you anything that you don't tell it.

25:27
to, you know, it's kind of limited or confined to a set of outcomes. For us, it is the former at this point, it's less generative. We understand the ins and outs of the data that's going in and we know why it's, you know, spinning out the results while we are the other on the outcome, on the output side. I would say generative has got a lot of potential, but within health, healthcare, we just need to catch up a lot.

25:56
a lot faster for it to be widely applicable. Currently, is it fair to say that Remy does have the largest database of imaging within ENT?

26:11
We are one of the top in the world. The data size as the use case grows, as the user base grows would be growing. The data are aggregating and being applicable to algorithm training in an aggregation basis or the identified anonymized.

26:39
It's an interesting part about the platform we're building is the users can benefit and they know what their, they benefit early, you know, rather than just being, benefiting from AI telling them what to do or assisting them. They're benefiting from non-AI capabilities of the technology, facilitating their visits, shortening their distance from their pain to a prescription, for example, or diagnosis.

27:09
already, early on. So we sort of de-risk the path to AI. And AI becomes more of a later phase. But it is definitely going to augment and assist the human journey all in all. Excellent. And so while sticking with the actual platform, and one of the third elements that I was particularly interested in when

27:37
we did invest from the Thai fund was the lack of the shortage of primary care physicians, and specifically even pediatricians in the United States at this time. Talk to me a bit about how as the tech, that platform of Remy builds out, will this enable doctors will it substitute doctors? What's the what's the how will this address this?

28:06
actually, it's tsunami that is now on us of this shortage of doctors in such a common disease area. Yeah, yeah. I definitely think that it is a tsunami coming at us just from my experience of having to book out. My wild child checkup is like four months out. I was like, by the time I get my son's appointment for his 11 years old checkup, he's 12. Yeah, so just to give you.

28:36
idea and then I got a letter from my in the mail saying that I'm quitting, you know, my physician is quitting real life, right. So I basically think that the AI will be enabling the physicians to free up their time, you know, from some non acute or issues that they so in the meantime, providing the quality of care that patients need not to sacrifice the quality.

29:06
to free up their time and become more efficient in a way. Especially I can think about ER avoidance, right? As a big use case for Remy and referral pre-screening, right? Specialty referral pre-screening, both of those, you know, are gonna free up quite a bit of our, you know, healthcare resources in terms of leaving them for those acute cases and really needing, you know, attention of the physicians. Yeah.

29:35
ER avoidance, basically you go, before you go to the ER, while you're waiting in the ER, you can perform a test or some sort of a visit with Remy using the Remy technology and specialties per screening. Per screening could be like, while you're waiting for the specialist appointments, which might be three, four months out, you can get the insights that you need already. So both use cases, I think, will free up quite a bit of our time.

30:04
both from pediatricians, nurses, mid-level providers, and specialists, EV doctors and specialists. Oh, Remy. Can you, for my listeners, talk about where they can find Remy today?

30:22
Yeah, we are, we're in, on Amazon, if you search Remy, we are website, remyhouse.com. We have a very convenient e-commerce, shipping and handling protocols. So you should be able to order on Friday, receive on Monday, for example, or even faster than that. And then we are, we are at your clinic. We're maybe at your clinic, maybe at your school district, we are working with a few of these.

30:52
physicians, clinics, there are logos on our website. If you're one of the patients of the clinics, you will get these at a discount, easily accessible rate. And if you visit us at the exhibits, in terms of commercial and marketing exposures, we are gonna be at Medica in Germany. That is next week, November 11th to 14th.

31:20
in Dusseldorf in Germany, we are part of the Washington State Pavilion to exhibit there. And then we are publishing, you know, academically we are collaborating with United, sorry, University of Southern California, USC in the speech and speech hearing and language pathologist community, especially in collaboration with USC.

31:50
We are publishing a poster there that's going to be December 5 to 7 in Seattle, Washington. Excellent. Let's switch to the founder sandbox. I'm passionate about working with company owners on their purpose, their scalability and their resilience. And I have a founder here in the sandbox with me today.

32:18
You're into what your sixth year of being a CEO. Tell me, what does resilience mean to you? Jane.

32:31
Oh my gosh, there are so many places you just have to hold on to. Hold on to the idea. I think first and foremost, it's something that you believe. There is some belief that this is there. You know, like it's worth your time. It's worth the effort. It's worth. Keep going. Right. So if you give up, it's it's probably you don't believe in it enough. Right. At some point, because of, you know, all the failures and problems that comes up.

33:02
Yeah, don't get me started. And then the belief is there. I think this is the future, the calling. It's historically inevitable, right? If it's Remy or someone else, it should be done, right? So that's my belief. And it's driven me every day when I wake up. And then when I think about resilience, I also think about when I'm fundraising, talking to investors, I get...

33:31
99% knows, right? And then 1%, yes. But does that mean that I'm not a good company, a good founder? No, it just means we're not good fit, right? Like investors have their own thesis, their goals to fill, their speed, stage of company, check sizes, everything has to meet perfectly. And even personality wise, those investors are gonna be with you for a while. You trust each other.

34:00
So that's fundraising. And then just keep going at it. And product wise, people say no to my product. Oftentimes for various reasons, customers are always right. Again, does that mean that I'm not a good product or services? No, the more I talk to them, the more nos I get, the more yes I will get as well. So again, that's sort of on the market research or understanding the general

34:30
target, you know, like as you're looking for the product market fit, you know, again, the keyword here is fit. And then the third piece is, is just just interpersonal, you know, like, people, oftentimes, I mean, like or dislike each other for a reason. And there's nothing wrong with, you know, knowing

34:56
knowing more getting more so I have a very big mentor mentor community I reach out to them every time I need an answer and they're just all willing to help that really helps with the mentality the the resilience as well you know I know I'm being supported I know I know people love me like my products are being loved my services are needed and my mentors really support me so that's that's what really helps with the positivity yeah excellent thank you for those four nuggets

35:26
your own words about what resilience means to you. Thank you for talking about your product and believing in the future of telehealth with Remy or not. It's very, very humble. And I loved, so the key word is fit, right? Fit with your investor, fit with your customers, what they're wanting, fit with the belief. Take that to the next.

35:55
question, fit or purpose driven? Are you fit for purpose? What is purpose driven enterprise? All right, so this this goes beyond the resilience to enterprise. Purpose driven, what's that mean to you?

36:09
I think I started the journey caring about sort of mental house of women, you know, that's like, you know, besides children's health, health, right. So, and I spent my whole journey, whole research doing underserved community health diagnostics, right. So I've been working on, you know, the

36:36
the worst diseases you can think about HIV, tuberculosis, these pathology pathogens, right? I was kind of in a class three bio lab, working while I was pregnant, tuberculosis. So you name it, right? Like any sort of crazy things that happen to people, I have really strong sort of desire to

37:05
help them or address it. Also something that's probably rooted in my family. You know, like I don't talk about that a whole lot, but my dad came out of sort of this pure poverty, right? Like he, my grandpa was a shepherd and he sort of, I guess long story short, my dad was also kind of a, would be a beneficiary of Remy. He had a perforated eardrum because he listened to

37:34
English radios too much before he came to UK for study, you know, as a first generation college student from his family. So nowadays he still has a deaf ear, right, like perforated eardrums. So I'm still thinking, you know, is there something I can do for him? But overall, I felt as a, like, just to echo where I started in the beginning, you know, as a woman in the prime years of, you know, career.

38:04
you know, where I wanted to be, you know, I was earning good money, I was having a good corporate job, I was caring for my child, you know, which really kind of pampered my productivity at work. I think that's kind of an issue that nobody really talks about because everybody wants top performers, you know, like you need to be working when your child is sick or something like that. But, you know, overall, it's kind of

38:30
issue that's there and near to my heart as women and children's health, especially for underserved communities. Thank you. Thank you, Jane.

38:41
Wow. Scalable growth. Take that resilience plus your purposefulness and scale it. Is it truly what the platform will become scalable? What does scalable mean to you?

39:11
how, you know, help the physicians in a way. You will, I will scale really well if I can, you know, bring benefits to ease their work, ease their stress at work. There are patients coming in, they're getting text messages from the patient, hey, what's going on with me if I can see this image? I was like, that's crazy. Like, how do you respond to that, right? Like in a way that polite and shows that you're a human, you care, but if you get 300 of those a day, how do you...

39:40
How do you do that? And then they say, oh, they send them to my charts. Again, that's losing or like the patient just waiting. How do you address this mismatch of having physicians providing care at top quality and efficiency while being a human to the patients and then the patients are satisfied and getting the needs met. I'm trying to make my story.

40:10
or resonating with physicians that they can be, just to give you an example, right? A physician mentioned that 50% of my, this was a specialist who said 50% of the patients who came to me should not have been in my office because I wanted to help those who can, they need me for a procedure most of the time. If they come to me for diagnostics confirmation, I could have done that.

40:40
with their information gathered in front of me already, before they come. So that's kind of the point. And it's almost like whenever they're open or free, aggregating physicians time across all these physicians who have time, whenever they have time to care for patients aggregated across all these issues, whenever they have an issue, we're trying to build sort of a bridge

41:11
the aggregation would really help address the problem of mismatch of asynchronous visits or waiting and not getting the answers. I don't know if that's too abstract. No, I get it. And you know what? Kind of along the lines of purpose, your purpose, caring about mental health for mothers, you also by the adoption of Remy Health in settings with the patients using it from home.

41:41
or being screened early on, you're clearly affecting the mental health of our caregivers, our physicians. And we do know that tsunamis here, there's a high level of attrition. Doctors actually just quitting. And if through tech enabled or AI powered, intelligent aggregation of data informs the decisions to reduce number of visits.

42:10
or have them more productive while in the setting, the clinical setting can move the needle, so be it. So thank you, Jane. This has been absolutely an amazing interview. I have one last question. Did you have fun in the sandbox today? Yes.

42:33
Absolutely, Randa. I really, really appreciate the opportunity. It's wonderful to every time I talk to you, it's wonderful, but especially interesting when we're like in this setting and you know, podcasting to more to a greater audience and really appreciate what you do for the community. Thank you. Thank you. So to my listeners, if you'd like this episode with Jane Tseng, CEO of Remy,

43:03
resilience and scalable and purpose-driven life story, as well as the origin story, as well as the product. Remy, sign up for the monthly release where founders and business owners, corporate directors and professional service providers provide their own stories on how to build with strong governance, a resilient, scalable and purpose-driven company to make profits for good.

43:32
Sign off for this month. Thank you for joining us.

 

 

On this episode of The Founder's Sandbox, Brenda speaks with Tammy Alvarez, founder and CEO of Career Winners Circle. Tammy is also an author, professional keynote speaker, inspirational coach, trainer, and epic storyteller. After experiencing firsthand burn out in a corporate career she struck out and intentionally created a work /life balance that resulted in  creating Career Winners Circle, a company offering career coaching, helping individuals figure out what you do that you love and organizations that want to ignite their employees.

They speak about Tammy leaving corporate life in New York, and how to “weather through”  seasonality in your business and your career to come back to your "Why?"

You can find out more about Tammy and her writing at:

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

https://careerwinnerscircle.com/

“Escaping the Career Trap: Transform Your Apathy Into Ambition and Never Hate Mondays Again;”

and the book Tammy mentions in this episode: https://www.barnesandnoble.com/w/scale-or-fail-allison-maslan/1128886160

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

 

transcript: 

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

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

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

01:20
Welcome back to the Founder's Sandbox. I am Brenda McCabe, your host in this monthly podcast. We're now into our third season. The monthly podcast reaches entrepreneurs and business owners who learn about building resilient, purpose-driven and sustainable businesses with great corporate governance. I want to assist entrepreneurs and entrepreneurs in building those scalable, well-governed and resilient businesses. And guests to my podcast are founders, business owners,

01:49
themselves who want to use the power of the private enterprise, be it small, medium, or large, to create change for a better world. Through storytelling with each of my guests that are going to touch upon resilience, purpose-driven enterprise, and sustainable growth, my goal is to provide in a fun environment where we can equip one startup founder at a time the skills to build a better world through great corporate governance.

02:20
Today, my guest is Tammy Alvarez. Tammy is joining the podcast as founder and CEO of Career Winners Circle. She also is an author, professional keynote speaker, inspirational coach, trainer, and epic storyteller. So welcome, Tammy, to the Founder's Sandbox. Thank you, Brenda. It is such a pleasure to be here today. I do feel a bit intimidated. You know, you're an epic storyteller, and I thought...

02:49
So we have two storytellers in the sandbox today. Should be good. Excellent. So in prior conversations with you, Tammy, and I did take some time to listen to some other podcasts where you've been featured. You, like me, share a mission. And you're very mission-driven. And you've experienced firsthand burnout in the corporate world. And you intentionally created.

03:18
a work life balance, which we're going to learn about more today that resulted in creating career winners circle. And it's a company that's offering coaching, career coaching, helping individuals figure out what you do that you love. Every guest and I we choose a title for the podcast, our title for this podcast with Tammy Alvarez, CEO of career

03:46
is purpose pivoting careers. So Tammy, you are joining us from Mexico City. I am. But your journey actually started years ago in New York and Wall Street. And then you took a little jaunt over to Belize. And I found some commonalities, my own work.

04:13
is informed by a major life change that I made back over 20, actually 15 years now, I moved back to the US after 25 years in Europe. And I work with companies, not necessarily individuals, to be fit for purpose, poised for growth, and made for resilience. What made you leave the Manhattan, Wall Street life and go offshore before it became fashionable?

04:41
in the post-COVID world? It was an interesting culmination of activities, if you will. I grew up in and around Wall Street. So my whole career was really around financial services and I loved the corporate career. Throughout my corporate career, I made 11 different changes in terms of the jobs that I had, everything from sales to audit and everything in between.

05:09
in five different industries and around Wall Street, because I had this mindset that if you don't like it, change it. And that's kind of how I navigated through my career. And I remember this one day, here I am, top of my career, managing director, the height of my career is managing like over 2000 people in 35 countries, like all these big girl things that are going on. And I remember sitting in a boardroom, we had missed earnings again.

05:39
And we were just waiting for the bloodletting to begin, right? So our boss comes in and every quarter it would turn into a game of hot potato. Of whose fault was it? Like, it's not my fault. It's sales fault. It's operations. It's this, it's that. And it just was actually, you know, became comical. And then we'd all go out for a few beers after the meeting was over. And so this time was particularly brutal in terms of how difficult the analyst call was. And I remember having this.

06:07
out of body experience it felt like in the movies. You know, when you're floating over the table and you're associated to it, but you're not really there. And I didn't realize it at the time, but my career had received its death sentence because I developed this disease that I call I don't give a shititis. And so, you know, six months later, I had found myself, I had cashed out of Wall Street.

06:32
I had moved to a tropical island off the coast of Belize in Central America and started this business, which was by far the most terrifying thing I've ever done. And I just really needed that reset because I had stopped learning. And it felt like I had just seen everything and to go to another company would have been the same, you know, the same thing with a different shade of lipstick. And I needed to reignite my desire to actually learn.

07:00
fail successfully and move my business forward. Say that again, you wanted to reignite. I needed to reignite my desire, my ability to learn, but also how to fail successfully. Okay. And continue to start a new chapter. Right, right. And we did speak about some of your intentional choices. All right, you leave, you had it.

07:28
What would you call that? You had a disease? Oh, yeah. I don't give a shititis, right? So yes. I think a lot of us have that disease, and we just don't realize it's, you know. Right. Well, by speaking your truth, which is what I'm hearing, and my listeners will as well. I was struck, though, Tammy, because you landed in that tropical island, but you really didn't yet know what you were about to do, right? I had no idea.

07:58
you age out of Wall Street, you just do. And so part of my plan, soft plan, the extent of my business plan, Brenda, was I'm gonna coach someday and sit on a few boards and do some academic work. That was the extent of my business plan. So when I pulled the plug, I think I've made every mistake an entrepreneur could possibly make, probably twice, because I'm a slow learner. And so I just fumbled my way through in the dark and just.

08:24
kept trying things and kept failing at things until I finally figured out the secret sauce, but it took several years for me to get to that point. And it was terrifying, right? In terms of feeling like I had lost the skill to learn, I'm like, oh, this is taking a lot longer than it used to because I purposefully stayed at a corporate. I did not wanna have a business to business company because I knew I was still addicted to the work. Yep.

08:51
And if I'd gone right back in, I'd just be in the same rat race under my own flag. And so I purposely sent myself to serve consumers and I didn't know anything about mailing lists or drip campaigns or marketing funnels. I knew none of this stuff. And so that, that journey was absolutely one of the most frustrating and rewarding journeys I think I've had. And, and you know, did you, um, you're six years into

09:17
this almost seven now. Yeah, exactly. auspicious number. Do you really believe that you've removed the golden handcuffs of a corporate life or and you are the best operator to actually be working with people that are leaving corporate life in Wall Street? Yes. And yes. Excellent. You know, since the day I started the firm, I've never worked more than 30 hours a week.

09:45
Right. We would go scuba diving a couple of days a week before work. Just as a way to start our day. What better way than to go play with the fish and get salty. And it was interesting. So I had how to coach when I, when I finally realized that I can't do this on my own. And I probably should actually get some help with somebody who's done this before. I was not looking at the finances in my business the way I was supposed to. And she kept asking me, you know, every time we met, where are we with the numbers? Where are we with the forecast?

10:15
And I would just, I didn't do what I didn't do it. And so she finally asked me, she goes, what are you afraid of? And of course I bristled, cause I'm like, I'm not afraid of anything. And she let it go because she knew she hit a nerve. And so I let that marinate for a little bit. And after a session or two, what it turned out Brenda, is that I was afraid of success. Okay.

10:38
I didn't know it at the time consciously, but I was afraid that I was gonna end up tethered to my desk just like I was in corporate. And so I was abandoning all the good practices and the things that I had learned in corporate because when I cut the cord, I cut everything. I didn't keep the good stuff. And so once I started to realize that some of these routines will actually help me scale without compromising my lifestyle, then that's when things really started to turn around for me.

11:05
Now we've got six coaches. We're serving individuals and businesses worldwide. And I'm still, I don't work on Fridays. And those boundaries are so important to me because I just gave up on those for my entire adult life. You said a few things here, too, that really caught my attention. So you intentionally did set out to want to make a difference in other people's lives. So you started with your own.

11:35
You work no more than 30 hours a week. You've built your work life, your work around the work-life balance. Yes. And you kept the good stuff that matter from that corporate life. I'm curious, is this a type of consulting that you do with the individuals that you coach? Yes, we do. Because a lot of the mid-assessors

12:04
mid to senior level leaders that we coach, start their own businesses. And so we helped them on that journey. And so the business found me initially, because one of the biggest mistakes I made is that I created a bunch of amazing programs that no one would buy. So I was like, okay, this is a terrible idea. Because I was a transformation expert on Wall Street. So we, every time the building was burning, my team and I were running in while everyone else was running out. I loved it.

12:31
But when I was in corporate, I realized that most people suck at this. Okay. And so I'm like, let me teach people how to be really strong transformational leaders, which was a great idea, but that didn't work with a business to consumer model because they wouldn't pay for it because they didn't see that as a gating factor to their success. That's right. And as I was talking to potential clients, it's like, yeah, yeah, I don't care about that, but I want to know how you did what you did. I was like, Oh, you do. And like, you know, cause they.

13:00
Most of our clients when we started were mid to senior level leaders, single career, multiple companies usually, but single career, and now they're miserable and they feel stuck and they know they don't like this, but they don't know what they did like. And there's a lot of shame that comes with that. And so I deconstructed the things that I did naturally over the past 20 years in terms of making all these moves. I'm like, how do I help others do this? And so the business actually found me.

13:29
And that's really how we started. But then as our customers' journeys evolved and they started to go into smaller companies and become C-suite executives for mid-size organizations or start their own firms or begin their own nonprofits, then we continue to serve them on that journey because those are new challenges and new opportunities for them to need a wingman or a win-win-win for. And so now we really work with

13:57
business leaders and individual executives within companies, if you don't wake up and love Monday every Monday, you're doing it wrong. Exactly. It's not a pipe dream. And that's really where we step in and add that value and make that difference. That's a great segue to the title of your book that you recently authored, The First Quarter of 2024. How did you?

14:26
Make the time Tammy, while running your business, attending to your clients, working with building your own team. So for my listeners, Tammy is author of Escaping the Career Trap, Transform Your Apathy into Ambition and Never Hate Mondays Again. So applause. Thank you. So you are an author. How did you find the time?

14:53
um, to write this and how, who was your target audience? Um, and how has that influenced the type of work you're doing today? Yeah, the book, um, has been in the making since I started the company. And I had a really good mentor because that was the first thing I wanted to do was write a book. And so he sat me down. He lived in Belize as well. And so he and I were, you know, having a cocktail on the terrace, looking over the ocean. He's like, Tammy, you don't need a book.

15:23
you need customers. And he's like, without customers, you don't have a business. And so this idea of a book kept going on my vision board year after year after year. And so the timing turned out to be perfect because we were moving from Belize to Mexico City. I had no friends in Mexico City yet, and I didn't speak the language very well. And so this was a really good time for me just to hunker in.

15:52
and really finally get this passion project of mine over the finish line. And obviously it takes a village, right? So I had a great coach and even better editor. You know, I'm a thought leader, I'm not an author by trade. And so there was a lot of heavy lifting in terms of making this readable for our audience. And the book surprised me actually, because originally it was written for the disenfranchised worker. Like if you hate Mondays, you need to read the book. And it's a coaching book.

16:21
where you absolutely know step by step exactly what you need to do. But then what surprised me is that organizations started to pay me to come in and deliver this message to their teens. Oh my gosh. I was like, you do realize I talk in the first two chapters about how messed up everything is. And they're like, yes, but this is the message. Cause in the message, the so what to this is that I think everyone needs to become that CEO.

16:50
of you incorporated. And when you start to treat your career like a business, whether you are a corporate person or whether you actually have your own business, because a lot of us haven't promoted ourselves into that CEO spot yet. But when you start to think about things in terms of running a business and apply those to how you manage your career, everything changes. And it's good for the individual, it's good for the business, it's good for everyone.

17:16
And so, you know, with the book now, we are working with companies who are really struggling with the majority of their employees who also have, I don't give a shit, itis. Okay. And like, how do you wake them up? Because there's this, especially in the middle market space, there's this concept of this, you know, global talent shortage crisis is what they're calling it. And so I'm here with all the layoffs, how can there be a talent shortage crisis anywhere?

17:43
But what I strongly believe, and what we're starting to prove out with our clients now, is that businesses have everything they need right under their nose. They just don't know how to activate it. Right, right. And so we've created a, you know, literally a three month like adrenaline rush process to reactivate the ambition and get people to start to lean in and care about what they do again. And it's made amazing results and differences for our clients.

18:12
So at the end of the day, we're all about loving Mondays in every way possible. And whether that's helping organizations or individuals find their path, there's a way forward for everyone. Right, I love the comment you made around the first three chapters when you were surprised that corporates were asking you to come in and speak is that everyone needs to become a CEO within their business, right? The business line, right?

18:40
Did I quote you correctly? Because I mean, you know, so when you treat your career like a business, yeah, and you become the CEO of you incorporated, then that's when the magic starts to happen.

18:55
I can't wait to read it because I will be honest, I have not read your book, but I loved the catchy title, Escaping the Career Trap. Transform your apathy into ambition and never hate Mondays again. And those golden handcuffs are there, right? Right on the cover. And I think for entrepreneurs and solopreneurs and new business owners, we feel trapped too sometimes and we become a victim of the monster we've created, either a victim of our own success.

19:24
or we're not seeing the growth that we expected and things are harder than we planned for. And so much of what's in the book and also what we coach on really helps you break through that and find your way to the other side. Because I think all of our careers have what I call seasonality, right? And we all know success isn't linear. And so when you start to embrace that seasonality in your business,

19:50
and in your career and realize, okay, how can I show up better for me first? Because when I do that, then the downstream impacts are gonna show up in my business.

20:04
seasonality and how can I show up better? All right. Let's switch gears. Tammy, we've talked about how you from created your business over the last seven years, walk my listeners through a typical is the, is the word engagement. Is it one-on-one? Um, do you consult as well for the executive team of the midsize companies? Walk my listeners through that experience.

20:29
Yeah, absolutely. And so we do work privately and we have group, you know, we have group programs that we use. And then we also do business advisory work. And so a typical engagement in any of those scenarios is really not only getting clear on what good looks like, but why? Oh, because so many times we were like, I want to do this, you know, a business is like we want to expand, you know, an individual is like, I want to get promoted or, you know.

20:57
in group settings, we do a lot of women in leadership type work. You know, it's like, I want whatever. And then the next question is why? Why? And if those answers ring hollow, then it's time to go back and take a look at that to figure out what you really do want. Because so often we're on autopilot, we do something because it's what's expected next.

21:23
We do something because well, that's what all the books and the magazines and the podcasts I'm supposed to do. And all of these things, it's like, no, let's lean back in and figure out what do you want? And I think a really good example is I had this summer, I had a summer of flow is what I called it. And we had hired all these coaches last year. We launched the book in January. We had a great book launch party in New York City in April. And everybody's like, what's next? And I'm like, I'm tired.

21:49
Nothing is next. Right, and so I promised we're gonna run the business, but I was just gonna not make any big decisions or start anything new for the whole summer. Nice. Now the summer flow is led into a raging river, but I needed that time to assess what I wanted. And as I was doing this, I read this book called Scalar Fail. Scalar Fail. And so one of the exercises is that, you know, you put your big hairy goal out there from a revenue perspective and you triple it.

22:17
And so I did that and I'm like, well, this is exciting and all that kind of fun stuff. But then I started to back into what the operational and personal expense would be in terms of lifestyle to do that. I'm like, I don't wanna work that hard. It's not for me. Right? And so I think checking in and asking ourselves why, because if you find that you've achieved something that you wanted and you get there, and suddenly you look around and you're like,

22:46
is this all there is, then you've been running the wrong race. And so we don't check in enough to make sure that the race we're running is going to give us the finish line that is truly where we need to be. So that's the really first part of the engagement, because once that's clear, then from an execution perspective and building that path forward through coaching and through skill building and through advisory work, that stuff becomes a lot easier.

23:14
because when you know Simon Sinek is great with that whole start with why, because when you're really connected to that, that is where you get your resilience. Okay. You know, I have found there's been several times in my life where I want to give up. Okay. And things got too hard. Do I really want this? Like, you know, it was just easier to just play it safe, do nothing, all the things. But when I connected to my, you know, my true why, like.

23:42
what is going on with me personally, then that's where I found my grit to keep going. Like when I was younger in my career, you know, quick story, but long story short, my parents split up when I was a teenager, my mom, my sister and I ended up homeless. And I saw how much she struggled. And I swore that that would never be me. And so for the beginning part of my career, my ambition was fueled by fear. Yes.

24:07
Um, and so, but that's what kept me going. It's like, I don't want this, like, you know, and so, so that was really what allowed me to find that internal fortitude to do the things that just seemed impossible. Now, when I started this business, I started to have second thoughts again. I'm like, this is so irresponsible.

24:25
It's like, you are a grown adult and you've left the job everybody wants. You're living on a tropical island. You have no idea where your first paycheck is coming from, let alone the second and third. It's like, what are you doing? And I was afraid, because at that time, my parents were aging and they had no money separately. And so my sister and I were supporting them financially. And I'm like, I have one daughter. I'm like, I don't want to be a burden on her because I'm off playing around the world. And so when I realized that, okay, now my...

24:54
you know, my big reason for doing what I do and for wanting what I want is so that way I'm never a burden on her, but I can still have the life that I want for me. Then the days where I wake up and I'm like, I'll be like doing this. I still get up and do it anyway. Right. So yeah. Thank you for sharing that personal story. And I feel honored that you shared that here on the Founder Sandbox.

25:24
So I'm good on how my listeners can use your services. So it's either individuals or mid-size companies. Yep, yep. Entrepreneurs, mid-size companies, that kind of stuff. Yes. So at Next Act Advisors, I work a lot with scaling companies. So it's normally the CEO and the founding team. I'm all about building scalable and resilient companies.

25:54
and the management of risk is very important. Can you, and you have a lot of clients that come from the Wall Street world, right? Do you have any specific highlights or experiences with executives who have pivoted their careers while working with you and are actually working in the risk and compliance functions? I mean, I'd love to hear some real life stories. Yeah, when I was in corporate, you know,

26:24
three of those 11 roles that I had, one was operational risk for a client defense, one was internal audit, so the very last stop, and then a major role in compliance, in terms of international banking and during the financial crisis. And so I think having a sales background, which is how I started my career, moving into middle office and operations, and then ultimately leading some risk functions,

26:51
There's a few things that I think if you're sitting in a risk function today, that make a difference between being adequate at your job and being an amazing business partner. And it's so easy to just hide behind the word no. Okay. It's safe. Like you can't do that. Like Dr. No. Right? You can't do that. You can't do this. You can't do these things. Whereas there's a true risk part.

27:18
is going to be able to help guide a business executive on how to get to yes, safe, and in a safe way. And very few, I think, risk partners actually do that. And so knowing I had a quota that I had carried in my life and frontline with clients when they're irritated because it takes so long to get them onboarded, or they have to fill out this form 700 times or whatever it is, it's like as a risk partner, it's your job to help.

27:47
the business safely get to yes and grow. And I think it's just too easy to hide behind the checklist, hide behind that this is what the regulators said. I mean, we need to listen to the regulators. They are there for everyone's safety. But there's so many ways to not have to have that contentious or that myopic relationship. And so I think from a risk partner perspective, really understanding how the business works.

28:15
really understanding where the risks are. So let's face it, you know, if you are going to be completely risk adverse, you would never open up your front door on a rainy day with marble floors. Because the chance of somebody slipping and falling is too high, but we open our doors every day. So there's at some level an assumed acceptance of risk. And like, how do we do this in a way that business people understand? You know, cause you've got your.

28:43
RCS says you've got your risk assessments. You've got all these things. The end of the day, they're just spreadsheets. No one cares about, right? You've got to and so to bring this alive, I'm like, OK, here's what we need to do. Let's find a way to do that. And with the business partners with you hand in hand, it's just an amazing combination to be able to get things done in a good way. I like that. I love how you've really brought it back to how a risk professional could tell their story and a more

29:13
coming CEO of your own career, all right? Let's go to another question related to 2025. So you took the summer off, you were in flow, now we're in a raging river. We are definitely in a raging river now, that's for sure. The team is like, hope you enjoyed the rest. You have something in store for 2025 that is related to your service offering with CEOs and management teams. Tell us a little bit more about that.

29:41
upcoming launch. Yeah, so excited about this. And this is going to be an absolute game changer for so many businesses. And really started with that aha moment I had when companies wanted me to start talking about the messages in the book. And so what we've done is we've cracked the code on how to reignite a workforce that no longer cares. In ways that actually move the dime.

30:11
Okay. And revenue, profitability, quality, customer satisfaction, key talent retention. And so it's called Amplify 360. And what we do is we take this three pronged approach to work with a company for three months. I think most leaders have kind of fallen out of love with a long term culture play.

30:35
Right, you bring consultants in, you bring organizational design people in, you bring in employee engagement surveys, you do all these things and nothing works. So what do you do? And so what we do is we take three months, basically it's an adrenaline shot to get the company started and kind of pivoted onto the right track. But we work with three different constituents. We work with the employees and teach them how to become that CEO of their career. Okay.

31:03
we work with the leadership team to teach them how to not screw that up. Okay. Right? Cause that's a press like, oh, I got a stick. I don't like this. It makes me uncomfortable. And then we work with the executive team and the board to make sure that their policies, their procedures, the things that they're recognizing and moving people forward in terms of behavior are taking the organization in the right direction of travel. Okay.

31:29
Because one of those three pieces, when one of them breaks, the whole thing breaks. Okay. And so we spend the first month doing baseline work and seeing where the company's at. The second month is skill building and training and coaching and those types of things. The third month is operationalizing this so they can be self-sufficient. Wow. And so it is fast, it is high energy. It layers in with,

31:59
You still have to run a business, so we don't have to shut down for three months to do this. And what we've found in some of our preliminary pilots is that the entire dynamic starts to change. And all of a sudden, the people who didn't have much to say are engaged and connected. And one of the biggest core foundational things that we work on is we work on connecting an individual's personal

32:28
um, ambition, you know, they're the things that get them, that get them up at night or aspirations rather. So we take their aspirations and connect them to the company's biggest goals. I love it. See, we don't tap into aspiration because you can't measure it. Right. But there's a reason all of us get out of bed in the morning, regardless of what we do for a living. So what is that? And when you figure out what that is,

32:56
And then you start applying that to the company's, you know, biggest objectives. Now, all of a sudden everyone is winning because typically the things that you have the biggest aspirations about are also the things you're most skilled in. Now you have more people spending time playing to their strengths. They're doing things that they personally care about and the business is winning too. So would you say that your secret sauce in this amplify 360 degree approach

33:26
is aligning the individual's personal aspiration with the corporate goals. Yes, that is absolutely step one, right? And it's something no one's doing, right? Everyone's talking employee engagement. I'm telling you to think about aspirations. Absolutely. Wow. And Tammy, just for clarification, are you focusing this new service offering on

33:56
it's sector agnostic. People are people, right? Our area of strong expertise are middle market companies that are in STEM and in hypergrowth, right? That's really where this has the best opportunity for an ROI fast. But we serve all clients in terms of if you need that kind of support and you're willing to do the things that you need to within your organization. But middle market STEM, that's really our sweet spot. Excellent.

34:26
Well, it's now your time to share with my listeners how to contact you, Tammy Alvarez, or your company. What would you, there'll be show notes for this episode and we'll be providing material to give some some information on how. Absolutely. Yeah. So, so the one thing I love to ask all of our listeners to do is connect with me on LinkedIn and send me a message. Let me know you heard the podcast, what you thought, you know, what you agreed with, what you didn't. I love to hear your stories.

34:55
But you can also reach us at care We are offering a complimentary strategy assessment for companies who might need the Amplify 360 solution, where we can see, are you ready for this and where's your best opportunity? So really between the website and LinkedIn, those are the best ways to get ahold of us right now. Well, thank you, Tammy. We're gonna go back to the founder sandbox and I love to ask each of my guests.

35:24
The meaning of three words, which is the areas of work where I engage with my clients. And it's on building resilient businesses, purpose-driven businesses and scalable growth. What does resilience mean to you? Resilience to me is being able to find joy no matter what life throws at you. Wow.

35:50
What about purpose-driven businesses? From a business perspective, I think having a purpose-driven business is about having that unifying force within your organization that everyone can get behind. Goes much further than a vision, mission, value statement. But again, it's the organizational aspiration. What is the reason we are getting out of bed in the morning, like a career winner circle? Our purpose?

36:20
is to make sure that everyone loves Mondays again, right? And to eradicate the apathetic haze that has taken over in organizations. And that is our purpose. It's big and everyone's behind that. And so that's where I think the value of having a purpose-driven company comes into play. Thank you. Scalable growth. Scalable growth kind of ties to me into resilience, right? In terms of the rate of change that individuals and businesses are experiencing right now is significant.

36:50
And so one of the things, especially through Amplify 360 that we focus on is making sure that the entire organization's ecosystem is future-proofed. And so, you can focus on your own shop, but if all your suppliers, your vendors, or your customers are changing tack and you don't know, then you can do all the things right for all the wrong outcomes. And so it's for me, that scalability, a big piece of that is you look at all the things that are involved

37:20
ecosystem internally and externally and make sure that everything is as feature-proofed as it can possibly be. Like amazing nuggets there. Thank you. Last and final question, Tammy, did you have fun in the sandbox today? I love playing in the sandbox, right? So I did, Britta. Thank you so much for the invite. And hopefully some of the things that we talked about today resonate with the listeners where you can start to take action on some of these things right away. Well, thank you.

37:49
My listeners, if you like this episode with Tammy Alvarez, sign up for the monthly release where founders, business owners, corporate directors, and professional service providers learn about how to build with strong governance, resilience, scalable, and purpose-driven company to make profits for good. Signing off for this month, thank you very much.

 

On this episode of The Founder's Sandbox, Brenda speaks with Martin Tobias.  Managing Partner of Incisive Ventures, an early-stage venture capital firm focused on investing in the first institutional round of technology companies that reduce friction at scale.

Martin is a 3X venture-funded CEO raising over $500M as CEO with two IPOs who has also invested in hundreds of companies and is a limited partner in over a dozen VC funds.

They speak about Resilience: Why starting a company today is awesome.

You can find out more about Martin at:

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

https://incisive.vc/

 

On this episode of The Founder's Sandbox, Brenda speaks with Eli Farhood, Chief Executive Officer at Katsh Digital ID. Hailing from Greece, Eli is a prior financial services executive and, with Katsh, a second time Founder. After experiencing fraud first hand, he pivoted a business in the making to create Katsh; separating one’s device from the need for authentication.
Katsh aspires to democratize identify protection.

For the month of October, they speak about cybersecurity and how to structure resilience into your company.

You can find out more about Eli at:

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

https://www.buzzsprout.com/2228414/episodes/15385106-stop-using-insecure-passwords-with-eli-farhood

https://missionmatters.com/defending-digital-frontiers-meet-the-hosts/

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

 

Transcription: 

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.

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.

01:22
Welcome back to the Founder's Sandbox. I am your host, Brenda McCabe. We're now into our third season and over 38 episodes. This monthly podcast, it reaches entrepreneurs and business owners who like building and learning about resilient, purpose-driven and sustainable businesses with great corporate governance undergirding them. At the Founder's Sandbox and in my work,

01:52
I have a very simple mission, and I want to help build the scalable, well-governed and resilient businesses. The guests that come to the podcast are founders, business owners, corporate board directors, investors and professional service providers who, like me, want to use the power of the enterprise, small, medium or large, to effect change for a better world.

02:17
Through storytelling with each of my guests, we're gonna touch on topics on their own journey that includes resilience, purpose-driven enterprises and sustainable growth. And my goal is to provide a fun environment in a sandbox where we can equip one founder at a time to build a better world through great corporate governance. Today, I'm absolutely delighted to have as my guest, Eli Farhoud. Eli is joining the podcast today.

02:47
in many roles, but primarily he is chief executive officer of Catch Digital ID. This is his second company that he's founded. And he also is an immigrant. So we're gonna touch on several of his stories while we go into this podcast. So thank you, Eli, for joining me today. Hi, Brenda, thank you for having me. I'm really glad to be here. Excellent.

03:13
So again, to my guest, you know, you can find this podcast on any major platform. And I do like to choose jointly with my guest a title. And Eli and I settled upon resilience. And it's gonna be about his team, the company, and the resiliency that's necessary when you're building a company. And we're specifically gonna go into what Catch Digital ID does, cybersecurity.

03:42
and democratizing. So I want to go back to my own journey before I get to your tagline, Eli. My work at Next Act Advisors, which is my consulting arm, and the Founder Sandbox is yet another channel to get to my guest and my clients, I was undeniably influenced by a major life change and moving back to the United States after living 25 years or more in Europe.

04:12
And I talk about being really purpose-driven, scalable, and resiliency in my own journey. So what would your tagline, Eli, be? I share that tagline with you. Resilience is everything. If we don't have resilience, we give up quickly. We don't keep pushing. We don't stay on foot. We don't build the foundation that will help us get there. Resilience is, in my view, I put it under,

04:42
know, being tenacious, having that tenacious and being tenacious and not giving up. And yeah, resilience is very, very important, not just in business. I think on a personal level, resilience brings success to your life. And with respect to the current company that you are leading, Catch Digital ID, does it also have a tagline?

05:10
Yeah, I would say resilience also matches. We're purpose-driven, but resilience definitely matches because most of our team members have had fraud in some shape or form in their life. And that was giving us the energy to keep pushing. For example, our marketing manager had her social accounts hacked multiple times. I was a victim for fraud twice, financial fraud. So...

05:36
My team members also, you know, they're coming from multinationals like IBM and the Raytheon and Symantec. And, you know, they've dealt with, you know, all the identity security, and they know the market very well. So they also understand how to be secure, you have to be very careful about yourself, about your information. And they've seen it over and over in those businesses, you know.

06:03
I mean, IBM sells identity products, semantic cells, and a virus, right? And Raytheon also does great weapons and other stuff, but basically they were working on the security, they've seen it all. And so resilience definitely, you know, is, it has to be, every one of us is an entrepreneur, let's put it this way, and you have to be resilient. That really is a great segue to, you touched on the resiliency of the teammates that, you

06:33
come with very large logos where they've served. They've also been as yourself victims of fraud. So what was your mission when you actually established the company Catch? So we want to really democratize access for everyone. This is basically the goal. We want to have Catch IT in the hands of most people for free. Okay.

07:02
the end user, the consumer. And the reason why is, well, A, we're able to do that. And B, that's how you provide or democratize access. If everyone has a digital ID that can protect their sensitive information from abuse, then you're onto a thriving digital economy. And you're able to unlock a lot of value there where people can exchange goods.

07:31
services, send money to each other, share payments, they can do a lot of things. And some of the things that today we have to do in person, because we're concerned that it's not secure to do that online. So how about if we're able to bring that security to the online world, you would think, like we once tried to imagine how people can use our product and it was so many like venues there.

08:01
You know, we're going to get to how you're raising funds right now. And I can't ask you, you want to not only democratize, but actually provide this for free. So we're going to get into this a little bit later. But there are a lot of cybersecurity products out there. Why is your solution different? And is it enterprise grade, or is it really for individuals, right, citizens? And that's that.

08:30
that leads to how you're raising money. Talk to me about how your solution is different. That's a great question. When we first built Catch, it wasn't Catch. Catch became Catch after I fell victim for fraud. But it was an identity solution to the military. So we wanted to build something military-grade, that the military community can use, can rely on, a reliable product.

09:01
And when we looked at biometrics out there today, all the biometric systems that are available, we noticed that the most reliable ones are dependent on a device, like clear at the airport, for example, your face ID on your iPhone, perhaps Amazon one at the Whole Foods and maybe other brands that I maybe don't know of. And that was the handicap, if you want, of biometric technologies.

09:29
is that requirement that hardware need, right? Yes. If you need a special hardware to operate a biometric system, then it's only convenient where the hardware is available. Got it. And not just that, you would still need to have to use passwords. And when I fell victim to fraud, the big lesson I learned is that fraudsters today can leverage data breaches.

09:59
use that information to their advantage, they can hack our devices, they can hack our identities and hack our accounts. So, and history also has shown, you know, when you see the likes of Microsoft being compromised, you know, hundreds of millions of accounts, AT&T just a few weeks ago, 70 million accounts, 3 billion social security numbers. We were talking about large numbers here. It's not a joke.

10:27
when you see those data breaches and cannot be stopped even by Microsoft, then what can the average Joe do here to protect themselves, right? These are 20 dollar companies who keep pockets, they have teams of engineers, I mean, they have all the resources they want and they're still getting compromised. So we came to that conclusion, like it's really hard. Once information is available on the public domain, it cannot be protected.

10:54
one way or another one day, it's going to be compromised. And so our solution was to eliminate credentials from the security equation. Can you say that again? So it's you're eliminating credentials? We are eliminating credentials from the security of our identities so that hackers have nothing to compromise or to steal anymore. Is that the same as in HIPAA where it is sanitized or it's

11:22
that the private data is disassociated from the health record? No, it's not. Because you're eliminating a credential that existed, and now it no longer exists. We're placing that credential with a hand biometric, but a strong security hand biometric. I can't emphasize enough on strong security, because if you ask people to replace their passwords

11:52
it has to provide a better security than password. You know, the beauty about password is that if it's compromised, I can change it. But can you change your biometric? No. You cannot. And accordingly, it has to be really strong security so that people can trust that technology or that product and use it. And this is really the genesis of cache is that we wanna provide that convenience on any device

12:21
using your hand or we call it palm, right? And it's a strong technology because it involves a lot of technicalities, we can discuss that later, but basically it's a very strong technology that even if a copy of your hand, a picture of your hand, or even a video of your hand has been compromised, that won't affect you or affect your identity security. And this is our promise to our consumers. And it's probably your secret sauce.

12:50
It is a process, but we can go over that quickly. Yeah. Yes, we can get into that. I like that it's independent of device, right? So device agnostic, right? And you eliminate the credentials. So it's fascinating. Fascinating. Got lots of ideas to explore. Because we know credentials are a pain. Absolutely. Right? Who doesn't manage hundreds of passwords? Yeah. That's on an individual level. Let's see in the enterprise world.

13:19
they even have a stronger pain there. As an employee, you have to keep changing those credentials, take care of this, they keep them in a secure place. Enterprise are spending hundreds of millions of dollars just to store that credentials and keep it away from the hackers. So this is a strong pain and it's not efficient. They go back to the sustainability, it's not sustainable. So if we were to go back up a little bit.

13:48
What have been the shortfalls or continue to be the shortfalls of cybersecurity? That's a great question. Yeah. Yeah. It's a big one, right? We know that 80% of fraud globally stems from stolen ID credentials. That's a whopping big number. I've been a victim. That's a big number. Right. And then they send you, you know,

14:16
crawl or experience and for a year it's free, but then you get another hack like that of Microsoft or Blue Shield, all right? So what have been the shortfalls of cybersecurity and perhaps we'll continue to have shortfalls that that catch can eliminate? Yeah, the shortfall like this big headline is that 80% of fraud globally stems from stolen credentials and.

14:42
That's how we came about this approach. Like, how do you solve this? Okay, we need to eliminate credentials. This is not sustainable. It can just keep rolling like this. The biggest shortfall is that we're aren't able to protect our data. I remember maybe eight, nine years ago, I hear of a data breach maybe once a year. Right. Maybe every other year. Now every other week, I hear of a data breach.

15:12
And this is not a surprise to, it's not surprising to us because we know that back in the days also fraudsters and scammers didn't have the technology on hand to conduct those preaches. Now they have access to the latest technologies as we do as well. And so they have access to AI, they have access to that automation that can make their job really efficient. You know, scamming or being a fraudster is a business. It is.

15:42
it is a business. And so they actually study, they do an economic study, like, how much are we going to spend to hack that database and how much we're going to make money out of the database. And the moment you make it extremely expensive for them to hack a database, this is where you're starting, you know, your, your, your, your goal to reach your goal of getting some security. The problem is that history shows, like I said earlier,

16:12
we couldn't just stop these data breaches. And now they're becoming more often, more often than ever. I can give you something a little scary. Like sometimes you can input ideas in a chat bot and it can give you a solution on how you hack a network. Think of just like a fraudster that has a lot of experience. He's asking AI how to hack a network. And I know AI will sometimes respond, I don't do this, like this is not ethical. But there's a way to actually rephrase the question.

16:42
and get the answer. And so now they have that artificial brain that is helping them, automating things for them. And now we can see it, you know, it's around us. And this is really the shortfall. We're not able to stop data breaches and they're providing access to fraudsters to our account. And that's why we need to do something. So can you walk us through

17:12
How you, I wanna download CatchID. How do I do this? Is it available in the market today? Where are you? Because it sounds like it can potentially be ubiquitous or is it you need to do the crowdfunding first? Walk me through some of the features and some of the data that you have already because I'm certain you have beta testing done, please.

17:40
Yeah, so we're made a testing right now with some clients. It is not available to the public, unfortunately. We're trying to get that availability in 2025. At this point, we're trying to validate also if there's any psychological barrier from an end user point of view. You know, sometimes users can be paranoid of biometric technologies. That's right. And that could be a barrier for market entry. So...

18:08
The reason why we launched the crowdfunding is that we wanted to validate. Do people want to choose convenience over passwords, which is already not providing the security that it's aimed for, the stuff they're trying to. Because the fact, the matter of fact is that in cybersecurity, if you ask anyone in the community, they will tell you that if your device is compromised, nothing can save you. Face ID can be bypassed.

18:38
One-time codes can be caught there. Google Authenticator can be accessed. So basically, if your device is compromised, which is a very common thing, by the way, a lot of people do not realize that their device is already compromised and someone has a back door and is able to track every move they do on those devices. I'm not trying to freak people out, but this is a fact. And I have to say things as they are. And so...

19:04
Once that scammer gathers enough information about you, or they need a piece of the puzzle, they can also visit the dark web and get the complete set of data from your social security to your email, to your phone number, and then what? They have that puzzle available now, and they have a fully-fledged identity that they can use to create an account. So I also get this question a lot, and I'm happy to share that with your audience.

19:34
Some people tell me, well, I'm not Elon Musk or like I have $0 in my bank account. I don't care if someone takes my private information. Guess what? Most fraudsters don't want to steal money from you. In fact, they want to use your name to create a fake account and funnel illicit activities using your name. That's the big goal. Some of them obviously they want to steal money but others...

20:03
They want to just use your name. And the thing is when they fall, you're falling, not them. You're basically, they're piggy-bagging on your identity. Identity, right? Right. So that's in the financial world, in the medical world, I mean, our healthcare system, sometimes you can just know that someone conducted a surgery using your account. When you get the co-payment, you didn't know about it, but you learned then.

20:32
Taxi then also. Oh yeah absolutely. Absolutely. And so that brings you back to the core reasons on like why we approached finding a solution. Today you're using password, you think you can't change it, but then hey you're at risk, you're vulnerable. We recommend you try something else. If you're not convinced with our concept, that's perfectly fine. But try something else. Maybe you want to use two-factor authentication or three-factor authentication.

21:02
It can be really complicated at this point, right? You just hear stuff, but it's something you should do. Just don't rely on passwords. That's our advice. All right, so you are currently crowdfunding, as well you're testing also, beta testing with different user groups for a 2025 launch. How is the crowdfunding going? Are you doing on Kickstarter? Where are you doing the crowdfunding?

21:32
Another question is how has that fundraising journey been? Because today there is no longer a stigma associated to crowdfunding. Whereas 10 years back, I was like, ah, didn't want it to go that way. But more and more, there are more and more crowdfunding platforms that are truly enabling, particularly in the past two years, it's been incredibly hard to raise early stage money.

21:58
Can you, I know that's a loaded question. That's two questions. So what is your experience with crowdfunding and how soon will that get catched to the market to have it in our hands? No pun intended. Yeah, I mean crowdfunding, yeah, it did transform over several years in the past. So it had this bad connotation, but no, actually I've seen great products, growing and starting with crowdfunding.

22:28
And we've taken that course because we were interested in that aspect, validating that consumers want that. Um, we, we didn't, we didn't find problems selling this to businesses, to be honest, because there's a strong pain for them there, especially on an employee level, right? Because employees are our first market, to be honest with the enterprise, not the end user. But when they come to sell it to their end users, we wanted to make sure that

22:57
and users also want that, right? At the end of the day, I was offered voice verification at my bank. I refused it, right? Like many, the reason why, we've heard it before, right? How AI can synthesize your voice and someone can maybe use my synthetic voice to access my account, so I wouldn't do it. And so again, banks cannot force you to use one technology, they can offer it for you.

23:23
And if you're not convinced, you're not going to use it. So we wanted to validate both ends of the market. So far it's going well. We raised about $30,000 in the first six weeks. And now we're extending our campaign to raise more to get more validation there. But again, our customers now are not, like I said, end users. Our customers are enterprise and they're employees.

23:49
which is something they can enforce. If I'm an employee working for an enterprise and they tell me, well, you have to use your hand, no more passwords, I'll have to do it. I don't have that choice of saying no. And this is where now we're focusing on our niche, to be honest. So it will be enterprise grade, right? And it will be the employees will be substituting. That is the first.

24:17
uh strong pain that we're trying to resolve. And um you've raised 30 000 are you going to continue to do crowd funding through the end of 2024 Eli? Yes it's going to end by November. Okay all right and do you have information that I can provide my listeners later in the show notes in terms of the crowdfunding platform?

24:42
Yeah, we're crowdfunding on net capital. So it's not a Kickstarter just to differentiate. So people who put money in our project, they're investing. So they're capitalizing on this amazing opportunity. They're capitalizing on a strong market. It's an $80 billion market. This market is growing at 17% compounded annual growth rate. So by 2030, this market will turn into a $200 billion market.

25:09
So this is something really important for retail investors or consumers to capitalize on and invest with us, back us. Because by backing us, they're doing two things. A, they're saying, yes, we want to get rid of password. We don't want this vulnerability in our life anymore. So they're giving us validation and we thank them so much. Also, they're capitalizing on that by investing in us and getting shares in our company. So yeah, Kickstarter is different because Kickstarter sells products. We're not selling your product here. You actually...

25:38
buying shares of the company and investing in exactly. Excellent. Right. So let's switch gears. Let's switch to your immigrant founder story. Do you believe that it's even more arduous as a founder to raise money or open those doors that if you were not an immigrant?

26:07
would open more easily. Talk to me about your own journey coming to the United States and working in the finance industry. Yeah, of course. My background is in finance. I worked for more than 20 years in financial services. Before I stopped working in finance, I was a portfolio manager. So I was running portfolios for my clients. We were managing those portfolios in equities, commodities,

26:35
option markets. But again, so as an immigrant, I think that it tends to be equally, you know, I think money is equally available to immigrant as much as if you're local or born in the United States. My first startup, for example, was in Cyprus and I was able to raise money. I wasn't okay. I wasn't in a really good way. So I have a Greek roots.

27:02
But I mean, Cyprus is considered a very kind, so I'm not sure if it falls under. But I wasn't born there. I just started there. So I've been Cyprus is amazing. And it's a beautiful place. And so I raised money there. I didn't face problems. So I'm not sure if you can consider that being an immigrant there. But no, I don't think I don't think immigrants have a better edge unless they have been, you know, obviously, if you have done.

27:29
multiple access in the past, if you've been a serial entrepreneur or you have a lot of success stories, raising money would be definitely much easier than being a second founder or perhaps a first founder. First founders definitely struggle and I've seen it over and over. They struggle to raise money, whether they're immigrants or not. I don't think it's really related, but for some reason I've learned from investors that they like immigrants slightly more.

27:57
And it's for a fact maybe because these people are coming to America and they have a lot of excitement about the move to the land of opportunities. You know, America is called the land of opportunities and it's, it's, I think it's in the heads of every immigrant. Like I want to go to America. I want to take that opportunity and be able to make success. And they're not really

28:26
by money, they're driven more by their story, driven more by their mission, they're driven more by that energy they have. I wanna have a successful story, I wanna change people's life, I wanna make a difference. I think they're driven by that. Why, maybe if I was locally grown here, I was raised here, I might be in a different mindset. I'm just saying, again, I can be in the other person's too, but that's my humble, you know?

28:56
Thank you. So the land of opportunity, right? And perhaps even a bit, a greater degree of resiliency. And tenacity. Yes, that's true. That's true. Excellent. So I'd like to give you an opportunity, Eli, to provide to my guests where they may find information about yourself, Eli Farhoud. And is it your LinkedIn and your website? How else can listeners that want to contact you get in touch?

29:25
contact with you. Sure. I'm happy to connect with anyone who wants to learn more about the patch. So they can definitely visit our website, where all the links are available there. So that would be k-a-t-s-h-i-d.com. So it's a k-a-t-s-h-i-d.com. If you visit our website, there's an Invest button.

29:54
If they click on that, it takes them to our crowdfunding page. They can learn more about our story, how we started this, about our mission and vision, what are we trying to achieve there. If they can learn about the opportunity, the market, our team, they're mostly veterans in their space. And so we're very excited actually. I'm actually very fortunate that I have a strong team, a team that has a lot of experience on hand.

30:22
And they're really helping me so much to get catch to the market and commercialize market. That's why I'm very excited about the stage we're in now. Right. And when did you actually form the company? What year was that? We started, so the company was incorporated in 2016. We were building actually a social platform back then.

30:47
I'll tell you quickly about it. That was really cool experience. So we were building a social platform that solves the problem of fake accounts. And the concept we had in mind was very simple. How about if people start connecting through a live video? That was basically it. Very simple, you know? No texting, no anything, no attachments, no images. Just connect through a live video. That's the first mean of communication.

31:16
And we thought, okay, that would be cool. You know, if people can connect through live video, it's obviously not a scammer, right? It's the same way they show in the picture and we can eliminate fake accounts. Now that doesn't work today because they can use AI to create deep pics, unfortunately, right? So just to show you the fortunes of how technology is a gateway to opportunity, the same way, if you can't reinvent yourself, you will end up, you know,

31:47
not doing any achievements there. So unfortunately back then though the broadband availability was very limited. We're talking in 2012. That's when we started this company. And we kept growing it until 2015 where we faced that problem that the user experience was really bad. Yeah.

32:16
limited availability of broadband, the user experience was not good, the video footage was not also very satisfying. And obviously people were turned off by that and we started dwindling down and our company failed big time. We learned that timing is so important. Yes, underline technology, yeah, that's available. Absolutely, you can have the best technology in the world, but if it does not align with a pain point or with time

32:46
If there's no need at this point, the strong need for it, and you're not able to provide that value, it's probably going to fail. And so that's why we're excited also about Catch because we think that timing is right now for biometrics to replace this credential problem we have, all the data breaches that are happening that will not season our view, that will keep growing and getting bigger and bigger and bigger. Actually, I no longer try to say to my...

33:15
for my personal information from harm, because I know they're already there. Everyone know it, like it's on the dark web, it's probably on someone's drive now. And I just got an email this morning from my bank that my credentials were compromised. So just to give you an idea that I already like took all the precautions on a personal level because I felt obliged to victim, I don't wanna fall a third time. And so, yeah. And then...

33:42
To go back to your question, we started Catch in 2019, 2020. After I have fallen victim, we conducted a lot of market research. We looked at so many competing technologies in the biometric space. We tried to hack those technologies in our lab tests to learn, you know, what is their strength? What are their weaknesses? And that helped us a lot to shape up the product and to create the solution we have today.

34:13
So do you have white hackers on board? We do, actually, yes. Yes, I imagine so. If you started military, great. And the pandemic happened, right? So everybody went, worked from home. We had, again, a lot of data breaches that way. A lot of enterprises were not ready. So there's a lot of data. I mean, the numbers tell you, Brenda, $1 trillion were stolen from that $5 trillion were printed during COVID, or fortune.

34:43
So one trillion or about that was stolen. So what happened then? Right? What happened is that a lot of scammers took advantage. They created fake companies, fake identities, and they started claiming through those programs. Yes, I want this program. I want funds. I want loans. I want... It's insane, right? Knowing that how much money we've paid and lost during COVID. And COVID like also...

35:12
in a way reshaped our mindset and business, to be honest. Like who would meet virtually pre-COVID? Very few people, right? Now it's the norm and people are asking for remote. Who would go to the bank now? Actually, if you go to the banks, most of their branches are like ghost towns. Yes. So that also tells you that COVID has changed a lot of things and that actually why we believe

35:42
know, the time is right also for a product like catch. And it's quite unique. I can't say that I've encountered a biometric that uses your palm, right? Your hand, the immutable, unique, biometric measure, right? Yeah. Well, interesting. Interesting. All right. I wish you further resilience as you come into the last quarter.

36:11
of 2024 and a launch in 2025 with enterprise companies and their employees that can bring this new solution into credential management, right? Absolutely. We're very excited to it. That's very exciting. I always like to take my guests back to the sandbox and ask a round of.

36:38
questions, which is around what the type of work that I do. And they the words resilience, purpose driven enterprise, and sustainable growth, what resiliency you've talked to me about it, what's the meaning your tenacity? Do you want to add anything else to that? What's that, you know, meaning to you? Perhaps as founder, immigrant? You like please? Yeah, you know,

37:07
You want to have a lot of ethics as well. You want to make sure that you're being very transparent with your clients, especially with your clients, because they're your success story. They're the ones who are going to become the beacon for you. They're going to talk about you. I remember back in the days, this is just a great example, how my friend convinced me on using an iPhone where I was stuck with my...

37:34
physical keyboard and I was like no way I am not using an iPhone and he was literally an ambassador for Apple. Even though he never worked for them. Just because he was excited. Like the product was so amazing for him. It was so easy to use. It provided so much value and he was like, you know, you have to use this. Like you have to just give it a try. If you don't like it, just give it a try. And the first time I put my hand on the phone, I loved it.

38:04
So this again tells you a lot about being transparent with your clients, being very ethical, make sure that you're providing value on a long-term basis. Yes. The only way to do that is not just to be of course transparent and ethical, but also to provide sustainable products that can work for the long run. And of course, we have to be obviously, you know, making money and profitable because sustainability is part of that, right? Right.

38:34
But having a success story for the long term requires that ethical part and being very honest with your clients. I remember like I've been sold a lot of products that were very deceptive. And I know how I'm sure a lot of people did too, right? But that deception feeling you get when you're sold something, it's so harming to that brand, to that product. And actually it's harming also for the good guys.

39:03
It makes you just on anything else. No, I'm not going to try this anymore. I've been there. No, I've seen this before. Right. That's these we're trying to be that person that not just cause harm to their own brand, but also cause harm to other people that are trying to make a difference in the ecosystem. What about purpose driven enterprise? You began catch out of your own mission. Right. But what is purpose driven in general? Right. Mean to you.

39:33
Eli. I'm driven by my experience with fraud. Identity for me is very personal. It's very personal. And I'm not going to allow it to happen again. Right. So you're out on a small story. Yes. You're doing something about it. Exactly. I'm doing something about it. And I'm very happy that many of our team members also are purpose-driven on the same problem they face, like I did, in different ways, of course.

40:02
Identity theft can take several shapes and forms. Sometimes it's as simple as an unauthorized transaction on your credit card, which is something maybe you can absorb and manage and deal with, which happened to me last year, actually, and it can be sometimes something very big where someone accesses your checking account and now you're kind of like going through a two or three year process to clean your records.

40:32
move your innocence and you become a risk to everyone. No one wants to do business with you because you've had an identity theft. It's just not a joke. And, you know, now it's probably gonna happen more often than ever, unless products, not just cash, but anything like cash can help us secure our credentials. And, you know, it's also about taking back control.

40:59
This is very important. Maybe we didn't focus on that so much, but I wanna mention this. We wanna take back control over our information so that a third party can just use it behind our backs.

41:14
very important and therefore democratization, right? Right, right. We wanna bring that to the market, democratize access and allow people to decide who can use their information, when they can use it and why they're using it. Because this is very important today, identity or personal identifying information is used all over the world. This information represents who you are. And now,

41:44
that information and other information about us, our lives, are being sold day and night from enterprise to, I mean, we've all heard it about how Facebook or other firms were selling our information, they're making money off our information. We don't wanna change that. We want to bring that control back to you. You own your own information and you decide who can use it and who, and no one can send it. The access. Yes.

42:12
That's really important in our view. And that's what we're trying to achieve. Very exciting. Finally, sustainable. What does sustainable growth mean to you? Sustainable growth is the growth actually that just can be a normal, I would call it a normal mathematical equation. I'm making being full of philosophic here, but it's really when...

42:38
when you're growing organically because people see the value, this is a sustainable growth. It's also sustainable because you're not harming others, you're not harming the environment when you do this. You're not harming, or sometimes business requires that someone is using for you to gain. And that's not sustainable. We don't want that sustainability. We want a sustainability where it's a win-win situation.

43:05
And that's what we're trying to achieve at Catch. Of course, I can't tell you enough about the environment. Like if you think about just plastic cards we use for our credit cards, they are piling somewhere every year, all those cards that are being stolen and thrown in a dumpster. Or if you think about like digital identities can have a strong effect on the environment as well. Because...

43:33
If you're able to do things more remotely, virtually, instead of spending time, gas, miles, or using plastic cards, which I think plastic is toxic, it should be out of our life totally, especially in the food chain. That's a separate discussion. But yeah, technologies like these can have a very positive impact on the environment and sustainability itself as well.

44:00
I like the philosophical approach and very global, how you're thinking about removing the carbon footprint, right? Right. Lack of reducing the use of plastic. Right. Yeah, that's very, very beautiful. Thank you, Eli. The last and final question. Did you have fun in the sandbox today?

44:29
Did you have fun in the sandbox today, Eli? I loved it. And thank you for all your very meaningful questions. I mean, they were, you're trying to hit on most important aspects of what we do. And I think we did a great job here. So again, thank you so much for having me. And it was such a fun conversation. And I hope we were able to tell your audience something new. They learned something new about identity security.

44:58
Absolutely. To my listeners, if you like this episode with Eli Farhoud, sign up for the monthly release where founders, business owners, directors, and professional service providers share and also learn how to build with strong governance, sustainable, resilient, and purpose-driven companies to make profits for good. Signing off, talk to you next month. Thank you very much.

 

 

On this episode, Brenda speaks about purpose with Allison Byers, founder of Scroobious,  a tech company  driving innovation to equitable capital access by removing barriers to partnership among diverse founders, investors, and service providers.

Scroobious is a platform that is working toward equitable capital access: In Allison’s words “ fair representation of all segments with the exclusion of none”  - now into its fourth year –  having served over 900 founders. 

“Finding the funding and the people are critical to early stage success of a company.“ Listen to Allison’s personal story of Scroobius and how her  relationships that go back 20 years ago and an introduction to the newly appointed President and COO of Scroobiuos. 

 

You can find out more about Allison, Scroobious, and other resources mentioned in this podcast at:

https://www.linkedin.com/in/allison-byers/

https://www.scroobious.com/

For founders working on a pitch:
Scroobious is dedicated to empowering founders for successful fundraising. Our platform provides invaluable resources including online learning modules featuring investor-vetted content, personalized pitch feedback, tailored pitch practice sessions, access to a vibrant community of hundreds of diverse founders, and connections with investors. Click here to apply for a sponsored (free!) account. You can also join our Lite plan for just $1 to access our community, events, and curated resources immediately.

For early-stage investors:
Scroobious connects you to a network of brilliant and diverse founders solving important problems. These founders have worked with us to clarify their story, showcasing comprehensive pitch material and coachability.

Click here for a quick platform demo.

Visit this website, register, and then use promo code EARLYINV for a free 6-month trial at the Stripe checkout page. After the trial, it's $10 per month (cancel anytime). Complete brief onboarding questions to enter the portal and start messaging founders!

https://www.newswire.com/news/scroobious-scales-up-to-meet-the-urgent-call-to-support-diverse-22415543

additional content here :

https://www.gov.ca.gov/wp-content/uploads/2023/10/SB-54-SIGN-MSG.pdf

 

Transcript:

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

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

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

01:19
Welcome back to the Founder's Sandbox. I am Brenda McCabe, your host. I'm delighted that we're now into the third season of this monthly podcast that reaches entrepreneurs, business owners, and corporate board directors, and VCs. All interested in building resilient, scalable, purpose-driven businesses with an undergirding aspect of great corporate governance.

01:45
I admission, my mission at NextAct Advisors, which is my consulting firm, is really simple. It's just building the scalable, well-governed and resilient businesses. My guests to the podcast are themselves founders, business owners, corporate directors, professional service providers who like me want to use the power of the private enterprise, small, medium or large to make change for a better world. With each of my guests, we go through some storytelling.

02:13
about their origin stories. And we will touch on topics around resiliency, purpose-driven enterprises and sustainable growth. And again, my goal is to provide a fun environment in this sandbox where we can equip one startup founder at a time to build a better world through great corporate governance. Today, my guest is Alison Byers. I'm absolutely delighted that she's joining me all the way from Boston.

02:41
Allison is joining and she wears many hats, but she is going to talk a lot today about her founder journey of Scroobius. And it is a very unique platform that unlike other platforms in the ecosystem used by startups, this is one that has a purpose to improve equitable capital access by providing pitch education for founders while making connections with investors.

03:11
to put unused capital to work. And we're gonna hear more as we get into the podcast. I like to have guests that are also very mission-driven as mission-driven as I. And you are, Alison, unequivocally mission-driven in your purpose after you yourself encountered gender bias firsthand while you were fundraising. So I think it'd be appropriate

03:40
story to start telling now. So thank you for joining me, Allison. Yeah, well, thank you so much for having me, Brenda. And absolutely love being so aligned in our missions and being able to talk about how we can use business elements to accomplish the mission-driven motives that we have. So.

04:02
Yeah, I'm happy to share my origin story for Scroobious. And we're a four-year-old company, so I incorporated in January of 2020, which maybe we'll hit on later what it means to incorporate right before a global pandemic. The initiative started after I, as you said, experienced pretty extreme gender bias myself.

04:26
So before Scroobious, I joined scientific co-founders and launched a medical device company out of MIT in a hospital system here in Boston. And I was the business one on the team and did all the things from incorporation through our fundraising. And we did raise almost $10 million at that company going through a series A prime. And then I really struggled to raise our series B. So we ended up going to early acquisition. And

04:52
I didn't know any of the things that I know now. I was not in this space before then. And Medical  device is a pretty specific industry with pretty specific investors. So you're kind of in that world. But we were acquired in an asset sale. The people that acquired us were men. And not too long after, raised $55 million. And not. Yes.

05:21
Every time I share that, there's eyes open. A multiple of what? 10? Yeah. And it was very clear to me that the one thing I could point to that was different was my gender. And I was co-running the company with another woman. So we were two women out there doing this, and one more woman involved in the company. But it's.

05:48
it set me on a path of trying to understand what happened. And so that's when I researched the field of capital allocation and investing in pitching first just to understand how I could have failed so badly. That's the internalization that many founders have when they're unable to raise the capital your company needs. And very quickly found all the data that I know you're very familiar with. But for those who are listening who maybe aren't,

06:17
Nationally, 1.8% of venture dollars go to women-founded companies. And in my state of Massachusetts, that number is 0.9%. We're also ranked one of the worst states, 47th, for supporting women-owned businesses. And once you learn that, as devastating as it is, it also releases that internalization of failure. Because you say, oh, I didn't actually fail. I just did not know.

06:45
that I was operating in a system that's designed to keep me marginalized. I was not likely to raise that money regardless of how well we were operating the company or how strong our fundraising pitch was. Okay. So that's my origin story for wanting to dedicate my professional career to working toward more equitable access to business capital. And it's not solely focused on women owned companies, is it? Exactly.

07:15
Yeah. So tell us a bit more about Scroobious and starting a company. And right when the pandemic, you know, set in here in the United States and we locked it went into lockdown. So, right. Yes. So I did at least a year of research before deciding.

07:33
what I wanted to do was meant to be a for-profit company structure. I didn't rush into it. That's not my nature. Did my full market analysis and primary and secondary research, thought about our own capitalization plan, then decided to incorporate in January of 2020. So, impeccable timing. But I know we'll talk about that a little later too in terms of how do you handle what

08:02
startups throw at you and building without the ability to predict how your business might fluctuate or how the macro economy might fluctuate around you. But no, we don't focus only on women. That's of course my lived experience. But when I researched it, pretty much any segment where founders identify as underrepresented in some way, receives incredibly inequitable distribution of.

08:31
business and growth capital. If you look at it by gender or race, that's true. If you look at it by geography or by sexual orientation or military veteran status, neurodiversity, there's a lot of different ways that people can identify as underrepresented. And we don't define that for somebody. Nor do we exclude anyone from our platform because we're really working toward equitable distribution which means

09:00
true representation of all segments to the exclusion of none. So, yeah. I love it. Can you say that again? That's a great tagline. So you're working towards? So we're working toward equitable distribution, which means fair representation of all segments to the exclusion of none. Fantastic. Yeah. So we've got white dudes in there too, right? Like we're not turning people away.

09:27
But our own go to market strategy was to and is still to partner with organizations that are diversity first as well, so that we're building the community that represents what should be equitably represented based on our population.

09:45
So let's go into the actual platform itself. It is a platform, right? Yeah. You've got founders on one side receiving pitch education and you have more, and you have investors on the other side. So how does a founder experience Scroobius? Yes, great question. And we are definitely a platform and we actually have three key stakeholders. So there's some marketplace elements with the founders and investors on two sides,

10:15
What we've come to discover, and this is part of the building and pivoting and resiliency of a startup, is that true understanding of how important relationships are in accessing resources and capital. This is not a transactional industry. And so the third key stakeholder here are service providers and program partners. They are very underutilized.

10:44
in this space and they are key connection nodes. And so we are a true platform with all three at the center there. But for founders, to answer your question, yes, we're a scalable platform. We were designed intentionally to scale because with all three of those stakeholder groups, they number in the millions. This is a huge market. And so

11:08
Founders enter our platform and immediately they can access our flagship program called the Pitch It Plan, which is full of micro lessons online, asynchronous access, about everything to do with fundraising strategy and pitching and building those relationships with investors because that type of quality education written from an authentic perspective of understanding that it is different.

11:37
for underrepresented groups and making it accessible and understandable for everyone is not easy to access. It's not freely out there. So your labor of love, for lack of another word, you've curated that and probably through your professional service providers, how did you curate that specifically for underrepresented? So it's all...

12:03
created by us. This is proprietary education, and we do work with providers. In addition to our custom material that we add to all the time based on the needs of our community, we also host workshops twice a month with industry experts on all kinds of topics related to early startup building. Apologies, I do have a cold today, so I'm going to lose my voice every so often. Yes, just.

12:31
But it's based on hundreds of interviews with investors, hundreds of interviews with founders, and personal experience of myself and others on the team to really create different material that speaks to the heart of what founders want to know. So for an example, we have a lesson on how do you give a 10-minute pitch? How do you give a five-minute pitch? How do you give a three-minute

12:57
What if you have a one minute pitch? What exactly goes in there? And we provide the insight into why it is important to an investor. So they get both the lesson and the understanding of why does this matter to do it this way. So they have access to that. And alongside it, they can upload draft material and get personalized feedback from our trained reviewers. So it's a combination of online learning

13:27
Again, that asynchronous scalable human delivered feedback that founders really do need to feel comfortable and confident. Once they have worked through our program, they have the ability to share their pitch and their profile with the investors, right? So that they can get in front of our network of...

13:50
vetted and active angel investors who are specifically looking to diversify how they find opportunities so they can put their capital toward the founders they're looking for, even if they are not in their geography or not in their known network or affinity groups. Is it national? United States actually? We're actually international now. We have founders all over the place. Yes, our community has grown. We've worked with over 900 founders now in basically four years.

14:19
Yeah. Wow. Excellent. And how does the investor then experience it? So are they actually contacted by the founder? Or can they just peruse Scroobius platform, identify opportunities that fit within their investment thesis? How does that work? Yeah. So it's a great question. And again, we've built a differentiated platform by listening to what.

14:48
investors want and we focus on angel investors. We're pretty specifically finding those who are more likely to write checks to our founder base to underrepresented founders and angel investors represent an enormous untapped opportunity. So when they join our platform they do give us some information when they on board about their thesis and what they're looking for and then.

15:11
They can see all of the founders who have uploaded their material, which includes both a comprehensive deck, because we QA what goes up there, and a short video introduction. So they can see the human behind the deck. And that is really core to how we curate for investors what they see. We are measuring variables both about the business and about the founder.

15:36
and constantly learning from the investors as they engage with different pitches, what are they actually drawn to? So that's the AI behind this is building an engine that's a little bit like Netflix, where it's constantly learning based on what you watch and suggesting other things you might like, right? Based on your behaviors, we're incorporating that based on your behaviors. Here are other founders that you might like.

16:05
And so you can log in and get a very customized experience. We also heard pretty loud and clear from angel investors that there's a variety of reasons why they might like to keep their anonymity and not be on a list or have founders reaching out to them constantly. And so they do. They make the first outreach to the founder and they can make that outreach anonymously if they want.

16:29
So they can open a founder's pitch material and ask questions within it, either with their name attached or anonymously, the founder still needs that feedback, still needs that connection. And then they can choose to reveal their name later on. If this seems like someone you want to get to know better. So that's in the investors control. Yeah, totally in the investors control. Interesting, interesting. And it's asynchronous. So if the investor were to ask any questions, then the

16:57
founder does see those and can answer. Yep. Everyone gets an email. They can answer in the platform. They can answer via email. You can have a whole conversation about a slide in a pitch deck in that slide to, again, make efficient use of everybody's time and decide, is this worth a 45-minute call after you can get through some of that conversation? Excellent. So you did share. I wanted to get into some of the metrics that there have been.

17:26
900 founders already experiencing Scroobiouss. What about investors? Because I had an interview just some time back. It dropped this month with Marsha Dawood. Oh, yeah. And she has her podcast, The Angel Next Door, and her new book has just released. I asked her, how many angel investors are actually in presently United States? There's only 300,000. I mean, if you think about that, we are a small group of.

17:55
angels and her mission with the book is to increase the number of people that become angel investors. So like back to you and there are funds of course. Yeah. Yeah. I know I was just with Marsha the past two days contributing to the Angel Capital Association Women Investors Forum and I got her book yesterday. I'm very excited to read it. So yes, and that I will

18:24
representative of the potential for angels that could be actively investing. And it's also very difficult to measure. There is not a good comprehensive set of data on angel investing activity because it does not have to be reported. So you can't scrape it. So personally, I believe that number to be much higher in reality.

18:52
And there also is, I think it's $32 billion in unallocated capital based on inactivity of angel group members. Wow. There are members who are part of that group, but not investing through the group. And that was pretty key in my research as well. To put this capital to work, it means they're not finding the people they want to put their money behind. So 32 billion in dry powder would be the word, right? Yeah, basically. Yeah, that we know of.

19:21
That's of angel group members and not every angel is a member of a group. Right. Right. So, yeah. So in terms of our own investor platform, we launched it last year in twenty twenty three and we've been working on a somewhat invitation basis. Although we do make it open to anybody to join. But we're really looking to have people who actively write checks to those who identify as underrepresented as part of our platform or those who are.

19:49
active investors in looking to start establishing those relationships. Again, we're not transactional. We don't affect the investment through our platform, but we are looking to make more of those connections. We're the infrastructure that allows investors and founders to find each other. I think it's around 40 or 45 active angels in there. We have...

20:15
multiple financings that have happened by discovery on our platform. And it really hasn't been that long a period of time. I know. And in a tough market, very tough market. Yeah, in a tough market. Although again, an angel is an entirely different investor than a fund manager. And where fund managers might go stagnant, angels don't necessarily do that. Excellent. And in the show notes, there will be links, Alison, to Scroobius.

20:45
as well as some other materials you've provided. In addition to your day job, right? You're now into your fourth year of running Scroobius. You also have been a catalyst for change and you have co-authored the California Senate Bill 54 that was signed into law in October, 2023. What's this bill about, Allison?

21:13
I got excited last year when I saw this and I got a lot of phone calls from VCs saying I need women. I need underrepresented found companies. Well, I'm very glad it already catalyzed calls to you and awareness of this. But no, I'm extremely proud to have participated in this and Scroobius is my company and we're making demonstrable change and growing quickly. But yes, I do also a number of other advocacy efforts.

21:42
Again, it's dedicating myself toward working to equitable access. And policy is something my own company needs and other companies in my space because this is unregulated territory for the most part when it comes to trying to move the numbers on at least venture allocation of capital. Again, different than angels. So the bill deals with venture allocation.

22:08
But it will require venture funds to publicly report diversity metrics about their prior year's investments. It is a California bill, but California is responsible for over 30% of investing activity and this will have a global, was it 30 or 60? I might have mixed up that stat. I'm so sorry. But...

22:32
It will have a global impact because it is about having a nexus in California, which could mean you invested in a company with a nexus in California, but your fund is located elsewhere. You will still need to report. And so nexus is defined in the bill. I've actually read it. And it comes into effect in 2027, or is it immediate?

22:53
So reporting requirements. Yeah, they're working through the implementation of it now. It was signed into law in the last year, and there's a whole lot of things that need to happen before this is implemented and enforced. But there are a number of efforts, especially in the private industry, that are already helping funds figure out how to make this the most efficient that they can. And it's information they're collecting anyway.

23:21
This is a data collection bill. It's to establish that baseline of where are the dollars going? So we have accurate data and they have it, they're just not reporting it. So now it will be available to anybody who wants to go see and have an enormous positive impact on future policy, but also on entrepreneurs and how they spend their time because it is not

23:46
transparent to any entrepreneur now, unless they're going to scour every website of every fund and then look up the leadership to know, does a fund write checks to women? Is it worth my time to go do that? So this is not telling anyone where they must invest their money. It isn't dictating that at all. It's just saying, we need a baseline of accurate quality data.

24:12
Because to date, all those numbers we cite, even the ones that I quote, they're from private companies. They're from Pitchbook and Crunchbase. And there's data flaws with their collection as well. Absolutely. And did you pick off California, start with California because of the sheer presence in the ecosystem? Because you're also championing initiatives in other states.

24:41
like the Massachusetts Senate Bill 978 and New York Senate Bill 809786. Yes, there were a lot of strategic reasons for California to start, although it's interesting.

24:59
work on Massachusetts legislation in this space predated the work in California. And we started by working with what we have been pursuing and are still pursuing in Massachusetts over there, over in California. It shifted to a different type of bill for a variety of reasons. I have learned a whole lot about this process in co-authoring that bill. But there's so much that goes with getting policy.

25:27
A lot of it again is people oriented, relationship oriented. California was a, we were there at the right time in the right place with the right people to push that through. I love it. We're going to switch gears a little bit here. And you made an important announcement in the past couple of days. Congratulations on the appointment of president and COO Ralph Gross III.

25:57
Thank you. He's joined you at Scroobius. And if you see the announcement on LinkedIn, it goes into detail about how relationships are important. So you've mentioned, you've touched on relationships several times, right? When you're an entrepreneur, you are an entrepreneur, you founded Scroobius, right? Can you share how relationships matter when building your business? That's the

26:27
And now that you have a COO and president, how's your day job gonna change? All right? Thank you. Yes. Well, I mean, we're now really the perfect example of why a platform like Scroobious and ours in particular needs to exist because it is relationship driven. And people will say everything in business is relationship driven, but there's plenty of transactions that happen and finding the funding.

26:56
And the people are critical to early stage success of a company. It's very different at the early stage. And for our story, I was introduced to Ralph three years ago by a woman who's on our advisory board, who I had actually met nearly 20 years ago when I won a scholarship from her as an MBA student. And he became one of our very first investors. He has an

27:24
exceptional career in large financial institutions and investment banks. But earlier on, he did attempt to start his own company. And it was very similar to what Robin Hood ended up being. But as a black man, he really couldn't raise the funds that he needed. So he experienced that bias as well when he was attempting to go the entrepreneurship route. And it's always stuck deep with him. Right. So he has a

27:51
very strong resonance with what we're building and our mission and firsthand experience, right? That authentic lived experience is something you cannot replicate and the connection with your stakeholders. We both have them. We both have them from the entrepreneur's perspective. And we both have them from an investor perspective. I'm an angel investor as well. And clearly, so is he. But we've developed our relationship over the three years of him being

28:18
of our team as an investor on my cap table. And very recently, he made the intentional decision to leave that corporate career and join us as our as leadership as our president and COO. So we'll be working very closely together as CEO and COO. And it accompanied a $500,000 investment into the company. So we have capital we need to really grow. This is a game changer.

28:48
for the trajectory of Scroobious, both from a capital perspective and a leadership perspective. Amazing, amazing. So I wanted to bring us back to the Founders sandbox and my guest. And again, you're very mission-driven, Allison. And I always like to ask my guests what the meaning is of three.

29:17
kind of terms that I use when I'm working with my clients. And those are resilience, purpose-driven, and scalable slash sustainable. But what does resilience mean to you? Please. So resilience is somewhat similar to me when people talk about grit. It's the quality of taking.

29:44
an unexpected circumstance and figuring out how you utilize that and move forward. And so for me, an easy example is that a month into my company building, we were in a global pandemic. I have two young children who all of a sudden had no school to go to, and all the things that life throws at you. I immediately had to decide, do I close the company down right away?

30:14
Or do I figure out a way to keep doing this? And so when I think about being resilient, there's a lot of elements to that. But that for me was, OK, I'm going to take it, and I'm just going to modify how I build this company. Because it's too important to just close it, and I'm too dedicated to it. And it really did impact our own growth. I was going to go raise a big round. That was my plan. Go do what I did before and start raising. I'm building a scalable venture backable company.

30:43
And immediately I had to say, nope, that's not what I can do anymore. So what do I do? How do I build slower? How do I make this a reality based on the circumstances that have been dealt to me? And we really turned it into a positive for how we've grown. And you did the data gathering. And also really just I love that

31:11
My guests share a personal experience, but personal slash professional, right? And that is an exceptional example of starting a company, incorporating it in the pandemic after experiencing the gender bias in your own previously venture-backed company. So amazing, amazing. What about purpose-driven enterprise? What does that mean to you?

31:40
Each guest has a different, this is kind of my favorite part other than your origin stories. I love it. It's really interesting. The word purpose to me is very interesting because I do a lot of speaking about social entrepreneurship and impact entrepreneurship, but purpose is a little bit different for me. It doesn't have to mean that you're an impact oriented company, but it reminded me of

32:11
guidance that we give our founders is something you need to be attuned to is as you're talking about your company and as you're pitching for the thousand and eighty second time, if you don't naturally get very excited about what you're talking about, that's a warning signal for yourself that you might have lost some of your purpose. Okay. It doesn't really matter what you're building, but as the founder,

32:40
you have to have a direct tie to the purpose of why you're building what you're building or your company is at risk of crumbling because as the leader, if you lose that, where is the North Star for everybody else? Excellent. And you often mentioned the word authenticity during this podcast today. And I think that, forgive me for

33:07
putting words in your mouth, but if a founder is authentic in sharing what that purpose was when creating the company, is don't lose that North Star. Thank you. Absolutely. You know, there's too many stories of companies receiving large amounts of funding and burning it and having to close. And there's too many founders that just want to be a successful founder, which is not.

33:34
it doesn't have that authenticity that you're talking about. And right, the other side of that is having the lived experience to be authentic with those who you are servicing with your company. And I mentioned it before, but again, that's when investors talk about a moat, which some of that lingo is so annoying to founders, but that's a moat, you can't replicate that.

34:00
You can't replicate someone's lived experience. And we're seeing that right now with some backlash in FemTech funding, where more FemTech funding is going to men than to women. They can never have that lived experience. It doesn't matter how close to a woman they are. They can't. And that is not ever going to be as authentically received by customers as somebody who shares that lived experience. Amen, sister.

34:29
Yes, I am co-leading with the TiE SoCal chapter. It's an entrepreneurial membership organization, a competition of women-led companies. We're in our third year, very large cohort, that's in semi finals and independent judges, male and female. It's amazing the energy. And we've talked about nails. We talked about an air purifying machine. The gamut of

34:59
you know, feminine or women-led companies was amazing. And just, we have a second session today. Yeah. And that's, you know, that's something that I talk a lot about and I try to get this message through because it's not something that people always communicate, but you know, the lack of funding to women, to black founders, to any, to take your pick of underepresentation.  For women, it is not just a women's problem.

35:28
We're not just building companies only for women. This is an everybody problem. We are building companies addressing enormous societal needs. And without our contributions to that innovation and to that problem solving, every single person is suffering, not just women. Thank you, Allison. Other term, scalable growth. What's that mean to you? Scalable.

35:58
Um, so scalable means that you are building something that is intentionally designed to reach many, many people and that you are doing it in a way where you can effectively sustain that growth, sustain that scale. Right.

36:21
and there are businesses that are made to be scalable. Scroobious is made to be scalable and there are businesses that are not and both are completely needed and fine, but there is a distinction. And if you are not building something scalable, you're probably not right for the venture capital funding model of how you capitalize your business, but you still might be right for angel investing or loans or debt.

36:49
whatever other type of capital you can add to your stack. But that isn't a very important thing to know. And again, something we educate in our platform for founders, it's not always clear to founders what is the right path or how to understand the venture capital business model and why it requires scalability to be viable. Exactly. And I love that you are all encompassing at Scroobious,  right? It's equitable capital access.

37:18
So not all businesses are venture capital, subject to venture capital. All right, so that's amazing. My last question, did you have fun in the sandbox today? Absolutely. I do love that question. We build humor into everything we do. I think humor is just a critical element of building. And if you're not having fun, what are you doing?

37:46
You have to be able to have fun. So yes, thank you for making a fun podcast experience. Thank you, Allison. So to my listeners, if you liked this episode with Allison Byers, CEO and founder of Scroobius, sign up for a monthly release of the Founders Sandbox where founders, business owners, corporate directors and professional service firms provide stories on how to build with strong governance a resilient, scalable.

38:14
and purpose-driven company to make profits for good. Thank you for joining me, Allison, and until next month. Thank you so much, Brenda. That was fun.

 

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

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

You can find out more about Marcia at:

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

marcia@marciadawood.com

Watch her Tedx Talk here

Order her Book here

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

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

 

Transcript:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

35:07
angel investing, right? So to my listeners, if you like this episode with Marsha Dawood, sign up for the monthly release of founders, business owners, corporate directors, and professional services go-to podcast to learn about how to build resilient, purpose-driven, and scalable companies while doing good. Thank you very much for joining me and Marsha Dawood signing off for today. Thank you.

 

On this episode of The Founder's Sandbox, our host Brenda McCabe speaks with Khalid Machchate; accomplished 3 x exit startup founder, operator of a startup studio, board of director positions and now in his “NEXT ACT,“ Khalid is a member of Morocco’s Royal Advisory Committee by nomination from His Majesty King Mohammed 6th, for the development of the Kingdom.

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

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

You can find out more about Khalid at:

Linked IN

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

https://khalidmachchate.com/

And view more of his content here :

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

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

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

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

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

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

 

Read an article by brenda on this topic at: 

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

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

transcript:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

01:12:47
Thank you again Khalid and to my listeners, you can download and listen to the Founder's Sandbox. Again, there's a monthly release on any major streaming platform. So thank you, have a great rest of the day. Thank you, you too.

 

Brenda A. McCabe, MBA's personal experience has contributed to the work at Next Act Advisors. The Growth Strategies of NAA clients are always informed by current regulations and the understanding of why things have evolved to where they are because of the regulations and how they might change in the future. Enjoy this special Founder's Sandbox Podcast episode of Brenda reading one of her published blogs, "Data, Data, Everywhere" ; Now that all our data – private and enterprise, is out there, how can enterprises uphold trust?

You can read along to this blog with your NAA subscription at : https://nextactadvisors.com/data-data-everywhere/