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In this episode of Outsider Inc., host Ian Hathaway sits down with Colorado Governor Jared Polis, a serial entrepreneur and Techstars co-founder who has spent his career blending founder instincts with public service. Jared shares how he built and exited multiple tech companies early, including BlueMountain and ProFlowers, and what those years taught him about capital, timing, and learning by doing. They also unpack how a founder mindset translates inside government, why Congress felt more like entrepreneurship than executive leadership, and how Jared approached policy like a builder. Along the way, Jared discusses accredited investor reform, why wealth is a poor proxy for competence, and the practical systems thinking behind Colorado’s biggest moves, from universal preschool and insulin price caps to Bitcoin tax payments and criminal justice reform. The conversation is a rare look at what happens when a repeat founder brings startup operating principles into politics, and what outsiders can learn from it.

Show Notes:

(03:00) Early work ethic, risk tolerance, and learning in the deep end

(07:00) Three exits before 30 and the pattern behind them

(10:00) Co-founding Techstars and the early days of backing founders

(14:00) Building and scaling ProFlowers and disintermediating the supply chain

(16:00) Running for Congress and stepping into public service

(20:00) Why Congress felt like entrepreneurship, not CEO leadership

(22:00) Founder mindset in policy and the push to rethink “qualified investors”

(23:00) Outcomes as governor, universal preschool, insulin caps, pardons, and more

(19:00) Bitcoin for taxes and treating government like a system you can improve

(32:00) Advice for first-time founders and why every new founder is an outsider

(34:00) Beyond the Bio: Jared Polis

✅ Host: Ian Hathway - Co-Founder & Managing Partner, FOVC

✅ Guest: Jared Polis, Governor of Colorado; AIS; Blue Mountain; Proflowers; Techstars

Produced by Spellbinder Media. Executive Produced by Bridge Five Ventures. Copyright ©️2026, Bridge Five Ventures, LLC, All rights reserved.

Listen & subscribe wherever you get your podcasts or at outsiderinc.substack.com.

AI-Generated Transcript

Jared Polis: [00:00:00] Congress was actually very comfortable for me as an entrepreneur. I have an idea. I’m like selling people on it. I’m pitching them on it. I’m getting to add their name as a co-sponsor. I’m working the floor. I’ve always been interested in policy, love policy, but like the kind of selling part and legislative part was much more like being an entrepreneur than being a big CEO.

Ian Hathaway: Welcome to another episode of Outsider Inc. I’m your host, Ian Hathaway. Today’s guest is Jared Polis, a serial entrepreneur turned political leader who spent his career operating outside conventional boundaries, redefining what success looks like in both business and in government. And he’s doing it right now as the sitting governor of Colorado.

Jared’s path has never followed the traditional script. Before the age of 30, he had already built three companies for more than a billion dollars in exit value, including blue mountain.com, in early internet breakout and digital greeting cards and pro flowers, which reshaped the online flower delivery industry.

Soon after he [00:01:00] co-founded Techstars, the global startup accelerator that’s now backed thousands of companies worldwide and helped redefine how mentorship and community can materially change a founder’s trajectory. But even as he was building companies and supporting other founders. He was also being drawn into public service, studying politics at Princeton, serving on the Colorado State Board of Education, and eventually running for US Congress in 2008.

That campaign marked a turning point, not just professionally, but personally. Jared came out publicly during that race at a time when being openly gay was still considered a major political liability. Colorado, a state that had been dubbed the hate state just 16 years earlier after Amendment two. Tried to strip away L-G-B-T-Q protections, elected him anyway, making him the first openly gay, non-incumbent ever elected to Congress.

He went on to serve five terms and in 2018 he came back to Colorado to run for governor and won becoming the first openly gay man elected to governor in US History. [00:02:00] But beyond the historic nature of his election, what’s most interesting is how he’s approached the role itself. Jared leads more like a builder than a traditional politician focused on execution systems outcomes, and applying entrepreneurial principles to government in ways that challenge how things have always been done.

I’m excited to dive into the early experiences that shaped Jared’s entrepreneurial instincts. What he saw in the earliest days of Techstars that made him commit instantaneously and how being an outsider in multiple dimensions has shaped the way he leads. We’ll get into how founder principles do and do not translate inside government and where he sees the biggest opportunities to build that have an impact now and in the future.

Governor Polis, welcome to Outsider, Inc.

Jared Polis: Great to see you. Ian.

Ian Hathaway: Thank you so much for being here. I wanna start at the beginning. Your parents are a remarkable origin story on their own. A Princeton PhD who gave up theoretical physics to become a watercolor artist and a poet who became one of the bestselling greeting card writers in America.

Together. [00:03:00] They built Blue Mountain Arts out of a pickup truck, traveling the country, selling posters before growing to dozens of employees. They describe themselves as hippies, and you grew up in the middle of all that, literally traveling to trade shows as a baby, watching your grandmother work, trade show floors and heels for 12 hour days.

Then at age 11 on your own initiative and without your parents’ involvement, you went to San Diego City Council to stop a condo development in a canyon where you played. You spoke at that meeting for about 10 minutes and actually helped change the outcome of the vote. The mayor even credited your speech.

The summer before you started Princeton at age 17, you took the money you’d earn from running a scrap metal arbitrage business out of the government surplus auctions in high school and used it to fly to Moscow where you spent two months as a floor trader on the Moscow commodities exchange.

post-Soviet Russia, early days of capitalism, often the only American on the floor. Most 17 year olds were surfing or [00:04:00] lifeguarding, but not you. When you zoom out on all of that, the family, you grew up in the Canyon speech at 11, the Moscow trading floor at 17. How do you trace the line between those early experiences and who you became as a builder, and was there a moment early on where you first understood that you could actually change the outcome of a situation just by showing up?

Jared Polis: You really did your homework, Ian. That’s great. Look, showing up and trying is a big part of it, and I always say you want to be in the deep end, just paddling above to keep your head above the water, right? You don’t want it to be just so easy. You’re like standing in the shallow end. You always wanna be struggling and learning.

So, yeah, in, in high school I traded scrap metal. These were sealed bid auctions from Department of Defense, and I would figure out what I would get for something about how much it would cost to get there, do sealed bids, and when I got it, I would arrange logistics and trucking mostly, you know, helmets and shell casings, things like that.

And then back to when I went to Moscow, it was a very exciting and hopeful [00:05:00] time. Obviously it worked out terribly for the people of Russia, but this was the time when. Communism had ended. There was a bright future, and the underlying commodity that was being traded were actually privatization vouchers.

It was, and always is interesting to me, how do you privatize a state on economy? They issued every citizen a privatization voucher. Now they had to be aggregated because in practice you can’t have a million citizens showing up with one voucher. So there was a market in these, they were 20, 30 bucks each at the time.

And then they also traded cement. But I didn’t trade cement. I just traded the privatization vouchers and you know how a floor on Chicago Board of Trade or something, I don’t know what they cost, like millions of dollars. Right. To get to the floor. It was equivalent of about a 25 cent admission price daily to be a trader there.

So the barrier to entry was low. You just had to fill out the paperwork and pay about a quarter to be a trader. So that was a lot of fun and great experience. Trans scrap metal, great experience. And then growing up, you mentioned my parents business. Small greedy card company was about 40 people, but it’s a very niche kind of love and poetry look.

People know the look, my mother writes the poetry, my dad does the artwork. And I grew up going to trade shows. My grandmother was sales [00:06:00] manager, so I grew up working and setting up booths the day before the trade show. These are gift shows, book shows, stationary show, all over Texas, New York, Chicago. So that’s what, you know, kind of my job as a 14, 15, 16-year-old in summer was.

And then you, you’re up in the booth usually with my grandmother, with a local commissioned sales rep for three days. You know, writing down greeting card orders that stores would take. So that was also very exciting.

Ian Hathaway: From early on there was this sense of industriousness, this sense of adventure. You finished high school in three years, you said it would have felt like a waste of time to stay another year.

You got accepted into Princeton at age 16, founded an internet service provider out of your dorm room freshman year, selling it for $23 million by age 23. Then you converted your parents’ greeting card business into Blue mountain.com, turning it into one of the most traffic sites on the internet before selling it to at and t for $780 million right before the.com bubble burst.

Then [00:07:00] you went and did it again with Pro Flowers, a direct from grower online flower delivery company that went public and sold for $477 million in 2005. Three exits over a billion dollars combined all before the age of 30. What you pulled off at such a young age is extraordinary by any measure. But I guess zooming out a bit, when you look at those three companies together, ais s Blue mountain.com, ProFlowers, there’s a pattern.

They’re all disintermediation plays. They all scale through network effects and the timing on all three is almost uncanny at that time. Were you thinking in that framework, or does the pattern only become clear in retrospect?

Jared Polis: It definitely only becomes clear in hindsight. In fact, as you were talking, it’s the first time people made me think of a IS as a disintermediation play, but in a sense it is.

We bought T one lease line access, sold dial up. Internet accounts and and lower speed lease line accounts? No. The thought processes on that was much simpler. Obviously, somebody who’s entrepreneurial, two friends I met through mutual friends at Princeton. They were both at U of I at the [00:08:00] time. Josh and Mike.

We kind of just were talking about what can we do without much money. We didn’t have capital, right? We had maybe between us, I think $5,000 or something. So like, what can you do? We said, you know, this internet thing is pretty cool. We as college students get to use it. It hadn’t gone mainstream yet. We actually thought the initial target market for internet accounts, if you will.

Unix based. This is before graphical Worldwide web. There was something called links, which was interface, but generally speaking, you had to be somewhat familiar with Unix. But you know, pine and and Mail were the two programs you used to read your mail. But in any event, I think that when college students graduate, many of them would want to pay 20 bucks a month to like keep.

An internet account. ‘cause at that point the colleges would kind of terminate it. There were sort of gateways to the internet from like the big commercial providers, A OL, CompuServe, prodigy. But then you had a weird looking account, you know, how do you get kind of a regular account even with your own domain?

And so that we thought was the target market, right? And it was a market. We certainly had those, but we quickly moved more into kind of where the money is, which it turns out is not. People have just graduated college, and it’s generally more on the business end. And when we sold the [00:09:00] company to a company called Exodus, which was doing a roll up, 98, I believe we started at 93, sold it in I think 98.

We were basically a third or third, a third, a third dial up internet access, a third commercial high speed corporate connectivity, and a third kind of web development, consulting services and hosting. Exodus paid us mostly based on the. Hosting and consulting piece. But yeah, that’s that story. In retrospect, the biggest disintermediation play was obviously pro flowers.

We literally disintermediated the supply chain rather than flowers, going from a grower to a wholesaler to retailer, to out on the delivery van. We worked directly with the growers importers, utilizing people like FedEx and UPS to get’em the point of delivery. So fun business

Ian Hathaway: continuing on your entrepreneurial journey, especially in Boulder, Colorado, and the startup community there.

Brad Feld, of course, has been on this show and he told us about the moment that Techstars was really born. He steps out of a meeting with David Cohen for the first time after David had pitched Brad on the idea of Techstars. [00:10:00] Brad calls you and says, I’m putting 50 K into this thing called Techstars, and your answer to his telling was something like, I’m in for 50 K.

What is it? It’s an amazing story that. To me is so fitting as a founding story for Techstars, given its cultural DNA of Giving first and a community orientation. Going back to that moment, what were you actually trusting that you were committing to that idea so fast, and maybe what’s the lesson that others can take away from that example?

Jared Polis: So going back to that moment in time, I was actively doing Pro Flowers. I was probably chairman of their board at that time. We’d have to look at the exact year. I had exited a IS exited Blue mountain.com. I don’t think Pro Flowers was public yet. It went public in oh three, so it was probably a little bit after it was a publicly traded company.

So I was excited by startup ecosystem. I think that the initial pitch was, we wanna do something like a startup accelerator here in Boulder. And I said, count me in. I was actively involved with and looking at a number of other startups. Some did well and some didn’t. I didn’t wanna be a, a manager [00:11:00] of a fund, but I wanted to kind of look for fun things that were also had a lot of upside and get a little involved to medium involved as a model.

I didn’t really plan to go back into like a day-to-day operating capacity where I could just do one thing, like CEO of a medium sized company. So. Tracking startups in accelerator Boulder was very exciting to me. I knew Brad for a number of years at that point. I met him in 96, so I probably knew him a decade or or eight or nine years.

I did not know David, but Brad vouch for him, met with him later on. Super excited and really excited by the concept. At that point, it wasn’t necessarily thought of as a scalable concept, as you know. It was like, we’re doing this in Boulder, right? We’re gonna bring people to Boulder. We’re gonna have fun with these companies.

Obviously later on, scalable, many cities, perhaps too many. You know, resized and, and hopefully pivoting. But at that time, very much let’s do something special here in Boulder.

Ian Hathaway: It’s interesting you mentioned that you wanted to get involved, you didn’t wanna run a fund, but you wanted to scale your activities more in Boulder.

That’s exactly the reason that David has given for his initial motivation, which, you know, he had just gotten out of an exit and wasn’t really satisfied with the engagement model from angel investing. [00:12:00] It was sort of write a check and move on. And so it’s interesting that you share that.

Jared Polis: Yeah, and that was very much the meeting of minds.

I was very excited about that level and picking the 10 companies the first few years and very, very hands-on. It was a lot of fun. As people that I met in those first few Techstars classes, I still keep in touch with.

Ian Hathaway: Well, that tradition still lives on today. It’s what drew me in. I was a Techstars mentor for five years before I became an employee.

I’ve been out of Techstars as an employee for four years and I’m still mentoring, so it lives on to this day. Jumping ahead. Techstars goes on to back thousands of companies worldwide, but what it really pioneered was this philosophy, the idea that mentorship and community, if done deliberately, can materially change outcomes for founders.

And you were mentoring actively, especially early on, including during your 2008 Congressional campaign finishing campaign events late at night and going straight into mentoring companies afterwards. That’s a big commitment of time and energy, not [00:13:00] just capital. What did you understand early on about what founders actually need that goes beyond capital, particularly for founders who, like you were building tech companies far from Silicon Valley, and maybe secondly was your experience as a founder and motivating factor for wanting to help the next generation of entrepreneurs coming up behind you.

Jared Polis: So I had founded businesses both with and without partners and, and a ISI had two very much coequal partners. Three of us ProFlowers I founded on my own. We brought in executive leadership, but for me the innovation was distribution technology. We innovated, patented. It was great. It is kind of fun. I’ll explain this to you, but basically these flower growers were pretty low tech, and so at the time, my value proposition to them was.

We are going to literally give you a fax machine and we will fax you the dynamically generated FedEx label and the card and the packing list all in one perforated form. And then all you have to do is assemble that and ship it off, and they come every day at three or four. So it was really [00:14:00] a solution that worked with.

Folks that maybe didn’t even have computers. We were among FedEx’s, I think the very first to do a dynamically generated shipping label through T-C-P-I-P. No, nobody had done that before. We were their pilot, which was really cool. I actually went to Tennessee and met with Fred Smith. That’s how important this was at the time.

It was a really cool meeting and they were like, okay, we’re gonna pilot this with you, and we were the first to do that. We didn’t even require that the growers had pc, so that was my innovation, but I realized we had to acquire customers. This was not an innovation, but we quickly had to become experts in customer acquisition, pricing and models, and I had to bring in that expertise of cost of customer acquisition, lifetime cost of customer, how do you do it across different channels to build on this proprietary advantage that we created that allowed it to be sold.

I didn’t really answer your question there, but through that experience I kinda learned how do you access different expertise, right? Okay, great. Your supply chain solution fine. How do you access expertise on selling through different channels or through marketing or finance if you’re gonna be doing some kind of a raise in stack?

So that was for me as a founder, what I wanted to [00:15:00] help other founders with, and wasn’t always me providing direct expertise. It was more how do we connect people to people who’ve been there and done that in areas. So the founder might not realize that they need to get to know very well in addition to their core competency for their innovation.

And

Ian Hathaway: sometimes you don’t know where that answer’s gonna come from. I think that’s one of the magical things about the Techstars mentorship model is that you bring lots of mentors together. Some of them might on paper feel like the perfect fit for a specific company, but others may have some hidden networks that wouldn’t be clear from a resume that’s actually the right person you needed to meet.

And so I think there’s a good lesson in innovation there that it’s really a numbers game and you just gotta take a lot of at bats.

Jared Polis: Yeah, and Colorado is a good size. It’s just very accessible. I mean, through, you know, an introduction, a one-on-one, you can meet with anybody and everybody, as you know. So you can usually access that expertise across different sectors when you need it.

And just you talk to people and sometimes that results in board of advisors or even more.

Ian Hathaway: And so continuing in 2008 on that. First Congressional campaign of yours to be US Congressman in Colorado. [00:16:00] You decided to come out publicly during that campaign. Colorado had been called the hate state just 16 years earlier when Amendment two was a statewide ballot measure to constitutionally strip anti-discrimination protections for L-G-B-T-Q people passing with 53% of the vote in Colorado.

The Supreme Court struck it down in 1996 and then 12 years after. The Supreme Court struck that decision down. You’re running in that same state as an openly gay candidate for Congress. That decision has a parallel to something a lot of founders face, something we’ve talked about on this show before, which is whether they should bring their full self into a high stakes situation where being different might work against them.

Whether that’s pitching investors, hiring a team, or building in public. When you decided to come out during that race, what made you decide that showing up as your full authentic self was the right decision? And maybe what did you learn on the other side [00:17:00] of that decision about yourself and about the public You hoped to lead?

Jared Polis: Well, so I was obviously out to my family. I had a boyfriend, he’s now my husband. But what was awkward at that moment in time, it’s probably even still true, is that there needed to be some like public acknowledgement. Otherwise, maybe somebody would’ve asked me at some point and I would’ve said yes, but you wanna do it on your own terms.

‘cause it had never like appeared in print. It had never like been public. So it was a really. Awkward thing, and that was the reason. It was more just, okay, obviously at some point this’ll come out. I mean, I’m not, I wasn’t like super closeted per se. It wasn’t official. Maybe people whispered or some knew, but how do you do it on your own terms?

And that would be the same for any corporate messaging announcement is, yeah, you always wanna do things on your own terms, right? This wasn’t bad news, it wasn’t good news, it was just kind of news that was material, I suppose, to some people. But how do you go about presenting material news in your own way?

And owning it, rather than just sort of, it randomly coming to you in some way where it could be portrayed as something negative. But I do think it’s important to bring your full [00:18:00] self. Another story is when I was raising capital for some of these companies, part of it worked to my advantage, being young.

I was like, you know, 23, 25 pitch deck for the internet. That’s who people wanted to invest in. If you were 55 or my age, now I’m 50. At that time you were not expected to know the internet. If you were 50, there was kind of reverse age discrimination. So I was the right age at the right time to kind of say, oh yeah, here’s a young guy who knows the internet.

This is who we wanna back.

Ian Hathaway: You raise a good point. I think it’s still an issue today. What people don’t realize is actually even amongst high growth entrepreneurs, even venture backed entrepreneurs, the average age of a successful outcome, the founder is around early to mid forties. That time of founding, but that’s a great point.

Age discrimination in tech is a real thing. Sticking with your time in government, you came into Congress with a background that almost no one else had. You built companies, you co-founded an accelerator. Manage real organizations with real outcomes, and you clearly brought a different operating philosophy.

You were the only Democrat in the Liberty [00:19:00] Caucus. You wrote a paper on privatizing the postal service you called Atlas Shrugged, a great book. You were the first representative to accept Bitcoin donations. This all made fellow Democrats nervous. That’s a very different operating system than how the government typically works, especially the legislative branch.

What did you learn about where that way of thinking like a builder, like an entrepreneur, actually moves the needle inside government in an effective way and where it just runs into a wall.

Jared Polis: Let me also give a little context. So while I was doing entrepreneurship in the 2001 to 2007 timeframe pre Congress, I also was involved with education in a entrepreneurial way.

I started two charter schools, and then I was a chairman of both For a while. I actually came in and ran one as superintendent for a year or two. That’s what I would’ve kept doing for a while had I not run for Congress. So I was really an entrepreneur in that kind of nonprofit sector with the charter schools and doing some philanthropic work.

Congress was actually very [00:20:00] comfortable for me as an entrepreneur. I probably had to grow into some of the skillset to be an effective governor ‘cause I had never run anything large, but Congress, there’s 4 35 of ‘em, as I used to say, was someone to be an entrepreneur. I have an idea, I’m like selling people on it.

I’m pitching them on and I’m getting to add their name as a co-sponsor. I’m working the floor. Knowing policy is something that’s a hobby. I’ve always been interested in policy, love policy, but like the kind of selling part and legislative. Was much more like being an entrepreneur than being a big CEO. I think the big CEOs who have some running things going into a legislative body hard adjustment for them.

And maybe you talked to some, maybe some enjoyed it, some didn’t, but it would be a very, very, very different thing. It’s a lot more similar to being an entrepreneur than it is to running something large. When you went a legislative.

Ian Hathaway: So your effectiveness in Congress then maybe bridging these idea of Techstars giving first, right.

Help someone without the expectation of receiving something in return. Was that a way for you to build bridges and build relationships and ultimately build coalitions to get things done? Or is that just like a [00:21:00] completely naive way to think about how to operate inside the halls of congress?

Jared Polis: I’d say I put time into the personal relationships like you do as an entrepreneur too, and the members appreciated that.

I had many good friends and trusted friends on both sides of the aisle. So when I wanted to work on something, I was able to get bipartisan folks to hear us out and get us on. So I did put time and effort into that. It’s an interesting way to talk about it, but I think understanding. That people like to attack Congress, attack politicians.

I get that. But by and large, these are dedicated people who care deeply about the country. I mean, it’s a ton of work. Most of ‘em would be making more money with a much easier lifestyle for what they weren’t doing this. So you gotta respect them. They’re there to make a difference, not not every single one, but the vast majority.

And so you really kind of get point, Hey, what got you into this? What do you care about? And try to form that basic values discussion and go from there on different policies.

Ian Hathaway: That’s been actually my experience as well. I’ve been involved with this organization called The Center for American Entrepreneurship, which is advocating for entrepreneur friendly policies in DC until last year was on the [00:22:00] board.

Wendy Lee, a mutual friend of ours, also serves on that board. We go to DC every year and I meet with members of the house in the Senate and what I tell people. Is that everyone’s really normal and we talk about really serious things, and all we’re focused on is getting things done. It’s nothing like the television spectacle, and so to me that’s encouraging in a way that maybe most folks don’t get to see.

Jared Polis: Sometimes I was able to use my startup sector knowledge and policy advocacy a number of different times, but one that comes to mind is having the concept of color qualified investors always irritated the heck outta me. I thought it was ridiculous that just because you weren’t super wealthy. You weren’t allowed to invest.

And I also said, just ‘cause you have a lot of money doesn’t mean you’re smart. I mean, there’s plenty of people that got a lot of money and they aren’t any more sophisticated than somebody who’s 25 years old and worth a hundred thousand dollars. So having this arbitrary like net worth validation for qualified investor was just something that irritated me.

So I kept trying to pound away at that from the day I got there and maybe replace it with a. Tests people take to get certified rather than a net worth thing. So [00:23:00] it was interesting to be a startup congressman. I worked on a number of tech issues. I formed an entrepreneurship caucus with Darryl Isa, a Republican.

He’s actually still there. He was an entrepreneur as well. So there were a handful of us, maybe 10, 12 of us that had that in our background.

Ian Hathaway: After five terms in Congress, you came back to Colorado and ran for governor, which is a fundamentally different job. You’re not voting on things, you’re running something, a large organization with real accountability and outcomes that you can actually measure.

And by that standard, the list of what you’ve gotten done is striking. You abolish the death penalty and commuted every death row sentence you pardoned. Over a thousand marijuana convictions. You launched free Universal preschool and all day kindergarten. You kept insulin prices. You eliminated state taxes on Social Security for seniors.

You made Colorado the first state to let residents pay taxes in Bitcoin. You signed abortion protections and gender affirming care into law. You signed the free range parenting bill before you were [00:24:00] governor. You founded two charter schools, as we just discussed, the New America School for Immigrant Youth who’d aged out of the traditional system and the Academy of Urban Learning for homeless teenagers.

Through the Jared Polis Foundation, you put thousands of refurbished computers into Colorado schools at a time when most kids in underserved communities didn’t have access to one. That’s not a legislative record, that’s an operating record. So I want to ask. How do you actually think about governance? Is running a state closer to running a company than most people expect?

Is that just a cliche? And where does that analogy break down?

Jared Polis: So, I had not run a large company when I came into state government. To me, the largest company that I had. And I wasn’t running it at the time as CEO, it was pro Flowers and at the time we sold it, it had 250 people. Right. And so to me, as an entrepreneur, 250 people was huge, right?

Like that’s, you know, I was not a big company guy. Like, oh yes, we have 8,000 employees in 16 different cities, right? But when I came into governor, we had 32,000 employees [00:25:00] roughly for the city of Colorado. So the first thing I had to do over two months was basically recruit my cabinet. We’d open applications for every cabinet position.

‘cause the way the government works, state government, it’s more like a conglomerate. We have different operational units. I had to hire the guy that runs Department of Corrections in our prisons. I had to hire the person that runs Department of Transportation and fixes our roads. I mean, we do very different things across state government.

We run colleges. We keep prisoners. We fix potholes. We license different professions. We monitor air quality. So 19 different cabinet positions. And I was experienced, I had some experience with hiring executives, right? I had done executive searches, not just my companies, I’d been on boards of others and been part of that, brought in high level executives, usually C-E-O-C-F-O.

So that was familiar to me and I was very proud of the fact that we had great tenure. In fact, here we are. Seven years later, and I’d have looked at the numbers, but I think about 70% of my original cabinet is still in place, which is huge for a governor. There’s usually a lot more turnover than that, certainly more than half.

We have great people. They’re really the ones that [00:26:00] run their divisions well, and as I said, when I was facing reelection, which I won by almost 20 points, I told my cabinet, I said, I’m here because your work excelling in your areas. People are happy with the work we’re doing, and that reflects on me and my reelection.

Ian Hathaway: You’ve been intentional throughout your career about. Not leading with identity, but you’ve also made a lot of history, so it’s natural that that becomes a part of the story. At the same time, you’re a father, you’re a husband, you’re someone who plays League of Legends to wind down at night, given those real personal responsibilities and human desires.

How do you stay grounded in who you are as a person outside of that role of Governor, Congressman, or CEO? And what are some tips that entrepreneurs out there listening can learn from your example?

Jared Polis: I think it’s obviously not only possible, but important that if you have a high power job, you also have a personal life.

I mean, for me, it’s having two kids, right? Which I didn’t when I first started. When I got elected to Congress, I didn’t. But we have two kids. One’s a teenager, another’s, almost a teenager, so [00:27:00] they’re middle school and high school. And it’s fun to spend a lot of time with them growing up. And obviously when you’re in a high power position, you never know.

You might get called or texted at any hour or day or night. You try to deal with it quickly, but it is important to have that balance. It’s hard in Congress in particular because of the travel and the job, right. Just so people don’t understand the, which Congress people do. They basically fly to DC every three to four days.

And then back home for three to four days. So your family could try to live in dc they could try to live home, but they’re basically, you’ll be with ‘em half the time, and that’s a sacrifice that members of Congress make. It’s also one of the reasons there’s fewer younger members of Congress. It’s very hard when you have young kids to do that and respect those who do.

As governor, obviously I’m able to be home pretty much every night. Our state’s a big state, and very rarely, three or four times a year, I might have to spend a night in some corner of our state, but generally speaking, home every night.

Ian Hathaway: Well, maybe just double clicking on that. Being a parent and having a demanding role, I have a demanding job.

My wife has a demanding job, but I view the role of Father as the most important job that I have. How has being a father made you better at all of these different [00:28:00] roles?

Jared Polis: It’s definitely helped me view the work I do in, in education more from that consumer lens. It’s always how I viewed it, but I also kind of came to it more from like, okay, do you have a thriving economy?

We need to make sure we have people with the skills to power the private sector. And that’s great. And it’s high level. Yeah. But it’s also about individual learners and, uh, how many kids do you have, Ian?

Ian Hathaway: I have three boys.

Jared Polis: You have three and I have two. And and you probably experienced this too, they’re very different.

Like my kids are different learning styles. They’re just totally different and every kid’s different. Right. And, and that’s why the challenge we have in our schools, in our workforce preparation programs is how do you meet the individualized learning needs of every kid, right? Diversity of learning styles, opportunities, outcomes that they seek.

Empowering parents and kids with information to make good choices. Colorado has open enrollment, school choice, a wide variety of different schools. But making that work for people. Certainly my experience as a parent help connect the dots. Obviously, I still believe we have to be competitive in the private sector.

We have to make sure we have kids graduate with the skills they need to power our economic success. Of course, ‘cause [00:29:00] everybody’s kid needs to work in, you know, an economic powerhouse and a rising tide. Obviously loose all boats, but there’s a lot more to it than that.

Ian Hathaway: I love the way you answered that. I grew up in Ohio, but I live in Santa Barbara, California, not the cheapest housing market in the country by any means.

And it’s interesting, most people say, I hope I can have enough wealth so that if my kids, when they get older, if they ever want to come back here, I can buy them a house or help them buy a house. And the way I think about it is, how can I help create a job for them to bring them a magnet back? And, and as you said, as governor, you’re thinking, how can I keep my state vibrant so that my kids will want to stay here so that they will have.

Opportunities.

Jared Polis: Yeah. Especially because the economy is information and skill-based. Do we have things like natural resources and ag land and are those top areas? Of course. But the bulk of our economy is what people have up here in our state. So it’s really about will we be competitive and human capital?

Will we be competitive and growing our own and attracting the best and brightest and hardest working people from across the country and across the world [00:30:00] to choose to deploy their talents here in Colorado and here in the United States.

Ian Hathaway: Well, Colorado is famously a magnet for talent growing more so every year comes with it, some growing pains, but it’s a problem of abundance that I’m glad you’re solving.

Speaking of your time as governor, your term limited this year, and we’ll be out as governor at 51 years old when your term expires next January. George Will, the conservative columnist once wrote that you’re someone the country is hungry for, and it’s hard to disagree with that. When you look at the moment we’re in right now, people are exhausted by polarization and the noise just seems to keep getting louder.

Leadership at the national level feels increasingly disconnected from solving the problems that people care about most, but you’ve proven that you can lead differently with thoughtfulness. The unconventional approaches and actual results being accountable to the public. So I have to ask, given where the country is right now and what [00:31:00] you’ve been able to do, is there any reason why you shouldn’t run for president?

Jared Polis: Well, it’s a very unpleasant experience to run for president. You probably heard that. I actually enjoyed running for Congress. My first race for Congress was a lot of door to door. It was fun for me every day. I went door to door five, six days a week, basically five to 8:00 PM in summer, four to six in winter.

So just meeting people talking. I enjoyed that. I was like in encyclopedia salesperson. You know, running for president, we’ve made that horrifically unpleasant. And then we wonder why no sane person wants to do it. It’s because it’s kind of a horrific thing. As I said, if the whole country begged me to do it, maybe I’d do it for a few years, but I don’t wanna run.

‘cause it’s really just horrific. I mean, it’s just two years outta your life and. And you know, just be honest, at the end of the day, probably a one or 2% chance of winning, which is great. It’s higher than you, right, Ian? Right. I have a one or chance, but I mean, you know, to invest when I have a lot I can be doing to say I’m gonna put two years of my life on something that, I mean, when you do a startup, you [00:32:00] realize the odds are against you, but they’re better than one or 2% right.

Ian Hathaway: I guess you have to start somewhere and if the whole country needs to beg you, maybe I’ll be the first. So hopefully we can get you to consider that. Maybe my last major question for you, you’ll have spent the better part of two and a half decades in public life by the time you leave Office State Board of Education, five terms in Congress, two terms as governor.

The historic first will always be attached to your name. First openly gay man, elected governor, first sitting governor in a same-sex marriage, first Jewish governor of Colorado. But those are designations that describe what you are, not what you’ve built. And when I think about what you’ve actually built, the New America School.

The Academy of Urban Learning, which you started even before Congress for kids who had fallen completely through the cracks. The Jared Polis Foundation, putting thousands of computers into schools that didn’t have them co-founding Techstars and mentoring companies on weeknights during a congressional campaign, abolishing the death penalty, universal [00:33:00] preschool, the ecosystem of entrepreneurs and founders you’ve tried to cultivate at the state level.

That’s a lot. Not to mention your insanely successful business career as a teenager and a young man. Looking back on all of that, putting the labels aside, the accomplishments, what are you most proud of? Not necessarily the history making moments, but the thing that you actually set out to build.

Jared Polis: Well, as you said, I’ll be 51 I guess when I’m done, which it helps me feel young to know that both of the candidates to be my successor will be older when they start being governor than when I finish being governor.

So I’m a little in heartened by that. It’ll be fun to see what comes next. I obviously love business and entrepreneurship and be nice to be able to spend more time with my family and those sorts of things, and we’ll figure out what comes next.

Ian Hathaway: Okay, so we’re almost out of time, but here on Outsider Inc.

We like to finish with a segment called Beyond the Bio. These are just some quick hit questions that let us step away from your resume and get to know you a little bit [00:34:00] better.

Jared Polis: Okay?

Ian Hathaway: All right. What’s a quick piece of advice from a mentor that has stuck with you on your journey?

Jared Polis: Just work hard every day at every task.

Ian Hathaway: Who is an unsung hero in your life and what has been the impact they’ve had on you?

Jared Polis: My parents obviously have been a great support network and, and just wonderful people

Ian Hathaway: who is someone in the Boulder or Colorado entrepreneurship community who doesn’t get enough credit and deserves a shout out from you.

Jared Polis: Good question. Obviously Brad does deserve the credit he get, but he, he’s not somebody that is unsung by any means. I would say. You know who ran, he ran Texas for, while David Brown probably is a little bit more unsung and he is teaching entrepreneurship at cu, I’ve guest lectured in his class and. Great guy and he’s a little bit more low key than some of the others, but deserve a lot of the credit.

Ian Hathaway: Great call. Tell us something most people don’t know about you. Something outside of work could be a hobby, a favorite travel spot, a guilty pleasure, or maybe even a hidden talent.

Jared Polis: It’s probably won’t surprise too many people, but I enjoy skiing with the kids. Don’t make it up a lot as [00:35:00] governor, but maybe five, six days a year.

So enjoy skiing.

Ian Hathaway: Yeah. Gotta support that Local tourism economy. What are one or two songs you’d like to add to our Spotify founder’s playlist? Something that maybe fuels your workday or has inspired you on your journey as an entrepreneur?

Jared Polis: These have to be. Short answer, Ian, that’s hard. I don’t know. In our family, my husband picks all the music and he plays it.

Luckily we have similar tastes, so Sarah Brightman, Barbara Streisand from Modern Stuff. Love Lady Gaga, but favorite songs that inspire entrepreneurship. I’m gonna go with The Kid. I by Cry. Cry Cry. And Montana Skies by John Denver. Those are two that always inspire.

Ian Hathaway: Oh wow. John Denver. Amazing. Those

Jared Polis: are both, you’ll have to look them up and you’ll have to add them to your lists.

Ian Hathaway: Okay, we will, I know this one is maybe even more difficult, but a book you might recommend, you know, maybe something that has been especially valuable to you on your journey, or maybe something that every first time founder should read as they’re getting started.

Jared Polis: Well, I would always recommend Atlas Rug by Anne Rand for sure.

That’s one of my favorite [00:36:00] books. In terms of what else I read, I, I usually pick an author and I just read through like all their works. Agatha Christie is one that I’ve read through all of her works. It’s just fun and easy reading.

Ian Hathaway: Yeah. Or the correct answer was The Startup Community Way by Brad Feld and Ian Hathaway Startup Community

Jared Polis: Way by Brad Feld and Ian Hathaway non-fiction category.

Ian Hathaway: Oh man. Well, it depends which ecosystem you’re in. Sometimes that might be fiction, but, uh, so, okay, so last question. If you could give one piece of advice to someone who’s about to start their founder’s journey, particularly someone who’s a bit of an outsider, what would it be?

Jared Polis: There’s no such thing as being an insider, as a founder, starting your journey.

So just do it. Jump in the water’s fine, and you just gotta learn as you do it and keep that vision, that powerful vision, that founder’s vision, and be ready to pivot on how to implement and make it work.

Ian Hathaway: That’s an inspiring way to end. Governor Jared Polis, thank you so much for joining us today, sharing your wisdom, your time.

I cannot wait to share this episode with our [00:37:00] listeners.

Jared Polis: Thank you, Ian. Take care.

Ian Hathaway: That’s a wrap for today’s episode of Outsider Inc. A big thank you to Governor Jared Polis for joining us and sharing his remarkable journey. What stands out about Jared isn’t just the exits, the historic first or the legislative record.

It’s the operating system underneath it all. A kid who spoke up at a city council at 11, a 17-year-old trading privatization vouchers in Moscow, a founder with a billion dollars in exits before 30, a congressman who worked the floor, like a pitch meeting, a governor who ran cabinet hiring like an executive search.

The through line is that Jared has never really separated building from governing. Identify the leverage point, recruit the right people, ship the work, measure the outcome. The labels change, the instinct doesn’t. What I took most from this conversation is how understated that kind of consistency really is.

Showing up as your full self when the safer move is to hide. Choosing the deep end on purpose treating policy, the way a good [00:38:00] founder treats a product. Jared’s career is a reminder that outsiders don’t wait for permission to build. They just jump in. The water as he put it, is fine. If you want more from outsider, inc, don’t forget to subscribe to the platform@outsiderinc.substack.com.

It’s packed with highlights from today’s episode and bonus insights you won’t wanna miss. You can follow Outsider Inc. On YouTube, Instagram, TikTok, and LinkedIn at Outsider Inc. Pod. You can also follow me on X at Ian Hathaway Outsider Inc. Is produced by Spellbinder Media. We’ll be back soon with another fascinating outsider conversation.

Until then, thank you so much for listening and remember great entrepreneurs. Can come from anywhere. See you next time.

Listen on: Spotify, Apple Podcasts, Amazon Music

In this episode of Outsider Inc., host Ian Hathaway sits down with Chris Schroeder, entrepreneur, investor, Co-Founder of Next Billion Ventures, and author of Startup Rising, to explore what American entrepreneurs and investors miss when they overlook the rest of the world. Chris reflects on a career spanning politics, media, venture-backed startups, and global investing, and shares how a 2010 trip to Dubai reshaped his thinking about entrepreneurship, emerging markets, and the future of innovation. They discuss the power of asking better questions, why humility matters more than certainty, what Silicon Valley often gets wrong about founders in other regions, and how time spent on the ground in places like the Middle East, Southeast Asia, Latin America, and China reveals patterns most people never see. Chris also shares lessons from building and selling HealthCentral, writing Startup Rising, investing through Next Billion Ventures, and why the best founders stay focused on real problems, not prestige.

Show Notes:

(03:00) Why asking better questions matters more than having all the answers

(05:00) The wonder of being wrong and learning through humility

(09:00) Family history, immigration, and the entrepreneurial mindset

(14:20) Politics, transactional relationships, and the long game of trust

(20:10) Building inside the Washington Post during digital disruption

(27:45) The HealthCentral thesis and why community can save lives

(33:10) The Dubai trip that changed Chris Schroeder’s life

(38:00) Writing Startup Rising and seeing what others missed in the Middle East

(41:30) Why global founders need to be understood on their own terms

(50:45) What Chris learns by getting on the ground in China

(55:20) The questions American entrepreneurs and investors should be asking now

(58:45) The danger of “third cappuccino syndrome” and losing focus on what matters

(1:00:00) Beyond the Bio: Chris Schroeder

✅ Host: Ian Hathway - Co-Founder & Managing Partner, FOVC

✅ Guest: Chris Schroeder, Next Billion Ventures; Author of Startup Rising; former CEO, HealthCentral

Produced by Spellbinder Media. Executive Produced by Bridge Five Ventures. Copyright ©️2026, Bridge Five Ventures, LLC, All rights reserved.

Listen & subscribe wherever you get your podcasts or at outsiderinc.substack.com.

AI-Generated Transcript

Chris Schroeder: [00:00:00] I will never have the depth of many of the people who have lived and have been a part of the cultures that I’m blessed to go to. But I can take a swath of interesting things and make connections and ask unusual questions that then are instructive to new kinds of answers. Overall, I can bring in an analogy they hadn’t thought about.

I can pull them out of their inbox and have them think about something they had not thought about before, and I think there’s a superpower in that.

Ian Hathaway: Welcome to another episode of Outsider e. I’m your host, Ian Hathaway. Today’s guest is Chris Schroeder, entrepreneur, venture investor and author who spent the last decade and a half challenging one of the biggest blind spots in global entrepreneurship.

What originated with Italian grandparents at Ellis Island? Chris built an extraordinary career, Harvard. Two presidential campaigns, a state department tour under James Baker, wall Street, private equity, CEO, and publisher of Washington post.com. [00:01:00] And finally, co-founder of Health Central, a community health platform backed by Sequoia, Carlisle and Barry Diller’s, IAC, which he grew to over 15 million monthly users and led to a successful exit.

But in November, 2010, at a startup gathering in Dubai, something shifted. He realized he’d been trapped in his own narrative bias, completely blind to the massive wave of entrepreneurship, taking shape across the Middle East, Asia and Latin America. With an insider’s track seemingly laid out ahead of him.

Chris chose a different path. That awakening led to Startup Rising, the first book on startups in the Arab world, the product of more than a dozen trips to the Middle East. In interviews with over 150 entrepreneurs, investors, and global tech leaders across the region. Mark Andreesen wrote The Forward, Chris, since co-founded Next Billion Ventures, backed exits like Kareem’s, $3.2 billion sale to Uber, and now chairs the German Marshall Fund.

But more than those credentials, Chris has actually been on the ground repeatedly [00:02:00] logging millions of flight miles to visit places. Most investors never think about asking better questions, determined to see what others miss from the heights of American politics, media finance, and technology, to the streets of Cairo, Shanghai in Sao Paulo, Chris’s perspective is one that American entrepreneurs and investors desperately need right now.

Today we trace the full arc of his journey where his curiosity came from, what it took to turn toward the places others overlooked, and what 15 plus years on the road has actually taught him. Chris, welcome to Outsider,

Chris Schroeder: Inc. Ian, it’s always wonderful to be with you. Thanks for including me.

Ian Hathaway: I wanna start somewhere personal.

When I was getting ready to launch this show, I asked one person for advice about how to be a great interviewer, and that person was you. Your advice was simple just to be myself. I’ll never forget it because at the time, I guess I was looking for something tactical or more specific, but I feel like what you gave me was far more valuable.

I came to you [00:03:00] specifically with that question because I consider you to be one of the best interviewers and moderators anywhere. You ask great questions, but more than that, you actually prefer it. You lean into asking questions rather than declaring expertise, which is interesting to me because I also see you as one of the sharpest and most knowledgeable people I know on a range of different topics.

I say all of this not as flattery, but as genuine observation that I think can be learned from. So with all of that in mind, you said. That the only thing you know for sure that you’ve achieved is that you ask better questions now than you did in the past. What’s the power of the question over the answer?

Chris Schroeder: You know, it’s a wonderful question that at one level I have difficulty answering because it’s been, I think, part of my nature. My mother thought I was a pain in the ass in my questioning, and so there’s a dynamic of it, but I think there is a more concrete answer, and it comes [00:04:00] under not only a sense of aspiring to have humility, but humility bred on a many, many humiliations.

You learn, I think, quite early in life if you’re paying attention, we don’t want to be wrong, and so we do everything we can to prove that we’re right. When you get knocked out a lot, you start to realize that one of the most powerful things you can do is have almost a wonder or amazement in being wrong because it helps you to get it right or.

And I had two sort of bookends of experience that made me very suspect about expertise. And it does not mean that expertise is not a thing or it’s not important, but it is been an exercise in humility. Again, when I was a kid, you’d mentioned, you know, I was like 22 years old and I worked in for Baker at the State Department at this time where the Berlin Wall fell and Nelson Man LOE was released.

It was a very formative experience for me, and I’ll never forget having some of the best of the best experts on Europe and Germany, say for all intents and purposes that the Berlin Wall will not fall and Germany will not unite anytime in the next 10 years, even though there were a lot of trends happening that people will remember from history.

I got a [00:05:00] lot of that in October of 1989 and two weeks later the Berlin Wall fell and a year later, Germany’s Unified, 20 years later, and I was in the Middle East and at a startup gathering in Egypt ever. I just had been in Damascus looking at entrepreneurs there and I was sitting with a couple of very senior American government officials, some very senior.

Egyptian business people. Very sophisticated, very smart. And there were a couple of young entrepreneurs there. This was just the time when the president of Tunisia had left Tunisia and the country changed dramatically. And the question at hand was, could this happen with Egypt? And the experts, the older people there kind of patted me on the head and said, um, nah, it could never happen here.

It’s a totally different country. The armies are different. Personalities are different. And I turned to the kids, you know, the entrepreneurs 26, 27 years old, and they gave, what I was later told was an extremely Egyptian answer. They were very courteous to their elders. They were like, oh, no, no, no. They know more.

And I, they have PhDs and everything else. And they paused and smiled at me and said, but I don’t see why we’re that different. And those [00:06:00] two young people, of course, were in career square two days later and 18 days after that Mubarak was gone. And so I think the, it’s a anecdotal way and book-ended way of saying that if you really, really pay attention.

You realize that predicting the future is a fool’s err, and that expertise is a never ending, uh, development and experience. And the only way to get better and better at sort of piecing it together worlds as an investor, as a citizen, is to embrace humility, to embrace wonder, and being wrong and realizing in the end, the best you’ll probably end up is asking better and better questions in service of whatever you care about

Ian Hathaway: to embrace this philosophy that underpins all that For you, this wonder of being wrong, was this something that’s been with you from the beginning?

And then maybe what are things that people can practically do to release this fear of humiliation, of saying the wrong thing, of looking stupid and embracing that wonder of being wrong.

Chris Schroeder: I learned pretty early on that if I could make people laugh, they embrace the whole kind of [00:07:00] circumstance, and so a little bit of self-deprecating humor when you screwed up and to kind of roll with it, you would get kind of a buy-in around you.

To this day, there are times when I’m dealing with someone and they’re pissing me off and my ego kicks in and I wanna prove them. I’m right. You never lose it. So I think it’s just part of human instinct and there’s actually tremendous value in it. But if your North Star is, in some respects, it’s almost a question or a word that’s always in my mind when I’m processing information, whether it’s War Now in the Middle East, or it’s a entrepreneur who’s pitching something and trying to convince me that they have a mode against ai, I almost have this voice in my head that says, well, maybe.

Now let’s unpack it. And I will tell you that I ran Washington post.com in sort of an era where this was one of the core values of the institution. I think it’s changed in the news world a lot and to be surrounded by reporters who were serious reporters. It’s not like they didn’t have ego, but they were fanatical about getting the story that was their North star.

And I think that also trained me to have a sense of persistence, but also first [00:08:00] things you hear may not be the stuff that will guide you most clearly. But in the end, we’re human beings and we have egos and we want to be right. And it’s a voice in our head that says, well, maybe let me pause and upon what evidence is that true?

And you can go from there. The great legendary editor from the Washington Post was a guy named Ben Bradley, who’s sort of a legend. He used to have this wonderful line. So you’d say something to him and he’d look at you and say, interesting, comma, if true. And I think interesting if true has been something that’s remained with me as a guy who built businesses as a investor and a lot of stuff that I do in the policy worlds now.

Ian Hathaway: Oh, I love that. I’ve got some new material. Now, what I like to say often to founders and definitely myself on a daily basis is, do you want to be right or do you want to be successful?

Chris Schroeder: I mean, the little secrets you and I know people would rather be Right. And that’s a tell you learn something in that.

Ian Hathaway: Yeah, unfortunately. So I feel like too much of the world is consumed with being right, rather than being successful. [00:09:00] We’ll dig into that more in a little bit, but I’d actually like to go back to the beginning for you. You were born in Manhattan’s Lower East Side, but grew up outside the city in the Westchester suburb of Scarsdale.

Chris Schroeder: Yeah.

Ian Hathaway: Your grandparents were all immigrants who came to this country with very little classic, you know, Ellis Island story, which really became an American dream for you. I know. You visited your ancestral origin a couple years ago, tracing your family’s footsteps in a small town in the Basili Kata region in southern Italy.

Why did you go there and what did that experience do for you?

Chris Schroeder: I’ve always been extremely interested by history overall, not in some academic intellectual sense, but in an understanding of what are the things that built us to where we are today. To give a context, I wish we can see the world and it’s very interesting to me ‘cause I’ll talk to people in Silicon Valley, like, I don’t care about history and it’s all about the future and everything else.

I’m like, you know, you played basketball when you had your ass kicked last week. Did you not learn from [00:10:00] that ass kicking and bring it to the next game? But it is a sense of trying to understand why we are where we are, what is the context to it? What are some lessons about leadership or things that have worked or not worked?

Where are the rabbit holes that people before me have gotten themselves into and not been able to pull themselves out? And can I keep that in mind without being too overly wedded to it? My family was a typical Ellis Island family from a hundred years ago, and my swath came from Central Italy and then Bocato, which was just breathtakingly poor at that time.

They also came from Naples from sort of middle class, so it was a Southern Italian story. So we found this little town my grandfather’s family was. The irony is it’s as beautiful a hill town now, as you would see in Tuscan. Yeah. And so you were kinda looking around like, grandpa, you should have stayed here.

It’s not so bad. But what really hits you in a sense of the humility is the nearest town was like 10 miles away and 10 miles away a hundred years ago is, uh, univers away. And the idea that this guy at 19 years old, his father and his wife of 17 years old, looked to each other, [00:11:00] walking around this town, I was walking around.

It looked pretty much as it must have then, and looked to each other and said, I have a great idea. Let’s leave it all. And they made the decision to go 10 miles to the next town and then 30 miles to a port and somehow or rather figure out how to get to New York City. It is a reminder. One, what I come from and a reminder of why I think I admire so much, that sense of in your teeth, I’m gonna solve a problem, whatever it takes.

That has been very helpful to me as I’ve been helping mentoring entrepreneurs.

Ian Hathaway: It’s a great story, and the very act of immigrating to a new country is an entrepreneurial act. To no surprise, immigrants in the United States are twice as likely to found companies as native born, partly out of necessity.

But I think it’s also part of that DNA of someone who’s willing to strike it out on their own, start new things. Your parents as well? They were both lawyers, but really, if you dig deeper, they were social entrepreneurs. Your father went to the first concert, Leonard Bernstein had ever conducted [00:12:00] and eventually founded an organization called Education Through Music because he was horrified that the arts programs were being cut from New York City schools.

Your mother who went to law school at age 18 as one of just two women in her class. She spent 50 years building the CareMore Center for Music and the arts. The family ethos was if you see a problem, fix it, not something that was necessarily discussed explicitly, but something that was just lived. How much of your curiosity and your instinct to ask questions like, what do you need?

How can I be of help? Two questions that you always ask me every time we talk. How much of that comes from directly watching their example?

Chris Schroeder: I think a lot came from their example. My mother’s father also served in government under LaGuardia in the city of New York, and there was always, uh, ethic that was implicit as much as explicit that if you, as you said, see a problem, you’re gonna fix it and not just talk about it or sit on the sidelines overall.

But it [00:13:00] was heavily implicit. They did not sit us down and say one day, go fix things. It really was observing when they took on things as they did, because it’s interesting to think of them as social entrepreneurs who spent much of their lives as attorneys, which is not normally thought of as a entrepreneurial venture, and I think in some odd ways seeing what their parents had been through.

Certainly the depression weight on them. World War II was a part of them. I think that they were this balance between the, also the immigrant value that you become a lawyer, engineer, doctor, or whatever it is, which was in their environment, but also saying, look, we’ve got some stuff and with that stuff we should fix things.

But I can’t remember a single time where we had a conversation about it. It was merely that you just kind of understood it and you unpacked it and you find something that you cared about. My father has always adored music, was raised very much in that tradition, but he could not stand because to him the data was crystal clear that schools that had good arts and music programs, kids performance in that school academically and in test scores, the R Square was like nine two, and yet these are the first places getting cut.

And so he came up [00:14:00] with this idea of education through music so that they could help fund arts programs and have kids exposed to music as a way not only to enjoy that in and of itself, but to build some additional musculature that was very valued. It became very large. It’s a problem that we may never be solved, but he certainly contributed a tremendous verse.

Ian Hathaway: Discovering problems, highlighting their existence and doing something about it feels like that’s what you’ve spent most of your career doing. So switching gears a bit on that, something that I don’t really get a chance to discuss on this show, the DC policy world, I spent time working in the DC policy arena during my career, so I have a bit of a window into that.

You of course, did as well during and after college. You worked inside of the Bush presidential campaigns, and then at the State Department you worked under legendary diplomats like James Baker and Robert Zeek mentors who undoubtedly had a huge imprint on you as well. But that world also taught you about something else.

It taught you about transactional relationships, people who were your best friend [00:15:00] until you left office. I’m curious what impact that realization had on you, particularly since. The world of entrepreneurship and ecosystems that we’re both operating in and thriving in today is famously the exact opposite of transactional thinking.

Chris Schroeder: I don’t wanna be overly sanctimonious about this. If we’re in business, there’s a transactional element to we do. We try to sell something and we try to convince someone. You pitch a venture capitalist, there’s a transaction to that, and so I don’t wanna blanket it. It’s problematic. But what I learned starting in those days as a kid, and I’ve seen it among the best that I’ve dealt with in the business world since, is that there’s a real distinction between people who come to you solely for the transaction short term, and if you don’t deliver it, they move on.

And someone who wants to engage with shared interest and shared outcomes of interest with a view that this could be a lifetime engagement, and it’s not always a lifetime engagement, but the nature of it is great. I know a lot of people in the policy world and globally and, and certainly in the business venture capital and [00:16:00] VC worlds, and I can almost tell within 10 minutes why somebody’s meeting with me and I know that they’re trying to get to somebody or they want my money, or whatever it is.

That kind of stuff. And there are other people where it’s the beginning of an engagement of understanding in a almost of service way. What are we trying to do here and what are we gonna be doing over time? And maybe this time there will be a transaction, but if not, there will be another transaction another day.

And we should just be under that kind of level of connectivity, under the thesis of good people, knowing good people, a lot more great outcomes come, whether they’re monetary or structural or just impact as we define it. And it was very, very clear to me very early on that the best people I saw were not hyperly transactional.

And in fact. When they got reputations of being about the transaction, they may succeed. Right? This is staggering to me how some people who I thought may not succeed end up doing very well because they’re so good at the transaction. They go, go, go, go. But they’re known for who they are and they’re not liked, and people don’t necessarily want to do business with them.

[00:17:00] Whereas there are these people who have just become legends and have done amazing things, and they really have that balance down, I think, in a very powerful way, and that inspired me, I think a great deal.

Ian Hathaway: So I think what you’re saying is it’s not just that you want to engage with people through a mechanism of a relationship rather than purely transactional.

It is in fact that in most of these cases, in these industries, I point out the example of tech and entrepreneurship, which I think is inherently collaborative, but even in politics, it can come back to bite you unless you’re truly exceptional. It’s not just about personal taste over the long term. In most contacts, it’s a better way to get where you want to be.

Chris Schroeder: I had a great sales executive in my life who mentored me a lot of times when I had sales problems and companies I invested in. We’d have this conversation, it sounds almost pedantic in its obviousness, but he would say to me, don’t ever forget. People wanna buy from people that they wanna buy from. I think the fundamental construct that [00:18:00] let’s figure out if there are win-wins together and let’s kind of go at it, does not mean that we’re not transactional does not mean that we don’t wanna make a lot of money.

It doesn’t mean that I may wanna beat you from time to time, but it’s a arc. Of understanding. And I will say, you touched on this and you and I have talked about it a lot because not only has it been exciting, I think one of the really better things one can say about Silicon Valley and American entrepreneurship writ large, but I think you and I have seen it replicate in other markets of the world.

It’s extraordinary, the generosity of time that entrepreneurs show to each other and the best of the venture capitalists show. And they’re not looking for an immediate hit because of that. I mean, they may realize that someday it could work out into something else, but it’s almost a cultural instinct. We will all get each other through this absolutely ridiculous and and absurd thing called entrepreneurship that we all know 90% of them are gonna go to zero.

And we’ve all felt it and we’ve all been there, so let’s lock arms. And that is a magnificent, and I think very genuine thing that often gets lost when people like to point fingers. They miss, I think what you articulated so well,

Ian Hathaway: one of the things you were describing there [00:19:00] reminds me of Annaly Ian’s famous collaborative competition framework.

You were on a podcast with her and Brad Feld. I’ve listened to that numerous times. I love that framework that really, it’s this collaborative competition. It’s not that we’re not competing against each other, it’s that we’re putting the cause, the mission of advance above even our own short-term interests at times.

And that’s what keeps the ecosystem vibrant and sustaining.

Chris Schroeder: It’s so interesting because the best entrepreneurs, you and I know are also killers. They are steely focused. They wanna win. You can slow ‘em down. You cannot stop ‘em. You. When we think about the super builders that you and I know, and we’ve been fortunate enough to fund a few of them, it’s not a hundred percent, but a lot of ‘em, I don’t really want to hang out with.

I don’t think I would’ve liked Henry Ford a whole lot. I don’t think I would’ve liked JP Morgan a whole lot. But the fact of the matter is, they built a lot with their tenacity and their killer instinct and transaction. But if you were to look at the arc of it overall and the kind of life you wanna live and the success you can still build, I still defer [00:20:00] to the things that you and I have just been sharing.

Ian Hathaway: Departing from your time in politics. You went to business school back at Harvard, where you went to undergrad, then into banking, private equity, corporate leadership. You became CEO of a company called Legislate, a B2B platform covering federal and state legislation, which you ultimately sold to the Washington Post in 1999 after working to bring the company into the online world.

I should also mention somewhere in all of that you had a successful DJ business that things were going great until they weren’t. On the back of the Legislate sale, you were tapped to become CEO and Publisher of Washington Post Newsweek Interactive at the age of 35. An enormous job at a relatively young age, a truly transformational time for the media business as it faced the tidal wave of the digital age.

First, set the scene a little bit for what it was like to build a digital media company at during the [00:21:00] time of the.com boom, when things were moving so quickly. And then secondly, what was the core lesson of trying to build something entrepreneurial inside of such a large storied institution?

Chris Schroeder: It’s amazing.

I think back 15 years ago, we got it to 30 million. Seemed like very big numbers and they seemed like nothing today, but they were big numbers at the time, and there were a lot of things that we experimented on that was making a case, which leads to your question, which is that there was going to be a significant paradigm shift in the way people engaged with information.

We were one of the first partners with Google, so we had a frontline understanding of how people behaved when they had the ability to find what they want, when and how they wanted to find it, how people wanna share information, how people aggregated truth. The idea that you go to one destination to know how the world works and evaporated before I even got there.

So you had all these dynamics, but when you think about those dynamics as I just rattled them off the top of my head, every one of those was a threat to the paradigm of the legacy business. The legacy business was based on the idea that you are a monopoly as a business. If you’re at the Washington Post [00:22:00] and you had a this juggernaut monopoly, local news and information sector, advertisers had no choice but to come to you, and now all of a sudden we’re in a world where I used to do this in meetings with the newspapers.

I’d show every section of newspaper and rattle off 20 competitors of every subsection of that thing to wake them up, that it was gonna be a very different paradigm. And while I think I was right on the substance of what was happening, that doesn’t mean that people loved you for it. And there were a lot of people who wanted to understand it and they were incredible co-authors.

And there were a lot of people who I think in many respects, either one wanted to squash it, or two, which one executive said to me at, actually at Time Warner at the time, he said, I know all this stuff is happening. I just want it to happen after I retire. It’s amazing to me that, ‘cause we had this flurry of new startups maybe, uh, 5, 7, 8 years ago, and you had Vox and you had, uh, Buzzfeed and all that, and everyone said that’s it.

Like the traditional news is over. And in point of fact, almost all of them are dead. And traditional news people are struggling for a whole host of reasons and a lot of things that have happening [00:23:00] with the diaspora of information. But I think you asked about lessons. One is change happens slower than you think.

Often. Not always, but I can’t tell you the number of VCs at the time who said, you know, newspapers and news will be dead in three years. And that did not play out that way. But the second thing in a way was a personality thing, because I sort of lucked into this role and I love the news and I’m very interested by it.

It was a huge consumer buy it. I thought it was important and I thought we could make it into a very big business. But when I began to observe. These structural ankle weights and the shuttle diplomacy that you described before, I actually most importantly learned something about myself. We see intrapreneurs a lot, and on occasion, people who are very successful in a large organization with a large balance sheet and so on, who do pretty well there, kind of should stay there.

Being an entrepreneur is just subsequently, subsequently different than being an intrapreneur. And I looked at myself in the mirror and said, I wanna build my own things and I have a lot of ideas and theses now how to do it, and I cannot be in that position. So when I broke off with some folks to do the [00:24:00] Health Central thing, I remember a board member from the Washington Post pulled me aside and said, what are you doing?

Are you crazy? The odds of this are very low and what are you doing? And I said to him, look, it may not work, but I’ve been dying to do this. I’ve had it in my teeth for years. I was an entrepreneurial kid. I’m gonna do this and there’s no going back. And I said, more importantly, no matter whatever goes wrong.

No one is ever gonna say to me, don’t do that because you might hurt print advertising. And he just cracked up. I mean, he got it right away. And to be an intrapreneur means a willingness and a personality type to navigate legacy that has a very different set of values and incentives. And if you are of that nature, you should do it.

And, and I think many large organizations, truly now in the AI world, we’re gonna find themselves very threatened, will need that kind of capability, instinct. Barry Diller would never have lasted a second. Mark Zuckerberg would not have lasted a second pick whatever, great entrepreneur, you know, they would not have lasted a second in that environment at that time.

By the way, I think Diller learned that because Diller did rise within very big [00:25:00] media companies, and when he did IAC, he could have very well have taken over another studio yet again. And he’s like, I don’t want that. I wanna build something that was never there before. And it’s a different musculature and it’s a different mindset.

And I would add, by the way, my first year as an outright entrepreneur was probably the shittiest year of my career in terms of my own performance. I realized that I had to up my game in a very different way. It wasn’t work ethic. I always worked 80 hours a week. It was mindset and getting out of me, the DNA of legacy.

That made me have some better success eventually,

Ian Hathaway: especially in this era of ai. I think understanding the inner mechanizations of legacy industries is going to be particularly valuable and important. A couple episodes ago we had Aeron Kaza, who’s one of the co-founders of Merta Libre. He talked about how his time at Proctor and Gamble, he was a brand manager working in marketing before Stanford Business School, before Mercado Libre.

He felt very [00:26:00] constrained in that environment, but then when it came time to scale Mercado Libre, he actually started leaning on some of those very processes that annoyed him as a young man. Are there ways, perhaps surprising ways that now you look back on it, or times when your experience in that role actually helped you as an entrepreneur?

Chris Schroeder: No question. That at a certain level of scale, you understand. There are things that need to be done operationally, accountability and so on, which are very important. But I will say at the same time, it is much better in a way to understand the importance of that at scale, but to make sure you’re doing it in the most efficacious and often new ways.

The thing which doesn’t change as much, I think, is that a leadership level, meaning I don’t think people change that much. I wish I understood this at 30 the way that I understood it. At 50, if you understand the incentive structure you put in place, in almost any operational organization, you could pretty much predict with 95% certainty how people are gonna behave.

[00:27:00] So the idea of that learning in a large enterprise of how in the end, I watched lots of people do things that actually at one level made no sense to me. But then when you understood the incentive structure, they made perfect sense. Understanding that mindset and being a realist about what motivates people and where they will behave to incentive, what is the kind of talent you want or not.

I want, I don’t have any question that some of the more established. Stuff reminded me of that.

Ian Hathaway: The incentives one is a powerful learning. There’s something that I ask entrepreneurs all the time, which is, do you know how your, your ICP, your ideal customer gets their Christmas bonus? It’s a simple question that they almost never have the answer to, but it ultimately, you’re selling to a person who has incentives that may be different from the organization and certainly different from yours.

Give all the credit in the world to my partner, Jonathan, for, for seeding me with that thought. Shifting gears, you leave the post and you join an investor group along with legendary investors like Mike Moritz at Sequoia Capital, Alan Spoon at Polaris Venture Partners, Carlisle [00:28:00] Group, Alan and Company, and eventually Barry Diller’s, IAC to acquire and essentially rebuild from scratch a company called Health Central where you or the CEO and Founder.

I know that thesis for Health Central was personal for you, and you had seen how these online communities of people going through the same thing, were helping save each other’s lives. It’s very clear your why, but it had to be a big adjustment for you. What was it like going from leading the company that we just talked about with this household name recognition, but with a lot of unwanted structure for you to then being the CEO of this company that most people had never heard of before?

Chris Schroeder: We inherited a few assets of which Health Central was one, and we elevated the brand, so we weren’t trying to relaunch it ‘cause we had a very different thesis. But what became very clear to me was the world did not need another WebMD, an encyclopedia of Health. They had very precise questions with very precise ideas of what they wanted to be.

And one, we should be delivering to those needs at scale. And two, that one of the most foundational needs that I learned in [00:29:00] the personal experience that you talked about is that if you can talk to someone who’s like you, going through what you went through and what they did worked. Then you were gonna absolutely replicate it and technology would allow that experience to scale in a way.

For me, it was the ultimate definition of empowerment. When I see someone like me do something that works and I do, it is an act of empowerment. And so I said, there’s no way how WebMD is gonna do this. These other sort of encyclopedias health weren’t gonna do it. Harvard had their own website. There’s a cacophony of information.

In many respects, I think I, I underestimated. But we realized that if we could start matching people, it could be very powerful. And the second thing that was very specific about that was the journey was not about let’s get anybody with breast cancer to a site. The thesis was, if I have an illness, what I want is someone who looks like me, acts like me, is in my background.

And the questions I’m asking are not yet. One more question about different kinds of drugs or treatment, though that’s a part of it. It’s like when do I [00:30:00] tell my children? Or do I tell my children, or I’m gonna go talk to my parents? Do I tell my parents this? By the way, I need some time off from work. I’m afraid I’m gonna lose my job.

How do I think about it? And it was only when you talk to people who had been there that those rich conversations became so profound. And so that’s what we tried to organize at scale. And there was a business model to it. It was very, very clear to me that if we could get the right advertising message, you would literally say, I’m someone who is struggling with this condition, whatever it was, and then all of a sudden, all I’m seeing are ads that are related to what I’m thinking about.

Those ads were no longer an interruptive annoyance. They in fact, were content. And because of that, we were able to charge much higher CPMs and it performed well.

Ian Hathaway: The company achieved its mission, it saved lives. Right. You’ve talked about that you grew to over 15 million monthly users, integrated five acquisitions, and ultimately you sold the company to Remedy Health in late 2011.

What went into the decision to sell the company [00:31:00] then, and when you stepped away from something that you had spent seven years building, particularly something that was so personal to you, so mission oriented, I can hear it in your voice about how valuable that innovative construct that you introduced about how people can engage with information and content around something that is threatening their lives.

What did it actually feel like for you to let go of the company? At that time,

Chris Schroeder: we had been building for about a year and a half different strategies about. How to accelerate the growth. We got very close to acquiring a very large enterprise. That would’ve changed the dynamics of the company very well. We actually had discussions about a merger with another enterprise that we would’ve split things pretty evenly and had a great CEO would’ve come in.

I could have been chairman and there was plenty of debate in the company, let’s go it alone ‘cause we’re actually, the trajectory is good. And all of a sudden we met an unbelievable CEO, just amazing guy who really understood our vision, who was working for this company called Remedy Health, that had a tremendous data and [00:32:00] traditional content, and it was a perfect fit.

And after negotiating it and going through both personal intellectual exercises that made an offer that was by far and away the best offer of how to think about building for the future. I think by that time in that process, my mental outlook was what’s best for this enterprise going forward. But I really felt that at that time in the competitive environment, one, we needed better scale, faster.

And secondly, we got an offer that was a great offer and that we all looked at each other and I said that was the right thing. But then all of a sudden, you know, the emails got smaller and the phone calls became less. And you start realizing, well, all right, now it’s time to do something else. There is, um, aour in it, but the morning was subjugated to this was a very good outcome for the enterprise and for a lot of people.

And now let’s see what we can do next.

Ian Hathaway: Speaking of that, I’m excited to get to what I think may have gotten you out of that morning period. Up to this point, you had an impressive track record, Harvard State Department, Washington Post Sequoia backed [00:33:00] founder with Mike Moritz On your board, you had a clear pathway to stay inside of that world.

I mean, who knows? You maybe even could have been an investment partner at Sequoia, but instead in November, 2010. Before the acquisition, you go to Dubai. You said that at the time you weren’t super thrilled about that trip. In fact, you were giving a keynote speech that wasn’t exactly relevant to what you were doing, but within a few hours, your life changes completely.

There were thousands of young entrepreneurs, another 3000 on the waiting list. You realize that you’ve been maybe stuck in your own narrative bias and missed this movement entirely. Walk us through that experience. What happened to you there in Dubai that changed your life in the span of just two hours?

Chris Schroeder: There was a dull roar to that particular event in Dubai because like every kind of gringo, CEO at that time, I outsourced technology to every emerging market. You can mention from [00:34:00] Argentina to Sri Lanka, right? Because it’s very easy to get high quality, great engineering at a fraction of the cost by doing so.

But unlike I think a lot of my gringo sisters and brothers, I actually visited some of my partners. And when you got on the ground, you realized almost instantly, and and Hernan would be an example of this in Mercado Libre, these people did not wanna spend their lives selling cheap engineering to people like me.

They had in their teeth. All these problems they knew that had already been solved elsewhere and could not understand why they weren’t being solved in their backyards. Mercado Libre is a perfect example of this, which is really why at the end of the day, Amazon may come here, they may not, but quite frankly, who’s better to create the Amazon of Latin America than us?

And even in the Middle East, at that point, there was not an Arabic email. And so all these young generation who were very well aware of what the internet was doing in English, and all the juggernaut activity that had begun with Microsoft and beyond in Silicon Valley began to ask this central question, why not us?

And then there was a second question, which is if everyone has a [00:35:00] supercomputer in their pocket, which was gradually happen. That meant one talent is everywhere and now you could unleash it. And two, I can deliver new services that leapfrog the traditional ones or the ones that never existed at all. And I just saw these conversations over and over again.

Anyway, in parallel of this, friends of mine who are really leaders in the tech ecosystem in the Middle East, in the Arab world, I mean, everyone knew about Israel and some amazing companies that came from there. No one, no one in America thought anything like this was happening in Egypt or Jordan or Lebanon or whatever.

Certainly not in the Gulf. In those days, Saudi Arabia was completely locked off and the UAE just looked too expensive to do something like this. And most Americans that if you ask them about the Middle East. Their answer would’ve been about ISIS or terrorism and so on. And I remember someone saying to me, he said, there are maybe 30,000 ISIS and maybe 150,000 people support ‘em, and the region is 350 million.

Wouldn’t you like to know what other people are doing in the meantime? And it woke me up so that when they had this conference, the [00:36:00] first major gathering of startups in the Arab Middle East, I was curious and I wanted to do it and I had no bandwidth to do it. ‘cause we were in the process of having sale discussions, everything else.

And they pretty much said, as a friend, would I do it? And you’re not wrong in what you said because within two hours I had been rewired of being there because it was 3000 young people who did not wanna talk about any of the geopolitical stuff. They could not have given a damn about any politician talking about anything.

They were incredibly sophisticated and creative about the problems they were solving. They knew exactly what they were. They asked me better questions than sometimes I got from people here. They had different problems than I would normally see in Silicon Valley. And it was very, very clear to me that this question of when the world has massive access to supercomputing, the whole idea of business, the whole idea of society, the whole idea of innovation, the whole idea of unleashing talent was gonna become completely different.

Than anything that happened in my year. And so at that time, I did have opportunities to work [00:37:00] in venture capital and particularly EIR. ‘cause I thought I’d go and build another company from scratch. But I got sucked in more and more to this question because I thought if I could understand this question better, I’m gonna understand something that most people don’t.

And this is where the world is going. And I should start focusing my time. So the lens became the Arab Middle East. But of course what I saw there, I eventually saw very quickly in Southeast Asia, Latin America, and China’s Exhibit a China was all of this on steroids. I mean, nothing drives me crazier. When Americans then and now talk about these places as copycats, they miss that these companies had familiar themes to successful Western companies, but they had certain clarity about things that were cultural, technological language, how people behave, how they use money, what their experience base was.

Last mile logistics that was gonna give them incredible innovation edge. In the companies they made and the journey just went from there.

Ian Hathaway: You got sucked in. Ultimately, it culminates in [00:38:00] you writing this book, startup Rising, which was the first book on startups in the Arab world. I know you made more than a dozen trips to the region.

Chris Schroeder: Yeah, a lot more.

Ian Hathaway: Yeah. Interviewed hundreds of entrepreneurs in the region from all across the region.

Chris Schroeder: Yeah.

Ian Hathaway: It’s a great book. I’ve read it more than once. There were lots of amazing nuggets in it. I think about this term, I learned from that book, wasta that you introduced, at least into my life. I apply it in lots of contexts.

Wasta is not just a Middle Eastern thing. It applies in lots of different pockets of society.

Chris Schroeder: Yeah. I’m in Washington, DC like the ultimate wasta city.

Ian Hathaway: Yeah. So Wasta, for those who don’t know, is really about this notion that you can’t get ahead unless you’re connected into the right networks, which is true in lots of different places we just discussed.

But really the success stories that were coming outta the Middle East just prove that it’s not just about knowing the nuts and bolts of building a product company and scaling. It’s the inspiration, the fact that, oh, this could be true for me [00:39:00] if that person can do it. So can I. Just tell us a little bit about the book coming together and what the initial reception was.

When you came back and explained to people what you were seeing, what was the reaction? Were people skeptical? Did they think that you were onto something or did they think you were a little bit crazy?

Chris Schroeder: I think a little bit of all of the above. I mean, why would you write a book at all? I had not written a book before.

I had blogged a lot and I had written magazine articles in Wall Street Journal and stuff like that, and very often it was in service of me clarifying my head. I realized. That is I process a lot of information. If you distill your thinking to 750 words, it’s hard to bullshit yourself, right? You need to really get to the essence of what you’re trying to say.

And the idea of writing a book was that what I observed seems so big and so important and such a case study of this bigger question that selfishly, if I spent a year going back and forth and reporting it, I would organize my thoughts and then it became clear to me if I did that it would be not just a series of articles, which I did do at that time [00:40:00] for a bunch of different groups.

Kara Swisher and others recruited me to write pieces about what I saw. Well, I wrote it. Those pieces became part of the outline of what was a book. And obviously Andreessen wrote the introduction because he was not making any predictions. But even said in the forward, this could be a trillion dollar question that needs to be looked at in a different way.

So I think when I came back, first of all, anyone. Who I met in Silicon Valley or even here who either came from the Middle East or came from a rising market, uh, they felt like I was preaching to the converted. They understood it. They knew it. They just couldn’t believe. No one was really focusing on it, but a whole swath of people.

But it wasn’t just Washington. It was like it’s a waste of time. Like there’s no way on earth this is real. I remember a top journalist at the Washington Post who published a op-ed that I wrote from one of those trips. Initially, his first reaction is, I’ve covered the Middle East for 20 years. There’s no way this is real.

And I just walked him through it and I reported him, I’m not a Middle East expert. I’m literally telling you what I saw and how technology is changing dynamics. And he took it and became a big supporter of it. [00:41:00] So it was a journey I think, of education and pushback. Some people embrace and some people just didn’t.

And I think the old narratives die hard.

Ian Hathaway: That was more than a decade and a half ago. Since then, you haven’t stopped. If anything, you are accelerating this curiosity of yours about entrepreneurship and innovation around the world. Next billion ventures, investment committees across the Middle East and Southeast Asia, the German Marshall Fund.

You fly hundreds of thousands of miles a year and you’ve backed exits like Kareem’s, $3.2 billion sale to Uber. I consider you someone who is extremely knowledgeable about the global tech ecosystem, and yet as we sort of just discussed, like the label you’ve chosen for yourself is not expert or authority.

You’ve called yourself an In-N-Out gringo, a gringo, CEO, the first person to say that no matter how many trips you take or how many books you read, you still don’t know enough. I think that’s real humility in an era where I wish more people [00:42:00] had that level of humility. Most people with your stature and experience might not do that.

They lean the other way, but you keep reminding yourself of what you don’t know your desire to question rather than tell. How do you think that’s improved the work you do in your life? More so than people who have decided that they’ve already figured it out?

Chris Schroeder: I must say there are many people in my life and career who would not describe me as humble, and I make many mistakes in my arrogance on a regular basis.

It’s more of an exercise in humiliation. It’s a beautiful thing of being my age, and you’re younger, but the difference between being 22 and 52 is you’ve been knocked around and you can either make a choice that you get knocked around and you wanna get off the field, or you get knocked around and therefore you’ve seen it all before and you have all the answers.

Or you can say, I got knocked around so I’m smarter, and now let me go dig through it. Having said that, I am deeply humbled when I go on the ground the minute I start thinking I’m getting a handle, particularly on a place. But the thing that you’ve done a lot, Brad Feld has done a lot and I’ve tried to replicate you guys in a way, [00:43:00] is that, well, I will never have the depth.

Of many of the people who have lived and have been a part of the cultures that I’m blessed to go to. I have a very unique pattern recognition by putting together trends of things in the intersection, firstly of different kinds of countries and seeing how different stages look at. I also think I have a tremendous amount of depth by also understanding how the intersection of technology, business, and policymaking has never been greater before, and that is also instructive.

I am not a great public servant. I am not the deepest person on China. I sure as hell can’t stand toe to toe with some of the greatest of Chinese expertise, but I can take a swath of interesting things and make connections and ask unusual questions that then are instructive to new kinds of answers.

Overall, I’ve also brought comfort in understanding that I will never understand with real depth. What other people have in the areas where they’ve been either focused on, they live, they come from, but I can bring on obvious connections. And often [00:44:00] the questions I ask are not only helpful in my curiosity or helping me refine thesis ‘cause I come from a different lens.

I’m very helpful to other entrepreneurs. I can bring in an analogy they hadn’t thought about. I can pull them out of their inbox and have them think about something they had not thought about before. And I think there’s a superpower in that. It’s just a different musculature that has its own value.

Ian Hathaway: I feel like you bring this journalistic lens into so much that you do.

I know your background with Washington Post was business, but it is a journalistic company. Mike Moritz, who was on your board at Health Central, famously a journalist.

Chris Schroeder: Michael and I used to talk about this. He actually was not officially on the board, but honestly he was as accessible and helpful as if he were on the board.

I learned unbelievable amounts of things from him. But early on when we were knowing each other and I did write periodically thoughtful pieces to help clear my head, he turned to me once and said, look, you’ve gotta make a choice here. I understand that this writing is service of your action, but do you wanna be a writer or do you want to build?

And I said, I wanna build, but I gotta tell you my [00:45:00] bullshit detector is in the writing. And he smiled and he said, I get it. I get it. But it was a good pushback and it was a reminder. You can sort of convince yourself the things that you do are in service. And lo and behold, as you know very well, great entrepreneurship is an exercise in focus.

And you gotta be careful of what’s serving what in the different ways you approach problem solving or question asking

Ian Hathaway: a hundred percent. Switching gears a little bit, also building on another journalist friend of yours from Jerusalem gave you this term that I know you enjoy. The third cappuccino syndrome.

Yeah. I wanna ask you, can you tell us about what is the third cappuccino syndrome, and more importantly, are we in a third cappuccino moment right now?

Chris Schroeder: She would argue that that is an element of human nature, that we’re always in the risk of a third cappuccino. And it, of course, you and I could now rattle off examples of why this is true today.

And the essence of it is how easy it is for us, all of us, to get spun up about something and then [00:46:00] get comfortable in the environment and move on. And I think in many respects, that very human instinct is on steroids now in the world of social media and AI because. It’s very, very easy to get spun up and to get value at saying, I tweeted X, or I put whatever it is on Instagram and therefore I’ve done my duty and hurrah.

And then two weeks later, nobody’s talking about a thing. And the definition of entrepreneurship is persistence in many ways. You can’t just sort of show up and say, I made a statement and move on. And yet there is a desire among a lot of us to do that. She’s a magnificent journalist and she’s taught me a lot about that.

Written amazing books also. And this first experience hit her when she was covering Jerusalem, probably would’ve been 2006 when there were attacks going on. She said, it just hit me very, very clearly that war could be here not far away. And then you go look, and the cafes are filled and the restaurants are filled, and people want their third cappuccino.

It’s like a very natural human instinct to do it. The [00:47:00] upside of it is it gives us a sense of survivability and appreciation that when things are uncertain, we can still grab onto something that we enjoy and love. But the bad thing is, what I alluded to before is that there’s a complacency in it. There is a substitution.

Of enjoyment and moving on quickly to the next thing and not the persistence that big and thorny problems require. I can remember being in Italy years ago, and there’d be all these headlines about Berlusconi taking over and making the country more fascist. And you’d go, and literally in Luca, you’d go into Florence.

The cafeterias are filled and the restaurants are great, and the energy is great, and I totally get the instinct and share the instinct for that third cappuccino, but I think there’s a real cautionary notice of that. It’s true in entrepreneurship, and I think it’s absolutely true in our willingness to stand up for things that we believe in, in any element of society.

Ian Hathaway: You once told a story about an endeavor meeting where a dozen or so entrepreneurs from Latin America, Africa, and Asia, sat down with their Chinese counterparts, and afterwards they told you, look, [00:48:00] the Chinese tech community understands us so much better than the American tech community does. Because when the American show up, they tell us how to be like Silicon Valley companies.

But when the Chinese see us, they expect us to be great Indonesian entrepreneurs, or Brazilian entrepreneurs, or Nigerian entrepreneurs. So from your perspective, what does it actually mean to engage founders on their own terms and why does Silicon Valley keep getting this wrong?

Chris Schroeder: This story, which was a very profound story.

Crystallized many experiences I had. You described it perfectly well. These were growth stage companies, all FinTech companies. Some of them had hit very large, multi hundred million dollar revenue bases and were on a good trajectory, many of whom were coming from regions in Southeast Asia and Africa and Latin America, where 80% of the population ever been banked before.

And literally we’re now learning about what it was like to do financial transactions on a phone. So it’s sort of an extraordinary thing. And what you realize generally speaking is that when you sit with an entrepreneur from Jakarta or from Cairo [00:49:00] or from Sao Paulo and they are trying to solve a similar problem, it is amazing how they share.

Very clear questions that you would never hear in Silicon Valley. So for example, you would hear literally 80% of my country has never been banked before. How do I educate people about what it means to bank and to move money and that kind of stuff? How do you navigate last mile logistics where in many parts of my country there are actually no addresses, but I need to think about how do you do that?

Regulations changing all the time. Politics is changing all the time. How do I think about this? I mean, all of a sudden there’s like a list of questions that have unique cultural and political and language differences, but are striking not only similar, but they are questions that almost invariably would never come up in Silicon Valley Venture Capital meeting.

And so here I am in Hong Jo with Ant and Alibaba. They’re some of the most senior people there with these great companies. And I literally just sat back and watched. Because this was a conversation of rising market to rising market. And China, of [00:50:00] course, 15 years earlier was an emerging market too. So they spoke the language perfectly.

They completely understood the questions that were being asked. And I watched literally one conversation form with four major regions of the world where 80% of that conversation would never have been included in a pitch in New York City or Silicon Valley. And it just hit me. There’s tremendous opportunity in that.

But there’s also a lot of shared learning. And that, needless to say, people in a place like China had a knowledge base and an understanding that was gonna serve them very, very well in a world where, you know, 80% of humanity was being unleashed by a supercomputer. And yes, the entrepreneurs love to gimme shit about this.

And I must say to you, it was two Mexican entrepreneurs who really gave me the gringo lecture about how much the Chinese were smarter than anyone they ever met in Silicon Valley, solely because of this thing. And they were funny about it, but they weren’t wrong.

Ian Hathaway: Speaking on China. I remember a couple years ago you spent a significant amount of time in China.

You wrote extensively about this on [00:51:00] Substack. Those were highly engaging articles. I recommend anyone out listening to read those. You mentioned before we started recording that you’re going back to China again soon.

Chris Schroeder: Yeah.

Ian Hathaway: What is it that you learn by being on the ground in a place like China? What question is it that you’re most hoping you can answer on this upcoming trip?

Chris Schroeder: I think the difference being on the ground and not on the ground is night and day. I have friends in Silicon Valley and elsewhere who are more than happy not to travel that much, and they aggregate incredible amount of information. They’re very informed in the world. But the fact of the matter is when you’re on the ground, you can watch behaviors and you walk into stores and you talk to cab drivers and you talk to translators who have 11-year-old children.

How they’re thinking about ai it, it is a very different exercise. I will tell you at 10 or 11 o’clock at night, entrepreneurs have a few beers. You have a very different conversation than you’d ever have on Zoom, and it’s just unbelievably refreshing and helps me reframe things. There are two fundamental things which I [00:52:00] absolutely optimize for in understanding where our world is going for whatever time I have left in the world and they are AI and China.

I don’t think there are gonna be any two issues that I could name that will have greater significant impact in the way the world will function holistically going forward. And some of those will be threats and some of those will be opportunities. And we have no idea what leadership will be like in five years.

But to me they are the most central historical shifts. And in fact, in the case of ai, I think we are wrestling with something that has no precedence. This is not some new to technology. This is a capability that allows us to think in ways that were simply never possible before. In the case of China, this is the first time in American history since World War II, where we have to deal toe to toe with an extraordinary, powerful, not only country with capability, but a culture of many thousands of years.

We have to ask ourselves, what does it mean to coexist and are there opportunities to co-author? And if not, we still have to default on coexistence. I could spend [00:53:00] every traveling day. Of my life between now and the next, whatever years I have left. And I will still not have a drop in a bucket of understanding a place like China.

But I think it is incredibly worthy for people to get on the ground because I think you see things differently. You understand things differently. You have a sense of how people view you there, and that gives you room to maneuver. And I think we’re living in a world now, whether it’s in technology or business or geopolitical, where there’s tremendous amount of instability and uncertainty, and at the same time, unbelievable opportunity to do things that you and I could not have fantasized about five years ago to say to ourselves, are we jumping down simple answers in complex areas?

Are we deferring the complex questions of a third cappuccino or are we doing the work? It takes to help to be proactive and intentional in building the world as it’s coming. And I have found being on the ground is very powerful. So to your specific question, I try on the trips to China, I’ll always go to Beijing and Shanghai and hung Zou and places [00:54:00] like that because they’re very much in the sweet spot.

I do not invest in China. I will not be investing in China, though of course, China looms large in the markets. You and I care so much about. I also am trying to get out of the, what I’ll call the gringo corridor and see other parts of China. On this last trip, I went to Shian, which is a second tier city, obviously has tremendous history, but I also have friends there who really walked me around.

And we talked about day-to-day life in Shian a little bit. I went to Nanjing, ‘cause history means a great deal to me, and it was a very, very significant cultural moment of horror in what happened in World War II there. So I wanted to understand that. Do our young people still thinking about that? You know, it gives me a different lens on it.

This trip, I’m gonna go to Sichuan and I’m gonna go to Chung Du and to Chung King. There will be business people I meet that will be interesting and what have you. But you know, most Americans don’t realize that these are like, these are cities of 30 million people and I wanna see something that’s outside of the corridor where I’m usually most comfortable and kind of watch.

The worst case scenario is I’m gonna see [00:55:00] interesting stuff and eat very well. But I have found in every trip that I go to, I come out thinking significantly differently than I felt going in.

Ian Hathaway: I wanna end where we began with this idea of asking the right questions. ‘cause right now there’s something I’m wrestling with internally.

You mentioned AI and China being the defining moments of the day, but I’m thinking about the country that you and I are both in right now as we are recording this. We’re genuinely in a strange moment for America’s role in the world, including for America’s relationship with the global entrepreneurship community.

We’re at war with Iran. Our relationships with traditional allies, longstanding relationships are strained. The Chinese tech community, as you described it, understands emerging markets founders better than we do. I’ve seen it firsthand in Latin America, Asia and Eastern Europe, and yet this is also the country that defined.

High tech entrepreneurship, right? That produced the most transformative technology [00:56:00] companies in history and really invented the social and cultural blueprint for how to create an environment for innovation and entrepreneurship to sustain, to thrive. So given everything that you’ve seen on the ground in so many places, being an American, but really a, a citizen of the world, what are the questions that American entrepreneurs and investors should be asking right now that almost nobody is asking?

Chris Schroeder: It’s such a powerful question. There are many situational elements of it, but I would tell you a couple of things. One is an environment and uncertain times with things changing as rapidly as they are, and with technology compounding it in many ways, one of the biggest things to do is breathe and say maybe and ask questions.

The act of being able to breathe and to ask the question and now have tools available to say, is this actually true? Do we really have evidence of this? Or are we acting as if we have evidence of this is an incredible one opportunity. It also has been something [00:57:00] psychologically helpful to me, this ability to sort of say, is this true?

Is it possibly true? But we don’t know yet, so let’s breathe. Is it helpful to me, even if it is true, is I think a tremendous opportunity that not just entrepreneurs, but all of us can bring to bear in a system that right now that rewards political polarization on each side and not a lot of latitude and freedom to be able to pause and breathe.

And ask those questions. And I think it also compels us through incentive to be very short-term focused and the ability to sort of say things are the way they are now. And I must say, Ian, I think there are a lot of cards on the table now that have been laying on the table for years. We may not have wanted to look at them for what they are, but I think the rise of China, there’s a lot that we hadn’t really thought about before.

The idea that 90% of Europe’s energy would come from one country, everyone kind of knew it but didn’t look at it. The idea that all of us wake up with 95% of our chips and the most advanced chips coming from one island, I mean, we have this ability. To ask questions [00:58:00] that have been brewing and are not just of the last year or 18 months, but have come to roost in a way that’s very important.

That approach, I think, can be very powerful, whether we’re thinking about politics as society, but is a very, very similar approach to the companies that you build. Because I think a lot of times, and I see this a lot, not just internationally, but very much in American entrepreneurs, is they have all the buzzwords down, but they’re not actually telling me a problem that they will solve over time for which they have a sustainable moat to do so.

And there’s a first principles element in everything I’ve just talked about that I think each of us individually can bring to bear. Not only in the questions that we ask, but the way we think about and frame them.

Ian Hathaway: It’s a great perspective. I’m definitely concerned. I feel like in so many ways we are on our sixth cappuccino, not really dealing with the fundamental issues in front of us.

Too busy being enraged.

Chris Schroeder: It’s real. I’m with you, cat Rapon to hopeful elements that come from the same space and they’re not enough to counter your worry and my worry, [00:59:00] I hope nothing I’ve said does not suggest that I’m not concerned about where these moments can go, because I tend to be a very hopeful man in the vlo haval sense.

But I also know that enough of a historian to know how things can go in other ways. But I gotta tell you something. My youngest works for SpaceX, and when you tour SpaceX. It’s hard to articulate how moving that experience is. Again, this does nothing to do with personalities. It has to do with being a mile long facility where people from all walks of life are building things that you and I could not have fantasized about in high school and college.

And it’s moving and it’s a reminder. And I’m sure you watched, and I know I was glued and literally teared up watching the launch of the first human craft going to the moon. Maybe it’s a version of the third cappuccino, but I don’t think so. I think this is a reminder to us that there’s so much actually that we can do, and the craziness that we’re dealing with and the things that people wanna focus on, what is problematic about ai, we will cure cancer with this thing.

And so it is a good reminder, I [01:00:00] think, to me, as something of a counterbalance, knowing full well that if you counterbalance too much, all of a sudden you’re on your third cappuccino. So we have to be alert and attending. To the worry that you and I, I think, share in many ways and remind ourselves of the unbelievable things that we do at big scales like going to the moon.

But also you and I could probably rattle off right now if we had more time, 10 human beings we saw this week who are doing such impactful things for their communities or for their families, and that’s very powerful. And not to be lost track.

Ian Hathaway: That’s a very optimistic way to wrap the conversation. I agree with that wholeheartedly.

But before I let you go here on Outsider Inc. We like to finish with a little segment called Beyond the Bio. These are just some quick hit, quick answer questions that go beyond your resume and let us dig into you. Sound okay?

Chris Schroeder: Sure. Great.

Ian Hathaway: Alright, let’s do it. What’s a quick piece of advice from a mentor that stuck with you throughout your journey?

Chris Schroeder: God, I’ve gotten so many of them overall, but I think Harold Tanner reminded me [01:01:00] often. About the long-term power of relationship building in many ways. He was the first guy many years ago who really showed me an action, indeed, the difference between transaction and, and long-term relationship engagement.

Ian Hathaway: Well, I can see you’ve embodied that throughout your life and career. Who is an unsung hero in your life and what has been the impact they’ve had on you?

Chris Schroeder: Yeah, I think people often will talk about older people as unsung heroes and all. But my kids are my unsung heroes. They have very different drummers.

They have done things in very, very different ways and have different passions. They’ve taught me unbelievable things about those passions, and they’re circumspect. They are humble, they’re incredibly funny and self-effacing, and they’re reminders to me to stay focused on things that matter in the way that we can be helpful to each other.

Ian Hathaway: Who’s someone in your local startup community or in your broader network who doesn’t get enough credit and deserves a shout out from you? [01:02:00]

Chris Schroeder: Man, there’s just so many courageous entrepreneurs. I really can’t single them out. I like you. I talk to three entrepreneurs probably a day. 80% of them blow me away and what they do and the courage, I would say that there are several that have stuck to their guns in places of impossible calamity.

Sometimes in the Middle East and Syria. Refugees who I’ve met in other parts of the world, I have that perseverance. You can slow me down, but you can’t stop me. And this is the opportunity for me to build something helpful in a moment. I have a special place in my heart for them.

Ian Hathaway: Tell us something most people don’t know about you.

Something outside of work could be a hobby, favorite travel spot, a guilty pleasure, or maybe even a hidden talent.

Chris Schroeder: I’m not sure I got that much in talent, but you touched on something parenthetically that surprised people generally speaking, which was earlier than you suggested in high school and college.

I was in fact a dj. If people think that I was the cool thing that we think of DJs today, I want you to think of the greater New York City area of weddings and bar mitzvahs. ‘cause that was kind [01:03:00] of it.

Ian Hathaway: Oh, that’s great. Well, building off of that, what are one or two songs you’d like to add to our Spotify founders playlist?

Maybe something that fuels your workday or it has inspired you on your journey as an entrepreneur.

Chris Schroeder: I am a fanatic of music and I like many things overall. I wrote my book to Bach and I love jazz and have dear friends who have shared that. And I love a lot of the current music now, particularly in areas of hip hop.

And I will tell you that I think some of the most interesting hip hop storytelling and flow is coming from Asia and particularly Korea. Lee Young G is one example of it. But I will tell you that through Ben Horowitz, who has created this incredible thing called Paid in Full, he has built an enterprise that has helped give economic support to the kind of the founders of the hip hop generation.

People that I think a lot of kids don’t know anymore. Quincy Jones did this for jazz artists. ‘cause you know, many of the geniuses who built jazz in the forties and fifties, sixties ended up homeless. No one remembered them and whatever this has happened. With the pioneers of [01:04:00] rap and hip hop in the seventies, eighties, and even nineties.

And so when I listened to someone like Rakim who, or people my age will remember, but a lot of kids don’t. It’s poetry. I mean his, his word and flow is poetry. In fact, he was very inspired by jazz saxophone and tried to replicate that in his flow. And there’s not a great rapper today, chancellor, rapper, or Kendrick, who would not tell you Rakeem was foundational to who they are.

And so folks like that, their music is incredibly inspiring to me. Then your entrepreneurs would love one of the epic songs of Rakeem who’s paid in full, and so you can play that one.

Ian Hathaway: All right, we’ll add it. I know you are an insanely voracious reader, so this question is almost impossible, but let’s give it a shot.

What’s a book you’d recommend, maybe something that’s been especially valuable to you on your journey, or one you think every first time founder should read as they’re getting started?

Chris Schroeder: I read over a hundred books a year, and my goal is 150, which I didn’t quite hit last year, but I’ve tried to do. Look, I mean, there’s a tactical answer to your question from an A founder perspective, Ben [01:05:00] Horowitz’s books, both of his books on culture and the hard things were unbelievable.

Our friend and hero, Brad Feld has written amazing books. You’ve written amazing book about entrepreneurial ecosystems and also kind of a handbook of how to think about things, which I think are very powerful. But I really think in the end. That the best books, quote unquote, to help entrepreneurs are in history and biography, and to understand perseverance and how people think and how human behavior is, and also to try to aspire to get more of a bottom up view of where the world is going.

So very concretely, in preparation for my last trip to China. Late last year in November, I read, I dunno, 25 books on China. And most of ‘em were very good. A couple of them were exceptional. But the one that jumped out was a book I deliver parcels in Beijing. And the book was written by a Chinese gig worker who had a blog for many years that got fanatically valued in China.

And he turned it into a book and literally he had like 18 jobs in eight years and he was literally delivering parcels, but he also worked on warehouse floors. The book is extremely [01:06:00] poignant in that it talks about how hard that work is and the expectations of not being able to go to the bathroom and other things.

It’s very funny. There were stories that were hilarious, but it was an incredible reflection about how I think about work. Like, do I wanna be 9, 9, 6? My parents want me to be an engineer. I don’t wanna do that. You know, everyone says the young guy should be 9, 9 6, which is the Chinese way of working very hard.

I don’t want that. You know, maybe my gig life for all of its problems. Fits the kind of life I wanna live or does it this incredibly poignant view, not from China experts telling you about China and economy, but what are real people on the ground navigating? I just couldn’t get enough of it. It was a brilliant, brilliant book and it changed me in many ways.

Ian Hathaway: That sounds incredible. I’m gonna check that out. I also agree with you obviously Brad Feld, amazing writer, Ben Horowitz. I love his book. What You Do is Who you Are. Even the statement, the book is amazing. The stories in that book are incredible, but just that statement is something I try to think about often and history, right?

So the book I try to read every day [01:07:00] is Meditations by Marcus Re, Marcus o.

Chris Schroeder: Good for, I no surprise that you say that. I swear to you that what a wonderful thing because if every entrepreneur had that on their end table, they’re, they should not take their foot off the pedal one iota, but they’d be more circumspect about what their day brings.

Ian Hathaway: Fantastic book. Okay, so last question, Chris, if you could give one piece of advice to someone who’s about to start their first company today, particularly someone who’s a bit of an outsider, what would it be?

Chris Schroeder: You need to have a problem that you wanna solve it in your teeth. You can’t imagine not solving the problem or grab the opportunity that you want.

And in parallel with that, you know more about that problem and activity. Than almost anyone around you and never, ever be intimidated by money. I can’t tell you the number of entrepreneurs who go meet venture capitalists will come to me like, well, the guy’s rich, so he must know something. I don’t know.

If you have a great idea, the money will come, and if you don’t, it may not. But this idea that if you get to meet with Sequoia, then all of your problems are solved and [01:08:00] you’ll be great forever, is a story we tell ourselves in the head that have no bearing on the actual outcome of what you have. Money matters, and having people around you who can shore up your weaknesses can be additive, but there’s a courage in sort of saying, I will not be intimidated by money and I will focus on this thing that I can’t imagine not solving.

Ian Hathaway: That’s a great perspective, certainly a unique one that we’ve had on the show. I can’t think of a better way to end. Chris, thank you so much for being here and sharing your time and wisdom. I’m so excited to share this episode with our listeners.

Chris Schroeder: Honored to be with you and you’re a great friend, so thank you.

Ian Hathaway: That’s a wrap for today’s episode of Outsider Inc. A big thank you to Chris Schroeder for bringing his curiosity and candor to the conversation. What stays with me most isn’t the impressive resume. It’s the choice Chris made in Dubai to abandon the path he seemed destined for, and instead chased the questions most people don’t ever ask.

He traded certainty for curiosity, expertise for exploration, and spent 15 plus years discovering what [01:09:00] most others. Miss. Chris reminds us that the most powerful position you can take isn’t declaring what you know. It’s admitting what you don’t. That humility isn’t weakness. It’s a superpower that being wrong isn’t failure.

It’s the first stop on the path to getting it right and that the best investors, builders, and leaders aren’t the ones with all the answers. They’re the ones still asking better questions. For outsiders listening, get on the ground. Challenge your narrative bias. Don’t miss what’s actually happening while you’re sipping that third cappuccino.

The next billion dollar insight might be waiting at a place you never thought to look. If you want more from outsider, inc, don’t forget to subscribe to the platform@outsiderinc.substack.com. It’s packed with highlights from today’s episode and bonus insights you won’t wanna miss. You can follow Outsider Inc on YouTube, Instagram, TikTok, and LinkedIn at Outsider Inc.

Pod. You can also follow me on X at Ian Hathaway Outsider, Inc. Is produced by Spell Binder Media. We’ll be back soon with another [01:10:00] fascinating outsider conversation. Until then, thank you so much for listening and remember, great entrepreneurs can come from anywhere. See you next time.

Listen on: Spotify, Apple Podcasts, Amazon Music

In this episode of Outsider Inc., host Ian Hathaway sits down with Willy Schlacks, Co-Founder and President of EquipmentShare, to explore what it really looks like to build a category-defining company outside Silicon Valley. Willy shares how EquipmentShare grew from operator pain in the field into a vertically integrated construction tech platform spanning technology, equipment, and services, and why embracing constraint can be a strategic advantage, not a limitation. They dig into the chaos of jobsite operations, the early decision to take a platform approach, what Willy learned from time inside Y Combinator, and how building from Missouri forced the company to master scale early. Willy also reflects on taking EquipmentShare public at a $7B valuation, building the startup ecosystem through Redbud VC, and what he looks for in founders when the hard part is still ahead.

Show Notes:

(03:00) Why struggle and friction can be an advantage

(10:00) Curiosity, questions, and what “creation” really means

(16:10) Reframing mistakes and failure as fuel

(19:05) The operator pain behind EquipmentShare

(23:00) The jobsite moment that forced the idea into motion

(27:00) Inside Y Combinator and what Willy learned from the Silicon Valley bubble

(29:05) Building from Missouri and the meaning of “home”

(32:45) Constraint as a forcing function for scale, systems, and resilience

(35:25) Going public and what founders misunderstand about the shift

(38:10) Redbud VC and building an ecosystem close to home

(41:10) What Willy looks for in founders when success is still unproven

(46:05) Legacy, ritual, and the long game of creation

(48:00) Beyond the Bio: Willy Schlacks

✅ Host: Ian Hathway - Co-Founder & Managing Partner, FOVC

✅ Guest: Willy Schlacks, Co-Founder & President, EquipmentShare

Produced by Spellbinder Media. Executive Produced by Bridge Five Ventures. Copyright ©️2026, Bridge Five Ventures, LLC, All rights reserved.

Listen & subscribe wherever you get your podcasts or at outsiderinc.substack.com.

AI-Generated Transcript

Willy Schlacks: [00:00:00] In starting EquipmentShare, I think you still made every mistake in the book. It’d be hard to find a mistake we didn’t make. So I would just encourage people who moved on a path of creation that the way we label these things like mistake and failure or. So wrong. If we could recapture those words so they don’t have a wrongness to it, then they’re very useful.

The most important thing is that your perspective is just deeply grateful to be breathing and creating.

Ian Hathaway: Welcome to another episode of Outsider Inc. I’m your host, Ian Hathaway. Today’s guest is Willy Schlacks, co-founder and president of EquipmentShare, and one of the most intentional builders we’ve had on the show.

Willy’s story doesn’t begin in a startup hub or around venture capital tables. He grew up in a cloistered environment in rural Missouri, a world with no private property, no personal ownership, and strict control over money and [00:01:00] agency. Inside that environment, entrepreneurship didn’t show up as ambition or status seeking, but as a curiosity, a way to engage with the world and learn how things worked.

Alongside his brother, JAIC Willy began building real businesses at a young age, learning through necessity how to pre-sell, reinvest profits, and operate with discipline long before those ideas were fashionable. When Willy left that environment in his late twenties, he entered the capitalist world for the first time and effectively started over.

That reset eventually led to EquipmentShare. A company born not from chasing a hot market, but from lived experience as an operator, confronting work that was reactive, chaotic, and disconnected, and deciding it didn’t have to stay that way. What began as a focus solution grew into a vertically integrated platform spanning technology, equipment, and services, scaling from a startup weekend idea in Missouri into one of the largest companies in its category.

Along the way, Willy made a series of deliberate values-driven choices. Building outside of Silicon Valley, embracing [00:02:00] constraint instead of comfort, choosing venture capital only when the problem demanded it. And just a few weeks ago, taking EquipmentShare public at a $7 billion valuation while retaining long-term stewardship of the company.

In parallel, he’s investing deeply in founders building far from traditional tech centers through Redbud vc, helping shape the kind of ecosystem he believes great founders actually need today. We’ll trace how those experiences shape the way Willy thinks about building from why constraints matter to how leadership evolves at scale, and what it means to stay close to the work as the stakes grow.

Willy, welcome to Outsider, Inc.

Willy Schlacks: Thank you. It’s quite the intro almost seems like we’re done.

Ian Hathaway: Well, you have an amazing story. I’m so excited to have you here while reading and learning about you. A theme that kept surfacing was the importance of struggle. The idea that too much ease can be its own trap, and that meaningful progress often requires friction.[00:03:00]

Most people spend their lives trying to add comfort and remove struggle. You do the opposite. So from your perspective, why do people so often misperceive the value of struggle, and in what ways have you seen it function as an advantage?

Willy Schlacks: Yeah. You’re going to the heart and soul of what it means to be human, which is an interesting topic for this day and age.

I think comfort and struggle. For me, there’s this innate common experience that I observe in myself and other people where we want ease and comfort, but the extreme boredom on the other side of that. Is very apparent. We can certainly observe humans who sort of accept maybe that reactive, here’s comfortable environment, and then I’m forced into uncomfortable.

And if life puts me there, I’m always trying to snap back to comfort. And that’s generally fear driven. But when I look at things that are creative or built or movement, these are the patterns that really get me excited. So my experience of. What is creative? What is [00:04:00] movement? What’s the dance? That’s where it looks a lot more like music and there’s certainly a cadence to it and there’s harmony if we want to use that pattern, but it’s where this human experience suddenly shifts away from a programmatic.

We’re all just doing a similar thing to, we are creators of something in the future. The ability to create that future is something I think we underappreciate, and that’s really what gets me excited about pursuing the North Wind of discomfort versus the couch of, oh yeah, this feels good. Oh yeah, I like it, but I get bored very quickly and I think everybody does.

Everybody wants something more. Instead of life being lived, they find themselves in a bullying lane with the lines up. It’s a fun little game, but there’s just so much more than that. It’s just the expiration that I continue to discover every day, and I enjoy it. The only time things stop is when we’re dead, so I’ll have plenty of time to rest then.

Ian Hathaway: I feel like actually [00:05:00] we have an epidemic in society to avoid discomfort of any kind, avoiding short-term pain at all costs. So to make that idea a little more concrete, I’d love to rewind to the beginning. You grew up in a cloistered, highly structured environment in rural Missouri. One where money ownership and even personal agency worked very differently than how they do in the outside world, at least for most of us.

Can you paint a picture of what daily life was actually like in that environment and how that way shaped how you think about work independence and building.

Willy Schlacks: First off, I feel so much gratitude, like the lens I see just is filled with deeper gratitude. Now, I don’t say that to negate pain or other people’s experiences because when I think about my early life, it was just in this environment that was definitely filled with certain things like fear.

Control. But for [00:06:00] me, I don’t shy away from or label those things as bad. It’s like, no, that’s part of this experience, this environment. Yeah. It was very cloistered. Everything was controlled when I was a kid. Didn’t really know anything outside of that. That was life. Everything was communal. There was no such thing as personal property.

Well, if there were personal property was pretty. Small intangible, like maybe your clothes, but even then, one of the calendars that we had kids was the clothes we would wear every day. And growing up in that, I never thought that that was unusual. Of course, ‘cause you grow up in it, but I didn’t expect to have agency over the clothes I wore.

I just was like, yeah, everybody has a calendar and somebody’s telling you what clothes you wear. It’s just all I knew. And it’s a funny flavor of the culture that I grew up in and I think as a kid. Those experiences that can be very different than as an adult or as a mind. That then starts to question and read and explore thoughts beyond a known environment.

And I really credit my parents for my curiosity and my exploration because there was a very [00:07:00] tight knit worldview that was imposed on us very tight knit with a heavy dose of fear if you didn’t comply with that worldview. But my parents are, were always like, yeah, I mean, this is it. But if you think of something else.

Go explore it. Like they always had that release valve for me and a lot of other folks there didn’t like, that was not an acceptable thought and I took advantage of that and I really explored in my mind and encountered philosophy at a young age, and they sort of banned the public library, which made all the more enticing to go discover books and the rethinks that were.

Banned and wrong and evil. And I think that’s where I also started to explore the concepts of, well what is that? What is this human word of evil? And what is the word good and what was the origination? Now, of course, in the environment I grew up in, there was an extreme rapper of religion around all of that.

And that was an unquestionable thing. You couldn’t question it. ‘cause if you question it, everything sort of crumbles. [00:08:00] And it did teach me, you could never label or consider curiosity as wrong. Curiosity to me is just, I’m like, yes, I’ll be the wind in that sail, whether it’s my kids or people I work with or whatever.

Because I experienced the fear of others when I would be curious. And what I quickly realized is that. Fear is just the caution tape to a question because all they’re doing is saying, Hey, your curiosity, you’re about to step across my caution tape and holy fuck, that’s gonna destroy my world. So please don’t.

So for me, when I would push on questions as a kid, and I really enjoyed it because I suddenly discovered that people would bristle up and it was meaningful to them, and I would push on. Their views of religion or the why of life or what is life, and I didn’t do it in the sense of I was right. I did it with questions and I started to learn that you can discover so much with a question and you had very little to discover if you had [00:09:00] the answer.

And it was those early experiences where I started to at least subconsciously appreciate that being right about things is the most freaking boringest thing on earth. Not knowing is just the adventure that you wanna be on. And as soon as you absorb something and it feels right, like okay, check it back there because it’s no longer interesting and you want to build on it, the theme and the movement of life and where I found as a kid that whether I would sneak off and go to the library and get books and feel guilty about it because it was wrong, but at the same time deep inside myself, start to form and question why is this wrong?

There was a lot of control around, particularly relationships and interactions. If they controlled the clothes we would wear, they probably controlled everything else, as you can imagine. But also to know that it didn’t matter to me, like what I enjoyed as a kid was the things everyone enjoys, you know, friendship and playing and all these other things.

And [00:10:00] I can remember that and taste it and also remember and think about the times where there was fear and darkness and all these other things, and I appreciate the complexity of that.

Ian Hathaway: That’s very fascinating. I wrote this down. Fear is a caution tape to a question. I haven’t heard that one before. You mentioned things you were curious about, books, philosophy, something else was entrepreneurship.

For you, more of a channel for curiosity, more than ambition. Maybe it’s not what you were calling it in your mind, entrepreneurship, but what do you remember about some of those early experiences, tinkering, building businesses? What were you trying to do? Were you trying to access knowledge, freedom, control?

Meaning, what was inspiring you to

Willy Schlacks: be able to create. That was the heart and soul of it. You have a fairly controlled environment, and I think this is true of any human. There’s something inside of us we want to express, we want to build, we want to create something, and whatever that medium is, we’re gonna lean [00:11:00] into it.

But for building businesses, it was creation. We didn’t even think of it as really building a business, even though we were, and I was fairly young when we started some of those efforts, my brother. Was six years older than me, so he was always more responsible and doing the adult things, and I was like literally a kid just coming along for the fun of it.

Now obviously as we both got older, we had some fairly sizable business ventures going on, but the unique aspect of it is we didn’t keep any of the money. ‘cause it all went to this environment and that didn’t bother us. We never thought about it. We wanted to make money. It was like, that’s the thing of whether we’re succeeding or failing.

But actually having the money was meaningless to us. We never had experienced that. There was certainly no driver beyond the fact that it was fuel for the next thing. But yeah, creating was amazing and I loved whatever the medium was. It was incredible. But there was so much risk to this creation of building a business.

Suddenly we would find ourselves outside this environment in a whole new world that we call them the others or whatever. [00:12:00] It’s like, well, these are the people that are outside and they’re paying us money, and so what do they want? And you start to get to ask these questions about making stuff people want and what if the stuff that you make is stuff you enjoy?

And so a lot of our early businesses had flavors of construction and craft and service things and whatnot.

Ian Hathaway: You mentioned going outside. Eventually you did. You left at age 27, which was not just a physical move, but a full reset. You were already married, you already had a child. You’re stepping out into this totally different world.

You mentioned your brother Jaic. He left as well, and along the way, the two of you have built everything together. I’m curious about that partnership. How did it form so early, and why do you think that particular division of trust and responsibility has held up across decades of building companies together?

Willy Schlacks: My brother Jabba, he’s ridiculously high integrity [00:13:00] person for him. It’s a very binary world for me. It’s a very fluid musical world. And so the reason it worked so well though is because we had always had a different perspective of everything, but ultimately a very similar route and a very similar outcome.

So through that understanding, we knew that there was nothing hidden. There was nothing inauthentic about our engagements. Like when you engage with another human who is authentic, it’s magic. You just win the lottery at that moment and you’re like, okay, let’s stay connected for as long as we can, or whatever this experience is gonna give us.

Whatever that relationship might be. It might be a spouse, a sibling, a business partner, whatever. But we’ve all had experience of encountering humans where we discover the inauthenticity and the older we get. I’m like, shit, I don’t wanna spend time with that. So yeah, my brother is so insanely authentic to a core that it made it really easy.

We didn’t even think about it. I [00:14:00] was like, of course. Who else would we. Business with?

Ian Hathaway: Well, it’s not always such an obvious answer. In fact, you know, many people would never do business with family members. But I think it’s a testament to the relationship that the two of you have. One of the components of that has been clear boundaries on responsibilities.

You’ve described in the past having this consistent split where he sort of runs operations and you’re more focused on customer and product. How did you discover that division and does it ever break down?

Willy Schlacks: Oh, it always breaks down. Yeah, it was just leaning into our strengths. I definitely love the ambiguity.

Whatever is ambiguous and unknown. That’s where I love to run to Jaic. He does not quit. He’s ruthless. He’s also a detailed operator. Everything has to be a known quantity in his world. So these two lenses that we had on the world really created strengths for him when it comes to operations and execution.

And then for me, you can have [00:15:00] five things that are all true at once. Like most people would struggle with that, but for me, it’s just an interesting puzzle. But for his world, I would say he has to collapse Those things, like reality has to collapse into something, and he’s much better at that than I am in the operational side of the business because everything does have to collapse into something.

Whereas I’ll sit there with my team and go, well, you know, there’s multiple possibilities. And they’re like, well, what the hell are we supposed to do with that can’t really do tomorrow with, with that type of response. So our strengths is what ultimately led us to handling different parts of the business.

More businesses as we were building them.

Ian Hathaway: Good compliments. That’s important in any business partnership. I want to, of course, get to EquipmentShare in a minute, but before we do that, we’ve kind of hinted that you and JAK have built multiple businesses before EquipmentShare, not tech, not venture. These were real businesses with customers and cash flowing.

You reinvested [00:16:00] profits stayed close to your customers. What were the core operating lessons that were forged during that time period that still shape your decisions today? And then maybe conversely, what lessons did you have to unlearn when you were building at scale?

Willy Schlacks: Yeah, we did some technology things too, like even in that environment we grew up in.

When I was a kid, I first encountered computer programming. I didn’t even know it was computer programming at the time. So we did a bunch of different things, including trying to start a technology company. It then got shut down when they realized what the internet was J it got put on church discipline, but we were always pushing the envelope.

I don’t know how many businesses we started before EquipmentShare, but quite a few in a lot of different domains. What I would say your question though of what did we learn even in starting EquipmentShare. I think we still made every mistake in the book. It’d be hard to find a mistake we didn’t make.

So I would just encourage people who moved on a path of creation that the way we label these things like mistake and failure are just so wrong. [00:17:00] If we could recapture those words so they don’t have a wrongness to it, then they’re very useful. The most important thing is that your perspective is just deeply grateful to be breathing and creating.

Doesn’t matter. If the thing that you did yesterday looks a little dumb compared to the thing you know now, that should be an obvious thing that should be occurring. Just the movement and progress of thought. Because yeah, you’d think after we built all those companies, we’d maybe do less things that people would observe as mistakes.

But no, for us it was learning. It was fun. So if for our advising people that, Hey, based on everything you learn what’s important in business and all this stuff, first and foremost, it’s derivative of you. You can’t escape yourself. If you are not authentic with yourself, you’re gonna be screwed up. This is the barrier.

You are that doorway to something where it just feels so amazing or you have regret in these other types of emotions that are completely unnecessary to live with, completely [00:18:00] unnecessary. It is a choice even when it doesn’t feel like it, it starts with you. I didn’t realize that till much Later on.

Pursue yourself. Give yourself a break too, just because you love money and you wonder if you shouldn’t. Who the flip cares love money because as soon as you get it, you’re gonna wanna love something else. And that’s okay. The way in certain societies we apply a moral wrapper around the things we chase is, is not helpful.

It actually just creates this divergence from the reality of what we feel. So embrace the feelings, embrace the internal knowing, and whatever your future is, it’s gonna be mind blowing versus. The level of control or the conformance that you wanna bring to your life. That’s probably what I am deeply grateful for about my upbringing is that I learned early on to not conform.

I loved being an iconoclast. I think if I had grown up in what we would call normal and it’d be quite a struggle, like the biggest struggle to humans in this day and [00:19:00] age is a moderately middle class or wealthy easy upbringing. That’s something I’d find challenging to surmount, and I worry about that with my kids.

I’m just putting so much barrier in front of ‘em. They’re gonna have to be super humans to get to the other side of it.

Ian Hathaway: That’s great. I agree with that. I wanna switch gears if we could, to EquipmentShare. What eventually became EquipmentShare was not about chasing a market opportunity, but confronting something that you and your brother kept running into over and over again As contractors, job sites were reactive, chaotic, and disconnected.

So what was the moment that you realized this wasn’t just your problem, that it was a systemic issue, a failure across the industry? And then secondly, once you realized this, how did you actually take steps towards solving this problem for other people?

Willy Schlacks: We assume everyone else was more organized than us, but we also could observe that even [00:20:00] that perception of maybe they’re better than we are still was a.

Leap and bounds from any contemplation of an industry moving forward and leveraging this whole digital world that had developed since late 60 seventies. Everything still was incredibly analog within another set of friction and duplication within certain digital realms. The chaos of an industry that has job based, I mean, there’s other job based industries, but nothing at a scale of construction where we have 14 trillion of stuff.

That moves towards a job based environment because a job or a project is a proof of concept. It’s very different than manufacturing or retail or any type of other industry that you sort of refine the same thing over and over again. You still have a lot of challenges in any environment of building a business, but when the outcome is once a proof of concept, like you build the bridge or the building or the tunnel or the house, it’s like, yeah, you’re not gonna do that again.

You sort of have to deconstruct into the things that you will do again. [00:21:00] But the whole digital revolution, what it could enable, and what we believed was that even with all these challenges. In construction and with an industry and humans that could absolutely still build stuff and keep getting better, but it was all analog driven.

The digital side was not helping for the built environment. Now, different for a design phase. When you design something that’s, that can absolutely be translate to largely digital, but the built environment you’re dealing with is physical realm. And if we wanted support. An enhancement from these digital tools, then you had to have a platform approach was our belief.

And because things weren’t wired up like a manufacturing site or a farm or retail. You had to have a platform and primitives in that digital world that could contemplate this crazy, flexible, chaotic movement of goods and services and entities interacting. And was a bit of a macro observation because we could observe and had deep experience in this [00:22:00] industry for decades.

We knew what it felt like to be chaotic, and we also knew that nothing was changing. Even as tools were showing up, we also felt certain severe pain points that felt matic of this problem that could be alleviated if a solution existed, if a platform existed, and one of our most severe points was.

Equipment rental, which is why we started that space. We never started the company with a thought of, this is our domain and this is the end. The day we started a company, or even when we started thinking about it, it was always a macro problem of, well, how big is this entire thing? And we wanted to find our landing pad, but we never constrained the thought to that.

We’ve been thinking about this for our whole lives, but the spark that launched it, we had a bunch of jobs going on and there was one project that was. Ridiculous in its intensity, its schedule, and it was a big, huge utility project, 16 feet underground. And we were connecting live sewer [00:23:00] and water and all this stuff.

And I remember it was freezing cold day. It was raining. J was 16 feet underground doing a live sewer connection, and we couldn’t find the equipment we needed, so we had to go rent some stuff and combine this whole environment where. It was such a specific high intensity urgent thing. We’re constantly sending people to go rent stuff and by the end of it, everything was fine.

It all got figured out like it always did. We were just problem solvers. Didn’t matter what the problem was. It was like, of course we’ll solve the problem, but we could sort of reflect and go we a shit storm literally and figuratively in this case. And I remember at that point I was like. We have to do something like this is so freaking insane.

It was everything from the economics of the rental provider that we were working with to the lack of their organization, to the lack of our organization. Nothing was measurable is what it felt like. So it all required superhuman effort on our part. We felt like that was fairly similar [00:24:00] for most companies we encounter in the industry.

You had some amazing superhuman people that could practically do anything, but if you’re always relying on super humans, can’t we alleviate that somehow? Can’t they progress past being the tip of the spear every single day? There’s a level of excitement around developing a craft and such ability, and I think that’s gonna be more common in the future as we create tools that let humans focus on craft.

Humans wanna be creating. They want a new frontier. They don’t wanna necessarily be doing the repetitive things every single day is, if this problem is solved, let’s not solve it again, type thing. So that next week is when we really got intense about, okay, we’re gonna build something that is solving this problem.

We just had a visceral understanding of the disconnection that was present in our industry.

Ian Hathaway: So early on you understood the pain, but while maybe the vision was clear, you had to find where the real leverage was. So do you remember in those early days, you’ve got the vision, but something is not quite landing.

What [00:25:00] exactly was wrong and where did you learn about where real leverage lived?

Willy Schlacks: I think because we’ve been doing this since we were kids, we didn’t even think about this. Beyond just a subconscious intuitive sense that if you’re gonna do something in this capitalistic environment, you have to ask what do people want and give it to them.

You have to earn the right to creating a better solution. We never even thought about the option of, Hey, let’s build something and raise money. And if it works and people like it, great. And if it doesn’t, that’s fine. We couldn’t even contemplate. How could you not go talk to somebody and they say, Hey, I want this.

You have to do it. We just wanted to do it in a way that had a perspective that would evolve towards alleviating all this chaos that we experienced. So we knew technology would be part of it, but it was just part of it. We never thought about the isolation of build software and leave the dirty works outta people.

Of course, we were gonna shoulder more than our customers. That was just, uh, intuitive, innate, [00:26:00] visceral feeling we had. Now, I would say later on, investors could not. Comprehend why the hell we were shouldering this vertical approach and they were frequently suggesting that we pivot only do software and or get rid of this other chaotic stuff.

But obviously we never did and we couldn’t contemplate those things. I don’t wanna say it’s ‘cause we were smarter or anything. We just happened to go, alright, we got a customer. But guess what? We’re also more interested in solving. A $14 trillion industry problem versus just their one thing. And for us, that was new, which is why we then had to go raise money and go down the path we did

Ian Hathaway: dealing with investors raising money.

One of your earliest experiences with that. You and your brother spent time inside Y Combinator early on, which also meant spending time inside the Silicon Valley way of building and doing things right, the pace, the assumptions about the need for capital growth talent. Why did you decide to go to YC and [00:27:00] what did being in that environment teach you about how companies can be built?

Willy Schlacks: We had never heard of yc. We bumped into Wade from Zapier and he heard what we were building. He was like, you guys should go to yc. And we’re like, well, what is yc? Looked it up online and like, okay, yeah, we’ll give that a shot. Applied and got in. There was no strategic thought to that. And as far as raising money, we had never raised money for businesses before.

We always just built the business with nothing and then use the profits to grow it. That was all we knew. So encountering this world of people will give you money. You really haven’t built something felt very weird and odd, but also it’s like, wow, that’s pretty cool. But we perceived it as sort of taking advantage of the system.

It’s like other people would literally go say something and then raise money on the thing. They said, like, there’s nothing real of that, but people are giving them money. And that felt weird, but that was the bubble we suddenly encountered in San Francisco. I do remember seeing that and just having a [00:28:00] slight moment of, oh, I wonder if we’ve just always been doing it wrong, and maybe that’s really how the world works.

But of course, our gut couldn’t ever escape the raw reality of just building value and doing stuff, so we never really experimented with the fantasy of raising money and the option of failure. I use failure only in the term of when you stop trying, like to raise money from somebody. Then to tell ‘em a year later, Hey, I’ve learned a lot, but your money’s not there.

That’s incomprehensible to me. But I watched a ton of people do that. Like to me, that feels like the couch. It’s just so easy to go, Hey, I’m gonna stop exploring that hard adventure because I’d rather have this couch and that million dollars you gave me. Thank you. I learned a lot. Like, what the fuck? I mean if a founder actually said that, like, okay, now I have a definition of failure, and that’s it.

Ian Hathaway: Yeah,

Willy Schlacks: so that’s what we encounter a lot of in San Francisco, and that [00:29:00] was a bit mind blowing to see people so cavalier about the promise and the facade of as if they are an adventurer. Then they open the door and it’s a little cold outside, and then they close it real quick and go, okay, yeah, let’s end this adventure.

I’m just, ugh.

Ian Hathaway: It’s a very unique and special place. I think a lot of what you’re describing is resurfacing now in the AI boom, but you made a very conscious decision to return home to Missouri. What gave you the conviction? To build EquipmentShare in Missouri rather than staying inside of that Silicon Valley gravity.

I mean, I have to think that many people, or at least some people around you, were discouraging your choice to do that, especially investors. But what gave you the confidence to do it anyway?

Willy Schlacks: Definitely. Most people thought it was a foolish choice, and I don’t discredit them for that at all. ‘cause they’re probably just working off pattern recognition and other things.

The reason we did it is a pretty simple answer though, and it’s simply because it was home. I [00:30:00] love the concept of home because home has different gradients to it, but it has a feeling of constraint. It has a feeling of walls, it has a feeling of ritual. ‘cause even choosing a home, people don’t realize the choice of home is not really ultimately home ‘cause you’re manufacturing something, something that loses a depth and a root to it.

So. The easy answer and the authentic one is it was sho like we never thought about it. And the older I get, the more I. Deeply appreciate the concept of home and not that you can’t move homes either, like, ‘cause I, I left an environment when I was 27 and it’s not like home has to hold you in that sense, like life will move you through it.

But that’s my point is life holds you through whether you find yourself in a stream and then you’re up on a rock or wherever. Life has a way of saying this is it. And you can sort of feel it in your gut and you know when you’re migrating to look for something else. But if you sit down and go, okay, I want good weather, [00:31:00] palm trees, beach, this, that, whatever, and then you go there, that’s the easy couch.

And the people that I observe who do that don’t have the same. Depth and sense of the home feel. Now, it doesn’t mean they can’t enjoy it, but because it is easy, they will get bored. Not that I’m wrong, I like traveling. I like a beach, but I do know that a good seven days into my travel indulgences, I am fucking bored home.

I just cannot imagine like the ritual of when I wake up, my wife and I are awake in the morning and it’s still dark outside, and then we start the fire, then we have coffee. Holy freaking hell. That’s so much more enticing to me than a seven day trip in The Bahamas. Home is just such an underappreciated thing, and I don’t mean that in the sense of a control perspective.

I mean, sometimes life drops you somewhere and you find roots there and it’s great, and sometimes you’re uprooted and then you find roots elsewhere. But it’s like [00:32:00] life chose versus me putting the list down of comforts.

Ian Hathaway: You don’t have to move somewhere for a job or to build a company. You should feel most equipped to build that company where you feel most at home.

Coming back from the Valley, you also made a very conscious choice not to optimize for comfort or abundance, but to keep operating inside of real constraints. Some of that is a function of where you’re building the company. You’ve talked about scarcity, not as attacks or a hindrance, but as a forcing function that actually builds resilience.

Tying this back to the idea of, of struggle as a key ingredient. How did choosing to build in Missouri actually shape how you operated day to day? Where did struggle show up as a strategic advantage rather than just a circumstance?

Willy Schlacks: I think it enabled us developing scalable process and scale far quicker than we would’ve if we were in a low constrained environment.

Say we, we decided, hey, new [00:33:00] York’s great, or, you know, Southern Florida or whatever. Those markets are so big that we wouldn’t have had to really figure out scale and remote ‘cause our ambitions were global. So a big part of what is underappreciated when you have a brick and mortar aspect to your business is store number two.

And if that’s just next door, you’re not really doing scale. Like you have to figure out all your systems and process for scaling people and hiring, and when you’re not there to solve the problem, how does the business continue on? How does culture emerge That’s far beyond and impactful then you as an individual.

Like when I think about my brother in the 16 foot trench doing live sewer, okay, superhuman Great. Guess what? I can’t clone him, put him around. So you have to then develop a culture and a company and process that is sort of starting to replicate not only the operational, but also the technological side of this.

So it was a huge advantage that, you know, our home is not a big market, it is the smallest market we’re in currently. [00:34:00] So very quickly we had to expand outside of the known. And if you look at what we achieved, and I just mean this from a data perspective. Scaling in the industry. Nobody in the history had ever done that.

Scaling like you had constraint of a balance sheet and just quantity of locations. Nobody’s ever done that. Now it’s not because we were a rocket scientist, it’s simply because we had this constraint of small market and we had an ambition of the whole industry. There was no plateau of, oh, okay, if we get to this revenue or we get to this thing, we’re sort of done.

Like even right now, we haven’t remotely approached done. It’s like when you see your destination on the horizon, like you keep driving for six hours is still not closer, 10 hours, that destination is not closer, which is fun because all the stuff that’s around us in our her view is different and exciting.

But I love having a destination that’s so freaking far out that there is no foot off of gas. But yeah, the constraint of having a small market was. [00:35:00] A huge advantage because we were forced to figure out scale very early and did, there’s a lot of lessons and things and tactics that we learned, not because we were so brilliant, but because the vision and our view of what we’re building forced us down that path.

Ian Hathaway: So you mentioned the goal is always in the horizon. You’re never reaching that destination. You’ve had some really big news, let’s call it a milestone, a huge milestone. EquipmentShare. Just became a public company listing on the NASDAQ at a $7 billion valuation. It’s an incredible accomplishment to be celebrated, and I have to think that that moment on the NASDAQ platform was surreal and a defining moment in your life.

But as you said, you’ve been very clear about going public. This is not an exit for you. It’s a tool. You see public markets as faster, cheaper, more transparent way to access capital so that the company can continue growing and [00:36:00] serving customers at scale around the globe. How do you personally think about.

The trade-offs of becoming a public company. And what do you think founders misunderstand about what actually changes and what doesn’t when you cross that line?

Willy Schlacks: We learned a ton through that process. This wasn’t part of the plan, but almost nothing was. So let me just put that out there. Now being public, I think my brother and I enjoyed watching that experience through other people’s eyes, probably more than our own, because.

We felt deeply that the year long effort of work to go public wasn’t that useful to our customers, and that always makes us uncomfortable when we’re doing things that are not useful to customers. In the grand scheme of things, it was necessary and it will absolutely be able to help serve customers. But the actual emotional content of experiencing it was super exciting to see through other people’s eyes, like our family, like having our parents there.

My mom and dad really aren’t. Big city people and having my mom and dad there and my mom [00:37:00] on the podium when we pushed the button, and she had no expectations. She didn’t even freaking know what was going on until she showed up and she was like, oh, what? What are we doing? Oh, this is great. And she was our biggest cheerleader.

And my dad, when we started the company, he was our first driver. It’s a family business type thing. Like there was so much trust and belief in what we did and our deep appreciation for what they did for us, that watching that come together was a really cool moment. The whole year of preparation was less cool, and then the moment after was wonderful because now we’re back to work and we really love that.

It does feel like we’ve got more ability from just a resource perspective to keep the foot on the gas towards that thing in the horizon that hasn’t moved an inch. ‘cause if our goal is this massive industry, we are so early on this effort. There’s no stopping.

Ian Hathaway: Well, speaking of building, which is what you’ve done your whole life alongside of building EquipmentShare, [00:38:00] you’ve also been very intentional about building the startup ecosystem in Missouri.

First, you founded scale, which later became Red Bud vc, investing your time, your capital, and your attention into founders building companies far from the coast. It’s not just a side project for you. It’s deeply tied to how you think about company building and leadership. What was the gap that you saw in the Missouri ecosystem that made you feel like this kind of founder first platform needed to exist, and why do you feel it’s important for you to help to build it locally rather than backing companies far and wide?

Willy Schlacks: We back companies anywhere, like our constraint is, it’s maybe flipped from what most VCs would do. So like most VCs have a, a domain, a region, a focus that’s more outward facing. [00:39:00] We put the constraint on ourself where our constraint is, here’s home, so we’re gonna do it here. Didn’t really think about any other option.

We weren’t trying to create ease for us. And then even raising money, this is an unnecessary constraint, but one we put in ourselves, we’d rather only take money from people that we resonate with. And that is because of some super negative experiences I had with investors. And I’m not saying it’s carp blanche, like I’m met so many good investors and I deeply appreciate our investor base writ large.

However, there are some anecdotes of. Just people that we made a tremendous amount of wealth for that are incredibly antagonistic and intent on our destruction. And that was puzzling to us. And it took me a while to come to reconcile the fact that some humans are a little different, whatever made them different.

Point being that humans don’t change for other people, they change for themself. And if they’re not interested in that, then guess what? They’re not interested in that. So it does matter to me. Where we raise money [00:40:00] from that is constraint. I want to resonate with those folks. So if somebody shows up with a hundred million bucks and there’s not that resonance and there’s a question of that alignment, life’s too short for that.

The outcome is not money. There’s something far more interesting and impactful. Money is really the fuel. We put the constraint on ourselves, but there is no constraint in who we invest in. And for that reason, a lot of our companies are. Now the fact that we are here and there is access to those resources for folks who are in the Midwest is really cool because when I was raising money.

For EquipmentShare. Back in 2015, there just wasn’t an awareness in an ecosystem. So I like the fact that that’s there, but also don’t wanna make a virtue outta that. It’s literally, again, the answer is home. That’s the only reason why I like those constraints. And venture is an amazing source of capital that’s fairly new in the grand scheme of history.

By and large, it’s a very healthy thing for creators who want to create, and I’m, I’m happy to be part of it. [00:41:00] Like I feel very fortunate. Everything else in life. This is fun. I think we’re following the footsteps of a lot of phenomenal people here.

Ian Hathaway: You mentioned creators. I think it comes down to people. I imagine you would agree.

Where the focus at Redbud in evaluating founders and companies is less on pitch decks and traction metrics and polished narratives, and more about the founders, right? Their judgment, their resilience, their capacity to grow their coachability. A lot of venture funds say they do that, but the reality is they default to pattern matching surface signals and social proof consensus, really so.

What did you feel was fundamentally broken about how early stage founders are evaluated? And when you’re meeting founders today, what are the qualities that immediately pull you in?

Willy Schlacks: I don’t know if anything is broken about the overall industry, but I would say that people who deploy capital, the way they deploy capital is reflective of themself.

So a lot [00:42:00] of people do it very successfully, but some people are great at raising money. Then when it comes time to deploy it, what capacity and experiences do they have to really do that, where they’re gonna create a phenomenal return for their investors? So what I felt is that we bring ourselves to the table, and that’s it.

So the abilities and the outcome of what we’ll create, that’s a constraint there. But being an investor, I would say it’s the easiest job on freaking planet Earth. I imagine this is the way actors feel too. Now, it doesn’t mean there aren’t fun challenges, but when I stack it up to all the other jobs I’ve done, like this one’s super easy.

And what that makes me wanna do is lean even more into what is hard. What really can create the outcome that I want, because I feel this obligation as an investor is too easy when it’s my money, when it’s other people’s money, I really lean in more. I like the risk of that because it’s, [00:43:00] it’s actually much harder for me and requires more work and effort and thought.

And attention when it’s other people’s money. So I think the fact that we were able to raise money is what’s really created this maturity in our venture world. I love the pressure of that, but what we look for is pretty challenging because what I know will create phenomenal returns for our investors is if we pick founders who have resilience to a degree that is abnormal and that cannot be tested unless you have time.

So one thing we love is when we have a lot of time with these companies. So our effort, we do a tremendous amount of work to get early into the conversation, even before a founder would ever be thinking about raising money. Now, that’s very hard. We, we do a lot to make that happen, and so I think that’s a whole part of our venture efforts that’s fairly unique.

I don’t see a lot of other venture efforts doing that. They prefer almost to wait for the symptom of success, but what we know is that if you’re waiting for the [00:44:00] symptom of success, your return profile goes down substantially. Now your risk goes down too, potentially. It depends on what people call success, but if you can discover resilience.

These attributes that we know always equal an outcome that’s quite remarkable. If you can discover that early on, you’re, you’re doing phenomenal. So that’s where we keep trying to push the boundary. But fundamentally, what we’re bringing to the table is decades of building companies. So whether it’s assessing the company or just helping them, I’ll put helping in quotes because I don’t really think a good creator, a good founder, needs help.

I literally mean that in the sense that they couldn’t take advice or something. I mean that in the sense that help ultimately sort of steals an experience from ‘em. It steals the learning. And that’s a double-edged sword. So I often find myself telling founders, oh yeah, here’s what I did and all this stuff.

And then I sometimes have to catch myself going, wait, what am I trying to do? Giving them the fast path to success. There’s no such thing. [00:45:00] This is about them, their internal growth. When they’re aligned, awake at night, they’re afraid of something. That’s magic. The only question is, are you gonna fucking quit or pursue it?

Are you gonna start to discover that this adventure can be enjoyed versus, oh my God, this is too stressful and that’s a little cold outside and lemme tell everybody I learned some lessons and that is really hard to surface in a human because everybody is gonna say they have it. So. You’re really approaching the conversation with, okay, I already know you see you have it, and I’m trying to figure out if that’s real.

You’re questioning the very core of what somebody says is true. And you’re going, I’m not sure. I’d love to believe that, but let me dig deeper. Lemme try to suss this out because it’s not the words that are gonna tell me. It’s the other things. And I can’t give up all that now because if founders hear me say it and then they show up, they’re just gonna say the words again.

I don’t have to come up with new tactics.

Ian Hathaway: It’s an amazing lens. We think a lot about this. My partner, Jonathan and I, we’ve kind of used the frame execution risk, like how can we [00:46:00] filter that better? But it’s really, we’re trying to say the same thing. How do you know if people have the. The grit and the ability to overcome these immense challenges.

So look, you’ve spent your life deliberately choosing hard paths, building in constraint, embracing, struggle, staying close to the work. 20 years from now, what do you hope you can look back to and say, that was a job well done.

Willy Schlacks: Couldn’t predict that at all. But the feelings I’m hoping to experience in 20 years are gonna be reflective of a mindset I have at the moment.

So I can’t escape the fact that what has continued to feel deeper and better only grows in magnitude. And that is the ritual I experience with close relationships. The depth of that just gets deeper. That movement of ritual with relationship is, is definitely gonna be the thing and the ability to.

Create on the other side of this, like the medium and the environment, all that, that’s hard to predict 20 years in the future, but the theme of [00:47:00] creation certainly isn’t gonna change, but the people you deal with, that’s where satisfaction structure really set in. And it’s not just the creation because ritual is this flip side of creation.

Ritual says, I’m gonna do the exact same damn thing every single fill in the blank, whether it’s day or whatever the ritual cadence is. But the thing that brings meaning to it is the relationship, whether it’s one with yourself or someone else, and you want to invite people to that. So it’s this beautiful other side of the coin of life where you have part of your life, you just run into the unknown, and then the other part is so known.

But that knowing part of it, the comfort of it, gives you this exploration of things that are below the surface. So I think in 20 years, I hope that the depth of both these sides. I appreciate I’m better at in the sense of like the natural motion of a dancer or a figure skater or whatever. When you see the, the number of reps they get is just so easy, but it doesn’t change the [00:48:00] delight in it because you keep doing it.

You just have such a fluid motion through those things where when you first try it, whether it’s a ritual or creation, it’s pretty awkward. If you get the bug, you don’t stop.

Ian Hathaway: I love all of your visuals. You’re such a visual explainer of things. I can’t think of a better way to end, but before I let you go, we have a little segment called Beyond the Bio.

These are just some quick hit, quick answer questions that kind of let listeners get to know you beyond your resume. Does that sound okay?

Willy Schlacks: Sure.

Ian Hathaway: Okay. What’s a quick piece of advice from a mentor that stuck with you throughout your journey?

Willy Schlacks: All my mentors are bad people in books, so I must caveat with that.

Ian Hathaway: Amazing. The best mentors

Willy Schlacks: like Thoreau, an impression that he was describing how instead of pursuing life, life pursues us. And I love that because we get surprised, it taps us on the shoulder. I’m like, oh shit. I’m where I never thought I would be versus I’m running after the thing that [00:49:00] we think we need to pursue.

Ian Hathaway: Oh, that’s beautiful. Who is an unsung hero in your life and what has been the impact they’ve had on you?

Willy Schlacks: Too many, but this ties closely in with. My person’s in my rituals. My wife is the center of that universal. I’m constantly pursuing her. Like even when I dress in the morning, I’m only thinking about she’s gonna be attracted to this.

I bet. My wife’s name is Caitlin. So many things that I do and I’m excited to do, they’re inextricably linked to me trying to woo her constantly. Like every day it feels like an adventure for me. She has a cafe that is one of her businesses. So part of my ritual most mornings is to. Go by her cafe, and sometimes she’s there early in the morning because she still loves the obsession of creating product.

But I show up and if I’m looking nice and all that, it’s like she has a gravity in my life that I revolve around and hope never to escape from that gravity. Well, and eventually I might get absorbed in it, but yeah, for now, it’s, it’s, uh, something that keeps me [00:50:00] trapped in a good way.

Ian Hathaway: Yeah,

Willy Schlacks: her story is freaking insane too.

Like even that story of that cafe, which. 20 years from now, it’ll just have a life of its own. But yeah, it’s pretty cool.

Ian Hathaway: What’s a strongly held belief you hold today that most people would disagree with?

Willy Schlacks: Take any one of those off the shelf, and I think I’d find an army of folks that would be on the opposite side.

My current one that I think most people would struggle with and disagree with, which I like because I want to evolve this view, is just fundamentally what truth is. And I think most people. Force themselves in a corner where truth has to have some binary meaning to it. Like at the end of the day, something is true or false.

And my view is that we’re still dealing with extracted concepts and that truth is not binary and truth is movement. Now, whenever I bring that up, I always get the classic, well, what about Hitler and what about this? And people very quickly subscribe. Truth and evil and good, and all these same things. [00:51:00] But my belief that truth is motion is probably the opposite of what most people would lean into.

Ian Hathaway: Tell us something most people don’t know about you. Something outside of work could be a hobby, favorite travel spot, a guilty pleasure, or maybe even a hidden talent.

Willy Schlacks: I like being healthy. I like working out and all this stuff, but when I’m lifting weights, the motivation for lifting that weight, I’m like, I’m doing this because I wanna look good, but I think I should be doing it because I wanna feel good at its core.

I’m like, okay, I’m just doing this for pure vanity, but I know there’s a lot of other good reasons to do it. I’m like, if the vanity wasn’t there, would I do it? And I’m not sure I would. I think I am purely vain in this effort because what I really want to do is not lift weights. I want my life to have so much motion and activity to it that I don’t need to lift weights, but it doesn’t.

Like I’m sitting at this desk talking to you and you’re talking to me. Yeah. We’re sort of vegetating at the moment, but [00:52:00] what if we were swinging an anvil? Making some cool sword, like we wouldn’t be lifting weights. I haven’t expressed this before, but since you asked the question, I observe an extreme vanity in this effort of moving this bar and steel around.

That is somewhat humorous to me because I see everybody else saying it’s for other reasons. So I think there’s probably some childhood trauma wrapped up in that that I haven’t deeply explored yet.

Ian Hathaway: What are one or two songs you’d like to add to our Spotify founders playlist? Something that fuels your workday or has inspired you on your journey as an entrepreneur?

Willy Schlacks: Music is deeply impactful to me. Most things in my life, I generally subconsciously associate to music and the pattern of music. Even morality to me is simply music. Not in the literal sense, but from a pattern perspective. As far as songs that are part of entrepreneurial journey, I don’t know. I don’t think any of us appreciate the depth that [00:53:00] harmony and discord and cadence have, and we see it as a thing that’s more entertainment.

We don’t realize that this thing rules at all. The TLDR R is the entrepreneurial side of my. Or building and whatever is not something that, you know, I’ve got my playlist,

Ian Hathaway: I feel like. Then my next question’s gonna open up a whole other can of worms. What’s a book you might recommend to a founder? Maybe something that help you on your journey.

Maybe something that every first time founder should read as they’re getting started. I

Willy Schlacks: think range is a good book for a founder to understand that. Good

Ian Hathaway: book.

Willy Schlacks: Yeah. Don’t sweat it if you’re not the expert. And being the expert is a disadvantage and most founders are not experts, so you know, pat yourself on the back because you’re in the right mindset.

That’s a great one.

Ian Hathaway: Okay, last question. If you could give one piece of advice to someone who’s about to start their first company today, particularly someone who’s maybe a bit of an outsider, what would it be?

Willy Schlacks: Better not be tomorrow, like God damnit, [00:54:00] do it. Because what the hell are you waiting for? And there’s absolutely nothing.

And that would stop you. And if there is, then go find another job. And that’s okay. But if, if you want to do the thing, then do it. Like we just don’t realize the amount of control we have over today. And that’s also all we have. I’m talking to myself here, by the way, too. And, but yeah, if somebody wants to do something, what the fuck?

I mean, why is this a conversation for tomorrow?

Ian Hathaway: Yep. Go get it. Well, speaking of conversations, this was an awesome one, Willy. Thank you so much for being here today, sharing your journey, and your amazing insights. I can’t wait to share this with our listeners.

Willy Schlacks: Thank you. Yeah, it’s been a pleasure to talk and thank you so much for being a storyteller.

Storytellers have. One of the largest impact on my life. So I deeply admire the trade and I’ve never done it, so this is cool when I encounter the folks that do it.

Ian Hathaway: That’s a wrap for today’s episode of Outsider Inc. [00:55:00] A big thank you to Willy Sch Slacks for joining us and sharing his fascinating story.

Willy’s journey is a reminder that constraint isn’t the enemy of building. It’s the engine. No outside ecosystem, no inherited playbook, no comfort to fall back on just the discipline to stay in motion, and the belief that the friction is the point. What lingers for me is how deeply the concept of home permeates through everything he’s built, not as a limitation, but as a root system.

You build better when you’re planted somewhere real. And if there’s one thing Willy would want you to take away, it’s this stop waiting. The only thing standing between you and the thing you want to build. Is the story you’re telling yourself about why today isn’t the day. If you want more from outsider, inc, don’t forget to subscribe to the platform@outsiderinc.substack.com.

It’s packed with highlights from today’s episode and bonus insights you won’t wanna miss. You can follow Outsider Inc. On YouTube, Instagram, [00:56:00] TikTok, and LinkedIn at Outsider Inc. Pod. You can also follow me on X at Ian Hathaway Outsider Inc. Is produced by Spellbinder Media. We’ll be back soon with another fascinating outsider conversation.

Until then, thank you so much for listening and remember, great entrepreneurs can come from anywhere. See you next time.

Listen on: Spotify, Apple Podcasts, Amazon Music

In this episode of Outsider Inc., host Ian Hathaway sits down with David Cohen, Co-Founder and CEO of Techstars, to unpack how a community-first mindset helped reshape what founder support can look like far beyond Silicon Valley. David traces his path from early founder wins and failures to building Techstars out of a small Boulder experiment rooted in mentorship and Give First. They discuss why networks and trust matter as much as capital, the hard tradeoffs that come with scale, and why David returned to the CEO seat with a renewed focus on quality, founder outcomes, and long-term community strength. Along the way, David breaks down his founder evaluation mantra, why teams beat ideas, what he believes most investors overvalue, and how to sustain a founder journey without losing yourself to it.

Show Notes:

(03:10) Community as the through line from the beginning

(08:25) Early computing and the power of networks

(12:40) First startup lessons and “unsucking” real problems

(16:35) Why Boulder and how place shaped the journey

(22:15) The moment networks became the unlock

(26:30) Building Techstars with mentorship and Give First

(31:50) Culture, scale, and why “better is better”

(37:05) How David evaluates founders: Team, team, team

(42:20) What most people overvalue in startups

(46:15) Founder mode, identity, and work life harmony

(52:30) Outsiders, underestimated founders, and why the model works

(57:10) Beyond the Bio: David Cohen

✅ Host: Ian Hathway - Co-Founder & Managing Partner, FOVC

✅ Guest: David Cohen, Co-Founder & CEO, Techstars

Produced by Spellbinder Media. Executive Produced by Bridge Five Ventures. Copyright ©️2025, Bridge Five Ventures, LLC, All rights reserved.

Listen & subscribe wherever you get your podcasts or at outsiderinc.substack.com.

AI-Generated Transcript

David Cohen: [00:00:00] It is so much about the team, what market they’re gonna pick matters that they’re gonna shift around with the idea and the specifics. They’re probably gonna stay in the same market, but that team is gonna define, are they? Good enough to feel their way around in the dark and stay alive long enough are they great founders?

That, to me, jumps out as the most important thing. You can have a really terrible idea and an amazing team, and they could either make it work or they’ll pivot.

Ian Hathaway: Welcome to another episode of Outsider Inc. I’m your host, Ian Hathaway. Today’s guest is David Cohen. Entrepreneur, investor and ecosystem builder.

He’s best known as the co-founder and CEO of Techstars, one of the largest startup investors worldwide that redefined what it means to support founders in faraway places. David is a pioneer in investing in outsider markets, one of the most influential voices for backing founders beyond the traditional tech hubs and a global leader for building [00:01:00] startup communities where none existed before.

Long before Techstars became a global platform backing thousands of startups and dozens of unicorns, David was a founder himself, building companies, experiencing real wins and real failures, and learning firsthand what early stage entrepreneurs actually need when the system isn’t designed to help them.

Out of that experience came a radically different approach to investing in mentorship, one rooted in trust, long-term thinking and community support rather than short-term transactions or manufactured hype. What started as a small local experiment in Boulder grew into Techstars, a global network that helped launch companies like Digital Ocean, Zipline, and Syngrid, while reshaping how founders are evaluated, supported, and connected across markets all over the world.

Through Techstars Ventures, David has also been a first check investor in breakout companies like Twilio, and a generation defining investment in Uber, which became one of the largest returning venture investments of all time. Recently, David [00:02:00] returned to the CEO role at Techstars at a moment of real change for founders, for startup ecosystems and for the venture industry itself.

Today we’ll trace that journey from his early influences and first startups to the philosophy behind Techstars, the hard trade-offs of scale, culture, and impact, and the work he believes is still unfinished for the next generation of outsiders. David, welcome to Outsider, Inc.

David Cohen: Thanks, Ian. Great to see you.

I’m super excited to do this with you and thanks for the great lead in intro. That’s awesome.

Ian Hathaway: Well, it’s great to see you. Thank you for being here. I’ve really been looking forward to this one. It’s great speaking to a mentor of mine. We’ll go to the beginning of your journey in a moment, but I’d like to start out a little more broadly if we could.

You built a career. Largely challenging the idea that only a handful of zip codes produce world changing companies. Some of the most influential voices in tech have argued the opposite that [00:03:00] Silicon Valley is the only place to be. I feel like those voices quieted some during the pandemic, but they’ve gotten loud again during the AI boom.

What does the Silicon Valley centric view, or really the Silicon Valley only view? What does that get wrong about entrepreneurship even. Tech, entrepreneurship, how it actually works.

David Cohen: It’s funny how that is coming back again. I’ve noticed that too. It’s obviously self-serving for people there to, to wanna have great founders be there with them and the challenge is when the story is, this is the only place you can do it.

It just ignores all the readily available data. To the contrary, it’s been a sort of personal pet peeve of mine. When people say that and you can’t do it anywhere else, just kind of irks me. And it’s very obvious that great companies are being built all around the world. And so it’s not that Silicon Valley is also more than one place.

Now, the Bay Area, San Francisco, San Jose, pick your favorite part. Palo Alto are great startup communities and, and likely will be for. A very long time, if not [00:04:00] forever. And there’s zero negativity that I have towards that or anyone who chooses to be there. But it sort of disrespects a lot of other places that already are great startup communities or will be in the future.

And I love helping those startup communities rise and succeed. I know you do too. That’s one of the things we, we have in common, and I think you’re gonna continue to see the same. Trend and pattern, which is that more and more great companies are started all over the world and at the same time, a lot of them will end up in the Bay Area as most of the big companies in the Bay Area are from someone who moved there, from someone else in the world.

What it misses is a big chunk of the opportunity, I think, if you’re an investor.

Ian Hathaway: Yeah, a hundred percent. And I love that you touched on the data that’s actually. One of the reasons I started this platform was wanting to tell more stories and staring at the data saying, look, there’s literally hundreds if not thousands of companies that we could tell the stories of that have had massive outcomes far from Silicon Valley.

And that goes beyond [00:05:00] those, as you mentioned, that are started somewhere else and evolved there just to have access to those markets. For you, that conviction didn’t come out of nowhere. It’s been earned over, you know, an expansive journey. I wanna go back to the beginning. For you before Techstars, before Boulder, you grew up in central Florida around your father’s accounting firm.

You witnessed your parents build a local tennis club from scratch with other families, I guess you could think of as a form of grassroots or community driven entrepreneurship. What did those early experiences teach you then? And then what influence do you think they have had on who you are today?

David Cohen: I recently went to, I won’t say the number, but a big number birthday for, for my mom.

My dad passed away some time ago, which I’ve written about to go to her big birthday party and to see so many people who had been around the entrepreneurship that my dad had created and different world wasn’t tech entrepreneurship as you said, accounting farm tennis club, but so [00:06:00] many people showing up for her big birthday that were still an important part of her life, and talking about the way that my parents had impacted them in their life.

That was pretty recent, but it’s sort of the microcosm of what I love about it and when I think back to working in my dad’s accounting office doing payroll for local companies and stuff like that, and data entry, it was a community, it was a, a small company, maybe 20, 30 people, but. They hung out together and they did things together and their clients loved them and they enjoyed being around each other and, and so to me, work was always community from very early on.

And I remember just going into that office and really liking the people. And even the dogs I had as a kid were found under that office and litter that was just there. And we kept a few of them and found homes for the others. Same with the tennis club, right? It, it was 15 families that my dad instigated ‘cause he loved tennis, wanted to get ‘em together.

And those families built the foundation of this tennis club, which then had many hundreds of members. And [00:07:00] so all my childhood friends, my athletic career leading into playing division one college tennis, was from those experiences. And I still talk to a lot of those people today. They’re good family, friends, personal friends.

Play was community. So community was just woven into the way that I grew up. I think I saw the impact of that, and then as I got older and internet came along and personal computing came along, it was just a different mode, I think to recreate some of what I had enjoyed earlier in life.

Ian Hathaway: I wrote that down.

Work was always community for you, looking back on the arc of your career makes a lot of sense. You also hinted at being interested in computers. Off to college at the University of Central Florida where you studied computer science in addition to playing tennis. What was your. Initial fascination or relationship to computing?

Was it the rebellious nature of hacker culture, or were you more curious about future infrastructure for the economy? Like what was the kind of the interest for you? [00:08:00]

David Cohen: I mean, I was a kid, so it was games and freaking the phone system, which people probably don’t even know what that means. In the early days, CompuServe was like a big innovation.

You’d dial up on your modem and talk to a computer in another place. Before that was just bulletin boards. And in order to get access to a computer in another place, you had to use long distance calls and your parents don’t really like you to do that, so you figure out how to freak the phone system, which is getting free calls anywhere in the world using approaches that.

Probably you shouldn’t use, but it was figuring out how to leverage early networking and it’s like, oh, I could talk to someone in another part of the world. Like how cool is that today we take it for granted. But I think when you’re a kid growing up in a town of 20,000 people in Florida and now you can talk to someone in Tokyo or you know Vancouver or wherever, that’s pretty cool.

That wasn’t easy to do back then and, and exchange information with them and play games with them. I started building games that could be played in a connected way. I remember playing this [00:09:00] asylum game. The goal is to escape the insane asylum, but you’re just literally typing walk down the hall or a turn left, and there are no graphics.

It explains to you the scene that you’re in and just learning basic to be able to do things like that and share them with people I was meeting around the world. It’s just a way to be part of something much bigger than myself in this little town I was in.

Ian Hathaway: Connectivity, interest in networks. That would be a theme that would continue for you.

Shortly after college, you landed your first kinda real job at Automated Dispatch services. A software company for ambulance dispatching based in Miami, came in as a programmer, but quickly elevated yourself to managing an engineering team. It’s also where you met David Brown who would become your longtime business partner, and it’s where you discovered that maybe you weren’t meant.

To work for other people long term. So reflecting back on that experience, how did it shape you? And maybe more importantly, how did it [00:10:00] reveal who you were meant to become?

David Cohen: I guess one way to think about it is it was kind of the first practical application of software and technology in my life. I always like to say I’m, I’m wanna know, in job interviews in my career, I’m undefeated.

That was the only job I ever interviewed for and got before I started starting companies. And it was this very important thing where they were dispatching ambulances and paramedic vehicles to pick people up in important lifesaving or medical transport situations that someone going back and forth to dialysis still really important.

And if it didn’t work, it messed up their life. It caused them anywhere from a delay to death, right? And so you really wanna make sure it works. It was cool to apply the technology in that way. I remember reading a book about borlin C or c plus plus, whatever it was, to try to be able to speak intelligently about it in the interview.

I didn’t know anything about the language. I learned the language on the job, so I, I realized, oh, if I’m a programmer I can learn any language. Like that’s not the hard part. You [00:11:00] just have to wanna do it. And so somehow fake my way into getting that job. And it’s sort of. Seemed to me that what this company was doing was.

Suboptimal. It was creating software that was on outdated platform, you know, very MS. DOS based and, and not graphical. And it was a time when Windows 95 was coming out and things were changing to graphical user interfaces and there was more connectivity. It just sparked something in me like, we can uns suck this.

You know, this sucks. And that ended up being the thing that was really defining for me. That’s how I think about entrepreneurship. It’s just caring about something and uns sucking it, right?

Ian Hathaway: Yeah.

David Cohen: It sucks and you wanna make it better. And for me, that first job would end up being the first startup I would create.

It was basically a better way to do dispatch. In a graphical user interface. We weren’t selling the service like that company that hired me was doing, we were instead selling [00:12:00] software to let other people do that in a graphical drag and drop way to help them save people’s lives and get them where they needed to be in a more intuitive and better way.

And, and so it was just literally whatever first job I stumbled into was gonna be the thing that I uns sucked, right? And, and got into entrepreneurship around it as my first startup. So that was kind of that part of my career.

Ian Hathaway: You left a DS to start pinpoint technologies. That’s the company you’re mentioning to make ambulance dispatching uns suck, I guess.

Yeah. Created the software. You started the company with David Brown, of course. Third co-founder Bob Durkin.

David Cohen: That’s right.

Ian Hathaway: So that’s the decision, your why, the belief that you could do it better. But you also made the decision to start the company in Boulder. What went into that decision? Why Boulder? Why did you move there to build this company?

David Cohen: So David Brown was also a part of Automated Dispatch services, so was Bob. We sort of all knew each other through that previous activity, and I think [00:13:00] when we decided to go and start this new thing together, pinpoint Technologies, which is the graphical computerated dispatch system we built. The reality is we were all in different places.

I had just moved from Miami to Mesa, Arizona, near Tempe. David Brown had just moved to New York and was doing some consulting, and Bob was still in Miami. And it was literally like, Hey, if we’re gonna do this, don’t we kind of need to be together somewhere? I think back then it was even more important to be together, so it started actually as a very virtual thing and people would fly into Arizona and we had a tiny little office.

The company was actually called Write With Inc. Before it was called Pinpoint Technologies Inc. And that was our way of trying to be funny ‘cause you write with in and we couldn’t think of a name. So that was literally on the door. And that was a two room office where we built this software for the first ambulance company that would use it.

And through those conversations sitting in a pizza shop, we all wrote down cities we were interested in. One of the cities that got written down was Boulder, Colorado. Other places included Asheville, [00:14:00] North Carolina and Orlando, Florida, and I can’t remember, but we still have the napkin, and we started visiting a few of these places.

And when we got to Boulder, we just all kind of fell in love with it. We had a couple experiences while we were here that were like, yeah, this is it. And so that’s where we eventually got together.

Ian Hathaway: Now that I’m recalling it, I actually do think I saw some kind of a napkin in the old headquarters of Techstars on the wall.

So that’s it. Speaking of writing with Inc, I remember reading one of your blog posts from years ago about the role that luck plays in serendipity. It’s funny, had you not chosen Boulder, would Techstars be a thing today? I’m glad you did. You moved to Boulder. Pinpoint ultimately works out. It grows after about six years.

It’s acquired by Z Medical, a publicly traded company. Now you’ve got this exit, presumably some fresh coin in your pocket, but what follows next is not a straight line. You began angel investing. You stay at the company for a few [00:15:00] more years. You step out. 2004, try eye contact a mobile social network, which didn’t work out.

But I know you’ve talked about it as a failure that you’re proud of and learned from. Then almost in complete opposite ear feeder starts as this personal side project and gets acquired remarkably fast. Take us through that stretch. How did the experience of having a meaningful win, a thoughtful failure, and an almost accidental success, how did that shape how you understood entrepreneurship?

What matters, what doesn’t, and how founders themselves might be misjudged.

David Cohen: In that period, it was, okay, I’m invincible. I created this startup and you know, we sold it to this public company and started playing around the angel investing, but wasn’t really doing much there. Maybe made a few investments in eye contact, which was the mobile social network, and for people who remember Foursquare or Looped, same thing, right?

That’s what we were working on. It was right around that time, kind of a friend [00:16:00] check-in, where are my friends? How do I get to them? What are they doing? Kind of app. The valuable lesson that we learned there. And again, doing it with the same people. Distribution is everything. And the internet’s not quite there yet and there’s no app store, right?

And it’s very hard to get your app in front of people in that era. I think we started that company to learn, oh, you know, we can do anything. Let’s go do a consumer thing. ‘cause that’ll be big. We use c plus plus before, let’s use Java this time. We were a enterprise software company. Let’s do a consumer thing, just change it up.

‘cause we’re, we’re awesome, right? We can do whatever we want. So we really didn’t leverage the strengths that we had built in the industry or even with the software stack or the network we had built. And somewhat predictably looking back on it, that company just didn’t work. And then building ear feeder and sort of having a quick, but not that big of a win.

You sort of realize, oh, there is power in building something that people really want and getting it out there and people will find it and use it. But also the [00:17:00] original company that acquired Pinpoint all medical that you mentioned, the CEO of that company coming back and sort of saying, Hey, you guys know you left half the money on the table.

Four years later, it’s like, are you jerk? Did you really have to tell us that? Why did you have to tell us that? That was a really shocking moment, I think, for David Brown and me. Wow. We sucked at negotiating that deal, and we could have had twice as much money quite easily. And that was significant. Why?

What’s been going on in these companies that work quickly or kind of didn’t work at all? And why did we negotiate so badly if we were so awesome? And I started to sort of realize that the things that were working had people that were more experienced around them. We had gotten lucky. We had nobody around us, right?

We figured out everything ourselves and had no mentors. But a lot of the things I had become loosely associated with or built on my own, that were working were because of some person who [00:18:00] made a big difference or set of people who made a big difference. And so that’s right around the time that Y Combinator launched.

And I sort of reached out to Paul Graham and said, Hey, love this. Can we do this in Boulder? You know, we love Boulder. And the answer was no. That’s not interesting to us. And so started to think about doing something kind of like that, but much more community oriented, network oriented to take advantage of the strengths that we had in Boulder that would become a different way to invest and become Techstars.

But at that time, I think it was very much about. The realization that networks matter a lot, who you know matters a lot. What expertise you bring to the table matters a lot. And it’s not just because you’re really smart that you’re gonna be successful, right? Some other things have to come into play.

Ian Hathaway: I’ve always wanted to ask you that.

I’ve heard the famous story of you and Brad meeting. He told this story earlier on this podcast, how you met through one of his random days where you showed him the Techstars pitch. [00:19:00] After about 10 minutes, said, great, as long as you’re not a flake or a crook. I’m in for 50 K. He calls Jared Polis, successful entrepreneur, current governor of Colorado, who says, I’m in for 50 K.

What is it? I love that story. It’s amazing in that how serendipitous it is, how Techstars clicks together in that moment, but it also encapsulates for me how giving first can give a person back so much more in return. It certainly did for Brad. I’ve always wondered where the original idea came from.

Sounds like from the pain of leaving money on the table, the timing of yc.

David Cohen: Yeah, that’s right. It was at a moment when David and Bob and I were thinking about what we were gonna do next, and one of the ideas was just lean into angel investing. And the experience with angel investing had been meh. Some people we met at coffee shops or some angel groups and not really enjoying the experience, not being very hands-on.

And yeah, sometimes it seemed like it was working, but most of the time seemed like a good way to turn [00:20:00] a medium-sized fortune into a smaller one. So like what could we do differently? YC was an influence in that moment. In Boston, there was another program called CRV Charles Rivers Ventures. Quick Start, a hundred k check in a 15 minute meeting.

That inspired me a lot. Do I believe in these people? That’s all I need to know. I’ll make an investment. And so, yeah, it was all those things coming together, but it was a brainstorm and I remember there were like 12 or 15 ideas, and this was the one that we just kind of, Dave and I started to gravitate towards.

Ian Hathaway: So in those earliest days, you’re gravitating towards this mentorship driven model. What was the big bet that you were taking? What did you believe would be true that you couldn’t quite prove yet until you got those first classes going?

David Cohen: Yeah, I think it was that you could do this in Boulder because, I mean, the most common question I get asked about Techstars is why did you start in Boulder and not in New York or San Francisco?

And I always say, ‘cause that’s where I live. But it, it was that people would be drawn to a [00:21:00] network of experienced mentors. And value that more highly than the money because the money we were offering was $6,000 a person for three months, which was basically enough to fly there and live there and maybe eat.

The real value that people had to place was in the people who were gonna help you be successful. And I think that was a, a pretty big bet that companies would fly from all over the country to Boulder and spend three months with us to get that.

Ian Hathaway: Did you think of Techstars as more of a program, or did you early on understand that this was fundamentally a network driven business?

David Cohen: I thought of it as a program initially, and I think we often talked about it as like, this will just be fun and like if it fails, it’ll still be fun. Yeah. We’ll meet some people and hang out with them and hopefully do more stuff with them. But it was 302 companies, I think applied for the 10 spots and, and it was to me just a three month program where we were gonna try to help these companies.

And at that time, frankly, [00:22:00] it was the mentors in Boulder. And those 10 companies, and that’s all it was. There wasn’t a previous class or 20 or 50 or a hundred previous classes to become your customers. The mentors really didn’t know how to mentor. We learned that together. They knew how to advise, which is you take equity and you sort of work at the company once in a while, but this give first idea of how you mentor and don’t really expect anything in return to build your community was pretty new.

I think for Brad and maybe for Jared, it was pretty natural. They sort of taught us that philosophy and give first of course became the mantra. It’s how mentors engage, but it’s also how alumni engage over time. But back then there wasn’t much of a network. There were not that many mentors, maybe 40 or 50.

A lot of them weren’t nearly as well known as many of the ones we have today. And I think we thought, oh, at the end of the program, they’ll have a decent pitch and we’ll try to introduce them to some investors and pressure them to write checks, which we did. Clearly it evolved from there into more of a network as a value.

Ian Hathaway: Just [00:23:00] kind of reflecting on those first few classes that were in Boulder. What actually made the model work in practice, not just the theory, you talked about give first, we’ve talked about mentorship, but any other critical choices you made along the way that you said these were the core things that we did right.

That enabled us to scale this model across the country and eventually across the world.

David Cohen: It pretty quickly became evident that the network was the value after the first program or two, and so we started to be much more deliberate about building the mentor network and stayed pretty focused on quality.

Now, you know, quality’s a relative term. Of course, you’re talking about very early companies that probably can’t attract venture capital yet there also wasn’t quite as much venture capital available. It’s about the people, right? It’s about the network of mentors you put together and the people you fund.

Instilling in them the philosophy that they need to help and give back, not only to their mentors, but to the next class and the next generation of startups in their community. So we showed them [00:24:00] like, Hey, we’re not asking for anything. All these mentors that are here helping you, they don’t have any upside or stake in this.

Maybe some of them wanna invest or maybe some of them want a job, but they’re giving first, and that’s what you should do. And it, it just built this. Snowball that got bigger and bigger and now that network is so powerful and and helps the previous generation and the next generation succeed. I think just thinking of it as a quality network where there are cultural norms, you are expected to give back what you got to somebody else doesn’t have to be.

The same person. That’s what makes it non-transactional. But you need to buy products from the network. You need to give them feedback. You need to introduce them to your investors if it’s relevant. These things became a social norm that really created a lot of momentum.

Ian Hathaway: I think I had my first sort of experience in a Techstars Accelerator in 2017 or so.

As a mentor and mentor, madness for me is still amazing, or mentor magic, whatever you wanna call it, but it’s always the [00:25:00] same for me. I’m looking at my calendar and it’s like, oh, I’ve got a busy week, but oh, I’m taking this whole day on Thursday, damnit, why did I sign up for this? What was I thinking? And then inevitably, the end of the day, it was the best day of my month, and it just happens every single time.

It’s just such an easy way to plug into something meaningful, and I certainly feel like I learn more and get more out of it than the companies that I’m mentoring. Evolving a little bit. Techstars begins to operate with some real scale, dozens of cities, thousands of founders and partners. The thing you were most intent on protecting wasn’t efficiency or brand dominance.

It was the mentorship quality and founder trust that defined the Techstars culture. You’ve also said that protecting culture sometimes means making very hard. Unpopular decisions like letting go of people shutting things down, or even disappointing communities that help build Techstars in the first place.

Looking back on that, what were the hardest [00:26:00] compromises that growth demanded of you and how did you decide in real time that protecting the long-term mission of Techstars was worth taking Some short-term pain.

David Cohen: There’s a lot. We’re 19 years in, right? In any journey, you’re gonna have a lot of things you look back on and say, yeah, maybe we should swerve left instead of right there.

But in the end, you’re still farther down the track, right? So I think the biggest regrets that I have are in those instances where we stopped operating an accelerator somewhere. And that’s just getting out over your skis, not having the capital to support it or not having the right people. And there was so much pull going on for us to be in so many places and some of those places we had to say, yeah, this isn’t working.

It’s not the right market for us, or It’s wrong people, or This doesn’t work culturally with how we do things. And essentially leaving those markets and trying to replace it with other things like Startup Weekend or Founder Catalyst programs. But it’s not the same as investing in 10 companies every year in the community.

So when I came back [00:27:00] almost two years ago now as CEO, I did so with a set of recommitment. One of them was bigger isn’t better, better is better. It doesn’t mean the smaller is better either. They’re just different. You can get bigger and continue to be better. You can get smaller and continue to be better.

And we sort of very careful now about where we’re expanding to the companies we’re investing in. There’s been a real return to that focus on quality and just better being better. Improved investment offer leads to more money per company, which leads to fewer companies, but more focus for those companies.

And so we’re down from our peak very intentionally in terms of volume on a lot of things. So that was a big one. Capital formation, always a challenge. We’re a multi-billion dollar asset manager now trying to match that availability of capital as markets come and go with your footprint. Always a challenge.

That’s been a thing that I think we’ve had to focus a lot on and had some mistakes along the way. For example, trying to lead series A rounds and write five to $7 million checks. It turns [00:28:00] out we weren’t really billed for that. We’re much better served to be sort of pro rata investors while we let others come in and sit on boards and do that sort of work.

It’s a different kind of approach. You learn these lessons over time, you tweak you, you improve, and the last couple years has been a return to a lot of those early values, really focusing on helping founders as your primary constituent. Another one would be the whole corporate partnership business that we built, which is a really powerful way for us to have grown.

And we wouldn’t certainly be what we are without that either. But again, I think we picked some of the right partnerships and maybe some of the wrong ones. And so over time again, you learn how to focus that and and be more focused on, on better instead of a lot. So that’s the theme that runs through it all.

I think for me, we got a little lost in a lot as opposed to better. And we’re back on track there, which is exciting.

Ian Hathaway: Well, thanks for sharing that. I’m happy to see it. I’m happy to see you back in the saddle. As CEO, I’d like to shift [00:29:00] gears if we could. You’ve invested in a lot of great companies and founders at the earliest parts of their journey.

Srid is a great one. We had Isaac on. He had some anecdotes for how you fundamentally helped shape the course of that business. Early on. You and Mark Solan, Twilio, Uber, obviously generation defining first check investments and others over time. You’ve landed on an evaluation mantra that you’ve repeated a lot.

Team, team, team, market progress, idea. Walk us through how that framework emerged for you, why team is so important that you say it three times, and if you had to break it down into some concrete signals, what tells you, Hey, look, this is an exceptional team and we should back them even when there’s no traction.

David Cohen: Well, having six things seems better and more scientific than having before. If you just said team market progress idea, that’s kind of boring. Yeah. It’s so important. We say it three times. I think it’s just from experience, right? Everybody [00:30:00] knows about the 10,000 hours thing. We’ve been investing in a lot of startups, and again, that is a formula for what we do at the accelerator stage.

A couple people dogging an idea. It’s so much about the team, what market they’re gonna pick matters that they’re gonna shift around with the idea and the specifics. They’re probably gonna stay in the same market, but that team is gonna define, are they good enough to feel their way around in the dark and stay alive long enough?

Are they great founders? That, to me, jumps out as the most important thing. It’s intrinsic motivation, which is a, a phrase Brad came up with some time ago. They’re doing it for some reason, other than the spreadsheet fantasy xls, that tells them it’s gonna make them a lot of money.

Ian Hathaway: V six,

David Cohen: final,

Ian Hathaway: final.

David Cohen: It’s just wrong by definition, but do they do it because they care about changing the world in some way?

And I often tell that story with Uber. Ryan Graves, who I met mentoring at at Techstars driving through Colorado, which if it wasn’t [00:31:00] in Colorado, he wouldn’t have been driving through. That’s how I met him. It was very much a vision of the future, very much about him. Like the feedback he was giving me on our companies was amazing.

Like I could tell he was a fantastic entrepreneur. He was gonna be the first employee of Uber Cab, which became Uber, and the original CEO is a lot of luck involved in that. But I, I think that sort of experience that I had Jeff Lawson at Twilio through mentoring to him, and it’s just like, gosh, this guy really knows his stuff and he really explains things well.

And he understands these businesses intuitively almost immediately. So backing the right people, they’ll figure out the rest. And so that’s how it got really elevated for me. Especially if you surround them with a lot of data. An experience in a mentor pool. I think most of it’s just from doing it long enough to realize like that’s the only thing that matters.

I mean, you can have a really terrible idea and an amazing team, and they could either make it work or they’ll pivot.

Ian Hathaway: Maybe with that in mind, what would you say is a founder trait that [00:32:00] you overweight on now that maybe you underweighted a little bit when you were doing some of those first angel investments?

And then maybe conversely, what’s something that other investors obsess over that you don’t think is important at all?

David Cohen: I think grit is the one that, you know, just cockroach tough to kill. Figures out how to stay alive. If I had to pick a second one, it would be frugality. I’ve watched so many great companies get built on so little resource, just being really careful with their money.

Grit and frugality. I think I overweight. I really love the stingy founder who’s like, not stingy on equity, but stingy on like how they’re gonna spend this capital or this revenue or this investment. It’s gotta be on the right things. It’s gotta be on the things that we really, really need. I’m not freewheeling with the resource.

Now, of course, people build big companies that way too. You could say, Hey David, you just talked about Uber and they, they weren’t exactly frugal. But I think in the very early days, they were right until they really knew they were onto something. And so [00:33:00] those are the two. I think on the other side of it, people overvalue, I would a hundred percent say experience.

I think experience is massively overvalued. In fact, it can be sometimes a detriment in, in a startup that is trying to change the world in a different way and not trying to do it like everybody else in the industry does it. I’m not saying experience is bad, but I think it gets, you know, overweight, uh, quite a lot.

Ian Hathaway: Yeah, you can see things through the lens of the status quo. I definitely agree with that. So wanna mention the term outsiders? Obviously that’s what this show is about. Entrepreneurs from overlooked places and backgrounds that don’t necessarily fit the prototypical Silicon Valley mold. I feel like we’ve talked a lot about Techstars from this geographic lens, but it really is more than that.

Over the years, the, the entrepreneurs I’ve worked with. They don’t necessarily come from tech backgrounds. They’re obsessed about a particular problem for an end customer, oftentimes they might have been that end customer and they’re leveraging [00:34:00] technology in the principles of product, businesses and scale to bring solutions to those customers in really impactful ways.

So I think it’s at worth pointing that out. But in your experience, what do outsider founders do systematically better than insiders might, and where might they stumble in a predictable way? I

David Cohen: think a lot of what we saw or or still see over the years are people who are undervalued by the market in some way.

They haven’t done it before. They don’t have a big network, and that’s why they’re coming to us. I think they’re quite hungry typically for coaching and experience because they don’t already have that in their network. It’s sort of what defines an insider versus an outsider perhaps. Are they connected in that way?

And it turns out there’s a whole market, as you know, of people who are not necessarily well connected or assumed to be outside the whatever the circle is. But guess what? There can be enormous untapped opportunity and talent in that segment of people and that. Set of places and we’re seeing it over [00:35:00] and over again.

You just mentioned you had Isaac on. Isaac wasn’t highly connected. He was just incredibly deep, technically and incredibly passionate and motivated, and somebody took a chance on him because he didn’t have the network that people just knew to do that he does now, after I ping a company and all that, I think what we learned over time is that’s our sweet spot.

That’s our bread and butter. That’s what we’re really good at. Let’s not go try to get the fifth time founder. That’s already iPod twice. That’s a mentor for us. That’s not the founder profile and that’s always been the knock on us. You can’t make it work unless you have the insiders, David, right? Like that’s what they would say.

I said, well take a look at the accelerator track record. It does work. And I think those people value. Those things, and so it, it’s matching that where they’re hungry for the coaching, they’re hungry for the network almost more than the capital. That I think is where the magic really happens.

Ian Hathaway: Obviously.

You have trained and spun out multiple fund managers [00:36:00] who are pursuing a similar type of thesis, investing very early with hands-on mentorship and support, oftentimes in founders that get overlooked by the venture industry broadly. So from that investor’s lens, what makes it so hard for the venture industry structurally?

Psychologically, what makes it difficult to bet on outsiders, even when the data keeps proving that these companies and these founders matter.

David Cohen: The typical design of a venture firm and the incentives that venture capitalists have are such that you end up with a small portfolio of very big check sizes and therefore larger ownership in a fewer, smaller number of companies.

That then drives a behavior pattern where that investor feels like they need to be close to that company physically. They need to be very involved because, gee, one 15th of my fund is in this company. And again, nothing wrong with any of that, but that is a highly concentrated [00:37:00] model where most venture funds operate, especially kind of series A, series B funds, and that causes them to want to look in familiar places close to home.

And not take chances outside of that. And so you see a lot of geographic proximity in that type of investing for that reason. So along come other things like AngelList or or Techstars, where it’s more diversified, higher volume funds like. Your micro fund means that you’re not probably the biggest owner in that company as it grows, but you’ve got a lot of shots on goal and it’s probably one in 50 or a hundred that are even gonna end up being big companies.

And so I’ve gotta place those bets and I think seed and especially pre-seed. You just have to be built different and think different than classic venture capital. It sort of sets up right, where if, if somebody’s saying run a billion dollar fund, of course you’re gonna start writing 30 or $50 million checks or more because that’s the model and that’s probably what you should do with that type of [00:38:00] capital.

But I think with, with seed and pre-seed diversification matters a lot. Every asset class learns that lesson eventually.

Ian Hathaway: Yep.

David Cohen: Venture capital will too. There will be the indexes, just like there are in public markets, which have now overtaken managed funds. By a lot, right? Where people realize, oh, we should just take the returns a market’s giving us.

I think that’s why you’re starting to see institutional versions of pre-seed, like Y Combinator, like Techstars and others that can deliver that kind of diversification and performance without following their traditional model.

Ian Hathaway: One of the big takeaways I had from my time as a Techstars employee working with Jason Seats, who we also had on the show was the data is just crystal clear.

The earlier you go, the more diversified you need to be. That’s. Not surprising when you explain it to a person in finance, but for some reason it’s still slow on the GP side. Certainly on the LP side, it was in many uncomfortable conversations with, you know, institutional allocators. But I think it’s [00:39:00] slowly starting to make sense.

David Cohen: LPs are trying to allocate probably between a small number of managers that are very big name and run that traditional model, and the reality is they could get that diversification a different way. We will see that continue to change. It’s already clearly changing. Venture is very much in the barbells when you look at the data, like people make money in the late stage and they make money in the early stage.

Ian Hathaway: Mm-hmm.

David Cohen: That middle part is black magic and a lot of luck is involved and it’s very difficult to do it multiple times in a row.

Ian Hathaway: Well, speaking of barbell beginnings, middles and ends, I want to talk about you jumping back in the CEO seat after nearly a decade and a half leading Techstars day to day as either CEO or co CEO in 2021, you took a step back, moved into the chairman’s seat.

You were deeply involved, still would always see you around, but just a different vantage point. In 2024, you come back in, you return as CEO. Felt very deliberate. So I’m curious, what do you see, first of all, from having that [00:40:00] vantage point being the CEO in the weeds day to day for a long period of time, from the beginning, the company goes through all these cycles and evolutions.

Then you sort of step back a little bit as chairman and now you’re back in what felt important enough or unfinished enough for you that you wanted to put your hands back on the wheel and lead the company day to day?

David Cohen: It was ironically right around when that whole founder mode meme came out, that only the founder could just go in and say, I’m just gonna change this and I’m just gonna do it this way.

I’m not gonna build consensus and all that. Not exactly how I operated, as you probably remember, right? But in that moment, I sort of referenced the three recomm commitments that I was making. It was a conversation with the board where Mayel, who had been running the company for three or four years, that I, I helped recruit and, and bring in.

She had grown a lot of scale and done a lot of great things, but I, I think from my perspective, having been a little more outside as chairman and watching it, when you’re in it, you’re just in it. You’re working in the business, not on the business. When I was chairman, I was working a third to [00:41:00] halftime, really supporting her and helping with capital, right.

With LPs, I sort of just more clearly saw. What I thought the error was, and I thought that error was basically a focus on quantity instead of quality and mistaking bigger for better and not realizing those are just different things, right? And again, the incentive structure and venture capital rewards more, more capital, more management fee, more shots on goal.

But if you’re just focused on that, you start to sacrifice on quality and you end up. Especially in pre-seed, having to do so many more things to just get to the same place. And so the recomm commitments were bigger is and better. Better is better. Help founders succeed. Like are we here for LPs? No. LPs are an important part of our system and they’re partners and we need to make money for them to be successful.

But that’s not our why. That’s not our reason for existing. They too need the entrepreneurs to be successful, the founders to be successful. So we’re all here to help founders succeed, and that has to be first and foremost. So that was another. [00:42:00] And then embrace startup communities. So that’s something I don’t need to explain to you.

Having written about it, that’s what brung us and that’s why we’re here, right? So we need to recognize that the startup communities we operate in are way, way more powerful than we are as a company, and we need to continue to incentivize and reward them for being partners in what we do. So we’ve done a lot of work on that as well.

But it was also, in a way, a return to values. It, it wasn’t that we lost any of the values, but they weren’t maybe being lived in that. Same ways and so hard for someone other than a founder to do that. So I sort of said that to the board in a very freeform way, and the board said, we’re not gonna run a search.

If you have the energy for this, let’s go do it.

Ian Hathaway: Awesome. So I, I wanna ask maybe a different type of question. You’ve been building companies and communities for decades now. Being in founder mode, being in the day-to-day, you’ve also worked alongside, supported, invested in, mentored, hundreds of other founders who have been through those experiences.

It’s intense, right? And there [00:43:00] can be a human toll. ‘cause we have other modes, right? There’s dad mode, there’s husband mode, there’s neighbor and brother. So when you look back on. This journey. Journey, what is it maybe demanded from you personally that someone on the outside might never see what has been successful for you in balancing the whole human self things you’ve done well, but maybe more importantly, things that you wish you had done better?

David Cohen: Yeah, I love it. I can kind of bring some things full circle that we talked about a bit earlier. I think in my first stint, which was 13 years or whatever it was, building the company, it was my identity and it was everything that I sort of thought about myself, where it was wrapped up in in Techstars and you know, I was working till three in the morning many days, and traveling way too much.

It was pretty unhealthy. And I literally have a Fitbit chart. Of every time we raised a fund showing my weight lying way up, and then slowly coming back down again. Just unhealthy stuff, right? [00:44:00] And I just committed when I came back like, Hey, as part of this, I’m just not gonna do it that way. I’m not gonna travel in this crazy way.

I’m going to exercise. I’m going to prioritize my family and just do it differently. And so I think again, during that chairman period, I was like, wow, this is really different. I can go back to work without losing all of that. And the first full circle thing is I discovered this new sport called paddle or padel.

And I loved it. And I, I’m a lifelong tennis player, played college tennis and all that. And I abandoned tennis for this new sport. And I went out and I recruited about a dozen of my friends and we built a paddle club here in, in Boulder, and it’s five courts and I play almost every day, often in the middle of the day.

I just. Find it to recharge me and it helps me be more productive the rest of the time. It keeps my energy up. I love this sport and it’s balancing for me, and so I’ve just really prioritized that. Because when all you do is your startup or your thing, yeah, [00:45:00] you, you make a lot of progress, but it can be pretty unhealthy and I think you lose the longevity of it, right?

You sort of sprint too much that you lose the marathon. I’m trying to approach it differently now and that sort of work life harmony. You know, I think you probably heard the phrase, you can never get balance, but you can get harmony.

Ian Hathaway: It’s definitely easier said than done, especially for people trying to get their company off the ground.

But a consistent theme is how this company becomes your identity at times can be useful for pushing things forward, but can also be dangerous. So is it as simple as having strict rules like I will exercise once today for at least 20 minutes. I will have dinner with my family. Do you feel like you need to have, I guess, a set of rules in place, otherwise it becomes a slippery slope?

David Cohen: For me, yes, because I’m an engineer by background and rules really help me, but I think it’s probably different for everyone. I, I remember working with a nutritionist, like you can have one burger every two weeks. I’m like, okay. And I have one [00:46:00] burger every two weeks because I could look forward to that.

Right.

Ian Hathaway: And how good is that burger?

David Cohen: It’s amazing. I’m a rules-based person and I find that’s what works for me, but I don’t think that’s necessarily what works for everybody. And I have to mention here another book by Brad and his wife, Amy, you know, the Startup Life. A great book for understanding how you might approach it and, and different things will resonate with different people.

I think in that book, what I contributed was. Always have a light at the end of the tunnel and make sure it’s not a train, right? Or there’s something you’re looking forward to with your family. That in our cases, we will always, 100% of the time, have a trip together that is planned in the future. It might be far off, it might be soon, but we don’t let it.

Be, you know, unknown. We know there’s a break coming and we know when it’s,

Ian Hathaway: that sounds really healthy. One of the things we do, no matter what, I have dinner with my family every night and we play, we call it roses and thorns and everyone says something good that happened today, something bad that happened today, [00:47:00] but it’s a nice little ritual.

So look, kind of last big question. If we’re having this conversation in 10 years, what is it that you hope. You’ve been able to accomplish with Techstars and startup communities that you’re involved with generally. And then maybe looking back over the arc of everything that you’ve created, not just you, but the team and everyone around you, what do you hope is gonna be different for founders in the future because of the example that Techstars has set?

I

David Cohen: mean, the thing we talk about as our ambition at Techstars is to get to having invested at the early stage in a trillion dollars of value in the portfolio. We’re, we’re at about three or 400 billion now. If we can look back and say, wow, look at this stuff we invested in that had a trillion dollars worth of impact in 10 years, that’s actually the goal we’re all talking about right now.

Now that sounds kind of economic. Less mission driven. But I think in order to achieve that, we will have done a great job helping founders [00:48:00] succeed, connecting them to a very powerful, if not the most powerful startup network in the world. And we will have built a great mentor community that gives back. I think that that should just be a starting point for what the network becomes.

And when I think about funds like yours that maybe in some small way born out of our community, I know there are now dozens of those we’re investors in a lot of them through Techstars Fund as well. That impact can be many trillions of, of dollars of value creation. And I think that’s just a proxy for helping founders succeed.

And that’s what I wanna be able to look back on and say, wow, we, we really punched above our weight in this little Boulder, Colorado town that grew a movement around the world.

Ian Hathaway: Well, it certainly has helped me and many others in countless ways. I feel like the philosophy, the mentorship driven approach and give First has given me a blueprint for my career and my life, and so thank you for helping gimme that direction.

It’s been awesome talking to you, but before I let you go, we have [00:49:00] one quick segment called Beyond the Bio. These are just some quick hit questions that let us you step away from your resume a little bit and dig into what makes you, you sound good?

David Cohen: Okay.

Ian Hathaway: All right. Let’s do it. What’s a quick piece of advice from a mentor that’s stuck with you throughout your journey?

David Cohen: Forget about the past. You have no way to control it.

Ian Hathaway: Yeah, that’s a good one. Who is an unsung hero in your life and what has been the impact they’ve had on you?

David Cohen: Probably my dad. We talked a bit about it, but just the example of community and entrepreneurship and caring about your employees and team and building something in a place that nobody thinks of as a place you build stuff.

Ian Hathaway: Who is someone in your local startup community or your broader network who doesn’t get enough credit and deserves a shout out?

David Cohen: Oh man. I hate to pick one person, but, you know, screw it. I’ll do it. Everybody else listening, don’t think that I don’t appreciate you. Uh, Jason Mendelson, uh, you know Jason?

Ian Hathaway: Yeah.

David Cohen: The quiet force behind a lot of great stuff that [00:50:00] has happened in Colorado.

Ian Hathaway: Tell us something most people don’t know about you. Something outside of work could be a hobby, a favorite travel spot, a guilty pleasure, or a hidden talent.

David Cohen: I appear to be the new ambassador for the sport of Patal in America,

Ian Hathaway: actually, I think.

Who else was on here? Oh, Scott Dorsey is also,

David Cohen: uh, Dorsey’s on the paddle.

Ian Hathaway: Yeah, he’s into it.

David Cohen: I might’ve been the one that was like pushing him to check it out. Came from tennis.

Ian Hathaway: Yeah, that might have been his same answer for the same question.

David Cohen: It’s very addictive. I want you to get into it. You’ll never get out.

Ian Hathaway: I’m gonna check it out. What are one or two songs you’d like to add to our Spotify founders playlist? Something that fuels your workday or has inspired you as an entrepreneur?

David Cohen: Oh my gosh. What jumps to mind is just money by Pink Floyd. But again, I don’t wanna seem like that’s my whole world, but it kind of gets you going for that outcome.

Ian Hathaway: I love that. That song will always be with me. It was the first album my dad gave me. I think I was probably inappropriately young for that, and I love [00:51:00] just singing. Don’t give me that good, good bullshit. So yeah, that’s always been very special to me. So how about a book? Something that’s been valuable to you on your journey or something that you recommend to first time founders as they’re getting going?

David Cohen: I’ll just give you one I read recently that was very topical today with, with AI and the coming wave of, of quantum computing, which is gonna be a kind of ridiculous collision, but if, if anyone builds it, everyone dies. Fantastic book about the sort of eventual outcome of building super intelligent ai and it’s a real eyeopener, really interesting book.

Ian Hathaway: Okay. Last question. If you could give one piece of advice to someone who’s about to start their first company, particularly someone who’s a bit of an outsider, what would it be?

David Cohen: Surround yourself with great people and don’t f it up.

Ian Hathaway: That’s a great way to end. David, thank you so much for joining me today.

I cannot wait to share this episode with our [00:52:00] listeners.

David Cohen: Thanks, Ian. Always good to hang out.

Ian Hathaway: That’s a wrap for today’s episode of Outsider Inc. A big thank you to David Cohen for joining us and sharing his incredible story. Having David here meant a lot to me. David is a mentor and the philosophy he built at Techstars is a blueprint I’ve carried into my own work.

What struck me most isn’t the portfolio or the unicorns. It’s the through line from his dad’s accounting office in a small Florida town to a pizzeria napkin sketch in Arizona, to a global movement built on giving. First it was always about community and what David is modeling right now, coming back, slowing down, choosing quality over quantity is something every founder who’s ever lost themselves in their company needs to hear.

The work doesn’t have to cost you everything. For the outsiders listening, surround yourself with great people. Don’t mistake. Scale for progress and remind yourself that bigger isn’t better, better is better. If you want more from outsider, inc, don’t forget to subscribe to the [00:53:00] platform@outsiderinc.substack.com.

It’s packed with highlights from today’s episode, and bonus insights you won’t wanna miss. You can follow Outsider Inc. On YouTube, Instagram, TikTok, and LinkedIn at Outsider Inc. Pod. You can also follow me on X at Ian Hathaway Outsider Inc. Is produced by Spellbinder Media. We’ll be back soon with another fascinating outsider conversation.

Until then, thank you so much for listening, and remember, great entrepreneurs can come from anywhere. See you next time.

Listen on: Spotify, Apple Podcasts, Amazon Music

In this episode of Outsider Inc., host Ian Hathaway sits down with Hernán Kazah, co-founder of Mercado Libre and Managing Partner at Kaszek, to trace the outsider journey that helped put Latin America on the global tech map. Hernan reflects on growing up in Buenos Aires, the early lessons that shaped his resilience, and how his time at Procter & Gamble sharpened his appreciation for process and execution. After arriving at Stanford as an English learner, he caught the wave of the internet boom, met Marcos Galperin, and helped launch Mercado Libre in 1999. A moment when internet adoption in the region was near zero, capital was scarce, and there was no startup ecosystem to lean on.

Hernan walks through raising money in the dot-com window, surviving the crash by cutting marketing, doubling down on product and organic growth, reaching profitability in 2006, and ultimately taking Mercado Libre public in 2007. He then shares why he stepped away in 2011 to co-found Kaszek with a clear mission: bring early, high-conviction capital and real operator support to the next generation of Latin American founders. Along the way, he breaks down what he looks for in entrepreneurs and why building in emerging ecosystems often requires solving more than one problem at a time. We also dig into Kaszek’s track record backing category-defining companies like Nubank, Creditas, QuintoAndar, and Kavak, and why Hernan remains bullish on the region’s potential. His guiding principle is simple: move with conviction … or don’t move at all.

Show Notes:

(06:55) P&G Lessons On Process

(11:10) Stanford Culture Shock

(16:34) Saying Yes To Mercado Libre

(20:08) Building In A No-Ecosystem Market

(23:55) Dotcom Crash And Capital Discipline

(29:05) IPO Validation And Profitability

(32:40) Leaving Mercado Libre

(33:47) Founding Kaszek

(42:07) What Kaszek Looks For

(46:18) Outsider Playbook in LatAm

(54:43) Legacy and Ecosystem Hopes

(57:21) Beyond the Bio with Hernan Kazah

✅ Host: Ian Hathway - Co-Founder & Managing Partner, FOVC

✅ Guest: Hernan Kazah, Co-Founder, Mercado Libre & Managing Partner, Kaszek

Produced by Spellbinder Media. Executive Produced by Bridge Five Ventures. Copyright ©️2025, Bridge Five Ventures, LLC, All rights reserved.

AI-Generaged Transcript

Hernan Kazah: [00:00:00] Latin America is still an emerging market where some gaps that are quite covered in more developed part of the world remain quite open here, and that I think offers a very, very, very compelling case for technology because in other markets you have traditional solutions that have solved those problems.

And in Latin America, you don’t have. I died in many, many cases. You can say, Hey, in the US you have a larger market. That is true. But when you look at Latin America, you say, Hey, there’s a bigger gap. So I think the net impact of technology in the world is going to be terrific, but it’s going to be largely in emerging markets.

Ian Hathaway: Welcome to another episode of Outsider Inc. I’m your host, Ian Hathaway. Today’s guest is Aeron Kaza, co-founder of Mercado Libre, managing partner of Kazak, and one of the foundational [00:01:00] architects of Latin America’s tech ecosystem. More than two decades ago, Anon and his co-founders put Latin America on the global tech map building Mercado Libre from scratch.

At a time when internet adoption in the region was close to zero, capital was scarce, and there was no real tech ecosystem to lean on. What started as a simple idea in online marketplace for Latin America became one of the most important technology companies ever built outside of Silicon Valley, surviving the.com crash and eventually going public on the nasdaq, where today the company trades at a more than $100 billion market cap.

After more than a decade, building Mercado Libre into a regional giant, Aon stepped away in 2011 to co-found Kazak with a deliberate ambition to take everything he’d learned as a founder and operator, and apply it to backing the next generation of Latin American entrepreneurs. At the earliest stages of their journeys, Kazak has backed many of the companies that now define Latin America’s modern tech ecosystem, including Newbank, Quinto, Andar, CITAs, Jim, [00:02:00] and Kava.

Becoming the most influential venture capital firm in the region, and helping turn what was once a fragile, fragmented startup scene into something far more sustaining. What makes Ourand story different isn’t just the scale of what he’s built, it’s the perspective he’s earned by living through every phase of the journey, founder operator, public company, executive, and venture investor, he’s seen firsthand how much of success comes down to timing, discipline, and resilience, especially in markets that don’t move on Silicon Valley schedule.

Today we’ll talk about what those experiences teach you about trust, conviction, patience, and building things that last, especially in markets where the path forward is rarely obvious. Anon. Welcome to Outsider, Inc.

Hernan Kazah: I’m very glad to be here. Thank you so much for inviting me.

Ian Hathaway: It’s so good to see you. I’m glad to be kicking off the new year with you.

Thanks so much for being here. You have had a remarkable journey, but when I look at that arc of your [00:03:00] story. The thing that jumps out to me most is your ability to see opportunity in people, in places, and in ideas that aren’t obvious, at least not yet. It’s a recurring theme that feels rooted in your upbringing.

You were raised in a middle class suburb of Buenos Airs. Your parents were public servants who placed a strong emphasis on education and a belief that progress can come from efforts rather than entitlement. So when you look back on that time in your life, how did you see the opportunities that were available to you and how do you think that early lens shape the way you approach work and ambition today?

Hernan Kazah: That’s a great question and a very comprehensive one. I had two great, very supportive parents. I have two good sisters, and were a modest, happy family. I would say. With that focus on studying, on [00:04:00] working hard, but also on enjoying things. And I wasn’t that much focused on what we were lacking, but enjoying what we had.

But I was always very, very curious and in a good way, unsatisfied. So I always wanted to learn more and visit more places. So I decided to go to high school. That was not the typical high school that was available in my neighbor. And for that I had to qualify for it and pass some exams and ended up being a great experience ‘cause it really opened up my horizons and, and allowed me to meet people that came from different backgrounds and had different aspirations.

And from there I went to, to the university a little bit because I was curious, as I said, but also because some of my classmates during high school wanted to go that way and I somehow admired them. And one thing took to, to another as that very famous speech of Steve Jobs says. When you look backwards, it’s very evident how you connect the dots.

But it is not [00:05:00] that I had everything planned at all because I went to Wood High School. I ended up being quite successful in the local university. And because of that I got an interesting job. And that interesting job maybe drove me to Stanford. And there I met Marco, who was until this year, the CEO of Merca for 26 years, my co-founder at the company and in Melia, I met Nicola, with whom we started Kasek Ventures.

So things, uh, somehow look as evident. Obviously you wanted to Stanford because you wanted to start a company and because you started a company, you wanted to be a vc. But none of that was part of a macro plan. But the plan was always out of curiosity, trying to be exposed to interesting things, more importantly to interesting people, people that somehow I admired.

And I think in that regard, I was quite lucky. It was not that I was. Rebellious person, but I always was uncomfortable with the status quo and I wanted to change things and try new things. Then once you go into something, commit to it [00:06:00] and really focus on making it work. And failure is not an option, right?

We had to make it work, and I think that’s something that I really focused on during all the different phases of my career. And then obviously lack luck always plays an important role. We went through many challenges as you mentioned, but luckily those challenges did not kill us. And once you go through those challenges and you endure them, then you end up at the end of the tunnel being stronger and with more resilience and more prepared you as a person and the company you’re involved with as well.

Ian Hathaway: I always like to say it’s better to be lucky than to be good. Hopefully you can be both, but luck certainly plays a part. You touched on so many things there. You are a product of your environment, the company you keep, right? Questioning the status quo, having a commitment. These are themes that play out through your life and are what make for great entrepreneurs.

You mentioned that you went to the University of Buenos RAs studied [00:07:00] economics. First job was at Proctor and Gamble as a brand manager. Sounds like you had some real responsibility early on, but at the same time, I would have to imagine that felt a little bureaucratic working for a large corporation like that.

When you look back at that experience, what did it teach you about how big companies operate and maybe what did you learn from that, that you brought with you into the next phases of your journey?

Hernan Kazah: Let’s a very relevant piece of my career, and during that time, Proctor and Gamble was a great organization, right?

It was one of those that professional young graduates wanted to join, and I’m really thankful for that opportunity I had. But as you all said, it was too bureaucratic. For a young kid that that was 22 years old and wanted to change things and did not respect a lot. The status school, I was brand manager and it was a small sized brand that likely nobody paid too much attention to.

So I had lots [00:08:00] of degrees of freedom to do whatever I wanted, and it was very evident. We had to change price. We had to change the distribution incentives for our sales force. It was very evident that we had to change packaging and sourcing of the product, and everyone agreed and it was evident that we had to execute the plan I put together.

But in a big organization, you had to know for whatever you want to do with sales, you have to collect several signatures to get the approval of the manager of sales and the manager of whatever, and the manager of the country and the manager of the district. So everything required, lots of bureaucratic steps.

That I felt were ridiculous and I became quite frustrated with it and I started to think, okay, this is not the place for me. I appreciate what I learned and I met very interesting people. It’s not the place for me. And I ended up leaving and went to Stanford for my MBA. My recollection was, okay, Proctor Grammar was a good experience, but ridiculous [00:09:00] bureaucracy.

It’s like the PO bore the Soviet Union in their worst years and, and then we start me. But once you change your role and you are the one that somehow is setting the rules and wants to establish some processes and ensure that the results obviously depend on people, but also ensuring that everything is aligned with the strategy you have and with the vision you have.

And we started to put in place a light version. All those process that Procter and Gamble had. And it was then when it clicked and said, okay, now, now we understand why Pro Gamble has been successful for over 150 years. Right? It’s like those processes, many things. Like then you start realizing, well, there was a reason why they were in place.

And the net result, even though for that particular decision, you may feel that it’s a pain in the neck, it made sense, right? That ensures the process ends up producing the right decision, regardless of who’s the person that at that [00:10:00] moment is making that decision. And I think I valued that significantly and I’m very happy that I had that experience, was a terrific learning experience.

And I obviously, nowadays, I speak with many young professionals that are starting their careers and want some advice and most of them come to me saying, I wanna be an entrepreneur. And I tell them, amazing. If you wanna be an entrepreneur and you know exactly what problem you wanna solve, and you feel that you have the right.

To find the solution for that problem and win in that market, go and do it. Otherwise, why don’t you explore one of these large corporation that have great processes that are going to be a terrific learning experience for you? And once you’re there, maybe you end up finding that that’s a place for you.

Maybe you’re end up finding that it’s not the place for you totally fine, but gain that experience that is very relevant and will serve you there or anywhere else you may end up going.

Ian Hathaway: I think that’s a great insight. So the things that [00:11:00] agitated you there as young man you grew later in your career to appreciate and I love that, having the right to go and win that market.

That’s really good advice. After P and g, you made a big move. You left Argentina in 1997 to pursue your MBA at Stanford. This was really the first time you stepped outside of the Argentine public education system. It came at a really interesting time to be in Silicon Valley. The internet and technology were really starting to feel transformative.

This is a place where professors are building companies, classmates are launching startups, and you’re sitting in rooms with people like Steve Jobs and Bill Gates and others who have made these massive outcomes maybe feel less abstract and more human coming to Stanford. As an outsider from Argentina, I have to imagine that maybe that transition felt a little bit like stepping foot on another planet.

What were your initial impressions of Stanford and the people that were around [00:12:00] you?

Hernan Kazah: Yeah, it’s exactly what you’re saying. For me, initially, it was like being in another planet. I learned English when I went to Stanford, more or less, so it’s not that I was bilingual before going to Stanford. The system was totally different.

You would go to each class with everything prepared. The objective of the class was to somehow discuss the topic that you had studied and use the professor as the moderator and everything was public speaking in English. And I felt that I was five notches behind everyone. And on top of that, when I was at the university, when I was working at Pro Gamble, I felt that I was part of the crowd and I understood what people were doing, where they were going.

And suddenly I go to Stanford and I have a guy next to me that tells me, oh, I’m going to start a search fund. Had no clue what a search fund was. No, I come from this hedge fund. Hedge fund. What the heck is that? I didn’t know any of those thing. And for me, I ended up closing the gap. But the learning [00:13:00] experience was really amazing.

And as you said, also, I, I ended up meeting amazing people. I did have a class with Steve Jobs, I have a picture with him. I did have a class with Bill Gates. I did have a class with Warren Buffet. And obviously one of those are incredible experiences. But the one thing I remember is. They looked like humans.

And before meeting them in person, they were like people that were from another planet and were totally different from us. And obviously they were amazing people, super accomplished, ridiculously bright with a vision and a conviction. That was incredible. But they were people, right? And that for me was wow.

It’s like, okay, I may not get there, but they have more things in common with me than different things. So that thing of having those classmates that knew how the world worked and wanted to do interesting things and new things, as you said, professor, that were involved not only in teaching, but also in advising companies and building [00:14:00] companies, being at that particular point in time when the internet took off, right?

It was two, three years after Netscape was created. And I was using that day in day out at the university with a very decent broadband connectivity. Suddenly I was open to that world of incredible business people, incredible professors, incredible classmates with the internet that was surrounding everything and proposing a great opportunity for anything that you wanted to build.

Also, it was leveling things up because up until then, actually when I wrote my essays to go to Stanford, I said, eventually I wanna be an entrepreneur. But I thought that was going to be something after a very successful traditional career, you could somehow make yourself independent from that big structure and create your own.

And I didn’t know exactly in what field, what industry, but I thought of that. I remember I wrote about it, but I thought this was going to happen 20 years after Stanford, once I [00:15:00] gained all disabilities and those skills, and suddenly the internet leveled everything. And actually not knowing, maybe it was an advantage because you could think things differently.

Versus those that had somehow some inertia from their prayer excuses and could not break out from them. And for me it was totally free. So I became in love with the internet, with technology and thought that what was happening initially and ultimately in the US was going to happen eventually in Latin America.

And that’s how I ended up joining the tech world when again, it was not part of my plan. It’s not how I decided to go to Stanford because I wanna join the tech ecosystem. I didn’t even know that there was a tech ecosystem in a way.

Ian Hathaway: Well, you touched on a couple things that I think are super important.

The first was that these are just people I’ve invested in entrepreneurs in Latin America, in Europe and Asia. And one of the things I tell them is go to Silicon Valley. And the people are talented. They’re some of the smartest, most ambitious [00:16:00] people in the world, but they’re more a product of their environment.

They’re not different than you. In fact, if your ambition is to build closer to home, you can create that environment. It’s just gonna take time. It’s longer, it’s more challenging, but they’re just people. So I love that story. And then also, it sounds to me like Stanford changed things for you. Maybe it changed you.

You came with not this ambition to be a tech entrepreneur, but you certainly became one by being there. You met some amazing people who shaped your life in very real ways. One of those was Marcos Galpin, a fellow Argentine, who was talking to you about this idea he had about building an eBay style marketplace for Latin America at a time when that was far from obvious, what made you lean in and say yes?

Was it the idea, was it Marcos? Was it the timing? Was it all of it? What was going on for you? [00:17:00]

Hernan Kazah: Yeah, a few things happened. One is. The environment was boiling and it was really difficult to stay out of it. Again, when I joined Stanford, I thought maybe I’ll join another large corporation. Maybe I joined an investment bank or a consulting firm, and that was something that I felt like a very natural next step after my MBA, and suddenly I was there with everyone trying to start a company and fundraising, and that plan that looked very attractive to me when I decided to go to Stanford Sunday.

Once I was there, many more interesting things are happening, and with that in mind, I ended up joining a startup in my second year at Stanford. That was a startup that had an idea, had a founder, had investors, but didn’t have a CEO. I knew some of the investors, I knew some of the people involved. They came to me and said, Hey, do you know someone for this position?

Can you recommend someone? And I said, yeah, that’s me. [00:18:00] And it was interesting, during my second year at Stanford, I was somehow a full-time CEO for that company. And I was also a student and the team was in New York. And I would fly to New York from California back and forth and read the cases on the plane and was a very hectic time.

But for me, it was amazing. I was learning by doing, not only by reading, not only by listening, also because I got involved with that, I started using the Stanford network more. So I would go to professor, Hey professor, I’m working on this project and these are the challenges we have. And I would sit with that professor and exchange some ideas and that professor would connect me with someone else.

And when you’re a student, Hey, I’m a student from Stanford, I’m, oh yeah, come in and, and I started to explore things. On the one hand, it showed me the value of that network that you have in, in the Silicon Valley and in particular around Stanford. In that context, Marcos, whose story is also interesting because [00:19:00] Marcos went to Stanford sponsored by the state owned oil company of Argentina.

His plan was to go back to that company once he graduate from Stanford. And in those two years that we were there, the company got acquired by a Spanish company. Corporate finance would move to Madrid and the the office in BU air was less relevant. So he decided not to go back and paid back the sponsorship and started thinking about what to do in technology because that was, again, if you wanted to do something, had to be in technology in those days.

And because I was in that project and Marco was thinking about the idea of Meier, we started exchanging ideas and somehow I was doing more work for Marcus, this idea than. For the other project. And I ended up leaving that project and joining Marcos with the Marco idea. Uh, and with that, we graduated in, in [00:20:00] June, 1999, and the official launching date for the company became August the second of that year.

Ian Hathaway: I have to imagine you had a lot of opportunities to stay in Silicon Valley, but you and Marcos decide to return to Argentina and build this company. So the challenge shifts from an idea to believing in something to now going home and actually building it, executing on it. There was no real tech ecosystem in Latin America at the time.

No experienced talent, no venture capital, no infrastructure, no precedent to follow. You were building it. So how did the reality on the ground look like to you? Especially as compared to spending those two years in Silicon Valley and more importantly, those constraints. How do you think they shaped how you built the company, how you hired people, and how you made decisions in the early years?

Hernan Kazah: Yeah. I think three [00:21:00] items. One is we were totally, totally convinced that what was starting to to happen in the US with the internet and with the Amazons and the eBays of the time was going to happen in Latin America, and everyone would say, no. In Latin America, the internet will not work. Or going directly into the specifics of Merca Libre’s business model, they would say, people will never, ever trade with strangers and those kind of things.

In Latin America, you need a higher level of trust. We knew that what we’re building was very compelling and it was going to work. We knew it was going to be difficult. We know we’re going to have competition. We know. It was going to take time, but we’re very convinced about it. So there was lots of conviction about that.

Then as you well said, there was no tech ecosystem, venture capital ecosystem whatsoever. But in a window of time, that probably was less than a [00:22:00] year. Obviously the.com boom was happening in the US and all VCs were very active investing companies left and right and some other financial actors, not the VCs were paying attention to it and say, Hey, there’s a new reality here.

There’s a paradigm shift and we need to participate. But it was hard for those outsiders of the VC world to participate. So they started to create the banks and the corporations started to create VC vehicles to invest in technology companies. But because they couldn’t do that in Silicon Valley, they started investing outside of the Silicon Valley.

Some of that capital during that window of time, that again, was less than a year, went to Latin America, so we could raise capital at that time, even though there was no internet around. Because in, as you said, also at the beginning, internet penetration was close to zero and e-commerce penetration was [00:23:00] non-existent.

We could raise some capital and that allowed us to get going initially. That goes to the third pillar. We were convinced, oh, the model, we were able to raise capital, but then we knew that availability of capital was not going to last forever. That it was going to take time because we had to wait for the internet to take off in the region.

So it’s not that we had, as today, 80%, 90% of population connected to the internet. We had one, two, 3% literally connected to the web. Those connections were the dial up connection, if you may remember. Right. So it was really slow connectivity. People could get to their house and dial in to connect to internet for an hour or two, or maybe if they were lucky.

They had a broadband connection, but it was very limited. So we had to be very, very patient. We raised that first round when we started the company at the peak of [00:24:00] the bubble, and it was really easy. A couple of guys from Stanford wanting to do something in Latin America. We was convincing enough that we got some offers and raised capital.

Then unfortunately, we very quickly burned that capital because junior period of time we thought that capital was unlimited and had to go back to a market. When we decided to go back to a market, the NASDAQ went down and down and down and down, and that round was really difficult to close. At the beginning we had like 10 term sheets.

Every day, one of the investors would call, well, I’m withdrawing my term sheet. And the following day, another investor was withdraw, and suddenly we were left with one single term sheet. Our investors at the time helped us put some pressure on that investor and we ended up closing that round. There was a miracle.

That’s luck. If you played 10 times that game, you lose it nine. But we were lucky enough to win it, and because we won that, we [00:25:00] got some extra capital, actually, significant capital, because the company was still very small and that was a $50 million round. So it was significant capital for the time and for the size of the company.

But we realized that that was going to be the last capital that we would get, and therefore we adapted everything to ensure that we could survive the following years to deploy our plan to grow, but also to wait for the market to take off and do all the things I wanted to do. But with a more careful spending.

Had we started the company earlier, maybe we would’ve run out of capital sooner, and then to raise more capital was going to be impossible and the company would not exist today. Or had we launched the company later and we could have never closed it. So certainly a lack there were favor there, but then we were very careful in how we managed the [00:26:00] progress and then the business plan of the company going forward.

So that is May, 2000. When we raised that round, we ended up, I ping in August, 2007 and we IPO with $15 million of that runs in the bank.

Ian Hathaway: So we were very careful

Hernan Kazah: with our spending, ensuring that we were investing in the future, but at the pace that was somehow reasonable with what was happening with the internet, with what was happening with broadband.

That clearly changed the user behavior. One other thing that did happen during that NASDAQ crash, one of those unfortunate things that end up building an incredible competitive advantage, and it was, I will focus on autonomy, right? And as you say, we wanted to make sure that we didn’t depend on external capital anymore.

And part of that made us really, really focus on building organic engines [00:27:00] of growth and building up our technology team, building up our technology platform so we could, by having a better platform, have more traction, more, more transactions, more volume transacted on our platform. And not doing that by investing in marketing.

‘cause at the time we had many, many competitors and all the competitors, including me at the beginning, had a not so great platform fueled by lots of marketing. It was bringing in users and some of the users would stay, but most of them would go away. And it was really steroid strategy, right? We were putting steroids to something that was not naturally meant to have that kind of strength.

And we started building the real strength working on our DNA, so our muscles were stronger, more resilient, would depend just on ourselves to have the force that we need and not from external factors. We ended up basically cutting down marketing [00:28:00] 95% and just going organically through our affiliate program through at the time, S-E-O-S-E-M, and things that were much more sustainable and obviously a much, much better product.

So also that crisis somehow forced us and made us focus on autonomous engines of growth, and that ended up fueling the company for the following 20 years.

Ian Hathaway: This is all happening in a very short amount of time. This nine month window fundamentally shaped how you built the company, your relationship to capital, how capital is a precious resource that shouldn’t be squandered and can be decisive.

It’s amazing to think about how a few key decisions you made then shaped the course of history for Latin American Tech. You faced other challenges, the classic Cold Start problem, especially in that nascent environment, having to manufacture liquidity to kickstart the market, the.com crash, navigating [00:29:00] partnerships with companies like eBay.

Basically your largest competitor over the years. You jumped ahead to the IPO 2007, the first Tech IPO in the US for a Latin American company. You step into the CFO role during that transition, and the company starts trading shortly after the IPO at around a billion dollars. I saw the photo of you and your co-founder standing up there on the NASDAQ platform.

It feels like such a pioneering moment, and one that definitely defines the beginning of what I would say is the modern tech movement in Latin America. What did that moment mean to you to have reached such an accomplishment, and especially thinking back to this young man who went to Stanford with not a whole lot of thought about what was gonna be next, right?

This really wasn’t even on your radar, and here you are a decade later standing up on that NASDAQ platform.

Hernan Kazah: When you do get the confirmation of the outside [00:30:00] world that what you’re building is useful, is successful, is appreciated, it’s significant. I think accomplishment, obviously, as I said, once I get into a project, I get head down on it and just think about how to make it work.

How to move it from one to two, from two to three, always with the idea of moving it from one to a thousand. But you lose a little bit of context of what people think about the work you’re doing. And the moment you go to a market and start speaking with investors and suddenly you become public and the general market decides what’s your value?

And the investors vote with their paycheck and say, I wanna buy more shares or sell more shares. I think it was a while we realized that what we’re building was valuable, was appreciated. We didn’t go crazy about, you know, that the A PO was the final goal of anything. But certainly I think it was an incredible accomplishment to see that others were valuing what we had.

[00:31:00] So thinking now, the two moment in times when we felt, wow, there’s something here is one, when we ended up having a profitable company, ended up being in 2006 because in 2005 when we saw that profitability was around the corner, we decided to overinvest again a little bit to get to profitability. A little bit later on, but with a higher revenue level.

But then in 2006, we did become profit at the end of the year, and it was really incredible. As, as I told you, we were quite stingy over time to try to ensure that our cash in the bank would allow us to build the business, wanted to build. But every day we would go at night to bed with $11 in the bank and would wake up the following morning with 10 and then ten nine.

So we had that, uh, nervousness that, hey, we will make it. And once you go to bed under seven and the following day you wake up and eight and the following day there’s nine is like, wow. It’s real value. Right? I always tell [00:32:00] entrepreneurs, at the end of the day, the only reason for businesses to exist is to be profitable.

We’re venture capitalists, so we believe in investing today for a greater future, but eventually you need to be profitable. Right. And when we did that, I think was one of the big moments, inflection points moment in Wow. We did it. And I think the IPO was another one.

Ian Hathaway: Well, those are definitely good lessons and the market has certainly agrees with you.

As I mentioned in Mercado Libre’s valued at over a hundred billion dollars today, which is a testament to the principles that you set out to achieve early on. It’s an amazing story. By 2011, you decide you wanted to make a change, leave the company, work on something new. What went into that decision for you, and I guess more importantly, how hard was it for you to leave this thing that you had been working on so hard and so intimately in the past?

We’ve talked with [00:33:00] founders who sort of a part of your identity at that point. You’re so close to the company, it’s such a part of who you are. What went into that decision for you, and how hard was it for you to leave?

Hernan Kazah: I have two doctors. They are the two things that I love the most in my life, but is one of the third ones, right?

You really feel it like a baby and you’re really proud of it, and you’re really committed to it. But also, as I said earlier, I was very curious and I wanted to explore new things. I felt that what we had done with Meco was incredible, but many other entrepreneurs could try to do the same, but the new company had to be created in Latin America.

The opportunity then was larger than when we started MER because once you see that it’s possible others will dare. We also thought that there was not a VC firm like the ones we knew from the Silicon Valley. Could help entrepreneurs not only with capital, but also with value added [00:34:00] advice and connections and helping them hire the right person, structure the right technology stack, find the right disability for your product.

We thought that there were many things that we had learned by doing them that nobody else was offering in the market. So I felt that it was the right time to move on, and I always said, every 10 years you have to reinvent yourself. I had spent 12 in Mer Libre and it was good. And then Nicolai, who’s my co-founder and Kasek, who was also a, a fundamental piece of the Merca Libre story, had left the company a couple of years earlier and we’re in touch with him, and somehow he agreed on the vision of the VC opportunity in Latin America.

Combined with the tech opportunity, Latin America, of course, we decided to start ka. Initially it was a fund where we invested our capital and Marcos invested some of the capital and we called a nice group of friends [00:35:00] and family that were the most of the capital pool for that initial fund. And things I think worked out as we respect it.

Clearly as you were saying in your intro, the tech ecosystem has grown significantly in Latin America today. You have players at all the different stages from Asian investors to early stage funds to late stage funds. All global investors today look at Latin America. Obviously you have to offer an interesting story.

You have to have a solid founding team and all the obvious things. But if you do have that, there’s capital available. And in the past, I remember in our early days in Merca River of our pitch deck, the first probably five, seven slides were about Latin America. Where it was, what kind of people lived there, why we thought there was a tech opportunity in the region.

And today you can skip that chapter, people have seen the Melia story, have seen the new one story, have heard about the vibrant tech [00:36:00] ecosystem that is out there. They need to now find a compelling business, the model led by great founders, but if they do find that they’re willing to invest.

Ian Hathaway: You mentioned the inception of the firm, the challenge you were solving, right?

Have people who were founders and company builders leading venture capital firms, obviously much more common in the us. Still not as common in Latin America even today. So the problem you were solving, your personal motivation is obvious, but I’m also curious in the beginning, just practically speaking, were there any design choices that you and Nicholas made that defined the firm from day one, maybe weigh that made it adaptable, this kind of.

Your experience, the Silicon Valley model, but making it relevant for building in Latin America.

Hernan Kazah: First, obviously our focus was Latin America, so there had to be a Latin American angle to the business, to the story, to the founder. ‘cause [00:37:00] we thought that globally there were great VCs and if we had to invest in someone doing something outside of the region, we’re relatively smart people and somehow understand technology.

But there were many others that could do that as well or better than us. But in Latin America, we thought that we had an edge because we could connect the entrepreneur with the right companies, with the right clients, with the right teams and everything else. So certainly we were very convinced that we could help people better in Latin America.

Also, our operational experience was relevant, so it was not only capital and connection, but also, hey, we did it this way, uh, it worked, so why not try it? Or read it this way and it didn’t work. So make sure you avoid that mistake or, or if you wanna do it, do something different. ‘cause if you do the same thing, probably you’re going to find the same mistake.

But we also did lots of initially handholding. Most of the entrepreneurs at the time in Latin America were equally smart, committed, ambitious [00:38:00] than those that you would find in the Silicon Valley, but knew less about term sheets or knew less about the VC world, knew less about, hey, how do you stage a business plan to execute your vision?

And we had to lots of handholding at the beginning. Obviously there were some entrepreneurs, like David Veer was part of our first fund that was coming from Sequoia and had studied in Stanford. So he had all the pieces that he needed, but that was not the average entrepreneur at the time. Things have evolved and because of this ecosystem that has moved in the right direction and is today much more develop.

Today you meet with entrepreneurs in Latin America and they’re very knowledgeable about what needs to happen in your business and how you structure it, and what kind of partner you have to find. At that time, we were very committed to being very active board members, and today we’re still close, but at that beginning we were much closer.

Ian Hathaway: You mentioned also your early investors. It was your own [00:39:00] capital. It was people close to you, friends and family. Eventually you would start raising larger pools of capital. Institutional investors obviously now have billions in a UM. What was it like getting those initial LPs, especially the large US-based global LPs, to buy into your vision and believe what you’re doing?

You were mentioning in the early days that the Mercado Libre deck. Five or seven slides was about Latin America. Here’s where it is, here’s the people. I gotta imagine there was some element of that in convincing investors to follow that same vision in Kazak. How did you convince people that this was something worth backing?

Hernan Kazah: I think it was a very natural process, and we were also quite lucky. We raised our first fund because people knew Mer Le and people had somehow a connection with us. There was one institutional investor that came, I think they sent an email to info [00:40:00] at Kasek and somehow we answered it and ended up being a great partner and a great lp.

That still is an LP in every one of our funds since then. But that was the only institutional LP that we had in that first fund. But it was great because we also said from the very beginning that we wanted to build a firm for the long run, and we knew that we were going to need more permanent capital.

That comes from institutional investors. So by bringing in this investor was great for us because it was an investor fund of funds, very active in the tech space, and allowed us to somehow set the benchmark at a higher level of what things we wanted to to accomplish, formalities we had to have with the fund, et cetera.

And then when the second fund came, a few other joined, and with the third one, a few more, and eventually Latin America became more and more popular and were doing a good job. And we started to show not only a promise, but also results [00:41:00] from our earlier fans and investor were happy. So it was a very natural process.

Next time we go to the market, we’ll see what happens in this business yard all the time. Proving yourself again and again and again because what you did is great for the next team. Cycle for the next few companies. But then you have to keep on renewing your portfolio and showing the same upside and keep on renewing your LP pool to ensure that you have the capital you need to invest in the opportunities you find.

But that was a very natural process and we ended up finding great, great institution investors. The the LP base changed initially, as I said, it was mostly friends and family. And today it’s mostly endowments, foundations, a few fund of funds, a few sovereign funds. And today also because they look for global diversity, they understand that Latin America is relevant and they wanna have some exposure there.

They’re not committing 50% of their funds to [00:42:00] Latin America, but maybe they wanna have three, five, 7% of exposure there. And I think we’re a good option for them.

Ian Hathaway: Let’s talk a minute about your investing approach. You’ve been the founder operator, you’ve started companies scaled them, taking them public.

You’ve invested in some of the best entrepreneurs, not only in the region, but globally, that happen to be from the region. You hinted at a few of the things that you think are helpful for companies to have this obsession with the challenge, understanding the problem they’re solving, having a mind towards profitability.

What are the things that you think are the marks for successful founders? What do you look for in an entrepreneur who’s pitching you on their company?

Hernan Kazah: We look for three things. One is the team, one is the business model, and the one is the market. And the deepest area is the team, right? People that are [00:43:00] capable, that are committed to what they are solving in an irrational way, they wanna solve it because there’s nothing else they can do with their lives if they don’t solve that and it’s not, they wanna solve it because they did some and numbering.

Excel and say, Hey, this is a profitable opportunity. It needs to be something that goes beyond that. We want to see that fire in their eyes when they talk about the problem they’re solving and why they believe they have the right to win. We really pay lots of attention to the team. Obviously, sometimes we invest in experienced executives or even second or third time entrepreneurs where you can see what they’ve done in the past and somehow project those past experiences into the future.

Sometimes we invest in very young entrepreneurs, so it’s harder to find data on their past, and we’re big believers in in that idea that past behavior is a good predictor, future behavior. And in that case, you try to find references. You try to meet with the entrepreneurs many [00:44:00] times and understand how they think, how they commit, how they act, when they encounter problems, and how they relate with others, with their teams, with their co-founders, and try to read that well.

They need to have a broad definition of leadership. They need to be able to attract talent to the company. They need to be able to attract others into their story, so, so sell that to the market, to the investors. Attract obviously customers, our clients, by building a great technology platform. So the team is something very, very relevant.

But I would say the most important thing is that irrational commitment that will make them stay involved and work hard when it looks like you’re failing, because all companies at some point think that they’re going to fail. We experienced that ourselves with Marco several times, and you only go through those death values [00:45:00] if you really believe that a failure is not an option.

Ian Hathaway: You have to make it work.

Hernan Kazah: And then in terms of the business model needs to be a business model that eventually we’ll see light at near the tunnel. And the tunnel is reasonably long or not too long that you think it’s going to be hard to continue financing this venture. Because one of the things that you have to acknowledge is that probably in Latin America, you do have financing, but it’s not the kind of financing that you can get in deeper markets.

And obviously you need to be in a business model where you build competitive advantages. So again, nothing is absolute in technology. Your competitive advantages today fade away if you don’t keep on investing in them tomorrow. But at least ensure that when you’re building something and you gain some initial success, that success grants you a custom of protection versus the newcomer that maybe is trying to eat your [00:46:00] lunch the following day.

In terms of the market, very obvious, but it needs to be a large market. We all heard this many times, but solving. Big problem or a small problem takes probably the same amount of effort, but if you end up solving a big problem, you get a much bigger price.

Ian Hathaway: Yeah. One of the things that people ask me as a US-based investor, why am I so excited about investing in startups in latam?

It’s always the same, which is the talent is what drew me in the most. It’s so recognizable. The problems are enormous, right? And they’re very large markets. But as you know, it’s a different game. Building companies backing entrepreneurs in emerging ecosystems is very different from how you might build a company in Silicon Valley or New York or other places in the us.

So with that lens, this is a platform about outsiders. Entrepreneurs from atypical [00:47:00] backgrounds, or more specifically overlooked geographies who have built great companies in spite of the odds. I would say you’re backing a lot of outsiders. What is it that you look for? Maybe the things that you think entrepreneurs who are building from these markets, things that they need to understand that maybe entrepreneurs in Silicon Valley or other mature markets don’t necessarily have to account for?

Hernan Kazah: Certainly when you’re building something new, there are challenges, and it doesn’t matter if you’re doing that in a very developed market and very developed country, or if you’re doing that in an emerging economy with some that is new. But I do agree with that. Challenges change in Latin America. The ecosystem has grown, and we’ve described it as more complete today, but there are still many, many gaps.

And in particular, when you go to solving a problem, you identify one problem and you wanna fill that gap, but then you realize that on the way to filling in that [00:48:00] gap, there are many other gaps that appear because the infrastructure is not there. So you need to be much more comprehensive. In your solution, like when you are building something in the us let’s say you can really focus on just one particular vertical where you feel that there’s a gap and be very obsessed about it.

When you’re building in Latin America, you need to start building things around that opportunity because you need the first version of America didn’t have a payments mechanism and then hey, people are trading things, but, but it’d be much easier if we could also solve the payment challenge. And if you were in the us, eBay had PayPal and there were other mechanisms to pay for the items you are buying now to Latin Americans, I need to start building lots of things around that solution that you’re building for it to work.

So that’s a challenge. You need to have a much more open mind, be willing to [00:49:00] address problems that you think maybe are not yours. But if you don’t solve them, nobody them, then you cannot really. Provide the solution where you’re trying to build. But at the same time, if you end up doing that, maybe your model ends up being more resilient, more defensible, because you own not only that particular solution, but also the ecosystem that serves that solution.

And once you build something that has synergies, the value you end up creating is larger. Therefore, the value you can capture is larger. And that becomes more defensible ‘cause you own not only your solution, but also part of the solution that others might need to build an alternative to your solution.

Ian Hathaway: Well, speaking of ecosystems, I’d like to talk for a minute about the ecosystem in Latin America. Obviously very different today than the ecosystem that you launched Mercado Libre into. We’ve talked about some of those breakout companies, but I think it goes [00:50:00] much deeper than that. In many ways, I think the secret about the potential for tech in Latin America is out of the bag, but there’s still a long way to go.

I’m curious what you think is the state of the tech ecosystem in Latin America today. How should people who are less familiar with the region be thinking about its potential and then where you think things are going? Where is Latin America going to be in 10, 20 years from now?

Hernan Kazah: Latin America is still an emerging market where some gaps that are quite covered in more developed part of the world remain quite open here, and that I think offers a very, very, very compelling case for technology because in other markets you have traditional solutions that have solved those problems and now you have a much better solution with technology.

In Latin America, you don’t [00:51:00] have that in many cases, or the gap is much wider. So what you bring from Latin America is not a significant improvement, but basically a solution that before didn’t exist. When you look at a market for technology, you can say, Hey, in the US you have a larger market. That is true, but when you look at Latin America, you say, Hey, there’s a bigger gap.

And that is true as well. If you wanna sell cars, probably you will end up selling more cars in the US than in Brazil. But if nobody is selling cars in Brazil and many companies are selling cars in the us, maybe the opportunity in Brazils worth the effort. And I think many of those things are playing out in in Latin America.

So I think the net impact of technology in the world is going to be terrific, but it’s going to be largely in emerging markets because you have a, a decent healthcare system in the US and you don’t have that in Latin America. The same thing with financial inclusion, or the same thing with education, or the same thing with access to goods and attractive prices because it.

In Latin America, you don’t have a network of [00:52:00] traditional retailers that offer you decent prices across the countries. So I think in Latin America, the opportunities is, is really large and technology will help us fill those gaps that we have in the market. So, so the opportunities is terrific. I look at, at the opportunity we had with Melia and we thought was incredible and then I look at what that opportunity was 10 years after that and it was larger.

And then I look at the opportunity we have today, it’s even larger, right? I’m very bullish. I do believe that that technology will, will help us solve many of the challenges we have as humans. And certainly there are more challenges in Latin America than in the US and technology will help us close those gap.

So think project is terrific and the fact that now we have companies that have proven that those business models can work well in Latin America, the barcode areas, the new banks and the kingdoms and the new shops and many others that will come, I think in a way. We’ll only make this more and more attractive and more at at the [00:53:00] macro level.

I also think that we’re entering in a positive cycle for Latin America. It’s not going to be an amazing tailwind, but I think it’s going to be a positive one. We started talking about this probably seven years ago when people started talking about having supply chains more connected to the markets that had the main demand for those products.

And then COVID came and that became more critical. And then you started having some tensions between China and the us And I think that Latin America is really well positioned to offer lots of the products and services that developed markets a need, certainly a very strong base for commodities, for energy.

Politically, I think the region is becoming more reasonable. I’m quite bullish with Latin America in terms of the macro view it may have going forward. But then on top of [00:54:00] that technology is, is going to have an incredible, incredible impact and, and both companies, new Bank and America Libre were built in Latin America with less of a favorable context.

You cannot imagine the many challenges that Nuba went through in Brazil, that Melia went through in Brazil, Argentina, Venezuela. With all those challenges, they ended up building amazing companies that are global benchmarks in their industries. So I think that now the bull case is more compelling.

Ian Hathaway: I agree with that.

I’m excited to see how it shapes out. I’ll certainly be spending the rest of my career working in the region

Hernan Kazah: looking forward to it.

Ian Hathaway: So maybe last big question for you, when you zoom out and look at this arc of your career. You’ve co-founded one of the region’s most important companies helping to kickstart a tech [00:55:00] movement in the region.

You’ve backed and helped shape an entire generation of founders. The impact you’ve had is widespread and clear 10, 20 years from now. When you look back on things, what do you hope becomes true for the tech ecosystem in Latin America, and what do you hope is the impact that you’ve had?

Hernan Kazah: I really hope that first and foremost, the region can solve most of those gaps that we still have.

Obviously, it would not be easy and it would require lots of work, but I think it’ll happen. Obviously, there are a thing like energy and other basic industries that need to work well, but I think some of those solutions will come from. Technology, and I hope that we play a good role in helping entrepreneurs build those solutions.

And I’m very proud of what we’ve built so far with Mecoli and, and TAs, but I’m really [00:56:00] focused on how can we help the next entrepreneur build the next solution. I’m focused on those companies that are emerging today. The Can Astra the dollar apps, they cover it, the new workshops of the world, and hopefully they will end up building great companies with lots of technology, creating lots of high quality jobs for Latin Americans, impacting millions of lives positively with a meritocratic system.

Things that have been quite common in in the Silicon Valley for several decades now. They’re going to become more common in in Latin America because of these entrepreneurs.

Ian Hathaway: One of the things that I’ve observed is that young, smart people. Talk less about how do I get the job in consulting or banking?

And they’re thinking more about working in tech companies, starting tech companies.

Hernan Kazah: That’s part of the change in the ecosystem that you mentioned. A very significant one. When we started Merkel area, [00:57:00] all graduates were aspiring to, to get a job and, and it was fine, but that was what they looked up to. And today they look up to joining a startup or starting a startup.

And I think that shifting mentality is a very positive one.

Ian Hathaway: It’s exciting. Well, I look forward to checking back in with you on this and see how things evolve. We’re almost out of time, but before I let you go, we like to finish with a segment we call beyond the bio. Just some quick hit questions to kind of go beyond your resume and get to know you as a person.

Sound okay?

Hernan Kazah: Sure.

Ian Hathaway: So what’s a quick piece of advice from a mentor that’s stuck with you throughout your journey?

Hernan Kazah: Focus on, on the long run. I think that has been a, a very important one.

Ian Hathaway: Long-term thinking essential. Who is an unsung hero in your life and what has been the impact they’ve had on you?

Hernan Kazah: I mentioned my parents, both of them.

I think that I got great things from my [00:58:00] father who was a sport and fanatic and an amazing cheerleader of his children and whatever we would do that could be starting Marco Lire or having, I don’t know, pick up game, uh, at the corner of our house. He was our number one cheerleader, and I think that allowed us to there to live in ourselves, to feel supported, and my mom that really focused on education and for me, was a factor that really changed my life.

Ian Hathaway: Well, I can see you’re carrying that legacy on today. Who is someone in the Latin American startup community or maybe in your broader network. Who doesn’t get enough credit and deserves a shout out?

Hernan Kazah: I would say that that Marcos Gino is being the founder of the largest company in Latin America, the most valuable company in Latin America.

Someone that people know, but there’s still some [00:59:00] controversy, like whenever he writes a tweet, half of the people say, well, this is the most amazing guy, and half are, I dunno if he’s jealousy or what is it, but gets criticized. I saw his work firsthand, so I was next to him and it’s really amazing what he’s done.

And going back to the gaps that Latin America has and the region we aspire to have would be in an incredible position if we had 10 Marcos Gallins instead of one. And he doesn’t get that level of credit. I think

Ian Hathaway: that’s a great insight. Tell us something most people don’t know about you, something outside of work, maybe a hobby, a favorite travel spot, a guilty pleasure, or a hidden talent.

Hernan Kazah: One thing that people may not know is that I’m quite shy, but I learned to fight against that. I’m curious. I like to test myself. I force myself into a podcast with you, even though I’m not the most comfortable person doing this, but I decide to face my fears rather than [01:00:00] hide them, but, but even though you might not realize, I’m nervous now talking with you.

Ian Hathaway: Well, it’s amazing. I appreciate you breaking through that and sharing that vulnerability. I felt the same way. I used to hate public speaking so much, and then I just forced myself to say yes to every opportunity and eventually now it’s just another thing. And so I can definitely relate to you on that.

What are one or two songs you’d like to add to our Spotify founder’s Playlist? Something that you might listen to throughout the workday or maybe has inspired you on your journey as an entrepreneur?

Hernan Kazah: I’m a big, big fan of the Rolling Stones. There was one song that I used to play before going to an exam that was mixed Emotions

I like a lot in the days of Mer Libre, we used to, every time we were dealing with a hard problem and couldn’t find a [01:01:00] solution, someone would play the Rocky Song Eye of the Tiger and that will pamed us. So those two have some history with me.

Ian Hathaway: Yeah. Those are two great additions. Thank you for those. What about books?

Are there any books that have been especially influential or books that you might recommend?

Hernan Kazah: Yeah, I read many. Top of my list are probably couple of biographies. One is Sonobel on Warren Buffet. You cannot say that Warren Buffet does not get the credit he deserves, but I think he deserves even more credit than what he gets because to be an investor that could see through things, that could change his winning strategy a few times over his career and succeed over probably 70, 75 years, it’s incredible.

And Snowball is one book that that I really like. The other one is the [01:02:00] famous biography of Steve Jobs by Walter Axon, which I think is great. And very few books I read twice that are coupled from Garcia Marque that I love. And Steve Jobs biography is one of those as well that I read twice.

Ian Hathaway: Okay. Those are some great books.

So last question, if you could give one piece of advice to someone who’s about to start their first company, particularly someone who’s maybe a bit of an outsider, what would it be?

Hernan Kazah: Act outta conviction or do not act.

Ian Hathaway: I can’t think of a better way to end anon. Thank you so much for sharing your time with me today.

I can’t wait to share this episode with our listeners.

Hernan Kazah: No, thank you so much for inviting me. Thank you so much for all the work you did because every single thing that you said about my past was correct. That is not typically a case. So amazing and great question. So thank you so much for everything and for your opportunity.[01:03:00]

Ian Hathaway: That’s a wrap for today’s episode of Outsider Inc. A big thank you to Aeron Kaza for joining us today to share his incredible journey and wisdom. Nan’s story is a reminder that outsider isn’t a disadvantage. It’s a forcing function When the ecosystem isn’t there, you can’t lean on momentum. You have to manufacture it.

You don’t just build a company, you build the conditions around it. Trust, infrastructure, resilience, and eventually belief. What I took most from this conversation is how quietly disciplined that really is. Confidence without ego. Patience without passivity ambition with a long-term lens. Because in the end, the people who change a market aren’t the ones with the cleanest plan.

They’re the ones who stay standing long enough for the plan to become real. And if there’s one lesson, Anon leaves us with, it’s this act out of conviction or don’t act at all. If you want more from outsider, inc, don’t forget to subscribe to the platform@outsiderinc.substack.com. It’s packed with highlights [01:04:00] from today’s episode.

And bonus insights you won’t wanna miss. You can follow Outsider Inc on YouTube, Instagram, TikTok, and LinkedIn. At Outsider Inc. Pod, you can also follow me on X at Ian Hathaway Outsider Inc. Is produced by Spellbinder Media. We’ll be back soon with another fascinating outsider conversation. Until then, thank you so much for listening and remember, great entrepreneurs can come from anywhere.

See you next time.

Listen on: Spotify, Apple Podcasts, Amazon Music

In this episode of Outsider Inc., host Ian Hathaway sits down with Seth Levine, co-founder and longtime partner at Foundry, to explore a two-decade journey at the center of entrepreneurship, venture capital, and ecosystem building outside traditional power centers. Levine reflects on helping build Foundry into a top-tier venture firm based in Boulder, his belief in entrepreneurship as a driver of economic mobility, and the lessons behind his new book Capital Evolution. He also discusses backing overlooked founders, the philosophy of “give first,” winding down Foundry by design, and his latest chapter launching Good Bread, a lending platform that expands access to capital for small business owners traditionally shut out of the financial system.

Show Notes:

(02:10) Why Entrepreneurship Fuels Job Creation and Innovation

(03:25) Capital Evolution and the Case for Dynamic Capitalism

(06:05) Long-Term Thinking vs. Short-Term Market Pressure

(08:45) Declining Economic Dynamism and Barriers to Opportunity

(12:00) Family Roots, Class Mobility, and Early Entrepreneurial Influence

(15:45) Lessons from the Dot-Com Boom, Bust, and Corporate Humility

(19:30) Entering Venture Capital After the Crash

(23:10) Founding Foundry and Betting on Non-Coastal Startups

(27:05) Backing Overlooked Founders and Scrappy Entrepreneurs

(31:40) Building a National Venture Platform from Boulder

(35:10) Deciding to Wind Down Foundry and Make Space for New Funds

(38:30) Writing The New Builders and Reframing Entrepreneurship

(41:30) Launching Good Bread to Expand Access to Small Business Capital

(45:45) What Makes Startup Ecosystems Resilient Around the World

(49:40) The Enduring Power of “Give First”

(54:00) Beyond the Bio: Seth Levine

✅ Host: Ian Hathway - Co-Founder & Managing Partner, FOVC

✅ Guest: Seth Levine, Co-Founder of Foundry

Produced by Spellbinder Media. Executive Produced by Bridge Five Ventures. Copyright ©️2025, Bridge Five Ventures, LLC, All rights reserved.

Listen & subscribe wherever you get your podcasts or at outsiderinc.substack.com.

AI-Generated Transcript

Seth Levine: [00:00:00] I think entrepreneurship is the anecdote to a lot of things. The truth is that most of the growth in jobs comes from companies in their first couple years in operation. Overall, larger businesses end up shedding jobs as they go out of business or get more efficient. And of course, so much of innovation in our economy comes from smaller companies and typically the private sector, right?

Sometimes in partnership with government, but often not entrepreneurship. It’s not the answer to every problem, but it’s the answer to many problems. How do we spur entrepreneurship? How do we create more opportunities for more people to start businesses?

Ian Hathaway: Welcome to another episode of Outsider Inc. I’m your host, Ian Hathaway.

Today’s guest is Seth Levine, co-founder and longtime partner at Foundry, Co-author of the new Builders and the Just released Capital Evolution, co-founder of Pledge 1%, and one of Colorado’s most influential voices in entrepreneurship. For nearly 20 years, Seth and his partners built Foundry into a firm that [00:01:00] redefined what venture capital could look like outside the coast.

They backed companies like Fitbit, Zynga, and AvidXchange from a base in Boulder, proving that a top tier platform could thrive far from Silicon Valley while championing founders who weren’t getting a fair shake from the traditional venture world. Foundry isn’t just another fund, it’s a blueprint for how an outsider thesis executed with discipline and humility can outperform the status quo.

But Seth’s work extends well beyond that. He’s advised founders and funds across the Middle East and Africa helped elevate a new generation of diverse fund managers, and recently co-founded Good Bread, a lending platform built for the entrepreneurs that traditional finance consistently overlooks. I’m excited to dig into the unconventional path that led him into venture, how Foundry’s outsider mindset became its competitive edge, and what he’s learned from spending two decades working across ecosystems in the US and abroad.

Seth, welcome to Outsider Inc.

Seth Levine: Ian, thanks so much for having me. It’s great to see you.

Ian Hathaway: Yeah, it’s [00:02:00] great to see you. Thanks so much for being here. I’m really looking forward to unpacking your journey in a moment. But first I want to start with some big news. You have your freshly released book, capital Evolution, the New American Economy, co-written with Elizabeth McBride.

Right now in a lot of public discourse, capitalism gets talked about like it’s an outright villain, extractive, broken beyond repair, and yet you’ve taken almost the opposite stance, arguing that capitalism itself isn’t the problem. Instead it’s the narrow, sort of Milton Friedman esque version of neoliberalism.

We’ve been practicing for 50 years. Your book makes the case that we’re already shifting towards something more inclusive and far healthier. So tell us a little bit about your thesis in the book and what you want people to take away from.

Seth Levine: Thanks for that summary, Ian. Actually, it’s quite a good summary.

So we started this project about three years ago and it’s interesting. We ended up writing a book [00:03:00] that is in part of defensive capitalism at the time. We started it at least that was not necessarily what we thought we needed to write. Although it, it is true that if you ask people under 40, nearly half, don’t believe capitalism works.

That number’s higher now than it was a couple years ago, but it’s been high for a while. And sometimes I feel like capitalism, it’s a little bit of like what Churchill said about democracy, right? It’s a terrible form of government except for all the others. And capitalism is maybe a very imperfect form of, of managing an economy, except it’s better than all the others.

But we wanted to acknowledge in the book, in our writing that. Capitalism needs to change. Neoliberalism did not work sort of broadly across our economy. We have like the Jeff Bezos in a bar problem, which is like, if Jeff Bezos walks into a bar, the average person’s a billionaire. It tells you nothing about the people in the bar.

And, and that’s a little bit true of our economy right now because we’ve seen wages at the top end of the scale grow over the last 40 years by 900%. And yet in the same period of time, wages of sort of the average worker have grown. 12%. And you know, that’s led [00:04:00] to not just inequality across our economy, but also in our minds to this political instability that we’re experiencing right now.

We wanted to talk about that and address it, and it’s not that we believe that it is. A done deal that we are moving to some new form of capitalism. We describe one in the book, we call it Dynamic capitalism, but that’s not a done deal. That’s not a feta complete. We’re in this sort of messy middle. We kind of started moving away from neoliberalism in probably about 2019 when the business roundtable.

Raised its hand and said, actually there’s other people who matter in a business. Not just shareholders, but also other stakeholders, employees, suppliers, the environment, community. But we’re not settled on where we’re headed and, and actually Trump is an interesting figure in all of this. ‘cause he talks like a dynamic capitalist, right?

I mean, he talks about empowering and ownership economy, empowering employees, not forgetting sort of the middle of the country, not forgetting the middle class, et cetera. He doesn’t necessarily govern that way. He kind of governs a bit more classically neoliberal, trickle down tax cuts for rich [00:05:00] people and other people will somehow benefit from that.

But the reason that he’s such a peculiar figure who got elected at this time is because we are in this sort of messy moment where we’re trying to figure out. Are we really moving away from neoliberalism? And if we are, what are we moving into?

Ian Hathaway: Maybe I’ll just pick it up there. What is your best guess for where things are headed?

Seth Levine: It may be a little bit aspirational, although I’m gonna describe it to you. It’s not like some massive departure. We felt like so many of the books about reimagining capitalism were just like these radical departures that sounded very much not like American style capitalism. And what we wanted to describe was something that was like.

A little bit of a. Twist and evolution of capitalism, but not this like major departure from what we’ve been doing as a country, and so therefore, pretty realistic. There’s sort of four key tenets of dynamic capitalism. The first one, this focus on the long term rather than the short term, and neoliberalism [00:06:00] really taught managers to focus.

On the short term really to the exclusion of the long term, much to companies peril, right? I mean, when people push back at me on this, all I need to cite is that the average half-life of the Fortune 500 is 20 years. So it’s not like they were doing a great job of sustaining their businesses for the medium to long run.

So that’s the first tenant. The second tenant is empowering an ownership economy. We wanna create more capitalists, is a better way to say that, right? We want more people to have a stake. In the market economy, when you don’t have a stake in the market economy, when you think you’re never gonna get outta your student debt, when you’re never gonna be able to afford a home, you have no stake in the success of our overall economy.

And I think that that results in people wanting free stuff, right? Which is the allure, if you will, of socialism. It’s like, Hey, I’m never gonna get outta my student debt, so what can I get? Someone else should give me something. That really is their sort of call for help of like, I wanna get out of this. I [00:07:00] don’t see a way out of it.

Thing three is a role for government, but a limited role for government. We have an entire chapter on this. I think that a lot of times people who write books about the future of capitalism, talk about government as a super actor in our economy. And our prescription is that we don’t believe that that generally works.

There is a role for government, but that role should be limited in size, scope, and scale. And then the last thing, which is a respect for the rule of law, right? The, we can only have a functioning market economy if we agree on the rules and if we apply those rules to everyone in our economy. And we are, I, I think, a little bit on shaky ground around that at the moment, which is why we felt like we needed to actually call it out.

Sad to say.

Ian Hathaway: One of the things from development economics, what makes countries great economically? Number one thing is strong institutions and rule of law. Yeah. A lot of what you said, I think pairs up nicely with entrepreneurs. Entrepreneurs are the epitome of capitalism in many ways, requires a [00:08:00] long-term commitment.

It’s really about ownership. I think that’s one of the things you hinted to earlier, young people not feeling like they have a stake in capitalism. Whether that’s from income opportunities, pathways to wealth, primarily through housing, has been a challenge, but also entrepreneurs want freedom to execute, right?

Limited government interference. So maybe just kind of merging those themes with where you’ve spent most of your time. From the vantage point of someone who works closely with entrepreneurs who has been doing it for many years. What’s actually changing in that operating environment, and maybe asked differently if capitalism isn’t the villain that some people make it out to be.

What is the real force that founders should be paying attention to most in this new economy?

Seth Levine: Obviously I’m a champion of entrepreneurship. I know you are as well, and I think entrepreneurship is the anecdote to a lot of things. The truth is that most of the growth and jobs comes from companies in their first couple years in operation.

Overall, larger [00:09:00] businesses end up shedding jobs as they go outta business or get more efficient. And of course, so much of innovation in our economy comes from smaller companies. Typically the private sector, right? Sometimes in partnership with government, but often not. Entrepreneurship is not the answer to every problem, but it’s the answer to many problems.

How do we spur entrepreneurship? How do we create more opportunities for more people to start businesses? One of the things that I worry about a lot in our economy, we talk about this really more at the end of the book. But we call out the declining dynamism in the US economy. I know you’ve written about this as well, Ian, but we are not as dynamic as we used to be.

The opportunities for people to change jobs, to change their station in life, to sort of participate from a meritocratic sense in the upside of our economy that is going away. I mean, that’s the American dream right there in a nutshell, right? It doesn’t matter where you’re born, where you’re from, what color your skin is, whatever it is, like you have an opportunity to be successful here.

And we are moving away from that. And there’s a lot of reasons we’re moving away from that. A lot of that relates to [00:10:00] systemic challenges around how we manage education in the country, but also a lot of challenges in terms of overall access. There’s a velvet rope and there are gatekeepers to a lot of things in our society, and we don’t let people in who aren’t well connected, and that is.

In my mind a perversion of capitalism because we’re not letting the best people find their path in our economy. I think about those sorts of issues all the time, and because of my day job, I think about them often through the lens of entrepreneurship because I want to enable more people to be more entrepreneurial.

I think that

Ian Hathaway: the creative destruction, right, this dynamism we talk about is something that is subtle, but really drives innovation, productivity, job creation. You mentioned. And I think this sort of gated access to economic opportunity, these are the kind of things that people fled from other countries to come to America to rebel against.

Right. The coming to America and and fulfilling that dream was an entrepreneurial act in and of [00:11:00] itself,

Seth Levine: which is perhaps why immigrants to the United States start businesses at twice the rate of people born here. ‘cause they’ve already done something incredibly entrepreneurial as they get here.

Ian Hathaway: Absolutely. And the US has been for many years. Hopefully, this is not one of the things that we’re turning our backs on, but the unique beneficiary of global talent. So whether it’s entrepreneurs, whether it’s college graduates, whether it’s Nobel Laureates, we’ve been that sole destination, and I’m glad you’re writing this book at this time, especially someone who has your experience in driving capitalism at the edges of high tech entrepreneurship.

I think it’s a unique voice and I encourage folks to check it out. Just hearing you talking about the future of capitalism, it’s hard for me to not see the echoes of your own family origin, your own history and story. Witnessing that one generation leap from lower middle class to to upper middle class that you’ve said in the past has shaped your thinking.

So if we could, I just wanna rewind a little bit to that. You [00:12:00] grew up outside of Boston, you an academic household and you had this influence of an entrepreneurial grandfather. What were those formative experiences like? And maybe what were some of those that left the deepest imprint on how you see opportunity and the role?

That business can have in shaping and improving people’s lives.

Seth Levine: You’re absolutely right. So my grandmother was one of the early graduates from the Colorado Women’s College. She grew up in Denver. Oh, wow. Which was very unusual back then. Right? She graduated from college in 1938 and not a lot of women were going to college.

My grandfather was, so these are my dad’s parents. He was born also in Colorado. My grandmother’s parents were from here. My grandfather’s parents were from Russia, roughly right. Probably Ukraine more than Russia. But his first language was Yiddish. He dropped out of high school to work during the Depression.

So he had this very sort of scrappy life where he had to kind of put it all together. He enlisted in the Army. Served in the Great War, obviously their greatest [00:13:00] generation. He came back, they ended up eloping because my great-grandfather felt like my grandfather wasn’t good enough. Here’s a kid basically who didn’t even graduate from high school, let alone college, and I think my great-grandfather had a lot of pride in the fact that my grandmother had gone to college, but they lived their lives for a while as a married couple, but not living together because they hadn’t told anyone.

And my grandfather sort of created this very middle class life. He was a salesman. He sold cars, he sold check cashing machines. He started a men’s clothing story in what is now LoDo in downtown Denver, before it was chic. So he did all of these various things and the result was that my father, who’s very smart, he.

Went to Cal and then went to Harvard and got a PhD in physics. So in one generation, my grandfather hadn’t graduated from high school, and then here’s, my dad’s got a PhD from Harvard, so I get a lot of that entrepreneurial spirit from that side of the family. It was incredibly formative time for me. He told me a lot of stories.

We were always very close. It’s why I moved to [00:14:00] Colorado was because I wanted to be with my grandparents. My grandparents on my other side of the family. My grandfather was very academic. He was a a relatively well known historian, and interestingly, Ian, he wrote. The stories of a lot of underrepresented people.

One of his more famous books was basically about black women in their own voices. I didn’t know my grandfather. He died when I was two, and so I only have stories about him. And he was also very interested in sort of the political and economic history, the United States. He wrote a a long book. American History and American Thoughts, his well most well-known book.

And anyway, I see echoes not just in enjoying writing books, but also in the types of voices that we choose to highlight. Certainly in my last book, the New Builders as well as this one. So it’s interesting. I’m the culmination of these two sides of my family. By the way, my mom also has a doctorate from Harvard, so I’m like the black sheep of the family.

I never even went to grad school. But yeah, I grew up in this very kind of academic household. My dad was actually a professor and he was a physicist, so I used [00:15:00] to get to go and play with the big telescope at Harvard, and then actually even better than that, he left academia just ‘cause. He, they’d had a couple kids and he couldn’t afford it anymore, and he went into computers really early, worked for Wang and worked for a couple other companies, and then eventually worked for Digital Equipment Corporation.

So one, we’ve always had a computer in the house, right? But he would bring these old computers home and I would take ‘em apart.

Ian Hathaway: I can see so many of those threads in what you’ve done, what you’ve become. There’s influences of computing, of entrepreneurship, of writing, of social justice, helping people maybe with fewer opportunities.

I know you left the East Coast. You went to school in Minnesota at McAllister Liberal Arts College. Not necessarily a place where people launch business careers from, but you did anyway. I know you spent a little time in New York, returned to your roots in Colorado, and then got to ride the.com rollercoaster with an internet data comms company called First World Went Public in 2000, and you got to live through the experience of that all tumbling down.

I think actually. [00:16:00] The Nasdaq peaked a few days after that company went public. Yep. So I’m just curious about what all of that era was like coming to Colorado at a time when really, you know, Denver was the hub for telecom and Boulder was just in the early days of really becoming the software hub that we know it as today.

To ride that really early in your career, fast growing company, I’m sure there were a lot of perks and good pay and things like that to then just being maybe knocked to your knees. What was that rise and crash like? What did it teach you and what did you ultimately become as a result of that?

Seth Levine: Well, first I should put a plug in for McAllister ‘cause it was a wonderful.

Experience for me, and I think the way that you learn what your passions are are to try lots of different things. And interestingly, you know, Mac is an incredibly entrepreneurial school. Some of that I think is because we have such a high percentage of international students, about 30% of our students are international and it’s a school of problem solvers.

Now I like to think about entrepreneurship. It’s solving problems of one kind or another. McAllister was transformational for me. It really helped me kind [00:17:00] of evolve into who I am and, and then like you said, I, I got a job in investment banking and I worked in New York for a couple years. As I mentioned, I wanted to come back to Colorado because of my grandparents, and I wanted to spend some time here.

I ended up being a sort of a person of all trades, sort of corp dev person for ICG, which is the name of that company. I think one of the reasons that the management team liked me is when you’re a banking analyst, you’re the lowest person on the totem pole. And so, yeah, I was carrying all the books and did all the analysis, ran the models and all that kinda stuff, but I also like, if you needed something, I was gonna go get it for you.

And oftentimes that was getting a snack or getting coffee or whatever, and. When I showed up on my first day at ICG and they had made me a director, so I’m 23, I think the next youngest director was like at least 10 years older than me, but they believed in me and they understood sort of my potential.

But I had a placard on my desk that said Seth Levine, assistant Director, coffee procurement, and all of the sort of senior leadership team came down that day [00:18:00] and jokingly left me their coffee order and, and I thought it was funny. But as I reflected on that, a few years later, I realized like. Showing them that humility was why they were so, I mean, truly the conversation I had with the CEO when I called him and said, Hey, I’d like to move to Colorado, can I work for you?

Was three minutes, right? It was, when do you wanna move? Absolutely. Someone’s gonna call you in five minutes, you’re hired. And I think that there’s something to that. And so I wanna share that because I think that’s important. So anyway, I had that great experience at at ICG. We did a lot of m and a things, did some big m and a deals.

I think they thought, because I was a banker, I knew what m and a was. Even though I wasn’t in the m and a group and I figured it out pretty quickly, I was very fortunate to have, in particular an attorney Rob Mince, who like just walked me through how to do deals. He was an incredibly impactful person in my life and just kind of mentored me up, and then my boss left.

To go to from a, a telecom company to a Datacom company at First World. And he called me up a couple days later and was [00:19:00] like, I want you to come over. And so I was like, all right, maybe I’ll do that. He had a guy who was head of corporate development and he was like, you’ll work for this guy. And I showed up.

I was the third employee of the sort of restart, if you will, in Denver. The company was really based out of Orange County. And two days after I showed up, Sheldon that the CEO called me into his office and said, I fired Andy. I don’t trust him. You’re the head of corporate development now. And I was like, okay, you know, what’s the plan boss?

And so I went around and bought a bunch of companies. That was the idea was to sort of do a little bit of a roll up and. It was an amazing time, Ian, right? This is the late nineties. It was fun, and then it became time to go public and we never had a CFO. We had a chief accounting officer and me. We split the CFO role, so I had the corporate finance, half of the CFO.

I had a group that did like the long-term modeling. I had the m and a group that worked for me. Eventually, I had investor relations actually reported to me as well, which was interesting. Like I just had to learn all this stuff. I didn’t know how to do it. So we go public. In [00:20:00] 2000, I led the IPO push, kind of structured the whole banking process, who we were gonna pick.

All of that stuff led the drafting of the S one. We brought in just under $300 million alongside the IPO from Lucent, SAIC, and Microsoft. I negotiated all of those deals. It was really, really, really interesting. And then of course the stock market hit its high two days after we did. But I had another.

Lesson in humility through all of this, and there was one moment in particular, we were drafting the IPO documents. We’re in New York. There were a bunch of us. So we had rented like a bigger limousine ‘cause there were like eight or nine of us going around at one time. So we’re at the printers, we’re doing the drafting, and TPG had asked me to come and keynote their CEO conference in, uh, San Francisco.

I’m like, Hey guys, I gotta leave. I’m taking a, the late flight to go to San Francisco and I’m in a suit. I get in the limo, I’m by myself in the back of this big limo, and I was like. I am hot. Shit. I have [00:21:00] arrived. I am fucking awesome, and I had a fantastic ride to Newark Airport. I was like, I’m the fucking man.

I’m flying over to, I mean, a stretch limo, looking good in my suit. I’m gonna be flying out first class to go to San Francisco to give this keynote. And I, I walk into the Newark Airport and I can’t find my flight on the thing, and it takes me a couple minutes and I realize my flight was from JFK, and like in an instant, the bubble burst.

There’s no flights, like it’s not happening, right? There’s no way to get there. And I end up in the shittiest hotel motel that you’ve ever seen outside of Newark Airport. And I get into the hotel, I drop my bag, I’m sitting on the edge of the bed, and I’m like, life is giving me a lesson like I was getting too.

Kind of full of myself and time to kind of pull that back. It happened at a good time for me, right. I think it was important, but it was a really good lesson of like humility, and I think that that’s, that’s important.

Ian Hathaway: You went over to SoftBank in [00:22:00] 2001, which then was renamed Mobius. Yep. It’s where you met Brad.

It’s where you met Jason Mendelson and Ryan McIntyre. The four of you would go on to found a foundry group. Several years later. Maybe looking at that experience, I know that Brad himself was doubtful that Mobius would. Even raise another fund. Easy to see why your experience doing deals in investment banking and working in-house leading corp dev for a large public company would be useful in venture.

But it was this evolution for you as well at a time when arguably almost couldn’t have picked a worst time to start a venture capital that you did. So maybe Mobius didn’t really work out, but the partnership did. So what was it about the four of you that you wanted to go off and start this new fund focusing on something different that no one had really done before?

What sort of was that [00:23:00] initial vision? What was that motivation?

Seth Levine: Well, first I’ll give Brad a lot of props. Brad hired me and they were down to two finalists and Brad was gonna hire the other guy, and the rest of the hiring team wanted to hire me. And Brad to his incredible credit was like, if you think Seth’s a better guy, we’ll hire him, obviously.

I mean, Brad’s one of my closest oldest dearest friends. It’s the quintessential Brad story. He had an opinion, but he was willing to defer to the group and say, no, no, no. If this is what you guys think. So I, I think that’s pretty important and, and the story of us coming together is really interesting.

Right? So in 2005, Moby has tried to raise another fund and. I wasn’t really a part of that. I started in 2001. I knew what I was getting into. Like it was pretty clear the party was over and like the keg had run dry. The cops had come and gone, right? Like it was, it was over, over. We all knew that we were just holding on.

But in 2005, I was this like super junior partner. I wasn’t involved in the fundraising process. I was only gonna get to do maybe one or two deals in the new fund anyway. And I actually went to Brad and said, Hey, I’m not quitting today, but I, I’m not gonna stay for this next [00:24:00] Mobius fund. And Brad said, actually, I don’t think we’re gonna be able to raise this fund.

But I’d really like to do something different. I’d love to do it with you. What do you think? And we started talking about that and I dunno if you had talked to Jason and Ryan about this, but two of our other partners, and we really started with like, who do we wanna work with? That was really with the four of us opting into working together, and it was a challenging dynamic to bring together.

Brad was a partner with his track record and had done really well. Jason was the general counsel of Mobius, so he was a partner, but sort of managing legal. And then Ryan was this sort of more. Senior, junior partner than I was, but who had done some deals and a couple in particular postini that looked like it was gonna be really successful and it ultimately was.

And so it was like this interesting sort of coming together. And I think the thing that really worked is that we hired an organizational consultant, Nancy Ralston. We still work with her and she really helped us even before we. Started Foundry before we had a name, before we decided what exactly what we were doing, she [00:25:00] helped us sort of understand from a first principal’s perspective, how were we gonna work together, what did we wanna do together?

And that was, I think it set the foundation for Foundry for a really long period of time. And I think it helped that we were all relatively similar in age. We vacationed a lot together. There was a lot of overlap. And I think a lot of that stems from this idea of mission that we could build a venture firm that wasn’t in.

California or Boston, and this is before New York was even on the map for Venture. We felt very strongly about that and we wanted to kind of prove that that was possible. And you know, we were very fortunate. We started in venture at the exact right time. We raised our funds right before the GFC, but we got to invest through the GFC.

Our first investment was Zynga. Our third investment was ad mailed that sold to Google for half a billion dollars like six years later. Fitbit was in that fund. I mean, it, it just was really, really, really successful and that laid the groundwork for people believing what we were doing. ‘cause a lot of people didn’t believe you could do this.

Have a national venture fund that was not based in, [00:26:00] particularly in Northern California, but certainly not one that was based in Colorado. That was really important. It wasn’t just a

Ian Hathaway: new firm, right? This was a genuinely outsider bet. It’s oh 6 0 7 timeframe long before anyone really believed you could build a successful national VC fund

Seth Levine: outside of the coast.

And not only that, Ian, it was also the belief that there were only maybe a dozen venture firms that were worth being in. There was no such thing as an emerging manager back then. People didn’t believe in the emerging manager thesis, and the emerging managers that we think about today who were the sort of OGs of the emerging managers, Foundry, I think is also one of those.

They had raised their funds in many cases, but they weren’t really on the map. Right? True. Not on the map. FRC existed, but not on the map. Union Square existed but not on the map. Right. First Mark was PWA back then and not on the map. Spark had raised their first small fund, but they hadn’t done any of the deals they’re known for.

It was a very. Different time in venture and it was hard to convince people that these [00:27:00] four, relatively young, most of us didn’t really have a track record. Partners were a good bet.

Ian Hathaway: Well, and it wasn’t just where you were located, right? It’s the types of companies you were looking for. Yeah. I know that you were told no by a number of investors.

Eventually you timco came in, stepped up, helped you guys launch. The firm, but it’s not just that you guys were outsiders, it’s that you were funding outsiders that was distinctive and ahead of its time. I know you eventually went on to to back emerging managers, but in the beginning you had this national thesis that was built from Boulder where you had kind of a third of the companies were in the Bay Area, a third were sort of local or regional, and then the third was.

Everywhere else. What made you guys think that that was going to be a successful investment thesis?

Seth Levine: I mean, eventually we raised $225 million and we got a lot of nos along the way. We started raising in January of 2007 and by probably May, it was pretty [00:28:00] clear it wasn’t gonna come together. Right. Like it was not working.

We got a lot of nos. Uh, Harvard in particular was a really hard No, because we, we had a bunch of meetings. We were like, they’re gonna say yes, and they’re like, ah, we just don’t believe it. And I give Linde a lot of credit. Linde Eckman from U Timmco now at Foundry, but he saw something in us. And in other emerging managers, right, he would be back true.

He back USV, he really has a great fund investment track record, and he was willing to take the bet on US entrepreneurs listening or other fund managers as well. Sort of the dynamic won’t be unfamiliar, which is like one person says yes and then all of a sudden, uh, a couple other people say yes. And then it kind of came together really quickly.

So we went from like May, I don’t think this is gonna happen to. Probably July or so when Lindel said yes to like basically August, knowing that the fund was gonna get raised, where did we wanna put the cap, right? We originally trying to raise $175 million and we ended up capping it at 2 25. We could have raised even more if we had wanted to.

At the time. I think we certainly really believed [00:29:00] that there’s nothing about that San Francisco quarter that had a lock on entrepreneurship or Boston. Eventually, or New York, we felt like great companies could be built sort of anywhere and and there’s ecosystem building that needs to be done. I know this is near and dear to your heart.

We always had that thesis that if we did the work, we could help create entrepreneurial ecosystems in lots of other markets. And I think that that’s come to pass, right? I mean, not every market that probably could be a great startup market has as robust a market as we’d maybe want it to. But you see entrepreneurship happening.

I mean, again, back then you have to understand it truly was. It wasn’t even San Francisco, nothing was happening in the city. It was Peninsula and a little bit in Boston based on just sort of the 4 95 quarter. There was nothing in New York, there was nothing in la, there was nothing in Austin, nothing at scale.

It was just a truism in venture that you needed to be in Northern California or maybe in Boston. And I think we fast forward now 20 years later, and there are lots and lots of entrepreneurial markets that have emerged, [00:30:00] and I think that that’s a testament to sort of the entrepreneurial spirit across the country.

Ian Hathaway: So what is it that you see, looking back almost two decades, what do you think the four of you saw about entrepreneurs in underrepresented geographies or underrepresented backgrounds?

Seth Levine: I think that we like the scrappiness. We like people that maybe had been turned down before that had been looked over by other venture firms.

When I think about a number of our most successful companies, a lot of them struggled to, even after we ended up putting money into them, they struggled to raise some round. Fitbit struggled to raise it. Series B ad mails felt struggled to raise it. Series B GIP couldn’t raise money forever. They were bought by Twitter.

There’s so many examples in our portfolio of companies that sort of struggled, and that’s not to take away from the companies that have sort of just taken off and done really well and had no problem fundraising. Like, great if you can do it, but. That’s not a lock on sort of great outcomes, right? And, and so we really felt that entrepreneurs with passion, with a bit of a chip on their shoulder with [00:31:00] something to prove those are the types of people that we wanted to back.

And it turned out that there were plenty of those people in markets that weren’t in the Bay Area or Boston. And by the way, we invest there too. But there were plenty in Colorado and, and all sorts of other markets that we invested in.

Ian Hathaway: There are a number of funds today, mine being one of them, that believe in this thesis that you can not only find good entrepreneurs in far away places, or not even far away places, just places that are not in this one or two concentrated geographies, but not that only that you can find good companies, but actually that you can produce better returns by doing so.

Just looking back on it at all, do you agree with that statement? How do you think it worked out for Foundry?

Seth Levine: I absolutely agree with that statement, and look, I’ve been blessed with an amazing life, right? I have great business partners. We’ve been very successful. We’ve been able to do it sort of the way that we wanted to do it.

Lots of hard times, right? It wasn’t easy. There was a lot of scrappiness. It was a lot of work. I’d rather be trying to do it now, frankly, than doing it [00:32:00] back then. What we did at Foundry specifically, I mean, I went to New York. More at least once a month, usually every three weeks for like three years when we were getting foundry up, up and running.

‘cause that was just a market that wasn’t well covered. And I just thought, well this is a place I can go find some deals to do. And that was just really hard. It’s hard on a young family, hard on my wife, all of those sorts of things. So I don’t wanna paint a picture that was like super easy and it all worked out great, right?

Like Foundry almost didn’t come together and we’ve had plenty of challenges, but I, I’ve been incredibly fortunate to have seen this opportunity and frankly to have had partners like Brad, Ryan, Jason, to help. Sort of execute with me and really having Brad as my role model. I have people ask me all the time, they’re like, Hey, how’d you learn how to be a venture capitalist?

And I’m like, it doesn’t work like this anymore. How I actually learned is I followed one of the best VCs of our generation around. For years, like four years, went to every board meeting, sat through all the pitches, heard his download on everything. It’s not realistic to replicate that. I just was really [00:33:00] fortunate to be in the right place and to learn from someone like Brad.

And I actually said to him, I think the greatest gift you gave me was the gift of give first, the gift of modeling this kind of behavior, both in terms of how we worked together, right? Brad, who could have easily said. We’re gonna do Feld Ventures and I’m gonna take 50% of the economics and did not. And I might have even said yes to something like that.

‘cause you know, what else did I have to do? But he did not. ‘cause that’s not the kind of person he is and that’s not the kind of firm he wanted to have. So everything from that to how he modeled give first and sort. Instilled in me this, this belief knowledge of how powerful it is, right? So I, I really, I just lucked out in so many ways in my life.

I mean, I lucked out with who I married. I lucked out with the life I live, I lucked out with my partners. I mean, when I get circumspect about it, I’m like, yeah, that was really a pretty amazing time to be in venture, to be with this group of people and to do the things that we did.

Ian Hathaway: [00:34:00] I would say you guys are unconventional.

It was unconventional decision to launch a new firm coming out of the.com crash to do it in Colorado and to intentionally back people who were building in those overlooked places. Many other unconventional decisions. You didn’t build a a big team and. You telegraphed early on that you did not intend for this to be a legacy firm, that when one of you or some subset of you were gonna turn the lights out, that was it.

And it’s one thing to talk about it in the abstract, especially many years in advance. It’s another thing to do it. And so that’s what you’re going through. Now, Foundry made another unconventional decision, which was to say that the last fund is gonna be it. I know that you’ve talked about wanting to be transparent early to avoid any misperceptions that you guys couldn’t get raised, but really it was about giving oxygen to a new generation of firms, and I know actually going through that [00:35:00] made the decision really real.

So what went into it? How did you all think about timing, communication, and what does wrapping things up? Well look like

Seth Levine: for the firm. Yeah. Well, I appreciate you teeing up that question because it really was deliberate. And when we started founder, we actually said this to our initial investors, like, look, we’re gonna do this for 20 ish years of funds, and then we’re gonna not raise any more funds.

We didn’t really wanna have a generational firm and the right thing to do was to walk away. And I think you said something, and a lot of people haven’t really picked up on this, but you said it very directly, which I agree with, which is like we were very conscious of taking up a lot of oxygen in the Colorado ecosystem in particular, and wanting to make some space for the next generation of funds.

Whether that’s range or Matchstick or Massive or a bunch of other people that are doing Next Frontier doing interesting things in Colorado. And we just felt like as long as we were still around, we [00:36:00] were, and we’re so much larger just because of the nature of the funds business and, and just how long we’ve been around than anyone else that we were just.

Sort of distracting in the market. And we felt like that that wasn’t the role we wanted to play. And so now we’re trying to be supporters, investors in these other firms to try to like kind of help give them not just the space, but give them lessons learned from what we’ve done. And I think that’s something that I think a lot about.

But I know one of the things that I’ve really enjoyed doing, and you mentioned it in the intro for me, is I do work with a lot of funds globally, and I, I like that role of trying to help. Other people be successful at their work.

Ian Hathaway: Well, you said maybe you felt distracting a little bit, but if anything, I’d say you’ve been an inspiration to at least my peer group of fund managers who are starting out their first couple of funds and who do think there’s another way to make money in this business besides investing in one concentrated [00:37:00] geography.

And so hats off to you guys for that. It’s been fun to watch, but I would like to shift gears a little bit if we could. We talked about it. In the beginning, you have a first book. I know we’re celebrating a new book today, but your first book, the New Builders, which pulled you far outside of the venture capital world and into the lives of entrepreneurs that most people might never hear about.

You know, bakers, shop owners, first generation immigrants, older founders who are starting second careers. I even. Remember one story of a woman who had launched a 16 person bakery with food stamps and, and one thing that really stands out is how many of the people that you interviewed didn’t even really see themselves as entrepreneurs.

They didn’t really relate to that word despite the fact they were creating real jobs and real economic value. What inspired you to work on that project? And maybe as a follow up to that, what surprised you most as you spent time with these entrepreneurs across the country? [00:38:00]

Seth Levine: Thanks for asking me about the first book.

I really enjoy the process of research and writing. I’m sure we have this in common ‘cause you do real research behind your writing as well, and there’s nothing wrong with VCs sitting down at a computer and writing about their life experiences. And I think there’s a lot that can be gained from that. But I also feel, at least for me, the kind of work I want to do is.

A little bit more sort of national or global in scale and sort of based on interviews and research, which is why the new builders was a year plus of research. This last book, capital Evolution was two years worth of research before we started writing it up. And I, I think the thing that really attracted me to the New Builders, which is a book about.

The changing nature of entrepreneurship. People who are starting businesses look different than they used to, right? Specifically more women, people of color, immigrants, as they always have, are starting lots of businesses in the United States, and when we, as it turns out, aren’t doing a great job of connecting them with capital.

I felt a couple things. One is I thought it was a really interesting story and a really interesting story to tell. [00:39:00] It was not a story that I actually understood the original intent. The book Elizabeth and I were writing was to tell some fun stories about non-traditional entrepreneurs. We felt like they were being ignored by mainstream media and we knew that there were great stories.

We were gonna write almost like a coffee table style book about people doing interesting things. And then we started researching it and we realized actually there was a, a much bigger story here. The struggles of the people that were starting businesses because we don’t do a good job of connecting them to capital and resources and just how fast the entrepreneurial landscape was changing.

And so we wrote it up. And interestingly enough, the most common reaction we got when we started sharing some of our findings with our friends was, well, that’s not right. And I think it’s because what they saw in like tech and venture entrepreneurship was like white guys starting businesses and that is what you see in tech and venture entrepreneurship.

Much to our problem. I think the other reason I, I thought that it made sense for us to write it is I wanted to. Essentially share my weight and voice to tell those [00:40:00] stories. I had a position that enabled me to tell these stories in a way that people would listen to them. We know that the new builders was, in particular a big hit on Capitol Hill, which is great.

Right? And we know it affected, ‘cause we heard from some staffers like, Hey, we read your book. And we changed in particular, some of the COVID relief stuff because we realized that we, we weren’t targeting the right businesses. I think that is a good example of why I’m so proud that we wrote it. I hope the new book has some similar attributes.

It’s probably maybe designed for a bit broader audience. It’s really anyone who cares about. Capitalism in our economy. So that hopefully is just about everyone in our economy, but I also hope that you know it, it gains subtraction in particular pockets where people can make a difference, right? People that run businesses or people that are in the sort of halls of power, particularly in Washington, but at the States as well.

Ian Hathaway: I have to think that taking that ground level. Reality sharpened the way you think about opportunity and access. Undoubtedly, the first book influenced not just the writing and ideas behind the second book, but maybe [00:41:00] influenced it entirely. Yeah. One of the things you said was that you were hoping the book would connect people to capital and resources, and rather than hoping for that, it feels like you’ve taken some action on that.

I want to talk about good bread. Yeah. It feels like a natural extension of this work in your worldview. After decades of backing venture backed companies, you co-founded a lending platform for entrepreneurs who are largely invisible to traditional banks. The people who we talked about it before make up overwhelming majority of American business creation and job creation, but they are left out of access to capital.

So with that context, I’d love to hear about what led you to launch good bread. Maybe what are you seeing early on in the data and and applicant stories that has convinced you to continue forward with a belief that this was a solvable and more importantly, an urgently solvable problem?

Seth Levine: Yeah, I mean, good bread came directly from the book.

33 million small [00:42:00] businesses in the United States. Obviously not all of them are ready to take debt financing of of any kind, but the vast majority, 85% don’t take money from VCs. That’s 1%, or banks, that’s like 13%. So many people are just unfunded and we are not reaching our potential as an economy because we don’t do a good job of getting money to these entrepreneurs.

And so I started talking about that as an opportunity when, when Elizabeth and I were doing these book events and eventually I met Noah Simons, she was running a group called the Upstate Capital Coalition in New York, and we were sitting next to each other at a dinner. She had invited Elizabeth and me up to Keynote a conference, and we just sort of had a mind meld on this, and she called me a couple days later and said, I’m pretty interested in this.

What do you think? And ultimately at the beginning of this year, 2025, she quit her job and started working for Good Bread full-time. And the experience that I had fundraising was. It was different on two levels. One was just, I sent a bunch of emails from seth@goodbread.net and I didn’t even hear back from a lot of people.

And then I would send the same [00:43:00] email to the same person from Seth at Foundry VC and people would be like, oh my God, I didn’t realize that was you. Of course I’d be happy to get on the phone. And so that was like, Hey, could you at least get back to entrepreneurs? So that was interesting and I just recognize that, yeah, I was able to close 1.2 million.

Largely on sort of emails that mostly I sent some Noah sent, she’s continued to fundraise, so we’ve, we’ve raised a bit more right about 1.6. The product works great. We have this sort of underwriting philosophy that is partially based on character. We’ve got this thing we call the Boss Index, but it’s a proprietary sort of grit slash character assessment.

We also are using sort of what you’d think of as modern underwriting writing techniques, right? So a lot of banking is still very. Kind of hand rolled if it’s digitized. It’s a digital version of what people did a hundred years ago, which is to take a bunch of notes about, well I know Ian and I knew Ian’s dad and you know, Ian’s mom was my, you know, preschool teacher or whatever.

And, you know, that’s how a lot of these loans end up getting made. And, and we were like, that does [00:44:00] not work in today’s day and age. And, and you know, even the SBA, you know, you gotta have two or three years of tax returns. Of course I care about historical financials, but I can hook into your bank account.

I can see what you did yesterday and last month. So the product is working really well. It’s ultimately will be mostly automated. Now we’re kind of hand checking things ‘cause it’s still early days and we’ve got a bunch of loans in the market. That part of the business is. Very expandable. Now we’re partnering with some capital sources, think banks or bank-like institutions, community loan funds that have funds to lend out, but they just are not efficient in making those lending decisions.

And one of the things that we’re trying to do is by being more efficient, we can actually lower dollar amounts, which better mapped to the market that we’re going after. One of the challenges that exists for small businesses is traditional banks need to lend you a couple hundred thousand dollars or it doesn’t work for their.

Economic model, but because we’re so much more efficient, we could lend 15,000, [00:45:00] 25,000, 50,000. In fact, our absolute max dollar amount will be a hundred thousand dollars because we can do it so much more quickly and efficiently. And by the way, that also means more people qualify. ‘cause there are a lot of businesses that need $25,000, they try to get 200 because that’s the minimum amount that they can get.

And then they don’t qualify for that ‘cause their business doesn’t support 200,000. And so we’re able to go to that business and say, Hey, we can loan you $25,000. That’s what your cashflow support. That’s what your business supports, and we’re able to do that and do that efficiently and effectively.

Ian Hathaway: Wow.

That’s super interesting. I’m glad we got a chance to talk about this. In addition to being champions of outsiders across this long arc of your career, you’re also a champion of ecosystems, not just in Colorado, where you’ve helped develop and promote this gift first ethos of helping founders and fund managers, but also in the Middle East and Africa.

From that vantage point, what actually makes a startup [00:46:00] ecosystem resilient? How do the lessons from Colorado compare with what you’re seeing in newer ecosystems, including things like the risks, when a place might drift away from its principles, trying to be someone else trying to be the next Silicon Valley versus the best version of themselves.

What do you think works?

Seth Levine: So first I would start by saying that I believe in the power of entrepreneurship to lift up people in communities, and that is a fundamental belief that I have. It’s not the only solution. It’s not, oh, if we just had more entrepreneurs everywhere, all the world’s problems would end.

But I believe that I. That that is an important ingredient in helping lift up communities and it’s the thing that I know. So that’s what I do and what I promote. And so that’s why I’ve been doing investing in particular in a number of countries in Africa. And it’s also why I’ve spent a lot of time in Palestine in particular, I was a advisor of the very first venture fund that launched in Palestine, was not successful.

It was. Right. It was [00:47:00] just ecosystem was challenged for many reasons. Back then, it was hard to get reliable internet even, and there was not free movement of people and therefore, in some cases, ideas, and all sorts of reasons why it was challenging. But there have been some successful venture style investments in Palestine.

There have been very successful sort of engineering outposts for other companies. Mostly Israeli companies in that case, in the territories as well. And then I spent six years with my partner Don Loeb, a guy that I’ve known forever trying to get an accelerator style program launched in Palestine, west Bank, east Jerusalem, and Gaza.

And we’ve just finally launched that a couple months ago. It’s powered by Google. Gave us a very large grant to do that. We’ve got a number of other great sort of sponsors to that, and we’re bringing a bunch of companies through this pre-seed accelerator. It’s called Nawa, and it’s been fantastic. I did a talk to the group a couple weeks ago and I’ve met a number of the groups [00:48:00] one-on-one for just sort of mentor sessions.

We have about 25 groups in this first co cohort. We had three groups from Gaza and I’ve, I’ve spoken to two of them. One of got interrupted, the went out. Entrepreneurial resiliency, try talking to someone from Gaza. And this is not, I mean, I have my views about politics and what’s going on there, but I actually wanna separate that completely from what I’m talking about, which is providing opportunity for people who want to be entrepreneurial in areas where entrepreneurship is hard.

It’s something I refuse to be apologetic for, regardless of what one may or may not think about the politics of a particular area or a particular region. I think that that’s important. I think it’s incredibly motivating and it’s incredibly inspiring. This is what gives me energy to do my day job. I want to do these other things.

It just feeds my excitement level, but it also informs how I work with other companies. I certainly feel like I’m giving back, but I also feel like I’m taking a lot. I [00:49:00] learn a lot from all these companies. It’s been a pleasure and an honor. We’re gonna do our first demo day in February. I’m excited to get back over there and see many of these, obviously not all of them, none of the Gaza entrepreneurs, for example, can get out of Gaza, so they’re not gonna come.

But I’m excited to, you know, to be there face to face with as many as I can.

Ian Hathaway: When you look back on the long arc of your career, foundry is the main thing. Foundry was done in a very specific way that feels core to the beliefs and purpose of this platform, what I’m trying to build here. But then there’s all these other things that are complimentary to that same mission, just in different ways.

So when you look back on all of that, what do you most hope endures? What would make you feel years from now? That you showed up in the right way for the ecosystems and the people that you’ve poured so much of your heart and soul into?

Seth Levine: I think from a sort of principle’s perspective is the notion of give first.

I feel like I [00:50:00] participated in sort of the thing that Brad and and David Cohen eventually named Give first. That’s probably the thing I would be most proud of. I mean, from an organizational perspective, pledge 1%, which we haven’t talked about, but is a global organization now of some 20,000 and growing companies that have pledged to give back to local charities, local communities, uh, percentage of equity profits, time or product.

And we’ve already generated over $3 billion back to local communities. So like organizationally, I, I feel like that’s the thing that maybe I’ve done that has been most impactful. But I think from an ethos perspective, it’s that give first. There’s a little bit of writing books that’s like, I hope some of these ideas endure, right?

I mean, the same way that I, you know, pick up my grandfather’s books here. 50 some odd years later, 60 years later and say, Hey, there’s some really cool ideas here. You know, I hope that someone will find capital evolution in 20 or 30 years and say, you know what? That actually was an interesting book. I can read it now.

And I take away a lot from it. And I will say in the new builders we released over [00:51:00] five years ago, and I think it’s still as relevant as it ever was, and that makes me proud that that book was enduring, and I hope Capital evolution will be the same.

Ian Hathaway: I’m sure it will be. Before I let you go, we’d like to finish with a little segment called Beyond the Bio.

These are just some quick hit questions that let us get away from your resume and just sort of get to know you. Sounds great. What’s a quick piece of advice from a mentor that stuck with you on your journey? Do Less. Who is an unsung hero in your life and what has been the impact they’ve had on you?

Seth Levine: Wow.

I think it’s probably my wife and the amount of time she has, you know, given me a therapy session or been my sounding board for really challenging things that were going on in the Foundry portfolio, maybe even that foundry itself. She and I have been, been together for 25 years. I’m very lucky to have had that kind of sounding board.

Ian Hathaway: Yeah, and I know you guys are doing some cool things together now, and so I’m sure she can say the same about you. Who’s someone in your local [00:52:00] startup community or your broader network who doesn’t get enough credit and deserves a shout out from you.

Seth Levine: Andrew Hyde. Andrew started Startup Weekend. Startup Week, ignite Boulder.

I mean so many things and I don’t hear people talking about him as much anymore, and I don’t know why. And maybe it’s just ‘cause he’s not as active, but I think he deserves a massive amount of credit along with a handful of other people. But he in particular deserves a lot of credit for coming up with super innovative ideas.

Ian Hathaway: Yeah. Good call. Tell us something most people don’t know about you. I am a Kentucky colonel. What the hell is a Kentucky colonel?

Seth Levine: It’s really an honorarium. Not nothing more than that, but I have a certificate from the then governor of Kentucky making me a colonel. It’s a small club, but I am actually a colonel.

Ian Hathaway: Oh my gosh. That’s a good one. I was not expecting that. Okay. What are one or two songs you’d like to add to our Spotify founders playlist? Something that fuels your [00:53:00] workday or maybe has inspired you on your journey.

Seth Levine: I listen to a lot of Fevery Corporation, so I’d probably add marching the hate machines to that.

Nice. And I really like aloe blacks. I’m the man. So a good one for maybe an entrepreneur to be listening to when they’re a little down.

Ian Hathaway: Okay. We’ve talked about several books today. So besides those, what’s a book you might. Recommend maybe something that I don’t know was valuable to you on your way, or something that you think first time founders should read as they’re getting going?

Seth Levine: Two books that I’ll recommend, they are related. One is Essentialism, which is a really, really good, uh, framework for thinking about doing less. And then the other which relates is subtract. And that talks about the human propensity to always add things. In search of solutions, but actually oftentimes the right way to solve a problem is to take something away.

Both of those, I read them basically back to back and they’re fantastic.

Ian Hathaway: Love that a lot. Okay, last question. [00:54:00] If you could give one piece of advice to someone who’s about to start their first company, particularly someone who’s a bit of an outsider, what would it be?

Seth Levine: If you’re an outsider, show up. Show up with humility, contribute to the community, and be willing to take back from the community.

Hopefully that makes sense for what I’m trying to say, but I think that a lot of people sort of show up and they feel like they need to prove themselves. I think the way you prove yourself is by showing up with humility, both trying to give to the community, but also being willing to take and take advice.

Ian Hathaway: Being willing to give and being able to receive. That’s a better way of saying it. That’s a great way to end. Seth, thank you so much for joining me today. I cannot wait to share this episode with our listeners. So much funny, and thanks for having me. That’s a wrap for today’s episode of Outsider Inc. A big thank you to Seth Levine for joining us today and sharing his journey and wisdom.

Conversations like this are a good reminder that outsider isn’t just a brand, it’s a choice about how you [00:55:00] show up in the world. With humility, with a bias to give first, and with a stubborn belief that entrepreneurship can expand who gets a real shot. I’m struck by how Seth has lived those values across many different arenas, venture capital, small business lending, and fostering ecosystems around the world, all without making himself the center of the story.

My hope is that wherever you’re listening from, you walk away a little more committed to supporting overlooked builders in your own backyard and a little more convinced. That the future of capitalism depends on who we invite in. If you want more from Outsider, inc. Don’t forget to subscribe to the platform@outsiderinc.substack.com.

It’s packed with highlights from today’s episode and bonus insights you won’t wanna miss. You can follow Outsider Inc on YouTube, Instagram, TikTok, and LinkedIn at Outsider Inc. Pot. You can also follow me on X at Ian Hathaway. Outsider Ink is produced by Spellbinder Media. We’ll be back soon with another [00:56:00] fascinating outsider conversation.

Until then, thank you so much for listening and remember, great entrepreneurs can come from anywhere. See you next time.

Listen on: Spotify, Apple Podcasts, Amazon Music

In this episode of Outsider Inc., host Ian Hathaway interviews Gail Goodman, former CEO of Constant Contact. Goodman discusses her journey from her early entrepreneurial endeavors to leading Constant Contact from startup to IPO and ultimately to a $1.1 billion acquisition. She emphasizes the importance of execution over ideas and how a deep commitment to small businesses shaped her approach to building and scaling a SaaS company. She also reflects on the emotional transition after 17 years as CEO and her ongoing work supporting underrepresented entrepreneurs.

Show Notes:

(02:57) Childhood Entrepreneurial Roots

(06:59) Seeing Dysfunction Up Close and Learning What Not to Do

(08:03) The Leap to Leading Constant Contact

(12:09) Overcoming Imposter Syndrome and Building a CEO Peer Network

(18:59) Customer Research and the Art of “Following Them Home”

(21:13) Cracking Conversion and Retention in Early SaaS

(30:57) Preparing for an IPO and Leading Through Rapid Scale

(33:40) Public Company Pressures and Cultural Shifts

(36:00) The Emotional Reality of Transitioning Out of the CEO Role

(38:14) Joining Boards and Rethinking Leadership from a New Seat

(44:10) Being an Outsider in Tech and Venture Capital

(47:30) “People Gut” and the Art of Hiring Well

(51:55) Supporting Underrepresented Entrepreneurs Through EforAll

(54:00) Beyond the Bio: Gail Goodman

✅ Host: Ian Hathway - Co-Founder & Managing Partner, FOVC

✅ Guest: Gail Goodman, Founder & CEO of Constant Contact

Produced by Spellbinder Media. Executive Produced by Bridge Five Ventures. Copyright ©️2025, Bridge Five Ventures, LLC, All rights reserved.

Listen & subscribe wherever you get your podcasts or at outsiderinc.substack.com.

AI-Generated Transcript

Gail Goodman: [00:00:00] 50% of small businesses fail. In the first five years, we literally had conviction as a team, we could change that number. That’s what drove us. That was the cultural North Star, was we were literally gonna change the success formula for small business.

Ian Hathaway: Welcome to another episode of Outsider Inc. I’m your host, Ian Hathaway.

Today’s guest is Gail Goodman sas Pioneer. Small business advocate and one of the earliest women to lead a modern software platform from startup to IPO as the longtime CEO of constant contact. Gail proved you could build a billion dollar software company by serving the customers that everyone else overlooked.

She took the helm in 1999, long before software as a service was even a buzzword. Setting out to tackle an ambitious idea help small businesses stay connected to their customers. Over the next 17 years, she led constant contact from pre-product and pre-revenue to an IPO on the Nasdaq, and later a [00:01:00] $1.1 billion acquisition, all while rewriting what it meant to build patiently and profitably in tech.

Under Gail’s leadership, constant Contact became a household name for small businesses and pioneered ideas that many founders now take for granted. Customer first design, human assisted onboarding, and a disciplined data-driven approach to growth. Since leaving the company in 2016, Gail has continued to shape the next generation of entrepreneurs as a board member at Shopify, mindbody, jobber, and ShipBob as a mentor at Mass Challenge and Techstars, and as a nonprofit board member at E for all.

I’m excited to talk with Gail about the lessons learned behind that 17 year climb, how she scaled a company one $30 subscription at a time. Evolve from startup CEO to public company leader and help define a business model that still shapes software businesses today. Gail Goodman, welcome to the show.

Thanks. It’s great to be here. You’ve had an extraordinary career building, one of the defining companies in small business [00:02:00] software, having the conviction to tackle a market segment that many felt couldn’t be done sustainably. Then spending years helping other founders find their footing. I’m really looking forward to going back to the beginning and unpacking that journey together.

But to start on a slightly higher plane, you’ve said that even a mediocre strategy can win if executed perfectly. While a perfect strategy will fail, if executed poorly. Why do you think founders even experienced ones still put so much weight on the idea itself rather than on the execution. Business

Gail Goodman: is a team sport that you learn by doing, and so many founders these days do not take the time to work in other companies before.

Jumping off on their own, so they don’t actually have any pattern matching. [00:03:00] To how to align a team, how to monitor and manage execution, how to create a rhythm of engagement with a team that drives to an outcome. How to communicate, how to set culture. It really is something that. Shaped me early, mostly by seeing really bad CEOs.

I worked for a few, don’t ask me to name names, but I did. I did see some horrible dysfunction and much like when we begin parenting, we say, I’m not gonna do what my parents did. I started Cing saying I’m not gonna do what they did, and what the biggest thing I saw was just wasted resource because of lack of alignment.

One group is going that way. The other group is going this way. When you’re small in particular, you have such limited resources and such a short runway to the next fundraise. If you are not all rowing in the same direction, you [00:04:00] spin the boat around. I mean, the idea does matter. You need a big market. You need a way to solve the problem in that market that nobody else is doing.

But having the idea, but not having the ability to get it to market, to get customers to success, to retain customers, particularly in a recurring revenue model, it just doesn’t work. And it takes incredible coordination, particularly in a SaaS business to get that execution right.

Ian Hathaway: Truly unique ideas. There are a few.

It really is about execution. Couldn’t agree with that. More just to rewind a little bit to your earliest days, you grew up the youngest of four kids in suburban Stanford, Connecticut. Eventually you’d graduate from college with a degree in computer mathematics and then go on to earn your MBA. But before all of that.

I’m curious, were there early signs where you would go on to build and lead as an entrepreneur?

Gail Goodman: It’s not a word that [00:05:00] was bandied about in my house. I’m also the daughter of an immigrant and one who was pretty conservative about making sure we all had careers and could take care of ourselves. But in hindsight, I kind of was an entrepreneur super early, so I started my first.

Business. I’ll put quotes around that when I was like 12. It’s the 1970s and it is the era of the suburban dinner party. And of course when you’re a girl, you are, uh, considered slave laborer for your mom during a dinner party. You keep things moving in the kitchen, you serve, you clean, you know, you clear, you do the dishes.

So I’m doing all of that. And one of the neighbors says. Oh, wow. You’re so good at this. Do you rent out why? Yes, yes, I do. I say instantly having never considered such a thought as before and end up then recruiting my friends. We created a mini business where we would show up at someone’s house when you’re having a dinner party, about an hour, hour [00:06:00] and a half before the hostess would take us through what needs to go in the oven when, and all of that, and how she wanted things served, and then she could go enjoy the party.

We managed the kitchen, we plated the dinner, we served, we cleared, we cleaned up. We put the leftovers away. So at the end of her dinner party, she did not have a knight’s of worth of work left. We would get giant tips. My friends were like, this is amazing. It’s the first time I learned about customer service.

And having a customer and understanding what their style was, which isn’t always the same as my mom’s style in terms of how they wanted the dinner party to flow anyway, first business ran it for a few years, never, of course, not scaling it. It was just me and my buddies in the neighborhood, but I guess I was an entrepreneur at 12.

Ian Hathaway: It’s really interesting, this focus on making people’s lives easier. Thank you for sharing that story. So after business school. You started your career in consulting at Bain, then you moved into [00:07:00] data and software first as a product manager at Dun and Bradstreet, and then into marketing leadership roles at Progress software and e-commerce, pioneer Open Market.

I’m really curious about. What that stretch taught you about how companies grow and operate, but even more so what you recognized going on around you. I know you started seeing some of your colleagues peel off and become CEOs and this sort of got you thinking about, well wait a minute, if they can do it, so can I.

When did you start seriously thinking about wanting to go out and run something yourself?

Gail Goodman: It started pretty early in my software experience, even at Dun and Bradstreet Software. Dun and Bradstreet had been a mainframe software company and we were in the midst of the transition to client server, and I was the product manager running the client server product line, and so I was on the forefront of change management.[00:08:00]

And it was the first time I really saw how hard it was if you didn’t have legitimate authority to get people to listen to you and to get people to do something different. So we were making these incredible investments in this new product, which if we didn’t move to, the company would die. And I couldn’t get sales managers to listen to me.

I wasn’t getting adequately empowered at the top of the organization. It takes leadership to drive change. It takes leadership to drive alignment, and people aren’t listening to me. I do not find that pleasant, and even as I then progressed to more senior roles, I still had trouble, and this may have been gender-based.

I didn’t notice it as that at the time. Now, in hindsight, as I observe other things that happened that are gender-based, it might’ve been that. I had a tendency to become the [00:09:00] favorite of the CEO, which always caused peer resentment because I would come in and I’d have insights and I’d have energy. And so I’d come in and I’d suddenly get a lot of responsibility, but then I’d also encounter incredible resistance, and that kept me saying, the only way I’m not gonna have resistance.

As if I’m at the top.

Ian Hathaway: Yeah.

Gail Goodman: And I think I know what to do and I wanna prove to the world that I do.

Ian Hathaway: Well, you definitely did. This opportunity shows up. It’s 1990 nine.com. Era is in full swing, exciting times. And your approach with an opportunity about a nascent startup called Constant Contact. It’s pre-product, pre-revenue, pre-funding, pre-business, really, and most people would’ve seen the risk and run away, but you saw potential.

What do you remember about that moment and what convinced you to jump in and take that leap?

Gail Goodman: It was called Roving Software at the time. [00:10:00] Changed the company name to match the product name over time. So the founder of Roving was a, a gentleman named Randy Parker, and Randy had the same passion for supporting small businesses I did at Open Market.

We had helped to build the first e-commerce platform for small business in partnership with at and t. It was at and t’s Secure Buy. It was a platform to help small businesses sell on the internet in a marketplace. It didn’t succeed. It was way too early, but it was during that time that I really became convinced that one of the things the internet was gonna do was let small businesses have unprecedented breach.

It is still true that most small businesses do 80% of their business within 50 miles, but. Suddenly you were gonna be able to sell to someone anywhere in the world and you were gonna be able to use the same tools big companies use. So I had this conviction, I met Randy and he had the same like we were Vulcan mind meld, like helping small businesses [00:11:00] is what we wanna do.

And it was also just at the point where Amazon had started to send out emails that said if you bought this, you might like that. Nobody was doing email marketing and I just knew it was gonna work. And then I was trying to decide whether Randy and I could form the right partnership, whether this’s the right opportunity, and they were going to a conference and I was like, well, can I just come and stand in the back and listen as you talk to prospects?

So I go to the conference, they gimme a shirt with the logo, I’m standing in the back. It takes like 20 freaking seconds for me to push them aside and start pitching. And by the end of that conference, I just knew. This was gonna resonate, people were gonna buy it. There were a lot of challenges between that realization and building a usable enough product, finding a go-to-market strategy that worked for a $30 price point.

A lot of challenges, but I knew this would help [00:12:00] our customers. And one of the things I tell all startup founders is understand how you deliver value. Who’s your target customer? What problem are you solving? Because if you are truly solving a problem for a customer, you can find a way to a pricing and a go to market model and all of that if you are not delivering a shit ton of value.

You’re not gonna solve those other problems.

Ian Hathaway: It sounds like you had immediate and then well-researched conviction about the opportunity. But in terms of stepping into that CEO’s role, you said you had this confidence inside, but then there were also maybe some doubts you were already. Encountering gendered issues in the workplace, but with it being your first time in the saddle, particularly in a little bit of a new area for you, did you have any internal doubts and how did you overcome

Gail Goodman: them?

Plenty of doubts, plenty of imposter syndrome, but in fact, I hesitated stepping in. [00:13:00] I was like simultaneously talking to Randy about this role and a guy who I’ll be forever grateful to. Chris Heidelberger about a VP of marketing role working for him. I’m sitting in front of him and we’re talking about the VP marketing role, and he said, you can do my job.

Don’t take another VP job. Just don’t, and I needed that slap like, so I’m forever grateful to him. Then I got in the job and there were a million things I didn’t know how to do. Like I had never managed finance, I had never managed hr, and I’m a quick study, but what I realized I needed to do was just not fake it.

Ask. So I started developing a network of other CEOs that I could turn to when I had a problem I hadn’t encountered before. We were all running small business software as a service companies that were non-competitive, so we were all trying to crack the same nut from different angles. They became trusted partners.

I could just make a quick call too. I just decided not to be [00:14:00] afraid to ask. Then once I had venture capitalists, I learned what they knew, what they didn’t know how to ask them. And then the thing I didn’t understand, but later really came to understand is your startup lawyers know a lot.

Ian Hathaway: Yes. Good call

Gail Goodman: lawyers to me, in my previous roles had been the last guys in the room to finish the deal, and I began to realize they could be counselors to me.

I found a, a really good one and started to lean on him as well.

Ian Hathaway: Yeah, those are really good insights for building peer networks. It’s not the one up one down mentorship relationships that are the most powerful. It’s the peers, it’s people who are going through the same thing at the same time. You mentioned there were other people in the local Boston ecosystem who were tackling software for small business.

Wasn’t that common though still? I would say you were very early in that. Serving small businesses, nonprofits, local [00:15:00] shops that just wanted to stay connected to their communities, to their customers. I have to imagine you had a lot of doubts from investors, right? That was an overlooked segment of the market at the time.

Now seems very common in SaaS software, but at that time it was believed to be too small and too difficult. I think of you as a small business advocate and you, and you had this affinity or disbelief, but what made you think it was worth betting on and what made it enticing to you personally?

Gail Goodman: Good question.

Let me start with a hundred percent right that investors wanted nothing to do with this. I cannot tell you how many times I’ve heard you’ll never make it work. This is before the words CAC to LTV, but essentially the question was always, how the heck are you gonna be able to acquire customers? You can’t afford a sales team at $30 a month.

All of those kinds of objections about reach, but where did my conviction come from? It really came from the power of [00:16:00] talking to the early customers. They were so over the moon with the impact of our product, not the product itself, but the fact that they would send an email and they would get revenue.

So you look at the typical small business, 80% of their business is repeat sales existing customers. So you talk to them and you’re like, how important is repeat sales? Oh, it’s my lifeblood. And then you say. What are you doing to make sure you get it? And you’d get this look like, what are you talking about?

They just come back. Email marketing was the first opportunity other than maybe direct mail, which is just way too cumbersome to actually remind your customers that you’re out there. And then I would say now the other 20% of the business, right? 80% repeat 20% new. What percent of that do you think is word of mouth referrals from your existing customers?

They’d say 80%. So [00:17:00] all of their thoughts about marketing were for that last 2%, the new customers that didn’t come from existing customers, and most of it was super expensive advertising sold by. Really pushy salespeople who they hate expensive, pushy salespeople, completely unmeasurable and so didn’t take me long to really understand this and say, this literally will change the success formula for small business.

50% of small businesses fail in the first five years. We literally had conviction as a team we could change that number. That’s what drove us. That was the cultural North Star, was we were literally gonna change. The success formula for small business.

Ian Hathaway: Well, you did. You mentioned LTV to cac, which I feel like you defied gravity on how to make that work.

It wasn’t just that you had these small ticket customers, which seemed, you know, fairly well [00:18:00] baked, at least in the beginning. But you also had this high touch approach to sales in onboarding, which led to. Greater customer loyalty, longer term value. But starting with that first point you mentioned, getting to know the customers was vital.

You had this practice of following the customer home, not just through data, but by sitting with them, watching how they worked, understanding their lives, understanding what was important to them. What did that look like for you? Practice and, and how did it help shape the company?

Gail Goodman: So in the early days, really small team.

There were like seven of us, right? We just all did it. We used to laugh about, uh, planes, trains, and automobiles. All of our early customers, we sat next to somewhere. We just would be sitting next to somebody, what do you do? And you start talking about it. Oh, I’m a small business. Boom, boom, boom. And so then we would stick with that [00:19:00] customer and understand what would it take from conviction they should to actually doing, because there were a bunch of barriers.

They had no email lists. It’s a new idea. They hadn’t collected emails. And in fact, at the very beginning, one of the biggest objections was my customers don’t use email. It’s 99 2000. There were people without emails. So we needed to teach them how to ask for emails from their customers. And then the second hurdle was, what do I put in the email?

They had no content and nobody to do content for them, so we had to really digest what were the barriers to usage. So problem one, get ‘em conviction that they wanted to problem two, get ‘em over these two non-trivial hurdles to usage. The thing you learn about software as a service very quickly is if they don’t use, they don’t stay, they don’t get value, they don’t stay.

If you don’t have retention, then you can spend all the money getting people in and you got a leaky bucket and they all come out the bottom. [00:20:00] We had to work on conversion and retention before we spent a lot of time on acquisition because if you spend money getting them and you can’t convert them, and then you can’t retain them, what’s the point?

That was painful. It took a long time, a lot of iterating. The internet had to move a little bit. We had to get graphical user interfaces, and what you see is what you get. HTML layout screens and things started to move in our direction technologically. But most importantly, we had to learn how to onboard people.

We had a free trial. Great. What percent of the folks in free trial actually sent an email? We learned that if they sent an email, they converted, but when we started, like 2% of trials were sending an email and we got that up to like 60, 70%. We got a free trial, no credit card to 30% conversion. No one’s ever done that before [00:21:00] or since.

Well,

Ian Hathaway: so how did you do it?

Gail Goodman: Well, there is no silver bullet. That’s the one thing I’d tell any SaaS founder, but you follow the customer journey. You figure out where the rubs are, right? Where’s the friction? Take the friction out. Where do they abandon? Why did they abandon? You’re not gonna see that from the stats, so that’s the other thing I see young founders do.

They’re watching metrics, metrics, metrics. Well, the metrics don’t tell you why. You have to go talk to people that understand why. You have to watch people use it. So it started from us just doing it as individuals and then it got more formulaic where we would bring people in and someone would sit next to them and say, here’s a new idea.

You’re gonna send an email to your customers. Here’s a website. Put your brain on speakerphone and see if you can figure it out. And every time the mouse hesitated, the moderator would say, what are you looking for? What are you thinking? Not click here. What’s going on for you? [00:22:00] And so we would learn again and again what they were interested in.

One of the interesting things, time and again, was they were looking for a phone number. I wanna call somebody. Oh. We didn’t have a phone number on our website, right? We’re gonna get swamped. We don’t know, whatever. Try it. We can always take it down. Try it, right? So we were never afraid to try things in small doses.

We tested every conceivable way to reach small business. The first time you do something, it isn’t optimized. Give yourself room to optimize so people give up too quick. People want the numbers to be perfect. People look at metrics without understanding the why behind it. We were relentless. Just watch ‘em understand flip things around.

Lots of tests, lots of AB split tests. But the most important thing, we’re gonna go back to alignment again, is we had a maniacal focus on first conversion, then retention. Cross-functional team, led by a strong internal leader. [00:23:00] Everybody in the room product. Marketing customer care, like weekly metrics. And by the way, these metrics platforms that everybody has now didn’t exist.

We had to build those ourselves and we were just relentless. You said we had a high touch, I would call it a very well timed low touch by a coach, not a salesperson. They were comp salespeople, but we called them coaches. They acted like coaches. They never asked for a credit card. They were there to help you get your email out the door because we knew email out the door equaled conversion.

So I’m at a cocktail party with my husband, who’s, he’s a software engineer, and we’re standing next to a friend of his and he says, oh, you know, my nonprofit just started using Constant Contact. Thank you so much. This really nice guy Steve called me. And I’m my husband. She’s like, you know, Steve is a salesperson dripping with disdain, right?[00:24:00]

And this guy, Carl says, not my Steve. That’s the experience we created.

Ian Hathaway: Oh, wow. That’s amazing.

Gail Goodman: But that was really important because people had been selling them ineffective marketing for high dollars, all you know, for ages. We wanted to be different.

Ian Hathaway: So you’ve got this deep understanding of your customers, you know who they are, what they need, how they think you’re manually helping them.

Get the most out of the platform earlier with this well-timed, low touch approach to customer acquisition retention. It sounds like it worked, but expensive also, and now comes the hard part, right? Turning all of that into a scalable business. I know before you’ve talked about the long, slow SaaS ramp of death, right?

It takes a long time to get to a critical [00:25:00] mass, especially when you’re charging $30 a month. So I have to ask, how did you make it all work? All the things you talked about sound great, especially early on, but how did you get it to scale?

Gail Goodman: We had a couple of things that I think really made a difference. We had headwinds.

Funding was a huge headwind all the way through. We were essentially broke essentially all the time, which created a lot of discipline. We started from using some partners, doing a lot of classic keyword buying, P-P-C-S-E-M. Those weren’t even the words people were using at the time in small dollars, and figured out if we could make that math work.

And this is where the conversion and the retention. Really gave us a huge competitive advantage. There were like three competitors doing the same thing, and we had twice the conversion rate, and more importantly, [00:26:00] we had like three times the retention. So the lifetime value of a trial on its way to being a customer was so much greater than our competitors.

We could afford to outbid them. And then was the magic. One of the wonderful things about small businesses, when they find something that works, they tell their friends. So in our real heyday, for every paid customer, we got 1.9 word of mouth referrals because of the extraordinary nature of the onboarding and success experience.

Ian Hathaway: So just word of mouth, not a formal referral program, just people loved it.

Gail Goodman: People loved it. Now we kept trying. We had to refer a friend. You each get two months free. None of that ever worked. Small businesses don’t wanna be bribed. They cannot be bribed. If something works, they tell people, but it has to be truly delightful.

You don’t get the power of referral unless your experience is delightful, [00:27:00] end to end. And we understood that. So all of those work together to give us, I used to call it an accelerator, call it the flywheel. Right? So a small turn of the flywheel, the flywheel started to move early on our, our magic number was 15,000.

If we got to 15,000 customers, we were break even. We got to break even at 12,000. The year is now 2001. 2002. There is no VC funding desert out there. We do a disastrous down round to get. Just a little cash, two and a half million of cash on the balance sheet, and decided to just run the business on the cashflow line, but it’s SaaS, so every month recurring revenue goes up a little.

At that point, it was going up like $2,500 a month, so every two months we could afford to hire one person. And so we just grew along the line with incredible discipline, incredible focus. We made the decision as an executive team. It was [00:28:00] no infighting. We all knew where the next dollar had the most impact, but that 2,500 turned to 5,000, and then it turned to 10,000.

And we just basically said, we’re never gonna let the cash balance get below 2 million. And suddenly we were a $30 million company. With 2 million on the balance sheet. And I went and visited one of my early investors who had just sort of given up on us, and I show him the curve and he’s like, if I gave you another 10 million, do you know how to spend it for growth?

And I was like, hell yes. And he’s like, you’re massively under capital. And I’m like, tell me something. I don’t know. Yeah. And he’s like, nobody told me this was actually a good business.

Ian Hathaway: It is now.

Gail Goodman: Right. That meeting inspired me to say we are undercapitalized and to go back and talk to some other investors and do what ended up, which I thought of as our me round before we went public, except at that point we’d [00:29:00] hit the flywheel, we’d hit the hockey stick, whatever word you want to use.

So I’ll tell you that that crushing down round. A pre money of five. This round was a pre-money of 95.

Ian Hathaway: Wow.

Gail Goodman: 2002 to 2006, four years. And as we grew along that line, we tried. One different channel to market after another. Try it small, scale it up, tune it, try another. Some worked, some didn’t. A lot of our decisions were made by comparing notes with others.

Having a network of peer CEOs, my chief marketing officer had a network of peer chief marketing officers. We were all in the SMB space. We were all trying things. We gave freely of our learning. They gave freely of their learning. I remember WebEx, we were trading notes with them all the time, like endorsement radio worked for them.

Where you get a personality to say, I use it and it’s great. Didn’t work for us, but DriveTime Radio worked for us, didn’t work for them. But you [00:30:00] share these learnings and you scale these things up. And we went from adding. A hundred customers a month to a thousand, to 5,000 to 10,000. You know, at our peak we were adding 50,000 new customers a quarter.

Ian Hathaway: Capital constraints lead to creativity. Really, it’s the patience. Persistence and delighting the customer that kept you going. Eventually things worked. All that discipline, that steady growth major milestone you hinted at in 2007 IPO, it’s a huge leap for. Any company, but especially one that started out so small, so customer focused, had near death experience just a few years prior.

Not many CEOs get to experience that. Ringing the bell, taking a company public. What do you remember most about that moment and how did being a public company change the way you thought about leading?

Gail Goodman: [00:31:00] I attacked the IPO process, just like I had done everything else. I started by just talking to all these CEOs who’d done it, learning, learning, learning, learning.

What do you wish you knew? Who did you trust? Who screwed you? I remember thinking that the IPO roadshow was a complete anachronism and in many ways a hazing ritual. So they take you on the road for two weeks. You’re living on four hours of sleep. You’re doing the same pitch over and over again, and then you arrive in New York for the final day, like the day before the pricing, and they say This is the most important day.

And you’re like, well, then why didn’t you get me here at six o’clock last night instead of 2:00 AM Like, was that last meeting in St. Louis really worth it? It was just stupid stuff. You guys are not optimized for what you should be optimized for. I think we priced at $16 and opened at 28, and I made a rare decision.

I didn’t stay in New York for opening [00:32:00] day. I wanted to be with the team. I went back to Walham. And we had arranged in all the kitchens to have bagels and a smear and a bell so we could all ring the bell together. And the IT guys had set up in these kitchens, these big screens with live tickers so we could all watch it open together and it’s up at like $28 and you know, they’re screaming and we’re all ringing the bell.

It was fun. And then we had a big party and it was really nice. We went in as every IPO company, CEO will tell you, saying we won’t let this change us. It’s still about the customer. We’re not gonna manage to the numbers, we’re not gonna this, we’re not gonna that. And for four or five years, we were able to be very, very, very true to that.

Partly because we were on the hockey stick. Growth was through the roof. I naively thought we were supposed to be profitable because the bankers had [00:33:00] told me that. So we’re starting to put up growth in ebitda. Like we started at like 2% and then 4%, and then 8% we’re growing and we’re expanding profitability.

Everybody loved us, but then things got harder. Economic conditions got difficult for small business competition increased. And people building backend SaaS platforms. Were starting to put lightweight email marketing in included in the package, and that was starting to eat at the edges of our growth here, there, and everywhere.

And so growth started to get harder and we’re coming to the quarter and we set expectations here and we’re just here, and maybe we will run a promo. Like we had never discounted, we had never run promotions, so we did start to do things we would not have done to hit our Wall Street numbers. They weren’t unethical, they just weren’t business as usual For us.

The sales relationship to customers [00:34:00] started to get a little more salesy. It hired professional sales managers who weren’t there during the heyday of we’re just coaches. That’s not my Steve. They just hadn’t lived through that. They brought the disciplines that they had brought from other companies. So things changed a little, and then just scale changes.

The fun of 75 people is very different when you’re 1400 people. Culture doesn’t flow the same way. Communications doesn’t flow the same way, so of course things change and it’s almost hard to figure out how much of it was just the growth and the size of the team and the degrees of separation between me and the line.

Founding CEOs always the cultural leader of the organization for ages. I did the first presentation to every new hire on their first day of work for years, and then it started to be impractical. Like these things change,

Ian Hathaway: they just

Gail Goodman: do.

Ian Hathaway: And I feel like very few CEOs [00:35:00] especially. B2B software. Make it through all those stages.

You stayed on as CEO after the IPO for another nine years until the company was bought in 2016. You know, 17 year journey is a very long time. You stepped down in 2016 to begin a new chapter. Step down. Yeah. Moved to the side. Kindly asked to, uh, consider other options. A lot of people talk about that transition.

As being a loss. There’s a little bit of a soul searching that goes on. This has been a big part of your identity for so long. I knew you threw yourself into some things right away in the Boston startup community, mentoring other founders and and such, and joining some boards that we’ll talk about in a minute.

But what was that transition like for you?

Gail Goodman: It was really hard, and it was weird because everybody was congratulating me and I felt something had died. It [00:36:00] was the end. It didn’t feel like a victory to me. I kept waking up in the middle of the night with woulda, coulda, shoulda. I made this mistake, I made that mistake.

If I had done this, might it have gone differently? Might I still be running it? Might we still be at greater than 20% growth rate? And that was really why we ended up selling. Wall Street is like growth hungry, and we were just about to slip below 20% growth, which takes you from a growth company to a value company.

Just to set the perspective, we were about 375 million in revenue run rate at that point. So 20% growth was adding 70 million in new revenue. Most companies would love to have 70 million in total revenue, but that’s a failure on Wall Street, right? But I just kept going over and over, over and finally I decided I need to get it out of me.

So I sat down and wrote the all the things I effed up memo. I just really needed to [00:37:00] get it out. And then I wrote down lessons learned, and then I did something for the business of software. They run a conference for CEOs that really is about the business of software. The long slow SaaS ramp of death pitch was from there, so I just started to get it out where everybody thought I should be ecstatic.

I was lost. Angry. Pissed at myself. Pissed at a few of my leaders who didn’t do things I wanted them to do, who I thought were to blame, just generally grumpy. And I decided that I was just gonna do nothing for six months. Just clear my head. Did a bunch of travel, started meditating. Had I done that 10 years earlier, I might have been a better CEO.

And then I began to say what I wanna do next, and at that time I thought I might do another CEO gig. It was definitely on the table for me. I started doing idea boards and started testing some ideas in different forums. I had some thoughts. Then I got approached by a few [00:38:00] founders who I’d been comparing notes, Rick Stollmeyer, who ran mindbody, and I had been comparing notes for years.

We were both s and b. We were a partner of mindbody, so we were the email marketing inside the MINDBODY application. Toby Lipkey and Harley Finkelstein from Shopify had visited me when they were. Just starting out. And I had done the SaaS funnel talk and the late LTV to CAC talk and they were like, that was the most formative talk of the start of Shopify.

And so at the time they said, will you join our board? And I was like, I’m running a public company. I don’t have time. Literally both of those folks, Toby and Rick, emailed me within a week of the announcement of the acquisition and said, alright, board now. Board now. Which was very flattering. And I hemmed and I hauled, and then I joined both of those boards figuring that that two boards I could do and still run a company like it wasn’t gonna inhibit me.

And I would learn a bunch of stuff and then as time passed, I realized I didn’t have the energy to go again.

Ian Hathaway: Yeah. [00:39:00]

Gail Goodman: Because when you lead, you have to lead from the front and set pace. You have to be the pacesetter.

Ian Hathaway: Let’s talk about that a little bit, that transition to the board director. Obviously Shopify, mindbody are iconic SaaS companies.

You also sit on the board currently of ShipBob and Jobber. There’s a few things that are unique to these companies. They’re founder led. High growth SaaS and e-commerce platforms, and you mentioned you wrote this essay of things you effed up, things you wish you would’ve done differently. Went on the speaking tour, this reflection tour, start meditating in this new seat.

I have to imagine you’re a great board member for these businesses. I’ve seen bad board members for sure. I think that gets talked about a lot, but what. Makes for a great board member, how are you leveraging all of your experience in this new way?

Gail Goodman: So there’s a couple of things that I think are really important.[00:40:00]

One is, I think really understanding the role of the board member. You’re not running the company, you’re advising, you’re sharing experience. I had some board members that were challenging and I remember pulling one of my board members aside and giving him a. Kind of a little talking to about the way he was interacting with my executive team.

And what he used to do was just ask these, I called them closed questions versus open questions. Why don’t we, as opposed to, have we ever considered, or I wonder if this might be interesting for us to try? Those are open questions. Those are questions that lead to a dialogue and that introduce ideas in ways that are not.

You should have thought of this. I bring that to the table. I also bring to the table a recognition that although I’m pattern matching, their market is probably different. So I don’t think I’m right. [00:41:00] I am very clear in saying, I don’t know if this is gonna fit here, but here’s what we saw. I think I’m very good at open-ended unthreatening.

Have we thought of, have we tried? I wonder if gentle. Second, I know that my answers aren’t all right, and I don’t try to defend them, so I keep a running set of notes and do an hour with the CEO after the board meeting and say, oh, there was these little things I just wanna mention, but I didn’t wanna distract the board.

Meetings have a flow and it’s, you know, your job to keep it on track. The third thing is I think most boards are terrible at closing a conversation and moving to the next one, and I think it can very much be my job to help the CEO do that. Almost all the CEOs are also chairs. I was a CEO and a chair, and when the CEO chair says, got it, let’s move on.

The board says he’s not listening or [00:42:00] she’s not listening, right. I cannot tell you how often I got told I wasn’t listening. I observed the board dynamics. And often play the role of saying, I think Sam’s heard us now, maybe we should move on to the next topic. So I help them manage the room and the timing, which is why they always end up making me the lead independent director.

I also have a perspective that is very different than the investors, and that’s helpful. I always start customer market first.

Ian Hathaway: Those are great insights on what it takes to be a good board member. But these are four amazing companies. What have you learned from them?

Gail Goodman: Well, Shopify is extraordinary and the team there is extraordinary, and Toby is off the charts, often unrecognized as the off the chart genius that he is.

What Toby has taught me is really to think in first principles, so his. Least favorite thing is, you know, why do, why are we doing [00:43:00] that? ‘cause that’s how other companies do it. You never say that to Toby. He wants to step back and say, how do we do that in a way that is true to our merchant first? Make commerce better for everyone.

Operating principles. So what’s common about these? They’re all founder led. They’re all mission driven. That’s what I love. And they’re all led by individuals who are learner growers. They’re just sponges. Constantly learning, constantly questioning, constantly willing to challenge the status quo and go for something new.

So what I’ve learned from them is to have the freedom to think differently about stuff. Because I was a first time CEO, I was very, this is how it’s done. I took that as the answer a lot. I would have much more confidence challenging that. I would’ve much more confidence breaking the rules. So many of the things we did early were [00:44:00] just things no one had ever done before, and we dared to do them because it was the only way we could see to make the customer successful and drive conversion and retention.

The metrics that drove the business led us to do things that were outside of the box. And then I started doing a lot of things inside the box as a public company, as a scaling company, I didn’t know what it had felt to run a company that suddenly had. Five locations and 1400 employees, and so I started following the playbook.

Screw playbooks

Ian Hathaway: you mentioned. These are first principles, thinkers, obsessive learners, great CEOs. Maybe there’s one more categorization I’d like to add that these folks are all outsiders. They come from unusual backgrounds, or they’re building their companies in unusual places. They, oh, that’s true

Gail Goodman: actually.

Ian Hathaway: They’re immigrants or they don’t have the typical pedigree that Silicon Valley folks look for. That’s what this show is all about. It’s celebrating those types of people.

Gail Goodman: I’m [00:45:00] sure. That’s why I feel affinity to that.

Ian Hathaway: I was gonna say, was that a conscious choice or do you feel like there was something subconscious in you where you could relate to being different to being other and using that as a mechanism to be a great leader?

Gail Goodman: I have always had a lot of confidence in my people gut. Like I know when. I feel a connection and I know when I don’t, and I’m not the typical mold. I didn’t go to Silicon Valley. I’m unknown in Silicon Valley. I’m like a minor hero out in Boston. I still run to people who have never heard of Constant Contact.

By the way, constant Contact still exists. It’s a $500 million business. It didn’t grow up in Silicon Valley. To them, it doesn’t exist. I got close to joining a board that had all the right founder things lined up for me. They were in Salt Lake City, Utah. Really liked the found, really liked the founding team, but the board was a Silicon Valley board.

They didn’t think I had enough [00:46:00] pedigree. He couldn’t believe he had to say it. He’s like, I’ve had three calls with you. I’ve learned more in those three calls than I’ve learned with anybody else, and I can’t put you on my board. And I was like, I’m gonna give you one final lesson before I don’t join your board, which is there are moments where you need to use your position as a CEO to say no to your board or to override your board.

And if you keep letting them constrain. How you grow your business, you’re gonna be in trouble. And I will say they’re in trouble anyway. I think as a result, because I don’t have visibility out there, because Constant contact doesn’t have visibility out there, I have never really been pursued by the classic West Coast companies.

And so naturally it’s these outsiders who have found me. Who recognize what they see, when they see it, and aren’t afraid to ask for.

Ian Hathaway: Do you feel like an outsider? [00:47:00]

Gail Goodman: I certainly felt like an outsider on Wall Street for sure. I felt like an outsider raising venture capital. I was a first time CEO and I was like 39, 40 years old.

Female 40. I’d go to these networking events in Boston and I’d look like everybody’s mother. Oh my gosh. You know, I’m at this networking event and on the keynote there’s this hour of schmoozing beforehand and I, I’m. I’m an introvert, so I hate these, but I do ‘em. And I’ve gotten good at just walking up to people and saying, Hey, you know, hi.

And so I walk up to these two women and I’m like, hi, you know, you guys, founders, what are your businesses? And you could see they were like, we need to go find somebody important to talk to. So they kind of snubbed me. They’re not totally impolite, but you could tell they’re dying to get out. An hour later, I’m on the stage telling the story, and one of these women runs up to me afterwards and says, I had no idea who you [00:48:00] were.

I would really like to book an hour to get some mentoring from you.

Ian Hathaway: Too late.

Gail Goodman: You never know who you’re talking to.

Ian Hathaway: Yeah, I love that. Following your people gut. I love that term. I’ve actually never heard it that way, but I think it’s important to do.

Gail Goodman: Mine has never been wrong. My direct reports, SVPs would be hiring somebody and I’d be the final interview and I would meet the person and just be like, I do not think this person is gonna work out.

I would say it and they’d be like, oh, they must have had a bad day. They’ve been vetted by this. I’ve done their backdoor references. I’ve done this, I’ve done that. And I didn’t say no. And every single time I was sorry.

Ian Hathaway: I think it’s sometimes hard to listen to that voice. I can’t agree with that more. I’m not surprised that outsiders have been drawn to you.

You’ve helped pioneer modern SaaS. You did it in a very unique [00:49:00] way at a time when most people felt small businesses should be ignored as a software and customer. You’ve helped countless founders through your mentorship and your board guidance, and I feel like you’ve shaped a generation of entrepreneurs who can now think differently about growth and customer relationships.

It’s been a hell of a run. I know the concept of legacy is a challenging one for most people to think about. What do you hope is most enduring from the way you did things?

Gail Goodman: The internal culture at Constant Contact. I’ll say this, immodestly really got the best out of people. We created a place where we challenged each other.

We had healthy conflict, but in the end we were super aligned. I’ve spawned more than 10 CEOs outta Constant Contact, and they’ve taken these operating principles of kind of executive team alignment, the giving and [00:50:00] receiving of feedback. The. Customer first, and they’ve brought them to other companies and to me that’s the legacy.

We had a method for resolving crucial conversations. We had a whole methodology for how we ran as a team that resolved stuff. So many places leave things. Messy and unresolved and they don’t close issues or there’s a debate and executive A didn’t agree with the answer and he goes running back to his team and says, we’re doing B, but I didn’t like it.

That was a fireable offense at Cons, like you just don’t do that. We disagree. We have the debate and when we make a decision, we line up and we execute like hell. And the team should never know what side of the debate you were on. We were maniacal about prioritization and doing the vital few. It’s the other thing team companies do.

They do way too many things. Resources are diluted. You don’t get the critical [00:51:00] resources you need to actually move a metric to. When I think about my legacy, certainly my constant contact legacy, it’s that culture, that leadership culture we created When we think about my bigger legacy. Constant contact made me fall in love with small business.

Small businesses matter. They create jobs, but more importantly, they create communities and they invest back in their communities. And we do not have as many small businesses as we used to have. And you walk American main streets and you don’t see a rich, diverse, and interesting set of stores and restaurants to go into.

You see vanilla repeat of national brands over and over again. Small businesses and all of the infrastructure to support them has gotten worse and worse and worse. They used to be supported by small banks. Those are gone. I want to help people realize the dream of small business ownership, and I have found and am now working with a nonprofit called Entrepreneurship for All, where we help [00:52:00] underrepresented entrepreneurs, people who don’t have backgrounds like maybe you or I that have the confidence to start a business, but have an idea and don’t know where to start.

We help them start those businesses, and we do it exceptionally well. Three years in, 70% of our entrepreneurs are still in business. That is eight points better than the national average, and these are economically challenged folks who would normally fall below that. We now are able to deliver this program nationwide.

We are helping over 500 entrepreneurs a year, but there are thousands who need help and we would love to help them. And so I am spending the bulk of my professional time now trying to help E for all scale and trying to find people who are willing to mentor these entrepreneurs. A big piece of our formula is that each entrepreneur gets two mentors and it really makes a difference.

My current mentee is doing a vinyl logo business. So if you look at the sides of trucks, like panel trucks and they have like the company logo and the [00:53:00] name on it, she does those through vinyl decals. They’re less expensive than paint. They are equally sturdy and reliable, and if you decide you wanna change it, you can change it.

It’s all great Black woman, Roxbury, Massachusetts, which is our inner city. And the biggest thing we’ve helped her with is customer focus. How do you reach customers? How do you grow customers? And then we were literally at a mentoring session yesterday and she started crying. I’ve been working on this business on the side.

I knew it was something, and now I’m really getting the sense I can make it into my full-time job. And she just starts crying. I want that to be my legacy.

Ian Hathaway: That is fantastic. Sounds like a great mission, and it’s like you’ve come full circle. You’ve been the small business advocate from the very beginning.

It’s a great way to end. But before we do, we like to finish with a little segment called Beyond the Bio. These are just some quick hit questions that let us get to know you. What’s a quick piece of advice from a mentor that stuck with you [00:54:00] throughout your journey?

Gail Goodman: View other people’s reactions in the light of their insecurities, not your own.

Ian Hathaway: Oh my gosh, that’s a really good one. Who is an unsung hero in your life, and what has been the impact they’ve had on you?

Gail Goodman: I will go with Mike Fitzgerald at Commonwealth Capital, who had faith in me when nobody else did. Who backed me when nobody else did, and who shamed other venture capitalists into doing their pro-rata at a time when we would’ve died.

Ian Hathaway: Well, it worked out for everyone. Go Mike, who’s someone in your local startup community or your broader network who doesn’t get enough credit and deserves a shout out? Joe Caruso.

Gail Goodman: He is a angel investor and mentor in Boston.

Ian Hathaway: Tell us something most people don’t know about you. Something outside of work could be a hobby, a favorite travel spot, a guilty pleasure, or maybe even a hidden talent.

Gail Goodman: I have a bizarre superpower. I [00:55:00] remember song lyrics.

Ian Hathaway: Oh,

Gail Goodman: mostly from the seventies and eighties. I can do whole verses. Where does it come from? I have no idea.

Ian Hathaway: Well, that’s a great talent and it is a perfect segue to my next question, which is, what are one or two songs you’d like to add to our Spotify founder’s playlist?

Something that maybe fuels your workday or has inspired you as an entrepreneur?

Gail Goodman: When I was growing Constant Contact, I had a, I’m pissed off playlist, and the two key songs were Sarah Bares King of Anything. When you listen to it, she’s talking about record labels, substitute venture capitalists. The key refrain is who died and made you king of anything.

And then don’t laugh. Miley Cyrus the climb.

Ian Hathaway: I was not expecting that one. Gail, down a different road. What’s a book you might recommend? Either something that was, you know, especially [00:56:00] valuable in your own journey, or maybe one that you think every first time founder should read. As they’re getting started, the

Gail Goodman: advantage, Patrick Lencioni.

Ian Hathaway: Okay, final question. If you could give one piece of advice to someone who’s about to start their founder’s journey today, particularly someone who’s maybe a bit of an outsider, what would it be?

Gail Goodman: Focus starting out. You cannot be everything to everybody or please everybody. Really take the time to understand what is your beachhead.

To create initial traction. What customer, what problem? Be really thoughtful. I mean, you may need to test and probe to find the right one, but you may have a really broad vision for what you wanna do. You’re tiny. You need to find a small landing zone land and expand whether that is land and expand the breadth of the solution land, and expand the breadth of the, the [00:57:00] types of customers you serve.

Focus, find your initial entry point, because from that you can grow and if you are too broad, you’ll get nothing.

Ian Hathaway: It’s a great insight. It’s certainly one of the biggest things that early first time founders tend to overlook. It’s hard to say no.

Gail Goodman: Yeah.

Ian Hathaway: It’s a great way to end. Gail, thank you so much for being here.

I had a great time and can’t wait to share it with our listeners. This was fun.

Gail Goodman: Thank you very

Ian Hathaway: much. That’s a wrap for today’s episode of Outsider Inc. A big thank you to Gail Goodman for sharing her incredible journey and wisdom. What lingers for me most isn’t the NASDAQ ticker tape. It’s the picture of a builder who sat humbly beside her customers asked open questions and aligned a team so tightly that execution became a love language.

Gail reminds us that small businesses aren’t just a segment, they’re a community, and if you truly delight them, [00:58:00] they’ll carry you further than any playbook ever could. For the outsiders listening. Choose a small beachhead. Keep turning the flywheel and let focus and integrity do their quiet compounding.

And always remember your people gut may be the most important metric of all. If you want more from outsider, inc, don’t forget to subscribe to the platform@outsiderinc.substack.com. It’s packed with highlights from today’s episode and bonus insights you won’t wanna miss. You can follow Outsider Inc on YouTube, Instagram, TikTok, and LinkedIn at Outsider Inc.

Pod. You can also follow me on X at Ian Hathaway Outsider, Inc. Is produced by Spellbinder Media. We’ll be back soon with another fascinating outsider conversation. Until then. Thank you so much for listening and remember, great entrepreneurs can come from anywhere. See you next time.

Listen on: Spotify, Apple Podcasts, Amazon Music

In this episode of Outsider Inc., host Ian Hathaway interviews Kyle Porter, founder and longtime CEO of SalesLoft. Kyle shares his remarkable journey from nearly failing in the first year of SalesLoft to scaling the company to unicorn status with a $2.3 billion valuation. He discusses the core principles of leadership, such as leading with love, staying mission-driven, and valuing corporate culture. Kyle also reveals personal challenges, including childhood health issues and a transformative college experience, and how these shaped his entrepreneurial path. Finally, Kyle talks about his current life on a tangerine farm and supporting his wife’s business endeavors, emphasizing the importance of family and personal fulfillment.

Show Notes:

(02:12) Leading with Love: A CEO’s Perspective

(02:55) Kyle’s College Turning Point

(04:55) Childhood Hustles: The Seeds of Sales Passion

(06:52) Overcoming Childhood Health Challenges

(12:57) Early Professional Experiences and Lessons Learned

(15:51) The Birth and Rebirth of SalesLoft

(26:49) Navigating the Pandemic: Challenges and Growth

(30:41) Life Changes During the Pandemic

(31:31) The Vista Equity Acquisition

(34:31) Transitioning from CEO to Executive Chairman

(37:16) Supporting Each Other’s Dreams

(44:04) Building SalesLoft in Atlanta

(51:08) Beyond the Bio with Kyle Porter

✅ Host: Ian Hathway - Co-Founder & Managing Partner, FOVC

✅ Guest: Kyle Porter, Founder & fmr CEO of SendGrid

Produced by Spellbinder Media. Executive Produced by Bridge Five Ventures. Copyright ©️2025, Bridge Five Ventures, LLC, All rights reserved.

Listen & subscribe wherever you get your podcasts or at outsiderinc.substack.com.

AI-Generated Transcript

Kyle Porter: [00:00:00] I think you gotta go with your heart and you gotta go with your mission and you gotta go back to what you’re here to do. I think all companies should have an answer to the question, why do we exist? And if what you’re doing today is not fulfilling the answer to that question, then you’ve gotta go some other direction.

And if we existed to create a world where sellers are loved by the buyers they serve, and here with our old product, they’re not being loved by the buyers they serve, then that’s a clear answer.

Ian Hathaway: Welcome to another episode of Outsider Inc. I’m your host, Ian Hathaway. Today’s guest is Kyle Porter, the founder and longtime CEO of SalesLoft, the Atlanta based company that pioneered sales engagement as a software category.

Kyle started SalesLoft in 2011 with little more than a vision to create an environment where people could learn more, do more, and become more. The early days were anything but smooth. The company nearly failed [00:01:00] in its first year, forcing Kyle to lay off most of the team and rebuild from scratch. But through bold pivots, including shutting down its most profitable product to bet on what would become cadence, a foundational component of the SalesLoft platform.

Today, the company grew into a category leader serving thousands of customers worldwide. Under Kyle’s leadership, SalesLoft scaled to unicorn status in 2021 and ultimately reached a $2.3 billion valuation the next year with a majority investment from Vista Equity Partners. Along the way, SalesLoft became one of Atlanta’s most celebrated startups, known as much for its culture and values as for its technology and business success, Kyle’s story isn’t just about building a billion dollar company.

It’s also about resilience from overcoming childhood health challenges to a life-changing turning point in college to balancing the intensity of hypergrowth with family life. I’m excited to dig into how he turns setbacks into defining [00:02:00] moments, what it means to lead with love as a CEO, and how he sees the future of sales enablement and Atlanta’s thriving tech ecosystem.

Kyle Porter, thanks for dropping by.

Kyle Porter: Glad to be here, Ian. Thanks for having me.

Ian Hathaway: I’d like to start off with something that you’ve been known to use a word that most CEOs avoid in business settings, which is love. SalesLoft’s mantra, love always wins, showed up in your company values. In how you described customer obsession and even in how you framed workplace culture, but love isn’t soft, especially when you’re making some of the tougher decisions you’ve had to work through in your career.

I’m excited to go back to the beginnings in in a moment, but before we do, I wanna start with this. From your perspective, what does it really mean to lead with love as a CEO? How do you put it? Into practice making it more than just a thing. That sounds nice.

Kyle Porter: That’s a big one. Before I started SalesLoft, I had gone through some kind of [00:03:00] crazy tumultuous times in college and reached this point where I was partying too much.

I wasn’t paying attention to what the future of my life was going to be, and I got this really big awakening. And in this moment I realized that I had been taking all the talents and skills that I’d been given in addition to the ones I’d been working on. I was squandering them. I wasn’t using them to the good of society or even to myself and my family.

And I made a commitment. I remember exactly where I was and exactly the moment I made a commitment for the rest of my life, I was gonna take those talents and skills and I was going to use them to serve the world in a better way and to help other people. And so that was like kind of big transition for me.

And in that really, I think was born this idea that. What is life if it’s not about loving the people you’re with and loving the things you’re doing and loving yourself? And so when we started SalesLoft, I realized that a company was going to be the biggest vehicle for change in my life. And so starting a company was the way that I could make the biggest impact.[00:04:00]

And I didn’t know what the business was gonna be at at the beginning. I just knew that I wanted to create an environment where others could come to learn more, do more, become more, take their talents and skills, apply them in ways that served the world and served others. And to me, that was my way of serving, was to create that company.

And started up, I realized, well, this is great because I love salespeople. I love sales, I love the problem of sales. I love helping solve those problems. And so loving the customer was just a natural extension. Then when I loved on the team, they turned around and loved on the customer. I’m very proud to say someone else on the team coined this idea of sales, love, and sales.

Love was our mantra of we’re going to serve sellers. We love them, we care about them, we want to see their problems disappear and help them to achieve their goals and dreams. And we’re gonna try to shower the world with sales love. That kind of took off.

Ian Hathaway: Well, you definitely have loved sales for a long time and have loved customers from the beginning.

Just going back to as a kid, you sold baseball cards, [00:05:00] beanie Babies, even Olympics, merch, when you know the Olympics was in Atlanta.

Kyle Porter: Comic books, action figures.

Ian Hathaway: Most people would chalk those experiences up as childhood hustles or curiosities. But I know for you. They planted something much bigger. What’s that earliest moment where you realize that sales could be not just a way to make money, that it could actually be a force for good, that you could use sales to create joy or deliver value for the person who’s on the other side of the

Kyle Porter: table?

So it was apparent very early on. I mean, I would go to Sam’s Club, or I guess Costco with my grandmother and pick up multi-packs of candy and take ‘em to school the next day and sell ‘em. And I think I could sell ‘em for less than you could get it from the vending machine and still make a lot of money.

And so here I am adding value to these kids. People wanted their Snickers or their Twix bar, we could deliver that, but I remember. The Chipper Jones rookie card, the Michael Jordan, when he came down and played baseball, and I had like 15 of those cards and I just [00:06:00] found so many kids that wanted them and look on someone’s eyes when you deliver with them something they wanted, something that they desired, something that they really couldn’t get any other way or they couldn’t find.

That’s therapy man. Seeing someone do that and like seeing them light up, and I think the greatest story of that was during the Olympics. You mentioned it. 1996. I was 14 years old. I learned that people just love these Olympic lapel pins. I could find them in certain areas. I could buy ‘em. I would call Walmart up and ask them when they were getting their Olympic lapel pin delivery, and I would ride my bike up there and be the first in the door, and then I’d take ‘em downtown and sell ‘em.

Sales gets a bad rap in a lot of ways, of course, and sometimes it’s earned seller, sometimes can be selfish and self-serving, but when sales is done right, it’s a thing of beauty and when you deliver something that they love, it’s just amazing.

Ian Hathaway: It’s a great story. Those sound like some joyous moments from childhood.

I know others were difficult. You had some serious health challenges as a young child. Nurse would come to your house every week to give you an iv. Yeah, [00:07:00] that kind of experience can give someone a different lease on life, especially with the right parental guidance. Can you tell us a little bit about those early days, that environment you grew up in?

Maybe the model of those around you and and how those setbacks, those early challenges for you shaped your sense of resilience of education or service and how it shows up in you today?

Kyle Porter: Yeah, sure. Well thanks for asking. You know, I was adopted at birth. My mom worked at Children’s Healthcare Hospital of Atlanta.

So she was on the hunt for a baby to adopt and she was able to navigate to get me and my biological mom never saw me C-section. She was out and off I went. But when I got home unhappily for everyone, I had this raging nasty fever and they rushed me back to the hospital. And quickly the doctors diagnosed me with what’s called a gamma globulin immunodeficiency.

It’s like the longest word I’ve ever seen, but basically there’s certain blood cells that my body wasn’t producing to fight off infection. If I would get sick, it was hard for my body to fight it, and I got sick [00:08:00] often, so I was in and out of the er. I had chronic asthma. I had these gamma guard IV drips once a week.

But I think at a young age it was tough because I kind of was like, everybody else is normal, but I’m this sick kid, and so I had this. Really kind of debilitating self-doubt that crept in and it gave me some insecurities. But then there was also like. This fight to prove the doctor’s wrong, to advance past this illness, to do everything that everybody else did while still holding my arm with an IV bag, IVs in, and I’m shooting one-handed basketball hoops in my yard.

I’m riding my scooter and the nurse is running next to me while she’s holding this thing. I tried to just basically live my life as best I could. Really what it taught me to do is just like fight like hell. You know? I think I kind of tricked myself a little bit into like, Hey, this isn’t real. And at age 11 my body started producing these blood cells to fight off infection and.

It was a miracle.

Ian Hathaway: Well, after hearing that story, I’m [00:09:00] 0% surprised that you became a successful entrepreneur. It seems like you were fighting like hell and making the best with what you had. That’s really what entrepreneurship is about. You hinted earlier about. A turning point during your college years, you went to school at Georgia Tech nearby where you grew up.

You were living that kind of classic campus life, maybe partying a little bit too hard, things caught up with you, and you eventually went into rehab in late. 2002. And you said that that moment, which was certainly a low point for you at the time, really changed your life for the better. Can you take us back to that time, like what was going on for you, but really more importantly, what shifted in your mindset coming out of that experience that’s still with you today?

Kyle Porter: I had created a animosity towards authority figures. I think that spun out of doctors telling me that I was gonna die and me not wanting to believe them. [00:10:00] And I got in trouble in school as a kid too. So it was teachers and principals, that sort of thing. But when I turned 11 and had this miraculous cure, I started kind of living my life for myself and almost like the world took something from me, I’m gonna get it back.

That meant that I was selfish. I was self-serving, I was partying, I was having fun. I wasn’t thinking about the future. I wasn’t thinking a lot about other people, quite frankly. And so in college. That was my only mentality. It wasn’t how do I get good grades and get a great job? It was, how do I have fun?

And that led down the road to being arrested once and then that went down the road to be arrested again. A month later, after the second arrest, my dad checked me out and sat me down and he said, Hey. You know, I think you need to go rehab. And I was like, nah dude, I don’t have a problem. And he goes, well, it’ll help your court case.

I go, okay, let’s do it. So I check in and there’s something weird happened. There’s like little voice in my head said, Hey Kyle, like why don’t you actually listen to what these people have to say and see what happened? And so I went in and there was like this small group where [00:11:00] there were a bunch of folks my age and all different walks of life, all different histories and experiences and troubles, and they all started just opening up and sharing everything.

So I told my whole story and it was like this breath of fresh relief of like, oh, they don’t think I’m a loser, because I was sick as a kid. And I started following the rules, like listening to what they said and taking their advice. They have 12 step program in AA and na and I to this day, believe that the 12 step program would help anybody regardless of whether they had an addiction or any issue with alcohol and drugs.

So I went through the process and had this big awakening. Call my brother, call my sister, call my mom. It was like the best our relationship had ever been. But in that was really this wake up call that said like first 11 years of my life, I was living to survive. Like my whole entire mission was live.

Like don’t die. And then after that it was like, take the most outta life that you possibly can. I’m like, I need a new thing here. ‘cause these aren’t working. I’ve [00:12:00] always kind of found myself in leadership positions and I’ve got these skills. Well, let’s use ‘em to make the world a better place. Let’s use ‘em to add value.

And I’m pretty happy to say that obviously I make mistakes along the way, but that’s been my mission in mantra ever since then.

Ian Hathaway: Mm. Thank you for sharing that story. I’m reminded of a, a friend of mine who also successful serial entrepreneur. He was. Addicted to alcohol. It was ruining his life as an adult.

But he said to me, I wanna live a life where I can go into any room and not be afraid of who I’m gonna run into, or a question I’m gonna be asked. And that’s lesson I’ve tried to take with me forward. I think of it as clear conscious living, which is a great way to live and deal with your problems, deal with your past so you can have a better future.

So as you pulled outta that situation. Finished college Georgia Tech. You jumped right into the working world first at a boutique. Recruiting and professional services firm [00:13:00] that really introduced you to Atlanta startup scene. Then you started a company Sports Bar Digital, which was placing ads and running video game machines and sports bars around town, and then a startup called NanoLumens, where you really accelerated your advance to the front lines of marketing and sales.

Looking back on those early professional experiences, what did they teach you about the kind of company that you wanted to build, and maybe just as importantly, what kind of company you did not want to build?

Kyle Porter: One moment I was driving a tractor trailer with a bunch of arcade game machines in the back of it, poker machines and golden tee golf machines, and I started to get drowsy, so I pulled over in a truck stop and I had this stacks of $1 bills that smelled so bad.

Dude, they smelled like beer. They’re grimy and it’s cigarette smoke and all these bars I pulled over and the business wasn’t doing what I had anticipated it would do and what I could do with it. And so I wrote a manifesto and the [00:14:00] manifesto was like, here are the things that my next business is going to have.

I’m gonna sell to white collar people and not sell in bars because I’m gonna take digital forms of currency. I’m gonna do an innovative business. Not a replicative business. So the amusement gaming business was one that lots of other people participated in, and I wanted to do a business that was new and no one did it at the time.

And then the last one was. I love these games, like really, really love playing poker and playing golf, and so I said I’m gonna validate the needs of the market for the product I’m offering based, not solely on my interest in that product. I’m gonna use real market validation to decide whether this is something good.

I think on the learning side. Every one of these experiences was paramount for instilling some skill or success kind of capability inside me. But I would say by far and away, the one that stood out as strongest was recruiting. When I started SalesLoft, I [00:15:00] knew that I could recruit. I knew I could attract incredible talent and I knew how to do it.

I knew how to motivate the right people to be interested. I knew how to share the vision and get them on board with it. I knew how to evaluate talent, but I really felt like I could attract high quality individuals to come on the journey with me, and that was really paramount for running the company.

Ian Hathaway: Those are incredible lessons. Doing something that a million other people weren’t already doing. Building a business that. There was actually a market for not something that you just thought was cool and needed to exist, but also the talent thing. I, I feel like for a lot of first time founders, especially technical founders, they are really surprised with how much of their time is spent recruiting.

Yeah. You’re the chief recruiting officer as CEO, and so that’s a great skill to have. You took the leap in 2011, you started SalesLoft, not with. A polished idea or even a product that was [00:16:00] usable, but an ambition to create an environment where people could learn more, do more, and become more. I know those early days were anything but easy.

The company essentially tanked after the first year. You had to let go of most of your team. You had to restart the whole company from scratch, basically. What was that experience like? For you, not just that things weren’t working early on as you had kind of anticipated and planned, but really about having the conviction to rebuild rather than walk away.

Kyle Porter: Humbling in some ways, but at that stage I’m just so forward driven that I’m not letting anything kind of stick to me that’s negative. Started the company and had a lot of fanfare, like a lot of market success. Notoriety won some awards. I really couldn’t produce products that delivered value to the customer that were meaningful enough to collect a paycheck.

I even had deals we closed that I just told ‘em, Hey, I can’t take your money ‘cause I can’t deliver what [00:17:00] I told you I could deliver. And so that was tough. But two things really came out of that, maybe three things. The first was no matter what, I wanna run a business with culture at the center of everything as a founder.

The values that I have and that we have as a company, something I have total control over, and there’s not a lot you have total control over, but that’s one thing. So I’m gonna make sure that I create that type of environment in the next iteration of SalesLoft. Number two was I wanted someone in the foxhole with meme who, when I was selling Beanie Babies baseball cards and Olympic lapel pins, they were writing code.

You know, I wanted that equivalent, someone on the journey that knew how to build software and deliver for customers. The last piece is I wanted to be good, at least at product management because I was bad in the beginning. I would tell our engineers to build one thing and then tweak it two hours later and then come back the next day and say, can we add this?

And just really not thoughtful and not understanding of the right practices of, of building product. And so those were the three things I was gonna change [00:18:00] with V two of SalesLoft. And those are the things I set out to make different. How did you go about changing those things? Well, first thing I went to our investor and my friend and partner, David Cummings, and I said, Hey, what do you want outta this business?

Because you’ve invested a lot of money and I haven’t, you know, shown any return for you. His response was mind altering. Quite frankly. He looked me in the eyes without missing a beat, and he said, what I want as a return outta this business is for you to find fulfillment as an entrepreneur. So that was like, okay, now I’m ready to run through brick walls for me and this guy.

That was step one. Step two was find someone that could be like a rebooted co-founder, that could be a technical co-founder for me and the business, and someone that I could believe in as a partner and trust. So that was when I found Rob Foreman, who is the most incredible person that I’ve ever had, join me on the journey of business.

And then we agreed together that we weren’t gonna do it without core values. At the center of everything. I basically said, Rob, I can sell anything, but I can’t build shit. And he was like, great. ‘cause I could build anything and I can’t sell shit. So [00:19:00] that worked out really well. And then the last piece was just.

I went down the road of like, how do I be a good product manager? Because I had the idea of the product always in my head. I just needed to know how to translate that to the engineering team in a way that we could build from it. So I just dove in and learned.

Ian Hathaway: Becoming a good product manager. What are some of those like early principles for early companies, especially maybe first time founders who haven’t built a product company before?

Kyle Porter: I just had to love the users so much that I could understand them deeply. I’m going into their world and I’m not leaving until I feel like I’ve got a solid grasp of what they’re trying to achieve. What their roadblocks are and some vision for things that could solve that. And that was fun for me. ‘cause if you showed me a, a room full of people selling and said, you get to hang out here and learn from them all day, that’s one of my favorite things in the world to do.

So I was fortunate to be in environments where there were lots of companies. Kind of startup ecosystem type environments where you could just bounce around table to table and and talk to people about what they’re [00:20:00] working on and why, and then knowing how to translate that and doing it in a way that’s not disruptive.

Really shaping the vision and building out the user stories and doing my research and kind of getting my story together before I translate it to them. I think that was really important. Then not thrashing, not letting kind of whims of the hour after I come up with a vision. Kind of shape that vision really quickly, but make sure that it’s real information that’s shaping it.

And I really did build it for myself too. Some people advise not to do that, but we always built SalesLoft for the version of size of company we were, plus the next version. The next version we were gonna be in. Growth is like always where the ideal customer was for us.

Ian Hathaway: And I know this gets repeated a lot, but I’ll just underscore it.

If you don’t have an intimate understanding of your customer’s day-to-day activities, their pains, their joys, how they get a Christmas bonus, right? You shouldn’t be building in that space until you do. It’s absolutely essential. So you pull yourself out of those initial [00:21:00] challenges. You start building a company and build a product that people wanted, but you faced another crucible moment.

Prospector, it was your flagship product. It was successful. It grew into 7 million a RR business, but it wasn’t generating quality leads. A lot of customers were using it to spam on LinkedIn. This, of course, made LinkedIn corporate very unhappy with you. It was a house built on sand. So in 2015 you made a really tough call and you killed that product.

It ultimately worked out for you, but just walk us through that moment. How did you have the courage to shut it down? Was that choice made for you or was it really a tough call?

Kyle Porter: I had envisioned a world where sellers were loved by the buyers they served, and that’s because they added tremendous value to their buyers, and they delivered them with authentic one-to-one human connected value added services.

And so we want it to bring sincerity into the sales equation and what. I had heard from [00:22:00] sellers and seen was they really wanted contact lists of people they were trying to reach out to. And the way to do that before was really bad. It was like jigsaw data.com. It was before the ZoomInfo is really kind of took off and we’re successful and we realized the best contacts, the most accurate and up-to-date list of people and professional settings in the world is on LinkedIn.

So what sellers were doing is they’d go to LinkedIn and they’d copy and paste first name, last name, company name, title. They’d try to backdoor into what their email address is. They try to find a corporate phone number and dial it, and I’m like, well, we can make that a lot faster with the Chrome extension.

That just takes that information and shoots it right to your CRM or a spreadsheet. And then we could build this email validator that we’ll talk to the mail server and check first name and last name and initials. Domains to validate whether the email is accurate or not. So we built it and it was awesome and it took off.

But what we started to realize is they were taking these lists and they were throwing them in these marketing automation grinders, if you will. I just had [00:23:00] this vision of them, like getting this list from SalesLoft, pouring it in the machine, and cranking out these spam emails and just blasting them all over the world.

And so we said, okay, well what if there’s a smarter way to communicate with your buyers manually? What we’re doing today is we’re taking those lists. We’re creating a template, but we’re adjusting that template to show understanding of the buyer, and we’re sending those emails one-to-one, and we’re following up and we’re tracking it in a spreadsheet.

Okay, well what if we make that faster, easier, smoother, and let’s create this communications cadence that buyers can put these lists in and start to reach out to their buyers in a, at a more authentic way. And so we started to build cadence. It was taking off and we were kind of unhappy with the other piece that people would do.

They would buy prospector from SalesLoft, download this huge list, cancel their subscription, and then they would come back like two months later and like renew, you know, and like do a big list, cancel their subscription. So it was kind of hard to do a recurring revenue [00:24:00] model, but at the same time, LinkedIn was unhappy with it, as you can imagine.

And some of those conversations can’t be repeated much here. I love and respect LinkedIn. Always have. And so I went into those conversations with a desire for us to still be able to build a great company and fulfill our mission, but also to showcase that we would rather be partners of LinkedIn than than not.

We walked away with a good handshake and I made a commitment to them what I was gonna do, and what I was gonna do was shut down that original product and ride on the tails of what we thought was way better. Which was a product that we controlled completely that didn’t depend on outside data sources that was growing well into the monthly double digits.

And I saw it as the vision of the future of the business. So it was hard in the sense that we’re kind of saying goodbye to recurring revenue, but it was easy in the sense that the dream was going to happen on the backs of the new product, the cadence product. And and I fully understood and realized that.

So we came home and came back to the office and. Set up [00:25:00] a graveyard and buried prospector and there was some incense and seances and there was a formal proper goodbye. We announced it to our customer base and. We put all our eggs in the basket of cadence and it just took off like wildfire. And then LinkedIn became an investor.

LinkedIn became a, a high paying customer. LinkedIn became a great API partner. We, we really did fulfill kind of full circle on showing that that was a company that we cared about and that we loved, and we wanted to be part of their journey and have them be part of ours.

Ian Hathaway: What would you say to founders out there right now who are facing this?

Decision, see this, especially in B2B Enterprise where your early revenue is actually bad revenue for a bunch of different reasons, but that decision to turn off. What is ultimately unsustainable revenue, but might be growing quickly. Investors are excited. You gotta raise money to stay alive. People who might be scared shitless right now facing that exact thing, what would you say to them to maybe help carry them through and making the right choice, which they [00:26:00] already know what the answer is Probably

Kyle Porter: worthwhile to say.

It’s a little Monday morning quarterback because it worked out for us, you know? Yeah, of course. It could have not worked out. But I did feel and know that what we had built with cadence was something special. So I was very confident. I think you gotta go with your heart and you gotta go with your mission and you gotta go back to what you’re here to do.

I think all companies should have an answer to the question, why do we exist? And if what you’re doing today is not fulfilling the answer to that question, then you’ve gotta go some other direction. And if we existed to create a world where sellers are loved by the buyers they serve, and here with our old product, they’re not being loved by the buyers they serve.

And that’s a clear answer. So I think you gotta follow your mission, you gotta have purpose, and those things have to align up with what you’re doing.

Ian Hathaway: Flash forward a few years, the pandemic happens. Changed a lot of things for a lot of people. In a lot of ways, sales teams go remote fully. Yeah. [00:27:00] Your own sales cycles significantly compressed during that time.

By 2021, your. Revenue doubled and you hit unicorn status with a a hundred million dollars series E round at a billion dollar evaluation. How did that super rapid growth, how did that unfold from your perspective? What was it like to go from like, oh shit. Yeah. The sky is falling to having one of the biggest quarters in your

Kyle Porter: company’s history.

It’s really weird. There’s so many mixed emotions. I’m surprised at how emotionally I got sad when you brought up COVID. Even though COVID boosted the business significantly, we were set to have our biggest annual conference ever. We had booked the hotel room. We had sold thousands of tickets. We had sold millions in sponsorships.

We had lined up high profile speakers, and we were planning to do it in March of COVID year 2020 in San Francisco. And three weeks before the conference, that gets canceled and we’re out like all the money, by the [00:28:00] way. So we gotta work out from behind that. Now we’re thinking like, this is gonna be a wild change and we’re gonna lose a bunch of revenue and lose a bunch of customers.

And I’m going on zooms with my investors and people are, it’s all about being cautious and being careful. We get a dip in revenue right at COVID, and we go, okay, the forecast changes. We’re gonna have to slow down the growth, and quite frankly, we’re gonna have to cut back on the team. And we lost a lot of people that I cared about deeply.

But coming out of that, things just blew up in a positive way. Now all the sellers are at home and we had these like longstanding sales cycles with enterprise customers that had taken six months before and they were signing pos like weeks after short term. We realized that we really could help and serve and deliver, and we communicated that to customers and they believed it and they understood it.

And so SalesLoft took off and the growth was dramatic, like you said. And you know, I think a lot of SaaS companies did experience that. They call it like the zoom effect in some ways. But yeah, it took off and, [00:29:00] and. Really grew rapidly after COVID. The reason I felt sad when you said the word COVID was I didn’t go to the place I cared so deeply about anymore.

I didn’t walk in the SalesLoft offices, I didn’t see the people on this journey with me. Every morning when I walk in, I get to high fives and all the fun. We’d had all the lunches and breakfast and meetings and happy hours and chess games. I mean like music and I mean, all that stuff went away and it went away fast.

That was sad for me and I think for a lot of people at SalesLoft, ‘cause we really thrive. Our in-person culture as a company really thrived. Jeff Ing, the founder of Insight Partners, walked into my office one day before COVID and he goes, you guys have gotta write a book on whatever you’re doing in this place because it is insane.

And so we lost all that too. What a boat of mixed emotion.

Ian Hathaway: How did you carry the culture through that period and how was it

Kyle Porter: different after?

Ian Hathaway: I

Kyle Porter: think culture always changes no matter what. Especially when companies grow and the faster they grow, I think it’s gonna change a little bit. You want to keep things core [00:30:00] and tight that don’t change, but we couldn’t keep the same.

In person, face-to-face, culture, vibe going, and so we ramped up communications. I was on weekly zooms with the whole team. I was just zooming with everybody and we were doing all hands more frequently, and they weren’t just like, what’s our pipeline? Are we gonna hit our number? What’s the roadmap? Hey, we’re showcasing what these team members are doing to live our values and reinforcing clarity of here’s why we exist.

Here’s what we’re here to do. Here’s what’s most important right now. Here are the metrics showing us how we’re doing that. Really diving into all those. But yeah, it changed in many ways. It changed for the better. People were able to be a little more efficient, but you know, we did lose some of that interaction that was so important to us.

Ian Hathaway: Yeah, it was tough. Even at the time I was working at Techstars, and that was a remote first company to begin with, but being stuck in your house. Seven days a week changed. Yeah, some

Kyle Porter: things. It also changed things in an amazing way for me because now I’m here on the farm with these kids that [00:31:00] I haven’t been spending a lot of time with.

To be honest with you, I’m traveling a lot. I’m living in two different cities. I’m going to customer events and customer site, so that was special because now I’m spending a lot more time with my wife. I’m spending a lot more time with Clark, my son, Brooklyn, my daughter. I’m on the farm, I’m on the water.

I’m riding horseback, you know, I’m doing other things. So my life did change too in that scenario, and it was like, do I want everyone to get back? Yeah, I want what we had before, but I kind of don’t wanna give up what I have now. A

Ian Hathaway: lot of folks are struggling with those growing pains right now. So I guess as we’re kind of returning to some level of normalcy, you hit another significant milestone.

When Vista Equity, which is one of the very top tech-focused private equity firms, acquired a majority stake at a $2.3 billion valuation,

Kyle Porter: gave us all the cash we had on the balance sheet back to us, which was a lot. Oh wow. Okay. That was December 21, was when that deal closed.

Ian Hathaway: Not a ton of founders go through that.

Tell us a little bit [00:32:00] about your decision to sell a majority stake to private equity. What made that attractive and what was it like to go through that process as a founder?

Kyle Porter: Yeah, that’s a wild one. So I think early in 2021, we had experienced that post COVID boost companies firing on all cylinders. I remember someone asked me, they were like.

How many times have you missed your number? And I’m like, never. So we’ve had this really great board dynamic where we throw a number out and we hit it all the time, every time. And so in 2021, I came to like a Q1 board meeting and I said, Hey, there are many, many lofts here who have vested investing and have been on this journey.

And I haven’t taken a bunch of money. And I think we wanna participate fairly in the value we’ve created. And I want to create a scenario where Loft get to take something from what they put in on this journey. So I wanna figure out a way, create some liquidity in the business. So that progressed. And then [00:33:00] I had another guy, a friend come to me and he told me a story about how in 1999.

His software company got a $3 billion acquisition offer, and the board turned it down. They wanted to remain private, independent, and go public, and then the dotcom burst happened, and he said that it took him seven years to get back to not even that valuation. And so that really weighed on me. I said, if we were to take a downturn in this marketplace.

I would’ve passed up on the opportunity to generate a way for lofts to participate in the value they had created through liquidity. I would feel very guilty and I don’t wanna live with that on me. So we had a lot of people that were always calling on us and and interested in us, and I think pretty clearly Vista stood out as someone.

Quite amazing in terms of the way that they cared about the culture of our business, the way that they cared about the fast growing nature and the vision of SalesLoft. Their portfolio was full of loyal, successful [00:34:00] customers of SalesLoft, and as we started talking to them, it really felt right to go on the journey with them, and they had the resources and wherewithal to handle downturns in the marketplace.

And so long story short, we felt like it was a great. Opportunity to partner with them went back and forth a little bit on what are the terms gonna be, but we got to a solid mutual understanding of a great deal and I think it was great. They believed in us and the team and and still do obviously, and it’s been a great journey.

Ian Hathaway: Shortly after 2023. You, you stepped down as CEO after more than 12 years transition to executive chairman. I know you’re still involved with the company pretty regularly, but a lot of founders we talked to have experienced. Identity crisis have challenges letting go, figuring out what’s next. Maybe that’s not true for you, but would love to hear about your decision to transition your role and what life has been like as executive chair.

Kyle Porter: I think there’s [00:35:00] two common pitfalls that founders explain, and there’s a lot of talk about it. One, you hear people say being a founder is a lonely road, and the other, A lot of times you hear people say that as a founder you really wrap your identity up in your business and your role. I recommend to anyone listening to this that you don’t do either of those two things.

I could never relate when a founder said, this is a lonely journey, because I’m talking to my wife almost every day about the journey. I’m talking to my dad every three days about the journey. I’m talking to my co-founder every four minutes about the journey. I’m talking to my board very frequently, weekly, about the journey, and I’m never holding back.

For my feelings of insignificance or scared or stoked, I never held back on the journey with them. So I never felt that the journey of SalesLoft was a lonely one. And then on the other side, I also never felt that my identity was tied to being the CEO of SalesLoft. The story of Kyle Porter doesn’t end with SalesLoft.

That came through Bob Lewis. My [00:36:00] CEO coach, quite frankly, was when he said the words. How you’re a holy, righteous, blameless child of the living God. And I heard that and I go, well, that’s something I could tie my identity to. That can never be taken away. I could tie my identity to being a great dad. That could be taken away.

I could tie my identity to be a great husband. That could be taken away. I could tie my identity to being someone who’s active. And that could be taken, you could take away so many things. But when I tied it to that, I think that that was the beginning of something really special for me. Now again, you can say like, had SalesLoft failed and lost money for people, would I feel the same way?

And I can’t answer that honestly. I just hope I would say that I’m still holy, righteous, blameless child of the living God. But uh, yeah, that was the first piece that was important. The second was that when we made the deal with Vista, I did not have the vision of leaving. I was set on achieving our mission as a business.

I was set on taking the company public. I was set on the long haul of the organization’s goals, but some things changed. We never went [00:37:00] back to the way before. Like there was never an end of COVID really. It was always like the new normal, if you will. And so I think that really hurt. Businesses started to get kind of political.

That wasn’t my favorite thing to be part of, to be honest with you. But I think I could have lived through both of those. Really the one thing that stood out the most, my wife, April, who’s been just my partner on this journey and all our journeys, on our very first date, she asked me what my dream was and I told her it was to build a company and mix a dent in the universe.

And I asked her what her dream was and she said that her dream was to restore the glory to the Florida citrus industry. I’m working more from home. I’m around her more. I’m watching her start to try to live this dream. I’m giving advice and stuff, but I’m realizing that I could like do more to help her achieve her dreams, and I’m also going, well, she was by my side for over a decade pouring into me while I’m living my dream, and so I started to realize this is my opportunity [00:38:00] to.

Help her to achieve what she’s always wanted to and to lend my resources and value. And by the way, this is gonna be a lot of fun. So that’s when I went to the company and I said, Hey, I’d like to work on a transition. I’m not leaving until we are in good hands by any means. And so I’m recruiter number one to go out and find a CEO.

And so that was about a year into the deal. You mentioned you’re on the farm now. Tell us a little bit about it. I married a fourth generation tangerine farmer. My wife is brilliant. She grew up through a time when the industry was going through a lot of pains with freezes, and she created a career path to save the family business.

So she went into finance. She wanted to make sure that that her family business was sustained into the future and that it, the industry stayed alive. They have a proprietary variety of Tangerine called Juicy Crunch. Which is the world’s best tasting tangerine, and I’ve got lots of people [00:39:00] to support and believe in that.

I think even Chad, GPT told me that, and we had some resources coming outta the exit to grow some of these crop and build out these groves and there’s a lot to do. And so we’re off to the races and she’s working super hard and the way she communicates it now, she wants the citrus fruit to remain on the Florida license plate.

It’s a really remarkable business and it’s super great for the family and it’s a lot of fun and it feels good to do something with my hands versus doing something that’s just bits and bites.

Ian Hathaway: Well, so I’d like to stay here for a moment. I have a million questions about the Tangerine business. It sounds like a lot of fun, including what skills you’ve brought from the tech world over, but maybe just more a question about your co-founder in life.

This is something that we’ve talked about a lot on this podcast. It seems like it’s gone well for you, that you have both been very intentional about it. What. Are some tips or maybe some [00:40:00] suggestions for how you’ve navigated supporting each other’s professional dreams while having a healthy marriage along the way and all the ups and downs of entrepreneurial life?

Kyle Porter: I don’t think I could give any advice without starting by saying I’m not an expert at it. I’m just, I’m living through it and I’m making mistakes and I’m deal with challenges all, all along the way. And one of those challenges is. Let’s say that I’m on the second pickup of the day, dropping the kid off at this place, and I’m responsible for dinner, and April looks like the old Kyle Porter on the patio pacing back and forth on phone calls, right?

When I see that I can either go jealousy, I can go resentment, or I can go, okay, April is living her dream and she’s accomplishing it, she’s doing it, she’s getting there, and I’m proud of her. I wish I could say I chose the latter every single time I saw that, but I can tell you that I’m cognizant of it and I’m working hard to think of it that way every time.

So I think that’s the [00:41:00] first piece is just to be honest, I’m not an expert. If you find one, send them my way. When I invest in my kids, I don’t get the same timeline. ROI of when I did things that SalesLoft and that I looked up at the LED board and our metrics went up. I don’t have a big 40 inch screen telling me like the kids are doing better.

You know, I just have to like feel it and believe it. So that’s tough. But it’s also rewarding because I know if I went on the same trajectory that I was on, on the SalesLoft times, if I kept that same attitude, mentality and kind of aggressive pursuit of always more, I think if I did that, I would have regret for the way that I spent time with my family and, and I would have regret for not helping my wife to get where she wants to go.

And so while they’re harder to see those returns in the short term. They really do make an impact. I think it’s worth it and I’m able to get stuff done. I need to get done. I helped co-found a business called Fastlane with an awesome CEO that’s gonna be announced in January. Got [00:42:00] lots of investments, some have done really well.

Super involved in Tiger 21 and YPO. I’ve got, you know, great groups of friends from Atlanta, from Florida, from the tech community, from SalesLoft that I invest deeply in and spend a lot of time with. I’m healthy, I’m active, I’m doing fun things I wanna do. I’m doing things I don’t wanna do too. Or in the middle of a nanny cert, and April’s like, why are you looking mopey?

And I’m like, I’m mopey right now. Because I’ve always done what I wanted to do when I wanted to do it, even when I was running sales love. And now I feel like I’m doing a bunch of things that I don’t wanna do. What’s going on here? You know? So we go through all that, but I think it’s just being self-aware.

And I stay on mission as family first. And I would’ve told you I was family first when I was running SalesLoft. And then my actions wouldn’t have represented it. Now, I can tell you I’m family first and guar damn t that my actions represent it.

Ian Hathaway: There’s obviously seasons in life from Kyle who’s pacing back and forth on the phone to Kyle who’s coaching baseball and running the kids around.

They have expectations of you. They have this vision of [00:43:00] you both you and April. What do you hope that you’re modeling for them?

Kyle Porter: That’s a really good question. I think values, first we say what’s important to us and then we operate in that way. So we talk about how I could still be running a company, but instead I’m doing this and it’s to be with you.

And so I think they know that and see that. And they also know about the journey and they know that I worked hard to achieve my dreams. And I mean, it kind of goes back to the beginning of the opening of this podcast. It’s all about love. It’s one thing to say, I love this, and it’s another to show that you love something.

And so. I’m just constantly operating from love with them, and I want them to know that that’s the most powerful thing in the entire world, and I think they do.

Ian Hathaway: I agree with that a hundred percent. One of the things we look for is how well do they treat other people when we’re not looking and. How much do they love themselves?

I feel like every terrible decision I made is because I wanted to fit in and I didn’t know who I was. [00:44:00] So I think that comes down to the same thing. Love for self and love for others. Speaking of love, I wanna shift gears a little bit and talk about Atlanta. Your home city. This show is really about outsiders.

People who don’t come from the standard kind of background or geographies, right? They’re not Silicon Valley pedigreed folks who have gone on to build great tech companies building SalesLoft, especially at the time that you started the company, was a very different experience than if you were building in the valley.

It’s always harder to raise. It’s always a little harder to hire. It’s harder to convince people. At the time you were going head to head with some really well funded competitors that were backed by some of the premier firms in in the Valley. What were the advantages and the disadvantages of building in Atlanta, and when you look at maybe some of your competitors, what gave you the conviction that SalesLoft could outlast all of them?

Kyle Porter: Atlanta has so many. Great [00:45:00] attributes that help companies to be successful. The airport can get us anywhere. We’ve got lots of Fortune 500 companies, lots of talent from the southeast graduates colleges, SEC and a CC schools. They move to Atlanta. The people are just amazing in general, you know that southern hospitality and you’ve got successful founders who have built great businesses who are pouring back into the next round of businesses.

So you have a lot of ingredients, right? Additionally, in my time, there was a surge of B2B marketing that was happening. You had silver pop, you had Pardot, you had MailChimp. And so there was this kind of B2B marketing energy that was in the city. And so for us to kind of take that one step and go B2B sales, that wasn’t a giant leap.

And I was very fortunate to get. Who I think today still are the two most successful founder, CEO investors, that had kind of gotten into the investor game in David Cummings and [00:46:00] Tom Noonan to get behind SalesLoft and to join the board and to be partners with me on the journey. And so we had incredible investors.

We had. The right scene in makeup and timing for B2B sales to happen. And then I think we could recruit really strongly. Now, when we got to 150 million a RR and we’re looking for a chief marketing officer, were there a lot of those in Atlanta? No, there were not. But early on there were those hungry, resilient, gritty, just want to be part of something special, awesome, smart people who could make it happen.

And I don’t think Atlanta has any shortage of that. So I think it helped more than it hurt. If I had been in Silicon Valley, I would’ve raised a bunch of money on Unreformed plan and I would’ve had to run in the direction that I had told them that I was gonna go, and I would’ve burned through a bunch of it.

And I feel like it was easier with the journey I had. It was, here’s the cash I’ve got, make some customers, generate some revenue, turn it into something we [00:47:00] don’t get the luxury of going to go get a $15 million seed round or something like that.

Ian Hathaway: That’s still true today. Most of the founders we’ve talked to have shared that same sentiment.

Some version of constraints breed creativity, and while the Valley has plenty of advantages, there can be a level of groupthink that can make things go sideways. Follow up question on Atlanta. You’ve been deeply involved from the beginning. You helping get Tech Village off the ground, you’re on the boards of Endeavor and the Georgia Tech Alumni Association.

How has. The Atlanta ecosystem evolved over these almost 15 years. Where does it need to grow? And I guess ultimately, how do you wanna be involved?

Kyle Porter: I think today that capital knows no boundaries. Like what you’re doing is a great example of this. And I think. Atlanta entrepreneurs realize that they may not be at the coffee shop with five other AI startups, but there’s nothing they can’t do.

And I think that’s really [00:48:00] awesome and you see some great founders. I mean, what tope has done with Calendly, what CABER has done with OneTrust, what Garrett has done with flock safety. I mean, these are breakout incredible businesses. And these guys are done building their companies, and they’re probably gonna pour back into the ecosystem when they are done.

I think we have a very, very bright future. Really smart people, incredible colleges, great attractions to pull. Residents from around the southeast and even further, and it’s gonna be nothing but great times in Atlanta. From a tech industry perspective, I wanna see south downtown Atlanta. This is an investment that one of my board members and primary investor David Cummings has done.

He bought 53 buildings in south downtown Atlanta, 11 contiguous city blocks. Is building a startup city in the heart of what was originally the place in Atlanta. I wanna see that thrive and flourish. I wanna be part of founders who are ready to take a leap and want someone along their side for [00:49:00] capital and mentorship and guidance.

That’s what I’m doing now, and so I think we’ve got a, a really cool future and I’m excited to be part of it.

Ian Hathaway: Sounds awesome. Love to come check it out sometime. Zooming out a little bit, when you think back to your journey as what might have been an improbable success, you’ve built an amazing company, you’ve been an integral member of your community.

You’re doing exciting things in very different domains. Founders out there listening who. Maybe don’t feel like they’re in the right ecosystem. They don’t have the right background. They’re not sure how to get started. What do you hope people take away

Kyle Porter: from your story? Everybody has something that makes them special and I want everybody to, to learn, to grow, to do, to become who they want to be.

And for me, it’s just like. Whoever you are out there, whatever you’re doing, make it your mission to do something that adds value to the world. And don’t stop, like don’t let anything stop you from doing it. It’s just [00:50:00] go, go, go, go, go. You can tweak along the way. I read a how Howard Mark’s quote the other day that I absolutely loved it was that it experience is what you got when you didn’t get what you wanted.

I absolutely love that. I’ve been saying that over and over again. And then we had this one, it was like the final proof of greatness lies in being able to. Take criticism without having resentment. And so I think put yourself around people who are gonna challenge you. They’re gonna criticize you in the right way.

I very fortunately, I had so many people that were a voice in my head on the SalesLoft journey, this other saying that was, I wanna learn faster than the rate of my own experience. And I guess that’s what I’ve been doing because I’ve just been surrounding myself with all these people, mentors, investors, friends, family, employees, like so many of the team members of SalesLoft would push and challenge me and argue with me.

And it was great. You know? I mean, it was awesome. And I think that if you can [00:51:00] constantly take positive criticism from yourself and from others and do the right thing with it, that you can just be unstoppable. Couldn’t agree more

Ian Hathaway: like we’re. Almost outta time. But here on Outsider Inc. We like to finish with a little segment called Beyond the Bio.

Step away from your resume a little bit and let us get to know you. Sound good? Sure. All right, let’s do it. What’s a quick piece of advice from a mentor that stuck with you throughout your journey?

Kyle Porter: I’m not gonna go mentor in this one. I’m gonna go book. There was this Tony Hawk autobiography and he said, once you’ve achieved proficiency, take your specialty to a level that fellow specialists can appreciate.

Innovate. Like that’s what will set you apart when you become a pioneer of pioneers. And to me, when I read that, I was like, I got it. That’s why Tony Hawk did the 900. I just wanna keep going and keep going and keep going and never kind of be satisfied that I’ve like reached the level of what I wanna to achieve while I was at SalesLoft

Ian Hathaway: and now

Kyle Porter: as

Ian Hathaway: well.

That’s amazing. I haven’t heard that one. Who’s an unsung hero in [00:52:00] your life and what has been the impact they’ve had on you?

Kyle Porter: Man, I like to sing about my heroes, so there’s lots that have been sung. There are three gentlemen that are more senior than me that were mentors on the SalesLoft journey, Charlie Pelli, rusty Gordon, and Bob Lewis.

All three of these guys have been entrepreneurs, corporate America. They’re probably my father’s generation, and they’ve seen so much and they challenged me. I remember I was saying something and I was making excuse for something and Bob goes, wow, that is one juicy rationalization. And I was like. He’s right.

I’m over here making excuse and I’m making it so good. It sounds so good. This excuse. And he is like, that is juicy. So I think those guys, they’re the unsung heroes of the SalesLoft journey, and I put my dad in that category as well. My dad is the unconditional love guy. My dad and my sister are like. The closest examples to the Walk of Christ that I’ve seen in, in the real [00:53:00] world.

They just love, love, love, love, love. Never stop. And sometimes they get walked all over, you know? And it’s sad to see that, but they don’t care. They just keep doing it and it’s really cool. That’s probably the greatest gift a father could give.

Ian Hathaway: Yeah. Who’s someone in the Atlanta startup community who doesn’t get enough credit and deserves a shout out?

Kyle Porter: Oh, man. Well, I mentioned to Kabir and Garrett, they all get, get shout outs. I think John Birdsong and what he’s doing is the CEO of South downtown Atlanta. Definitely shout outs Philip Lewis and what he’s doing with Fulcrum Equity. Really, really awesome. So I think those are some of the guys that you definitely need to pay attention to.

Ian Hathaway: Tell us something most people don’t know about you. Something outside of work could be a hobby, favorite travel spot, a guilty pleasure, or maybe even a hidden talent.

Kyle Porter: I’m probably logging three days a week on the dirt bike. With my 3-year-old sitting on the dirt bike with me right now, Abby wants to go fast and she wants to go bumpy, so I put her a little [00:54:00] helmet on.

I sit her on the front of the bike and we just roll out on the farm. Probably doing that three times a week. Fast

Ian Hathaway: and bumpy. Well, I think we know who’s gonna be the entrepreneur, uh, in the family. Next, what are one or two songs you’d like to add to our Spotify founders’ Playlist? Something that fuels your workday or has

Kyle Porter: inspired your journey.

I’m gonna add one from each kid actually. So Brooklyn is listening to Bailey Zimmerman, new to country. So we haven’t been to a Bailey Zimmerman concert yet, but I’m going to, by the way, one recommendation I have, I have a commitment with each of my kids to do one thing that they love annually each year.

So me and my daughter have committed for the rest of our lives that we’re gonna go to a concert every year together. Oh wow. And me and my son have agreed that we’re gonna go to every baseball stadium in America. And so yeah, I’ve got Bailey Zimmerman on the to doula, so that’s Brooklyn’s, and then the Ozzy Osborne song, A Crazy Train that is my son’s baseball walkout song.

And so those will be the two that I’ll put on. Uh, I love that.

Ian Hathaway: It’s [00:55:00] amazing. Well, you already mentioned one book by Tony Hawk, but any other books that were valuable for you on your journey or that you think a first time founder should read as they’re getting going?

Kyle Porter: The Advantage by Patrick Lencioni is the closest thing to a playbook that we used at the company.

It’s incredible. I think if you just ran a business from that one book, you could do well without reading another book. Now we didn’t do that. We read every book we possibly could, but that was the best. Danny Meyer. Setting the table is fascinating. I mean, it’s just, it’s so good. You could teach someone to set the table well, but you can’t teach someone to want to set the table.

Well, I remember that one. And then How to Win Friends and Influence Others. Dale Carnegie. Everyone should just read that like every other year. ‘cause when I read it again. I go, oh, I knew all these things. Oh, I didn’t do this thing today. Why not? Okay, I need to read it again.

Ian Hathaway: Last question. If you could give one piece of advice to someone who’s about to start their founder’s journey, particularly [00:56:00] someone who’s a bit of an

Kyle Porter: outsider, what would it be?

I would actually recommend the Man’s Search for Meaning Vitor Frankl story. Here you have someone who has been in concentration camps, beaten, pulled, naked, afraid. And Viktor Frankl comes to the conclusion that while there’s things in his life that he cannot change at all, which is what happens to him, he has complete control over how he responds to that moment.

I think that’s the most empowering thing in the world, that everything can be taken from us, but the last of our human freedoms to choose our attitude in any given set of circumstances. We choose our own way, and I think that if he can do it, then anybody can.

Ian Hathaway: I love that book. Kyle couldn’t think of a better way to end.

Thank you so much for sharing your time, your wisdom. I can’t wait to share this episode with our listeners. Awesome.

Kyle Porter: Thanks for having me.

Ian Hathaway: That’s a wrap for today’s episode of Outsider [00:57:00] Inc. A big thanks to Kyle Porter, not only for the SalesLoft story, but for the clarity behind it. Lead with love wasn’t just a slogan, but a hard filter, clear conscious living and purposing his talent into the service of others to find SalesLoft’s culture and guided his toughest calls.

The Vista Chapter reinforces simple truth, anchor identity to the mission, not the title. The blueprint. Define why you exist. Let values guide, strategy, and keep obsession aimed at the customer. There’s no doubt that Atlanta’s ecosystem is stronger because of Kyle’s example. If you want more from outsider, Inc.

Don’t forget to subscribe to the platform@outsiderinc.substack.com. It’s packed with highlights from today’s episode and bonus insights you won’t wanna miss. You can follow Outsider Inc on YouTube, Instagram, TikTok, and LinkedIn at Outsider Inc. Pod. You can also follow me on X at Ian Hathaway [00:58:00] Outsider Inc.

Is produced by Spell Binder Media. We’ll be back soon with another fascinating outsider conversation. Until then, thank you so much for listening, and remember, great entrepreneurs can come from anywhere. See you next time.

Listen on: Spotify, Apple Podcasts, Amazon Music

In this episode of Outsider Inc., host Ian Hathaway interviews Isaac Saldana, the co-founder and former CEO of SendGrid, and current CEO of Joy Labs. Isaac discusses the interplay of humility and confidence in leadership and shares his unconventional path to success. From being a non-English-speaking teenager who managed a family and two jobs at 19, to raising significant capital and guiding SendGrid to an IPO and a $2 billion acquisition by Twilio, Isaac reflects on the pivotal moments and decisions that shaped his career. He highlights the importance of grit, mentorship, and a values-driven approach to leadership. Isaac also touches on his current venture, Laneful, and the future of email communication infrastructure powered by AI.

Show Notes:

(10:42) The Entrepreneurial Spark: Rich Dad, Poor Dad

(14:21) The Birth of SendGrid: Solving Email Deliverability

(19:21) Navigating Early Success and Challenges

(23:33) A Pivotal Decision: Replacing Himself as CEO

(27:10) Scaling SendGrid to IPO

(30:41) Post-SendGrid: The Birth of Joy Labs

(32:40) Lane Four: Revolutionizing Email with AI

(35:34) Leadership and Values in Entrepreneurship

(42:42) Balancing Family and Ambition

(47:20) Beyond the Bio with Isaac Saldana

✅ Host: Ian Hathway - Co-Founder & Managing Partner, FOVC

✅ Guest: Isaac Saldana, Co-Founder & fmr CEO of SendGrid

Produced by Spellbinder Media. Executive Produced by Bridge Five Ventures. Copyright ©️2025, Bridge Five Ventures, LLC, All rights reserved.

Listen & subscribe wherever you get your podcasts or at outsiderinc.substack.com.

AI-Generated Transcript

Isaac Saldana: [00:00:00] I think humility and confidence, they compliment each other very, very nicely. Somehow someone else needs to know that, you know, whatever you’re talking about. But humility helps you make that even stronger by saying, I don’t know, but I’m gonna learn some experiments and I’m gonna figure it out. Or I’m gonna figure out that it’s not doable and that we can’t do it, and so that on itself even creates more confidence.

Ian Hathaway: Welcome to another episode of Outsider Inc. I’m your host, Ian Hathaway. Today’s guest is Isaac Saldana, co-founder and former CEO of SendGrid, and now founder and CEO of Joy Labs. Srid, which Isaac began in Southern California in 2008, but more formally launched out of Techstars Boulder in 2009, grew into one of Colorado’s great startup success stories, powering email for companies like Uber, Spotify, and Airbnb.

The company scaled to hundreds of employees, sending tens of [00:01:00] billions of emails each month going public on the New York Stock Exchange in 2017 before ultimately selling to Twilio in a $2 billion acquisition. Isaac’s path to that moment was anything but conventional. Born in the US and raised in Mexico.

He returned to California at age 14 without knowing English. By 19, he was married with a family, working two jobs and putting himself through school full-time. His journey wasn’t driven by pedigree or privilege, but by grit, persistence, and a willingness to learn what he didn’t know. Since Ingrid Isaac has continued to build, he co-founded Joy Labs, experimented with new ventures in the communications domain like Memo, and today is back in the arena with Lane Full, an AI powered messaging platform designed to reinvent how email and communication infrastructure work at scale.

I’m excited to dig into how an introverted engineer grew into a public company founder, what he learned from the highs of an IPO, how the Colorado startup community shaped his [00:02:00] journey to success and what he’s aiming to build Next, Isaac Saldana. Welcome to Outsider, Inc.

Isaac Saldana: Thank you, Ian, for the invitation.

I’m happy to be here.

Ian Hathaway: Thank you so much for being here, Isaac, it’s, it’s a real treat to have you here with us. I’ve been following your story for years, so this is a lot of fun for me. I’d like to begin with something that struck me as I learned more about you and your story. You’ve described that the biggest engineering problem you faced was not a technical one, but instead the personal transformation from being this introverted engineer to stepping into the role of A CEO.

Many founders out there can relate to that tension. They’re great at building product, feel, comfortable writing code, but are far less comfortable being the public face of a company or even managing people. So for some it’s. So much of attention that it, it prevents them from actually stepping into the role of founder et all.

I’d love to hear [00:03:00] your perspective on that challenge more broadly, what do you see as the biggest hurdles for technical introverts to cross that chasm and thrive as founders and CEOs?

Isaac Saldana: The, the biggest transition for me was to, to go from this technical person. I work from home all the time. I feel way more comfortable with English now than Spanish, but at that time I felt way more comfortable with Spanish.

And so you have this introvert person that also has. Limitations on the language and it’s just in my charter. For example, I couldn’t pronounce the word deliverability, and so that’s kinda what we sold at at SendGrid. It’s like email deliverability and I just was in front of the mayor saying that it word for about one month every day, multiple times per day, until it just somehow was able to pronounce it.

At that time I was working from home and so I didn’t talk to people too much. It was just straight technical for years working from home. And then suddenly you have something that works and you have to [00:04:00] sell it. And it was so hard making that transition. When I went to Techstars, it hit me that someone had to do the selling.

Like I felt very comfortable doing the technical things. There were three technical co-founders and in total, and I was the one that had to do the selling and. I just had an option. Now, if I would’ve had the option, I wouldn’t have done it. We launched in August, 2009. In November, a few months later, I was completely out of money, and that was the first time I had to borrow money to pay rent.

That tells you how much I had to sell it. I had no option otherwise. I was not gonna pay rent. And at that time, I had two kids and I was married, and that was the motivation for me to start learning. Now I still stutter a lot. It’s somewhat challenging to express myself, but when there is passion on what [00:05:00] you do.

It somehow magically comes out for the founders that are struggling to do this, I took a training called Decker. They have two exercises. One exercise they tell you to talk about the stuff that you like. So technology and, and they video you. And they did that to me and I’m like very passionate about like all this email stuff and, and it comes across very nicely.

But then they give you this random topic. To talk about and oh my gosh, I struggled so bad. I started stuttering. I started moving I, and so there are some things that over time with some practice you can control. I just wanna acknowledge how hard it is.

Ian Hathaway: I get that, and hopefully most founders don’t have that pressure of literally, we’re out of money and I have mouths to feed.

But that’s good advice. I think in general, that’s just what it takes to be a leader, is leaning into those areas of weakness and [00:06:00] just practicing and doing it until it feels like second nature. You touched on a number of things that I definitely wanna dive into in a moment. But I’d like to go back to the very beginning if we could.

As I mentioned before, you were born in the US to a working class family around age five. You moved to Mexico and then returned to Southern California at age 14, and you didn’t really speak English very well at that time. By age 19, you were already married, you started a family, you were working two jobs and putting yourself through school full-time.

That’s nowhere near what a typical tech founder is facing in terms of the challenges. I think it certainly earns you this outsider badge that we’re focused on, but more specifically, that’s just a lot more responsibility to carry than most college students will. Could you take us back to that time having so much of that on your plate?

How do you feel like that shaped your mindset, both as a person and as someone [00:07:00] who would become an entrepreneur? I think it influenced

Isaac Saldana: quite a bit. I was gonna school full-time. I had two jobs, had to be a dad and a husband and a family. And for the people that are married and have kids, they understand how hard it is to run a family.

I know it brings a lot of happiness, but ultimately it’s still very hard and it just doesn’t get easy. There’s no economies of scale. And so what I traded at that time is health and sleep. And so I, I did not sleep too well. I was 180 pounds. I’m five six, and so 180 pounds, it, it’s not good. And so I traded that for time.

And so I had to get it from somewhere, and that was like, eat whatever you can as fast as possible and try not to sleep. And so what that did to me is that when it was time to do a startup, it was more like, oh. I got this. It’s not as hard as when I was 19. That time when I was in college. It [00:08:00] just gave me so much work ethic that now it just feels that it’s much easier compared to that time.

Ian Hathaway: Speaking of challenges, at that time, I know you were sort of figuring out what you were interested in. A high school counselor. Suggested that you study computer science because you liked math, and that was something that was offered at uc, Riverside, but you found it challenging. It was difficult to perform in some of those classes, but it, it sparked a genuine passion for you in coding.

How do you feel like that? Experience affected your sense of identity from being a kid who was just growing up and trying to get through life. A lot of responsibility to someone who found this joy in building something that was difficult.

Isaac Saldana: I went to a counselor in high school and she mentioned to me that, well, you’re good in math, so you should go into engineering.

I’m like, okay, well what kind of engineering? And I think she mentioned like, oh, [00:09:00] computers are like this new thing. This is 1997. I did not apply to many universities because the time that I was at Mexico, if you go to a university, then that’s a big win for everyone. Now I did not realize like the reputation associated with universities here in the us So I applied to the closest university that that was uc, Riverside.

Uc. Riverside at that time did not have a computer engineering degree, and so I just chose something that had computer and it was computer science. The first quarter I got a B minus in the first computer science class, and that made me realize. How much I didn’t know about computer science and how to think that way, and for me, getting a B minus, it was like this big shock.

I was getting very good grades in in high school, and so that was the trigger point for me to go to the library, specifically Palm Desert Library. They did not have many programming books, so I just picked anything. It was like basic, and I started [00:10:00] developing whatever I could. And so the following quarter, I got the highest grade on on that class because I was in a mission to start learning this thing.

I feel so lucky and grateful. It just happened randomly by luck that I picked computer science and I just became very good at it. And not only that, but I also got a job at uc Riverside. By the time I graduated, I already had way more experience than my peers, so that gave me some sense of humility because I cannot say I was very smart to design this.

Ian Hathaway: I feel like when we’re living in alignment, the right things have a way of finding us. I know you were sort of on the path to graduating. Sticking with a stable job, but a friend of yours actually gave you a copy of an important book that really changed your life. Rich Dad, poor Dad. It shifted how you thought about your future and what you wanted to build for yourself.

[00:11:00] What was it about that book that connected with you so deeply and led to your entrepreneurial spark?

Isaac Saldana: My friend that recommended that book, his name is Elmer Thomas, and at that time it was my senior year, I was getting ready to explore what was next, and so I read that book and I just realized that I had never thought that way.

It was always about finding a secure job and the highest paying job you could find. I realized that there was this new thing that I should consider, and that was essentially building wealth and creating businesses and investing in real estate and stocks. I didn’t do any of that, but I did focus on creating businesses, and so the day after.

I finished reading that book. I got together with Elmer Thomas, and we started creating our corporation to create businesses specifically in the tech industry, and that was the beginning of my entrepreneurial career.

Ian Hathaway: We’ll get to SendGrid [00:12:00] in a minute. Massive success, but along the way, there were some non successes, right?

I think one was a website generator and something was like a services marketplace similar to Thumbtack. You had some success in those. Ultimately, they didn’t work out, but I guess just. In those early entrepreneurial experiences, what did you learn from them and how do you feel like those experiences shaped how you were going to be a better entrepreneur the next time?

Isaac Saldana: The first business was this website generator that. It’s similar to WordPress at this point in tech. At that point, websites cost about a thousand dollars per page for a person to do this static HDML page. And so the average number of pages was five for a business, and so they would pay about $5,000. We thought we could create software to generate those, and half the customers essentially customize their own websites and then just pay us 10 bucks.

Per month. But at that time, we didn’t know how to [00:13:00] market it, and we thought that if we had more resources, we were gonna be able to advertise the business better. We could never get funding. And so we closed the business. And so the next business we created was the one similar to Thumbtack, where we wanted to connect.

Service providers with people looking for those services and bid for the best price. And the customer, which is based on price and ratings of of the service provider, who to pick. We raised a million bucks and we try to spend it a lot on marketing, but we sometimes sponsor conferences at car shows and like these weird things, we bought ads on newspapers and so like by now don’t make sense.

I still think that both were very good ideas and they were pre Thumbtack, pre WordPress. I didn’t know what. I needed at that time, and so when I found out about Techstars, I realized that [00:14:00] it was a mentorship driven program, and I’m like, oh, that’s probably what I need. In addition to the team, the the, the idea and resources, I need someone that can help me ask the questions that I don’t even know to ask, and I think it worked.

Ian Hathaway: Techstars was, especially at that time, solving this huge gap in, in knowledge. Shifting gears to SendGrid. I know you began writing the first lines of code in late 2008. You were still in Southern California, starting the company near Palm Springs. You mentioned you had two co-founders who were both technical, Tim and Jose.

I know that you participated in Techstars the following summer in Boulder, ultimately moving the company there. Before we get into that whole experience, what were those early days like? Maybe these are all connected, the beginning days in 2008 and Techstars culminating in what actually SendGrid really was.

But what was the problem you discovered? Why did you care so much about it? [00:15:00] How did you kind of get going with your co-founders and with this decision to go to, ultimately to Colorado?

Isaac Saldana: These startups that I did, I faced the problem of email deliverability, and that was when someone would come into our website, they would sign up and we needed to send an email confirmation to just verify they own the email address.

And these emails were letting me on the stamp folder as CTO. I’d have to solve those problems. The more I looked into solutions, I could only find. Email marketing solutions, and these email marketing solutions were very, very expensive. I became passionate about that problem. I started writing things for the email server to solve these problems, and the solutions that I developed were terrible and they didn’t work.

And because of that, it just made me. More attracted to the problems. And so I reached out to the co-founders and they were interested in, in [00:16:00] continuing, and once we had the team, it was time to apply to Techstars.

Ian Hathaway: You got into Techstars. Why do you think they took you and what was that experience like?

Isaac Saldana: I remember.

Meeting David Cohen at at the LAX and I don’t think he was too impressed. I was like this person that had no experience talking about business people. Luckily David was technical and so we could communicate in technical terms, but like I think he probably realized right away all the things that I needed help with in that conversation.

So we got in and we named the company S-M-T-P-A-P-I, and. I’m still this technical person. I have this opportunity to create a company. I wanted to create this massive company, like I wanna build a whole platform on top of email. One thing that we realized during Techstars was that this massive platform known is gonna be able to [00:17:00] understand, and we decided to focus on only a single problem.

That even started this idea of a platform, and that was email deliverability. And to our surprise, that was a massive problem. I thought it was just we were gonna be able to make $10,000 a month and then we’ll be set. But it just happened that at that time the cloud was growing. This is 2009. In 2006, Amazon had launched Amazon EC2 and and SQS, and the cloud was beginning to take shape.

And with those resources, there were a lot of spams taking advantage of that. And so because there were a lot of spammers then that created problems for the legitimate centers. That’s a problem that we started solving. And so initially they helped us just focus on that problem and figuring out pricing.

The text experience for us was that we were connected to mentors. They don’t have a template for every team. [00:18:00] Each team is different, and so if you don’t have a technical team, you may connect with technical mentors, or if you have a a strong technical team, you can connect with non-technical mentors. And so we ended up connecting with non-technical mentors because that’s kinda where we needed the most self focus.

Marketing, positioning and pricing was one of the things that Techstars helped us tremendously with. Some of the advice was to start very high because marketing companies charge like probably like 10 times, 20 times more than our pricing. And so the argument was, Hey, you should be able to charge more and we could charge more.

It just didn’t feel right. It still gave us room to put our own spin to the advice, and so we decided to adopt certain prices and somehow they’re the standard now. They’re still the standard.

Ian Hathaway: You hit on a lot of things that are really good about. Mentorship accelerator, however it comes. A lot of times founders don’t realize how important it [00:19:00] is to have that narrow focus in the beginning.

Pricing is more art than science, so always feel like the best way is to talk to folks who have seen more of it, but then ultimately there isn’t one answer. So you’ve just gotta experiment and iterate in the market. Obviously you ended up landing on something that was a really painful and really big problem.

Right after demo day, you raised 750 k in seed funding. The company was out of money. You ended at that before you needed to sell Then. Things kind of flip to this situation of abundance. You had an unsolicited acquisition offer for millions of dollars. Term sheet comes in for $5 million. Series A led by Foundry, this elite firm.

That’s an extraordinary swing of events, right from being in the LAX airport, feeling like you’re not making sense to getting into Techstars, to tapping into this problem, almost running outta money, then being. [00:20:00] Very adequately capitalized. Take us back to that period where you’re navigating these choices about, should I sell the company now?

Should I take this term sheet and go for the Moon and Stars? What was that like for you? I’m gonna

Isaac Saldana: tell a story that happened in November to provide context in the previous businesses that I created. I was on the hook for this loan. I was banking with Wells Fargo. So they called me on November and say, Hey, we need to work out a payment plan for this loan since you closed this business.

I think it was like 300 bucks a month. That was kind of the agreement We raised money. In November and I called my wife and said, Hey, yes, you could actually now go to the store and pay rent because I got my first paycheck after we raised the 750. I deposited the, the check and Wells Fargo decides to take the whole check.

They forgot about the payment plan, and that’s why I had to borrow money in November. I mean, I had nothing. I remember one of the investors, I told him the story and I [00:21:00] was in Boulder at that time, and he let me use 20 bucks to put gas in my car to go back home. I eventually paid the loan by March. We get this unsolicited term sheet from Foundry.

After that was known, a company gave us also an unsolicited acquisition offer, going from zero and having to borrow money. To being able to be a millionaire in four months. It’s crazy. I still remember the help from the board at that time. Mark Soland and, and David Cohen were on the board and I remember Mark telling me, Hey Isaac, we’ll support you guys.

We. The probability that you would get acquisition offers in the future? Is I getting that? You’re already getting acquisition offers? He gave me a lot of advice, but I still remember just that piece of advice because that was what I. Changed my mind. I’m like, yeah, we’re on a mission. This thing is probably bigger than us at this [00:22:00] point, and I’m still passionate about emails, and so that helped me pass on being a millionaire and take the funding route.

And so we took the term sheet and went back at it again.

Ian Hathaway: What was it about what he said that made you want to keep going?

Isaac Saldana: I felt that they actually wanted what’s best for me. I used to end emails with like, thanks in advance, I, I would do the, the d the past tense when I would say thank you, and then David would correct me and it’s like, Hey, Isaac, you, you say it this way.

And it’s very easy to not say things and it’s harder to say the right things. And so it just gave me more confidence as an entrepreneur and founder. We always question ourselves. Even till this day, I kind of question the stuff that I’m doing, and so sometimes you need those fears that will tell you when to start, when to stop, and when to continue going.

And so I felt that from the board [00:23:00] and I was right.

Ian Hathaway: You touched on so many important things there. Surrounding yourself with people who do have your best interests at heart, people who you trust, but then ultimately trusting yourself to make that right decision. It goes without saying that all of you were right with that decision, so well done.

Speaking of making difficult decisions, you’re off and running, kept the company going, raised the series A. In between the series A and the series B, you made another pivotal decision, which was to replace yourself as CEO. You brought in Jim Franklin, a local entrepreneur in Colorado, not a super common step for a series A CEO to make willingly.

What led you to that decision?

Isaac Saldana: When we started? We raised our seed round from Highway 12. One of the things that I told the board is that obviously they didn’t have experience, and so I was looking for a COO to help me run the business. I started recruiting for CEOs [00:24:00] very, very early on, but imagine going to a very experienced COO candidate.

Saying, Hey, awesome COO candidate work for me. I don’t have anything to to teach you. You’re just gonna teach me and hopefully we’ll make it. And so I was in like this very inspiring CEO or founder, so I could never recruit a COO for like a year and a half. At the end of 2010, we, we got together with the board and we decided that it was best to swap the title from COO to CEO.

And then after that I started getting amazing candidates willing to lead Ingrid. And so what was great about that recruitment process is that these candidates were open to working with me for months. For NA intern just to get a shot at running Ingrid. And so I worked with Jim months prior and then I would invite him to like meetings and stuff [00:25:00] like that.

And then by March, 2011, that’s kind of when we made the decision. Yeah, Jim is the person and. Jim, even before joining Ingrid, he’s like, Hey, I want to join a company that had these four values and there were the four Hs. And these four Hs became the SendGrid values. Happy, humble, hungry, and honest. Before Jim joined, we had 10 values and I don’t even remember most of them, and so immediately I started learning from Jim.

For me, it was more like, I can have someone grow this thing that I have a lot of invested interest in, and I get to learn from awesome people. It’s like, sign me up.

Ian Hathaway: Well, it’s an incredible insight. It’s a very rare level of humility in a founder to think that way. It sounds like by the time you actually made the move, it was a pretty easy one for you because you had had the opportunity to work with Jim.

What would you say [00:26:00] was the impact of that decision? How did Jim. Over the course of the company. How did he change Ingrid?

Isaac Saldana: Well, I think by that time we were growing fast and we had still the $5 million that we had raised, and this is like a year later, I think we were cashflow positive or very close to that, so we weren’t spending that much money as CEOI was very, very uncomfortable spending money.

Very uncomfortable. So I was preventing the company from growing. Like me sponsoring the conference was tough. It’s like, Hey, you have to pay $10,000 here. It’s like, oh, it just took me so much to make, $10,000. And we were accelerating growth too. So like helping to set up the culture was like one of the biggest things that Jim did.

And so even before I start a company now, the first thing I do, I, it’s set up the values because I know. All much different inmates. People tell me that Ingrid has been one of the best places they’ve ever worked, and I think a lot of it has been attributed to the [00:27:00] foundation that Jim set up.

Ian Hathaway: Wow, that’s an incredible testament.

Ultimately, these are people businesses, right? And so in order to scale the business, you gotta scale the people. You hinted at how fast the company was growing. You caught lightning in a bottle. It was one of those businesses, and you laid the infrastructure. For it to grow sustainably. Within a few years, you’d grown into hundreds of employees, billions of emails sent every month.

By 2017, the company went public on the New York Stock Exchange. Very few founders. Ever get to ring that bell? Can you take us back to that moment? What did that feel like? What did that mean to you personally to see this idea of yours? S-M-T-P-A-P-I make it all the way to an IPO and ringing that bell.

Isaac Saldana: So one of the things that we did is that we took all the employees that had been with us for five years or [00:28:00] more, between 50 and a hundred.

And so once we rang that bell, I was able to look down and see these people and I’m like, they believed in the dream. And this is the ritual for that dream to convert into something. Material, and that was so special. There were these people that, despite their personal challenges, they showed up and that was what I remember the most is it’s ringing that bell, everyone cheering and just knowing that dream turned into something material that was very, very special.

Ian Hathaway: It sounds like it meant a lot to you, that it meant a lot to so many people. Of course, company went public in 2017. I know you stepped away the next year. Then less than a year after that, Twilio came in, acquired the company for $2 billion, which is also an amazing step up from the IPO that had happened in a short time before.[00:29:00]

It’s an incredible sort of conclusion to the SendGrid story, which was one of the defining stories. Of Colorado’s now booming startup scene. It’s one of the few companies that has gone public since@leastthe.com era. You’ve been very vocal and supportive of both the Techstars and the Boulder Denver startup community and how they contributed to your success.

What do you think makes the ecosystem in Colorado so distinct? And what have you taken from that and carried forward in your current work?

Isaac Saldana: I moved to Colorado for Sangre in 2009. I mean, I was so close to Techstars that to me, I associate Colorado with Techstars and. At some point we could not hire fast enough in Boulder and we moved to Denver and I think we just kind of started blending with the whole ecosystem.

And so that’s kind of when I started seeing that Colorado wasn’t just Techstars, it was actually the [00:30:00] community just coming together. It was just people meeting with each other, trying to help each other, and also willing to provide mentorship and, and I think that’s something that I see a lot in Colorado, and that’s the give first mentality.

You just help. Not expecting anything in return, and somehow after some time it just comes back two x 10 x 20 x. It’s not very specific when it comes back, but it always comes back. And so I will define the Colorado ecosystem as that.

Ian Hathaway: I believe the startup community reflects the broader community. In Colorado, people are generally helpful and open and have a love of place, which is really what’s required.

So shifting gears post SendGrid. I know you didn’t write off into the sunset, you rolled up your sleeves and were ready for your next challenge. You created an innovation platform called Joy Labs with the notion of launching new companies in the communications infrastructure domain. [00:31:00] So tell us a little bit about that.

Leaving the company that you spent a decade building and then diving right into building new ones,

Isaac Saldana: join labs. Was essentially this company that would help entrepreneurs create other companies and, and I didn’t know what that was called, but after working with Techstars, I knew it was called the Start Studio.

And so that’s kind of what I wanted to do. I wanted to help entrepreneurs. I wanted to do some investing and just kind of explore what was next for me. So I did that for a few years. I realized that I’m a terrible investor, and so I don’t invest anymore. It’s so hard. I thought it was just like, just give money to people and things will come back.

And I mean, it’s, it’s not as easy as that. And so I, I have huge respect and admiration for the VCs and investors that know how to do it right. I’m not one of those. And so in doing so and helping a few entrepreneurs, I, I ran into an idea that I fell in love with and, and that was a memo, memo I, we developed for about.

Three years and we never launched. I just never liked the solution [00:32:00] to the problem. I’ll I, part of coming back to the problem at some point, but I feel that the world is very well physically connected, not logically. And so at some point I want to come back and solve that problem. In developing this problem, I started exploring email again and I’m like, oh my gosh.

Email has not changed since Ingrid, and it’s like more than 15 years. And industry’s just still using concepts that I introduced a long time ago. And now with ai, there’s more resources to change how email works. And so I launched a company called Lane Four. And so Lane four offers. Communication lanes that are monitored by AI agents.

So they’ll tell you if there’s some issue with that lane and how to solve it. And so the first lane type that we introduce is email, because I know email quite a bit. And so right now [00:33:00] you have email deliverability agents, uh, you have to pay like 70 KA year for someone to do that. And so now you get for free.

And then the cost of sending email, I’m planning on running at two zero right now. It’s like. Some people have say 60 times the amount that they pay existing, some that pay millions to these platforms, they have saved over 50%. And so my plan is for that. Not to have too much of a business on sending email, but actually making email better.

I hate email and I think most people hate it, but we still use it ‘cause we need it. And so I’m planning on introducing new technology on top of email so that, so it doesn’t suck that much. We focus a lot on the ROI of this email deliverability thing, but a, a big learning experience in my time at Ingrid was that I wish I would’ve convinced a company to allocate resources.

To make email better, we were just focusing on the email deliverability aspect. We never focused on making email better. [00:34:00] Unlike companies like Google for example, they have been the catalyst to introduce HTP two and then Htcp three and the Chrome browser, and, and then at some point they became standards.

I wish I would’ve done more of that. And so now. I’m on a mission to do that this time. Was ful awesome.

Ian Hathaway: How’s it going? Where are you on that journey?

Isaac Saldana: We just launched last month, so we’re just brand new and we are doing very, very well. We’re still integrating big partners and so that takes time, but at least some partners are open to saving millions of dollars and so that in itself feels very good just to be able to provide more cash to businesses so they can do more investment on AI or whatever they wanna invest or extract.

Profits from their business. That’s very rewarding. And so I think we’re just gonna focus on that for the next year or so. But in the meantime, expect some net new technology from us on top of email that will make email much better. It’s not hard to. [00:35:00] Know what email needs if you compare it with other communication platforms.

And so this is kind of what we’re trying to do. Bring the good things from other communication platforms on top of the email and still keep the, the awesome things that email has, like being completely decentralized and distributed and so anyone can have their own version and stuff like that. I think that’s a good thing for email and I realized that it, it’s not going away.

I thought that by the time I came back it was gonna go away and now it’s like as strong as ever. So.

Ian Hathaway: It’s amazing. These problems that have been fixed for years are still not fully fixed and so plenty of opportunity. Just kind of closing note on you as the CEO, how would you compare where you are today on the journey, having had the benefit of being at Syngrid now as the CEO of Lane Full?

What do you think you’re better at this time around?

Isaac Saldana: I

Ian Hathaway: think

Isaac Saldana: I’m much better at projecting confidence. I’ve been talking to some companies and I feel very confident telling them the likelihood that your team is gonna be able to do it better than me is [00:36:00] very low. And so for me, saying that when I started was so hard because humility is one of our values.

But I think it’s important to recognize that confidence and humility, you need to learn how to manage that. And so I feel very confident now it may not happen. From the stuff that I developed, but I know that I will create some trigger points for people to start looking into making email better, and I know it will happen.

This is the difference. Whereas before I was hoping that it would work. Now I’m like, okay, I’m just patient enough, but it has to work. I just don’t know how long it’s gonna take because changes. Involve people and then people need time to know or realize when something’s better. But I’m prepared for that.

Now,

Ian Hathaway: this is a really important point about confidence. You have humility, but the truth is you can do it better than that customer you were talking about. So if you don’t share it in that way, you’re not actually helping the customer. Are you more confident because you’ve had that success? And [00:37:00] for founders who maybe haven’t had success, what might be some tips for them?

To just break through being overly humble, we, we know that there’s plenty of people who are overly confident in this industry, but enough attention doesn’t get paid to people who are actually under confident, that are very competent, that do understand, but they feel like they’ve never been in that position of having to project that strength.

What might be some tips that you would suggest for people. Who don’t have the success of an IPO to stand on when they’re in these boardrooms and, and having these discussions with customers.

Isaac Saldana: I think humility and confidence, they compliment each other very, very nicely. Somehow someone else needs to know that, you know, whatever you’re talking about.

But humility helps you. Make that even stronger by saying, I don’t know, but I’m gonna learn some experiments and I’m gonna figure it out, or I’m gonna figure out that it’s not doable and that we can’t do it. And so that on itself even creates more confidence. There [00:38:00] are many things on email that I, I may not know, but I’m very transparent and that helps me.

And I’m like, I create even more trust with the customers. And so it’s very important to let them know what you know and what you don’t know and what you don’t know. Explain how you’re gonna figure it out. It comes down to trust when someone’s giving you money. And so it’s not different than when you’re talking to customers.

It’s like you have to sometimes talk about your motivations. Why are you doing this? Your skills, your intent. That’s important. When founders talk, you have to let them know what you know and what you don’t know.

Ian Hathaway: Sticking with this thread of leadership. You’ve talked about your leadership as not one of promoting yourself, but really about promoting ideas and promoting your company.

And when the answers aren’t obvious, you don’t know what to do that you. We’ll lean into your values. When you talk with founders today, what do you emphasize as the overlooked qualities of leadership?

Isaac Saldana: I think everyone has to develop their [00:39:00] own style, and I think a fundamental thing for anyone is their values, and once you set up your values.

Everyone can measure anyone in that company or like compare their behavior to those values. They’re, uh, essentially a compass to your direction and sometimes, many times you don’t know when you’re faced with something that is not right or wrong, or you don’t know if it’s gonna be right or wrong. If you go to your values and your values actually help you make decisions for founders that have not set up their values, I strongly recommend that I learned it from Jim and for me, it’s the first thing that I do when I create companies.

Those values will also shape the kind of leader that you are, and at some point there is strategy of execution. So you have the strategy of the company, but then also how are you gonna execute against that vision? And on those, then your values also help with that.

Ian Hathaway: You know, you said earlier that. You didn’t feel like you were a good investor, but a big part [00:40:00] of early investing is about identifying founders who not just have talent.

Or an insight, but have the mental fortitude to build a company who have that grit and determination. You’ve experienced a lot of highs and lows, right? From scaling to an IPO, shutting down companies and managing a lot while having a family at a very young age. What do you think separates. Those founders who are anti-fragile, I guess is the term they grow stronger through setbacks versus those who might be derailed easily and maybe what have you learned about balancing ambition on the one hand and having a family that actually works on the other?

Isaac Saldana: I associate success now with luck. Also the environment, the idea, many things are variables into that. What I do think, though, is that founders get [00:41:00] much, much, much better over time. And so if founders consider themselves entrepreneurs, no different than a professional athlete would. Sitter himself or herself as a professional athlete, then setbacks are just part of the process, right?

So like sometimes if you’re a basketball player or if you don’t make a basket, then what do you do? Well, you just try to play the game longer so that you can make more baskets. And so I think founders should. Associate themselves as being founders and that’s their profession, and be okay with failing because that’s just part of the process.

I’ve seen very, very smart people with funding not succeed. We see that all the time with even very experienced founders. It doesn’t define who you are, the outcome. So we have to be humble enough that also there was some luck involved. But we do get better over time. We get better with finances, with managing people, with managing health, managing family.

One of their values at Joy Labs is you, they spell out happy. Humility, adaptability, [00:42:00] peers, passion. And you. And you, it’s ‘cause the company can only provide so much. But if you’re not sleeping, if you’re not exercising, you’re not taking the time to take care of mental issues or like physical issues, it’s still your responsibility.

And so you, for us, means there’s a balance between what you do and what the company does. So I think if founders have that grit and resilience to not just. Look at one idea, but look at the rest of their career. It just unstoppable. But it’s very hard to look that far. Why? Because we need to pay our rent at the end of the month and we have a lot of distractions, right?

But I feel that at some point, given enough man in the game, many entrepreneurs would, would make it.

Ian Hathaway: We’ve used the term co-founder a lot and. One of the things about starting a family so young for you, that it made work life balance a necessity, not just a platitude. And I love how you said it before, what’s that?

Your spouse is always your co-founder, and [00:43:00] the older I get, the more I realize how true that is. So for founders listening who are in the thick of trying. Balance, ambition with family. What has worked for you? How have you been able to integrate those two things? In theory and in practice,

Isaac Saldana: it’s very similar to when you talk to a customer, and we’re talking about trust and stuff.

There are times where we both make good decisions and bad decisions. And so for example, prior to start, Ingrid, I wanted to join a startup. And there was a startup that looked very cool and they would pay me a little bit less than I was making, and then we would have to move to Santa Monica where it’s way more expensive than Riverside.

And my wife’s like, Ooh, that doesn’t sound like a good deal. You’re gonna be making less. They’re gonna pay more rent. And so I passed on that. This is back to 2002, 2003, around there. In 2009, there it was becoming more popular. And so my wife knew kind of what that startup was, and it was [00:44:00] Google would’ve done very good.

And so she’s like, okay, I’m gonna trust you. What the srid thing? ‘cause it looks like, you know. What you’re doing. And so it gave me some type of credibility with my wife years later. And then now he still provides me feedback after work. I work with my wife and my kids. They give me just energy and like all this motivation to continue going, it’s the fuel to power for the next day.

And so finding that balance is tough. And sometimes you make sacrifices, but sacrifice and love is they go hand in hand. And so I do think that the family sometimes sacrifices for you and and vice versa. And that’s when magic happens. So I would recommend to be completely transparent with your significant other and because sometimes they have the right motivation.

And so ultimately for us, ended up being better that I didn’t continue exploring the Google route and that I got the credibility enough to start Ingrid years later. [00:45:00]

Ian Hathaway: Sometimes some parts of the family need more attention than the others. As long as over the long haul, it more or less balances out. And also that you’re aligned on the same mission and communicative.

I’ve heard a lot of founder stories and the deeper I dug in on yours, the more I realize you know it. It is a really unique one. There are so many things about you that are different. A constant for you has been balancing resources, relationships, knowledge, and and happiness when making decisions. That clarity of thought has guided you through some incredible chapters.

I feel like at many opportunities you have chosen what’s best. For the whole, you’ve taken a very low ego, but high confidence approach to building business, which also feels very unique. Those are the things that stand out to me. What is it that you hope that people will take away from your story and your example of leadership?

Isaac Saldana: The reason why I continue doing startups [00:46:00] is because they, they just give me so much purpose, and purpose leads to happiness. It’s funny that you mentioned that, that framework that I use, it’s a quadrant of happiness, relationship, knowledge, resources, and I try to find the balance between those and I think for me.

Kind of like values. That framework has helped in making decisions at a personal level. There are different people that have different things that work for them. I’m an engineer and so I like frameworks. I ended up going to school much later. Oh, funny story. I, I went to business school after. The IPO to learn more from the academic level and, and learn more of these frameworks and stuff like that, and, and they’re very helpful.

I do consider values as a framework. If you trust those values, then whatever the outcome is, you, you know, you follow the right path and a happy path.

Ian Hathaway: Well, I think you could be teaching classes in the MBA programs and as you were giving that answer, one of the things [00:47:00] I was thinking about is that. I feel like you could really be coaching founders on how to set culture for an organization.

It’s not just about stating values, it’s about making sure that you’re living them because people follow what you do, not what you say. Look, it’s a great way to end. We’re about out time, but before I let you go. We like to finish with a short segment called Beyond the Bio. These are just some really quick hit, quick answer questions that let us step away from your resume and your career a little bit and dig into you.

Isaac Saldana: That sounds awesome.

Ian Hathaway: Okay. What’s a quick piece of advice from a mentor that stuck with you throughout your journey?

Isaac Saldana: Mark Sulin. It’s like if you get an acquisition offer this early, you’re probably gonna get more. And it made a huge difference, obviously, for us. I still can’t believe he said that, and I would never say it.

I mean, it’s insane, but it helped me so much until credit to Mark for telling me that.

Ian Hathaway: Well, you know what’s interesting is that. We are 15 episodes into this [00:48:00] show, and I think you’re the second person to bring a Mark Solan quote into this. The first was Jason Seats who said, when Mark was talking about relationships, it’s quantity not quality, right?

That you need to spend time with people to build deep bonds. It’s not just about the highs, it’s about the mundane, and that’s really where relationships are forged. Who’s an unsung hero in your life and what has been the impact they’ve had on you?

Isaac Saldana: Oh, my wife by far, we’ve been together for over 26 years to save my life and her life.

I think I just see it as one, and that’s how deeply I’m connected with her. That brings me a lot of balance. It’s funny how the phase of companies is the entrepreneur, but like there’s like so much behind it. And so my wife should start also doing some conferences and podcasts because we’re we’re one

Ian Hathaway: that’s beautiful.

Who’s someone in your local startup community or your [00:49:00] broader network who does not get enough credit? Someone who contributes a lot behind the scenes and deserves a shout out from you.

Isaac Saldana: King Kim. He wrote code prior to the founders at SendGrid. He now works with me and as. Probably one of the smartest technical people, the most kind, but I never seen anyone invite him to a conference.

He’s always getting impressive things done. And so a lot of the innovation that happened at Ingrid, he was part of, and now at Lane Folk, he’s continuing that and he lives very close to me. So for any founders that no king or want some technical advice and from someone that is very quiet. Is that person?

Ian Hathaway: Yeah, a

Isaac Saldana: quiet doer.

Ian Hathaway: Tell us something most people don’t know about you outside of work, a hobby, a travel spot, a guilty pleasure, or maybe even a hidden talent.

Isaac Saldana: I’m into health quite a bit. I’m 46 and I [00:50:00] feel. My prime and before 2021, I thought that in your forties is kind of when you start preparing to get old.

I never thought that in my forties I was going to feel, not a little bit but way, way stronger than in my twenties or thirties. I have a very rigorous diet and workout exercise and like supplement and all that stuff outside work. And so if I’m not doing family stuff or company stuff, I’m doing some health stuff.

Ian Hathaway: What are one or two songs that you’d like to add to our Spotify founder’s playlist? Something that fuels your workday or maybe has inspired you on your journey as an entrepreneur? I listened to hip

Isaac Saldana: hop, heavy metal, and classical music, 2001, 2002. That’s kind of when I was getting ready to start exploring more things, and so I would quote quite a bit.

And then Dr. Dre released one album, I don’t remember. [00:51:00] 2001, what it was called, 2001. Oh, it was 2001. Okay, cool. Yeah. I would do that and or the Metallica album, enter Salmon or something like that.

Ian Hathaway: That’s quite a range. I know we’ve already talked about a couple of books, but any other books you would recommend that have been valuable to you on your journey?

Isaac Saldana: So many, but I would mention a few. Good to Grade Made to Stick Speed of trust, five Dysfunctions of a Team.

Ian Hathaway: Five dysfunctions of a team. Yeah, that’s a good one. You are the culture guy. This is what I’m saying. You’re a culture builder. Okay, last question. If you could give one piece of advice to someone who’s about to start their founder’s journey, particularly someone who’s an outsider like you, what would it be?

Isaac Saldana: Become an entrepreneur for the rest of your life, and at some point you’ll play the game long announced and it’ll increase your probabilities of. Success and when you win, also [00:52:00] be humble enough to understand that there is some luck involved.

Ian Hathaway: Wow, that’s a fantastic way to end. Isaac, thank you so much for sharing your time and your wisdom.

I got a lot out of this conversation and I’m sure our listeners will too. Can’t wait to share it with them.

Isaac Saldana: Thank you, Ian. It was a pleasure being here.

Ian Hathaway: That’s a wrap for today’s episode of Outsider Inc. A big thank you to Isaac Saldana for joining us. What stayed with me most wasn’t just the IPO, it was the growth that made it all possible.

A non-native English speaker practicing deliverability in the mirror, an introvert learning to sell when his back was against the wall, and a selfless leader welcoming a new CEO when the company needed it. A relentless focus on culture is what got him there. You can see it in that New York stock Exchange moment looking down at teammates who believe from the beginning.

Above all, Isaac reminds us that values aren’t wall art. They’re operating instructions. [00:53:00] Confidence and humility can live side by side, and sometimes your most important co-founder is at home keeping you grounded for the long game. If you want more from outsider, inc, don’t forget to subscribe to the platform@outsiderinc.substack.com.

It’s packed with highlights from today’s episode. And bonus insights you won’t wanna miss. You can follow Outsider Inc on YouTube, Instagram, TikTok, and LinkedIn at Outsider Inc. Pod. You can also follow me on X at Ian Hathaway Outsider, Inc. Is produced by Spellbinder Media. We’ll be back soon with another fascinating outsider conversation.

Until then, thank you so much for listening, and remember, great entrepreneurs can come from anywhere. See you next time.

Listen on: Spotify, Apple Podcasts, Amazon Music

In this episode of Outsider Inc., our guest is Aaron Slodov, co-founder of Remesh and co-founder and CEO of Atomic Industries. Aaron shares insights from his unique journey from a child tinkering in Cleveland to working at Google X, and founding a series of innovative companies. The discussion delves into the challenges and opportunities in American manufacturing, the impact of globalization, and the role of software and AI in modern industrial systems. Aaron also touches on his vision of re-industrializing America, his belief in tackling complex problems, and his leadership in fostering a new movement through the Re-Industrialize Summit and the New American Industrial Alliance.

Show Notes:

(04:34) The Formative Years: From Cleveland to Google

(11:23) The Birth of Remesh: A Social Experiment

(15:09) Challenges and Lessons from Remesh

(18:00) A New Beginning: The Genesis of Atomic Industries

(20:36) The Flaws in Global Manufacturing

(24:10) Building a Testbed Factory in Detroit

(26:21) Merging Software with Physical Production

(30:23) Scaling a Movement: Reindustrialize

(33:26) Encouraging Talent in Hard Tech

(36:00) Personal Insights and Reflections

(40:01) Beyond the Bio with Aaron Slodov

✅ Host: Ian Hathway - Co-Founder & Managing Partner, FOVC

✅ Guest: Aaron Slodov, Founder & CEO, Atomic Industries

Produced by Spellbinder Media. Executive Produced by Bridge Five Ventures. Copyright ©️2025, Bridge Five Ventures, LLC, All rights reserved.

Listen & subscribe wherever you get your podcasts or at outsiderinc.substack.com.

AI-Generated Transcript

Aaron Slodov: [00:00:00] I think we take a lot of this for granted. Nobody really knows or cares about how all the crap that we have gets made. We just wanna buy it, you know, at a decent price. But ultimately, the people that wanted to push a globalization agenda. We’re well-meaning because industrializing a poor nation will help uplift people out of poverty.

It’ll help advance their cultures. But that’s also just saying we think it’s okay for somebody else to basically pay slave labor wages, right? And like working in awful conditions just so I can get like cheap socks or a TV or a computer. Somebody else should do that, and it’s okay if they’re a slave laborer.

It’s good for them, actually, and I just think that’s psychotic.

Ian Hathaway: Welcome to another episode of Outsider Inc. I’m your host, Ian Hathaway. Today’s guest is Aaron Slodov, founder engineer, movement builder, and one of the most original [00:01:00] voices in America’s industrial revival Today. He’s the co-founder and CEO of Atomic Industries.

A hard tech startup built in the Midwest that’s re-imagining software as the solution to revamp the ancient craft of tool and die making, but that description barely scratches the surface. Atomic isn’t just a factory, it’s a blueprint for rebuilding America’s industrial base With 21st century tools, Aaron’s team is building generative AI for manufacturing training models on site with their own supercomputer and deploying tech that could make producing physical goods as scalable as writing software.

This story starts with a kid in Cleveland, soldering circuits for fun, a physics major grinding through school while working full-time, and a restless mind drawn to both big ideas and hands-on invention. After a stint at Google working on the early self-driving car project, Aaron co-founded Reesh a real-time group insight platform that reached all the way to the White House.

That experience showed him what’s possible when technology and imagination align and what can go wrong [00:02:00] when incentives don’t. After a tough exit, he pivoted hard, attempting to build a hardware product and running headfirst into America’s broken manufacturing system. What followed was a full on obsession, launching atomic to turn tribal knowledge into scalable infrastructure.

Since then, he’s gone even bigger, founding the re industrialized summit and the New American Industrial Alliance. His vision isn’t just to build a company, it’s to start a movement. Today we’ll talk about challenging a culture addicted to short-term thinking and why Aaron believes American industry is the defining project of our time.

Aaron, thanks for stopping by. Thanks for having me, Ian. It’s good to see you. I’m glad we could finally make this happen. We have a ton to dig into today, including some recent news that you have a major fundraising round. Congratulations. But I’d like to start with a window into your worldview and approach.

You are a mission oriented person who believes that you should be spending your time tackling the hardest problems imaginable. [00:03:00] That pursuit ultimately led you to revive America’s industrial base, but that mindset. Choosing difficulty. Chasing the uphill problem isn’t how most people operate. Most people don’t swim upstream.

They follow the path of least resistance, but you don’t. And so I’m just curious, where does that come from you and what do you think it reveals about how you see your role in the world?

Aaron Slodov: I’d like to imagine that I’m not necessarily a soft handed technologist that has never experienced the grit and hard nature of the true world, but I’ve been through a lot of stuff myself, and I guess where this comes from is a deeply profound appreciation for my existence.

I don’t wanna waste a second of it. I think as time moves forward and as technology becomes more and more advanced. Every single moment is the next highest leverage moment. And I think that’s really empowering in a lot of ways because everybody can have [00:04:00] superpowers on some level. I never thought I would be doing the things that I am doing right now, but it is just kind of the, the era of you can just do things and I am really embracing that.

But it does come from a long time in life lived of. Decent hardship and growth and. Exploration. So I think ultimately I just kind of wanna grab life by the reigns and make the best of it.

Ian Hathaway: You mentioned you can just do things. You feel like this is the era we can do that. I feel like that’s part of your story from the beginning.

So to rewind, just for a minute, you grew up in Cleveland, soldering electronics as a kid. Working menial jobs, eventually grinding your way through college at nearby Kent State while working full-time. That’s not common for a lot of startup founders today. But looking back on that, what kind of kid were you and when did you first realize that you saw the world through that engineer’s [00:05:00] lens, right?

That builder, that doer, that instinct to fix and tinker.

Aaron Slodov: I had an interesting upbringing. My mother worked at the Natural History Museum in Cleveland, and so I’d like go to work with her and steal her keys and like run around like it was night at the museum and people would just stare at me like, how does this little kid have the keys to go behind exhibits and stuff, you know?

And like go into secret doors, like, yeah, this is badass. And then my grandfather on her side was an electrical engineer at GE in Cleveland for 40 plus years, and he. Was like a ham radio operator. He invented miniaturized Christmas light bulbs and a, a bunch of other crazy stuff. It was just interesting, like having a, a tinker around all the time.

My first instinct was to just rip things apart and try to figure out why they were, and like put ‘em back together. I was a terrible kid. I got in trouble a lot. I guess I’m kind of a pot stir in in a lot of ways, but I wanna make people think and I like to question things a lot, [00:06:00] and I don’t think anything gets done unless you do that.

I like barely made it through high school. I actually had to go to a community college to do remedial like math before I even applied to go to a state school. There was a big awakening moment when I was 17, 18. That’s probably the subject of a whole other podcast, but it was a, a very enlightening and like awakening moment for me, and that’s kind of when I just grew this appreciation for what I have basically, and I needed to apply it.

So that was the moment where I was kind of like. I really wanna explore the underlying nature of the universe, and I studied a bunch of different religion and then ultimately came to physics as kind of my backstop, and that’s kind of what I poured myself into.

Ian Hathaway: I feel like there’s so many elements there that makes sense.

What you’re doing today, you have this kind. Family, DNA, of tinkering of curiosity, even electrical engineering being a component of that, not [00:07:00] being a rule follower, but being super smart. I feel like those are common traits of many entrepreneurs. You mentioned you studied physics as an undergrad. I know you were working full-time while putting yourself through college.

That certainly made your path slower, but I have to imagine that it also made you more grounded or maybe more appreciative, or maybe you had more ownership over it. How would you say that experience? Doing it in that way shaped you as a builder, as an operator? As an entrepreneur, and maybe did it change how you approach risk, ambition, or even building teams?

Aaron Slodov: Yeah, I didn’t take like the traditional route either. So after high school, I did a bunch of menial jobs, then I got serious and then went and did some of this remedial stuff. During all of this, it did let me keep more ownership over all of it because nobody was paying my way and every loan that I took out was basically like a big oof.

So I had to [00:08:00] build relatively pragmatic. But it was cool because I was also exploring a lot of things that were very new to me and very exciting at the same time. But I kind of dual tracked a lot of this stuff, and I still want to kind of take a. Pragmatic approach to anything. Even my first company or when I was working out at Google or in Atomic or anything that I do, I guess has that same kind of architecture and it is more grounded.

I think it does benefit people to be an anthropologist or sociologist on some level. I think that’s what’s actually pretty interesting about good product leaders in software too. They just understand basic human behavior. So I think taking a lot of those principles and applying it to. Really simple stuff like what kind of company would I wanna work at?

What kind of summit or conference would I want to attend? We all have these like prescriptive, rote behavior types of things that we all go through and still attend or join or build ultimately. But why don’t we do new things, [00:09:00] or at least be a little non-prescriptive about it and try something different?

Occasionally.

Ian Hathaway: Before you started your founder’s journey, you did move to Silicon Valley. You worked at Google as part of Google X. On the self-driving car project more than a decade ago, I’d love to hear about that. What did that teach you about what’s possible when smart people are well resourced and wanna change the world?

Aaron Slodov: I think everybody pines for this idea of a Bell Labs type environment where you have unlimited resources. A couple things I noticed, which were really inspiring was being on the bleeding edge of everything 15 years ago was super cool. You definitely feel really badass working on these things day to day.

Even then, right when Google was like a fraction of the people that it is now today, you could still feel. Bureaucratic friction. And in something like self-driving, it was just very apparent that the regulatory friction outside of the company would be a huge barrier, let alone the [00:10:00] internal friction of just the chain of command and how the system itself was being built and invented was actually pretty fascinating.

So in some way, I think a lot of the things that. Made Silicon Valley really cool and interesting. Originally, like way back in the day, just this permissionless kind of culture. There were less rails everywhere and people were just trying to build stuff and get stuff done, and I think what working there exposed me to was the level of excellence that I hadn’t been exposed to.

So I kind of understood what was absolutely exceptional, what was not. I guess the dream for people, maybe like me or maybe a lot of other people, is just a giant sandbox with unlimited resources,

Ian Hathaway: a giant sandbox with unlimited resources and very few rules. Yeah. It sounds like a great place for your coming of age.

Right, and that’s the thing, like not enough people study the, the history of Silicon Valley, the true history, which is it wasn’t the most obvious winner. Even [00:11:00] in the us It really comes down to. Some seismic shifts in culture of openness, collaborative competition, and supporting people to spin out and do new things.

You eventually left Google. I know you were working on a PhD in Energy Systems Engineering. You spent a lot of time in research roles, so I guess it makes a lot of sense that. Your first startup Reesh was born from this kind of spirit of helping people engage more meaningfully with a larger group, almost like a researcher living inside of a live experiment.

Tell us a little bit about Reesh. What was kind of the original aha moment that led you to start the company, and when did it click that this was actually a business worth building rather than just a tool to use and to work on?

Aaron Slodov: When I was kind of winding down my job out on the west coast and coming back, I ended up talking to my longtime friend who I [00:12:00] went to undergrad with, Andrew Conia.

This was like during the other really big, you know, Israel Palestine flareup in, in 20 11, 20 12, and they came up with a framework based on some really fancy math about like collective speech. Andrew was surrounded by. Israelis and Palestinians in his PhD program, and everybody was kind of like, yeah, we’re chill, but our governments are psychotic and they’re trying to kill each other.

And the idea was what would happen if we got massive groups of people together and were able to sift through their sentiment and comments and allow them to communicate group to group? What would that look like? So they developed an interesting mathematical framework for collective speech. And then when I moved back, I tried to bring some of my Silicon Valley experience back to this, right?

And like, yeah, we should totally start a company around this and productize it. And the first year was joining. A local accelerator program in Cleveland, [00:13:00] running around on college campuses, taking the initial product that we built and trying to get groups of Republicans and Democrats or like men and women to, to speak to each other on our platform.

So it was, it was a really interesting social experiment.

Ian Hathaway: Company starts in 20 13, 20 14. You had success early, right? You, you got some of that local early capital. You went to Techstars in New York in 2015, raised a C round shortly thereafter from coastal firms in raised a series A in 2018. From General Catalyst, which is sort of a legendary venture capital firm, but there you are in Cleveland, and so you’re kind of traversing Cleveland, New York, raising money from elite investors on the coast.

How did you do that? How did you initially get the company capitalized? What was the relationship between Cleveland and New York? You know, we’ve had this discussion before. Was Remesh a Cleveland company? Was it a New York company? And why would that [00:14:00] matter

Aaron Slodov: ultimately? Yeah, I mean, we headquartered, it started it in Cleveland, but it moved headquarters to New York after Techstars, and then we were located there and bounced around in the city until after COVID and then it went, you know, remote.

Ultimately getting a couple of those rounds done was hinged on being in in New York City. There was like an expectation that a good dearth of the company was gonna be located there and then. Moving it back after COVID, nobody cared.

Ian Hathaway: It doesn’t sound like the decision to be in New York was driven by the company or maybe even an ability to find and recruit talent.

Was it purely being driven by investor demands or was there something that felt like being in New York was beneficial?

Aaron Slodov: Both definitely at that time it was way easier to just get on a train and have meetings all over the city. There’s a lot of customers there as well for for that product too, so it was a lot easier to have those types [00:15:00] of meetings really easily without friction.

Ian Hathaway: I know COVID changed the business in many ways as it changed. Lots of other businesses. Every startup has its share of growing pains and setbacks. But Remesh went through something much deeper. You had aggressive growth mandates, investor expectations. Ultimately, the company was restructured in a way that wiped out.

A lot of early stakeholders. Could you share a little bit about what that experience was like for you, and then maybe how that positions you today, how you think about control, how you think about long-term ambition as a founder, how you think about stakeholder alignment as you’re considering partners, investors?

Aaron Slodov: Yeah. It’s never a great topic to have to cover something like that because we wanna just celebrate all the victories, but there is important scar tissue that. People should understand, at least like when you get into a game like this that you know is, is at stake. [00:16:00] And ultimately, I think a lot of this was just bad market timing.

We had a really awesome potential exit, and this was like right before the market took a nosedive in. 22, where a lot of high growth tech was just completely devalued by the market and the glint in, in everybody’s eyes with the available multiples going into the toilet, took the light out of their eyes.

I wasn’t willing to go along with the restructuring. I didn’t really think it was a fair thing, and I wanted to go my own way and maintain my relationship with everybody. So that was ultimately the best path forward. It sucks, but sometimes you gotta do that, even if your exit isn’t close to the expectation of what an investor thinks.

They can just veto that, especially if they have control. I think a lot of founders also want Zuck level control when they’re starting out and it’s like a, a push pull kind of relationship where the investors wanna [00:17:00] maintain some kind of. Downside protection. Obviously founder led companies are going to be the most successful at the end of the day.

Giving founders control, I think, is some people would argue that you should do that because they need to just do whatever they need to do to build like zero barriers, zero friction, but then on the other side, you’re gonna. Release like an Untamed Beast and it has no control. What if they just like kill the company?

A lot of people try to figure out what a good quality founder looks like, right? Like a world class founder. I don’t think that those people are minted. They’re forged. It’s not something that you just kind of like pop out and you’re an Elon all of a sudden, like Elon went through 25 years of pain and suffering to get where he is, and he’s still learning, right?

Like he doesn’t have all the answers either. These are just

Ian Hathaway: experiments. Some work, some don’t. I think how you handle the ones that don’t says more about you than how you handle the ones that do. You left the company [00:18:00] 2020. You wanted a fresh start, build something that you’ve never touched before, led you down this route of building a physical consumer product.

Tell us a little bit about that journey. I know you ultimately end up with Atomic. We’ll get there in a moment, but. Just talk about like what you were thinking as you were jumping right into your next thing, coming outta that tough exit and wanting to do something that was unfamiliar to you, something that was so different.

Aaron Slodov: Very simply. That was it. I’d done software, done some goofy hardware stuff. I wanted to actually like make something. I’m a dork and I play Dungeons and Dragons and I’m getting old, and something that I kind of noticed is that elder nerds were like spending tons and tons of money on tabletop games and collectible stuff because a lot of these things evoke.

A sense of nostalgia from like when we grew up. And I thought that was interesting. I had no interest whatsoever in doing like a venture backed [00:19:00] company at that moment at all. This was just like a passion project and I was gonna build a company that made figurines like monsters and all kinds of goofy stuff for these games.

And then when I got to that step. I was like hitting up my friends that still worked out in the Bay Area. It’s like, how do you actually manufacture shit? And they’re all like, yeah, just go to China. It’s this magical thing. And you just give it your designs and money and then your product shows up. I had a a really nightmarish time doing that and a lot of people suggested you gotta go live in the factory for a little bit.

Like you have to go to China and and go do that. And I was just like, no. Why do I have to do that? I just thought that was the worst imaginable thing I could, you know, spend my time on. I don’t run factories, like why do I have to go sit there and make sure they make my stuff? And then that set off a whole chain of trying to figure out if American manufacturers were interested in stuff like this.

And none of ‘em are because it’s more commodity. I thought this was a very, [00:20:00] very interesting thing. How did we get to this point and why is it so hard to just make a stupid plastic toy, especially where the Venn diagram of speed to market quality and price all kind of converged to a point where I could actually execute on it?

And I thought there has got to be a better way to do this. If it’s this hard to make a toy, how hard is it to make every other thing on the planet? A really eyeopening moment.

Ian Hathaway: What was the fundamental problem facing manufacturing in America as it related to the questions you were trying to answer?

Aaron Slodov: Mostly that the practice of globalization put us in a really strategically onerous position. And on a philosophical level, I think we take a lot of this for granted. Nobody really knows or cares about how all the crap that we have gets made. We just wanna buy it, you know, at a decent price. But ultimately, the people that wanted to push a globalization agenda were [00:21:00] well-meaning, because industrializing a poor nation will help uplift people out of poverty.

It’ll help advance. Their cultures, but that’s also just saying we think it’s okay for somebody else to. Basically pay slave labor wages, right? And like working in awful conditions just so I can get like cheap socks or a TV or a computer. Somebody else should do that. And it’s okay if they’re a slave laborer.

It’s good for them actually. And I just think that’s psychotic. We’re not gonna escape that anytime soon. But the whole system of like labor arbitrage, industrialization is very untenable to me because a country like China over the last 40 years. Starting with basically nothing other than the advantage that they were cheap and we let them into the WTO allowed them to come in and ultimately sell into the market, and they weren’t good in the beginning.

And obviously over four years, you’re gonna [00:22:00] become extraordinarily good. At making things right and they are, can you keep repeating that process over and over and over again? Are we gonna do that basically to every country? It’s not like if we industrialize Thailand, right? They’re going to challenge America on the world stage.

But a country the size of China, obviously is doing that now. Ultimately tying our economies closer together is creating more conflict, not less so. It was like, great try, but we need to like reselect the level of globalization that we wanna operate at, because when you’re potential adversary and at least ideologically you’re done, that’s not a good position to be in.

People point to

Ian Hathaway: NAFTA as crippling the us, but they overlook China’s ascension into the WTO, which was the real Big bang event. Shifting gears a little bit, in addition to seeing this sort of global manufacturing and supply chain problem, you started really seeing it as a software and manufacturing problem.

When did that shift happen? Was [00:23:00] there any resistance to that realization and how did that shape ultimately launching atomic and building what you’re building today?

Aaron Slodov: I knew the tailwinds of. Software, materials, robotics, all these different fields, were just not gonna slow down. I knew it was just gonna become easier to do this.

And the reason I think our problem is super interesting is a lot of the work that we’re trying to tackle comes down to. Non repeatable, complex engineering, that’s all rooted in physics and mechanics, and it was more of a computational problem that could be solved. I’m trying to tackle a very low dimensional system, like a mold is basically two blocks of metal that get cut up, and in the middle of that thing there’s a cavity that represents some unique shape and it just blasts out that shape all day long.

That’s a controlled physics problem. My whole conceptualization of this is that as we kind of built it and addressed the [00:24:00] problem, new things would kind of evolve, that I could integrate into what we were building. So even at the core, a lot of the foundational software continues to evolve every day.

Ian Hathaway: You built your own testbed factory in Detroit and you have an in-house supercomputer to train your models.

Why was it so important for you to control the full stack from day one and what does building it in Detroit unlock for you that doing it in California couldn’t? We did not start

Aaron Slodov: with the

Ian Hathaway: factory.

Aaron Slodov: Ultimately, the way that we evolved was starting with the software just alone, right? And like a small 10 person team.

And then demonstrating that we could actually compete with a human expert or set of experts on very specific. Sub design tasks that are involved in this process. That is kind of what unlocked the seed round that got me the factory. But the reason that I think it’s essential is in manufacturing, right?

The thing that we’re trying to solve [00:25:00] is being able to, one shot a production process. Somebody sends you a CAD file, they only care about getting the parts out the other side. There’s all this crazy stuff that happens in between making it up in CAD and then actually holding the part in your hand and collapsing that whole process as far and fast as possible is the mission.

People that have no experience in manufacturing. A lot of them think that they can just make software and then magically the product of what comes outta their software is somebody’s gonna just execute on in a factory somewhere. But when you do that, there’s always like a gap between reality and what comes out of a piece of software.

So I would just prefer. If the software were dictating reality, and the only thing you’re feeding into it is like a requirement, a KAA CAD file, and the software basically understands how to design the thing and then ultimately execute that design by orchestrating CNC machines and printers and like drills because it knows how to cost optimize every fabrication step.

The other huge part of it, obviously, is the data collection. You’re never gonna [00:26:00] be able to train a software model well enough for hyper-efficient design and manufacturing unless it’s connected, basically just like a self-driving car. So a lot of the stuff that I do, I take principles from building self-driving car systems, and I think it’s very analogous to production.

Ian Hathaway: I’d love to talk about this a little bit more, this seeming divide between. It’s a world of bits in the world of atoms and tech and venture, and I’m very convinced that there’s a huge opportunity for companies that can merge software with physical production. I think there’s a small but growing chorus of people who agree with that as well.

Manufacturing could be much more valuable than software, but it’s also much harder to innovate in. I know. You’ve talked a little bit in the past about just culturally in the tech world, so many people are chasing these short-term returns and optimizing for funding rounds rather than like shaping the future and building real infrastructure.

Why do you think this gap still persists, and [00:27:00] maybe more importantly, what needs to happen to close that divide?

Aaron Slodov: I think everybody should just come to her factories, basically have a more thorough understanding of how something goes from design to production. And without that, it’s all just some kind of intellectualized version of what they think manufacturing is.

And until you actually see. Somebody try to take a CAD file and then turn it into G code and then actually like machine, a block of metal and then put it together somewhere that really shatters people’s confidence in terms of just understanding the full structure of the system and how it functions in reality, and there’s not a lot of room to replace a lot of those things.

On a one-off basis because they’re just so ingrained in the engineering and manufacturing world, and to your point, right, it’s extremely expensive to do reps in the physical world. So it’s a tremendous disconnect because people just haven’t been exposed to the horror of. How bad everything is in [00:28:00] manufacturing, but at the same time, that’s the size of the opportunity too.

You’ve got old and new and friction there, but also depending on what you’re talking about, especially manufacturing old still holds all of the actual valuable. Trade knowledge, it isn’t being transferred to new like it needs to be. You

Ian Hathaway: raised this $17 million seed round from folks like Fallon at Nariah.

You also had early backing from yc, but you just also closed a $25 million series A round led by Mac and DTX. Congratulations. Not the easiest fundraising environment, especially when you’re doing something hard and something truly different. How does it feel to have secured a fresh round of capital, particularly in this environment, and what are you planning to do with it?

Aaron Slodov: It just puts more pressure on, I’m already thinking about the, the full next like 24 months and executing along that [00:29:00] and how quickly I can get to the next milestone. It’s good in some ways because now you get to take a breather for a second, but just one second. Yeah. No, no more. These companies aren’t super easy because you have to juggle not only like.

World-class, cutting edge software development in bizarre areas where there just like aren’t really skill sets for these types of engineers, right? Like applied ai, physics simulation, numerical solvers, all kinds of crazy stuff to actually build this software. I think a lot of mistakes that are made.

Historically, so far in this very specific niche area of tech enabled manufacturing is that people aren’t actually developing enough technology that lets them scale into more. Infrastructure. Infrastructure. It’s great if you can buy hundreds of machines and everything, but if your technology doesn’t allow you to actually efficiently use that, if [00:30:00] you’re still linearly or worse scaling with like people in machines, then that’s not really like a super scalable thing.

So I’m basically just trying to de-risk my ability to infinitely scale into machines and infrastructure with the tech. So I’m like. It’s a balancing act.

Ian Hathaway: Speaking of scaling yourself and scaling your company, you’re also scaling a movement. At a certain point, you realize your mission wasn’t just about building atomic, that no one single company could actually re industrialize America alone, and so you launch.

Re Industrialize, which is a summit that brings people together who are actually building things, engineers, founders, machinists, policy makers even. And that eventually gave rise to the New American Industrial Alliance. What do you feel like was missing from the national conversation that made you believe that this was a space that required a more permanent infrastructure around it?

And how are you thinking [00:31:00] about building this two movements into something that’s lasting?

Aaron Slodov: We don’t have a lot of things to point at. With respect to inventing a new industrial base, there’s not a ton of people out there trying to build sci-fi factories. Elon has done a really great job of making the factory the product and hopefully getting the point across that mastery over production methods is incredibly important.

And it doesn’t matter if you’re making cars or rockets, but the idea that you can actually. Affordably produce things here is very important to people because I guess going back to the whole globalization in China thing, you don’t need to be like a China Hawk to just realize and understand that China cannot be a.

The only game in town, it doesn’t matter if we’re number one or number two, there just cannot be one. That’s unacceptable. And something I repeat over and over again is just that the amount of r and [00:32:00] d and innovation in manufacturing is tragically low. We became so wealthy and so smart that we just. Gave up on innovating there, and I think the perception of manufacturing is this kind of like low value process on the edges of design and r and d, and then sales and distribution is kind of insane.

You can’t simultaneously complain about China being a threat, not being able to make ships and drones and submarines. Then completely ignore the fact that like we’ve just decimated our industrial base. That’s just a non-starter. So what does that mean? That means that all the OEMs that wanna make a bunch of stuff either have to deal directly with our adversaries, or they’re not gonna make anything because there aren’t suppliers to do it.

So you wanna scale production of something and you can’t. That’s not a great place to be. We should actually focus on the building blocks of industrial [00:33:00] society from like raw materials through widgets and like the actual machines that do these things. I think all of that is important in building this movement.

And the thing that people are missing are these really basic ideas and concepts that we take for granted, ignore, or don’t want to talk about because they’re too costly or they’re not high enough margin or they’re bad businesses, like who cares? Figure out a way to make them viable. And that’s kind of what we’ve done.

You’re tackling

Ian Hathaway: the established ways of doing things, the existing power structures, any good movement requires talent. So how do you. Encourage young, smart, ambitious people to look beyond building apps and software, to tackling the challenges like fixing the grid, building factories, solving these real world problems.

What do you say to early career folks who are curious about what you’re doing, but might be too intimidated by hard tech? And [00:34:00] what do these people need most? How can we accelerate the talent pipeline?

Aaron Slodov: It’s a huge combination of different things. I think that the incentives need to change a little bit. A lot of engineers went into computer science and electrical engineering rather than things that were necessary for societal stability.

The field that I went into was power systems engineering, and that’s the kind of applied study nature of the electrical grid. The electrical grid is. A disaster. And is that because we didn’t have enough engineering talent going into it? Probably ‘cause everybody was leaving to go into computing. I think incentives will always be king.

Exposure is another. Go walk around in a factory, get a tour. We need more content around this stuff too. I think people are fascinated by making things and by manufacturing. We have to eliminate the idea of blue collar altogether because it just pigeonholes you into the idea that [00:35:00] you’re less than where a lot of manufacturing cognitively is way more advanced than a lot of knowledge workers.

It’s unbelievable that we. Classify those things as like low skill or like a hundred percent compared to, you know, an accountant or something. Sorry, accountants, I guess. But it blows my mind that like we stratified things that way and I think that this stuff needs to evolve. I think we should change labor laws, right?

Like touching a machine shouldn’t mean that you’re relegated to an hourly wage and you can’t have a salary. At some point, the overriding mission will, will drive a lot of people to this too because it’s a growing and burgeoning kind of field right now. So I think it’s just a mixture of incentive of people building and funding new companies to, to funnel this talent into, as dumb as it sounds like, more content around this stuff, like people just need exposure to it.

And then we need companies to have wins and like grow and we need to build new industrialists, [00:36:00] literally.

Ian Hathaway: I guess closing that out and maybe focusing a little bit on you as a leader. Obviously any movement is reflective of the people who are driving it. I’m not surprised you’re doing this. In fact, we first crossed paths in 2017.

This just feels like a natural extension of who you’ve been all along, company builder and community builder at the same time, this is also a show about outsiders, right? People who don’t fit the mold of what they’re doing. You are now seen as one of the key voices in America’s Reindustrialization movement, and yet you’re not a defense industry insider.

You’re not a legacy industrialist or a beltway operator. You’re a startup founder from Cleveland. You didn’t go to MIT, you didn’t go to Stanford, but there you are at the face of this movement. How have you been received in that world? What perception hurdles have you had to overcome as someone who’s not an industry insider and maybe what kind of [00:37:00] advice might you have for other outsiders about how to break into something from that outsider stance?

Aaron Slodov: I think it’s a challenge that a lot of people ultimately face. Nobody’s gonna pay attention to you until it matters or un, until you really cause enough commotion. There’s like this really important gap or delta where you’re an unproven quantity and you have a lot to prove, or you have such a important story to tell, and it just takes the will of somebody else to pull you across and give you the chance to do that.

Thankfully, one of the great things that AI has done actually is kind of like break down some of these silos where people previously wouldn’t take it seriously, but now they’re like, holy shit, I’ve seen what AI can do on other things. And I’m like, now questioning if that would happen in what I do. And it’s crazy because even five years ago talking about AI powered factories and things like that, people would just be like, get the hell outta here.

But I do think this is one of the largest benefits building like crazy stuff, is [00:38:00] breaking down people’s barriers around what the art of the possible is. There’s some level of showmanship and some level of execution that you have to also balance, but on the individual builder level, it’s just keeping your head down and making stuff happen.

Sometimes you have to make a big splash, but most of the time you don’t. I personally try to balance this. I struggle with, you know. I don’t need to be the center of attention, but nobody else is doing it at the same time. So who else is gonna do it? What I do care about is that this message is pounded into people’s brains.

Ian Hathaway: You’re on a generational mission. What you’re doing successfully done will take decades, not years. So with that in mind, when we get together 10, 20 years from now, and we’re looking back on what you accomplished with atomic. What you’ve accomplished with this reindustrialization movement in America. What do you hope that we can look back on and say mission accomplished?[00:39:00]

Aaron Slodov: Maybe that we feel safe and comfortable with the state of things? You know, that would probably be a good. A good outcome is this gonna be something that benefits your children and grandchildren and the future? Somebody ultimately has to do this and it’s probably one of the best investments that our country could possibly make, and I think that, you know, it could help us rebuild the middle class.

I think it could elevate. A lot of the economy in ways that we just don’t even know yet. Big aspirations for sure.

Ian Hathaway: Well, I think it’s a noble mission. I’m glad that you’re doing it. You touched on that last point. Helping the middle class. It’s something growing up in a manufacturing town in Ohio myself, I got to witness that firsthand.

The population in my community peaked the year I was born and has been on the decline ever since, and so it’s definitely something that I feel personally and I know you do as well. My hat’s off to you and I, [00:40:00] I’m wishing you the best of luck. We’re almost outta time, but before we go, we’d like to finish with a segment called Beyond the Bio.

So these are just some quick hit questions that let us go a little bit beyond your resume and dig into you. So what’s a quick piece of advice from a mentor that stuck with you along your journey?

Aaron Slodov: It’s kind of a weird one ‘cause it wasn’t necessarily advice. It was more of like a moment, I guess I got fired from a landscaping job by the owner of the landscaping company because I reminded him too much of himself and I always thought that was really fascinating and I was like, wait, what?

Why am I getting fired for that? He was like, you need to be building your own things. And I guess the takeaway that I got from that was. To never not pursue something that I like wanted to do. And that happened pretty early. I think I was like 16 when I got fired by that guy. I’ll never forget that

Ian Hathaway: he saw something in you maybe you didn’t see in yourself yet.

So who is an [00:41:00] unsung hero in your life and what has been the impact they’ve had on you?

Aaron Slodov: Both of my parents, ‘cause they each brought a different. Piece of resiliency that I couldn’t find anywhere else, and they both had like their own unique way of supplementing their form of resilience in in my life.

Each of them kind of gave me a really unique and useful piece of them through that.

Ian Hathaway: How did growing up in northeast Ohio shape you as a person and as an entrepreneur?

Aaron Slodov: Midwest people are kind of interesting and unique because they have four seasons and like half of their year is depression. Basically. I think what it helped me ultimately understand was suffering is actually good for you as it builds character.

I think ultimately growing up in the Midwest and in Cleveland probably exposes you to a level of. Unfortunateness that may maybe not everybody has to go through.

Ian Hathaway: Yeah, I would say the Cleveland Browns are [00:42:00] definitely unfortunate. So who is someone in your local startup community or your broader network who does a lot behind the scenes and deserves a shout out from you?

Aaron Slodov: There was a guy named Bob Soko, who was part of the ecosystem in Cleveland for a long time. He was just a force of nature and he was part of Case Western’s entrepreneurial ecosystem. He was a total machine. Could make anything happen for anybody at a given moment’s notice, which is kind of crazy. His whole thing was connecting people and making stuff happen, and I’ve never seen anybody kind of like operate at that level, and I try to do as much of that as I can as well.

He obviously deserves a massive shout out and I would definitely put that behind Bob for sure.

Ian Hathaway: I didn’t realize Bob had passed, but he was, as you said, a force of nature. Thanks for mentioning him. Tell us something most people don’t know about you, something outside of work. [00:43:00] Maybe a hobby, travel spot, guilty pleasure, or even a hidden talent.

Aaron Slodov: Most of the time outside of work that I spend is tending to my Husky, Loki, and so yeah. All of my free time goes into hanging out with him basically, and taking care of him. So,

Ian Hathaway: hey, nothing beats unconditional love of a dog. So what are one or two songs you’d like to add to our Spotify founder’s Playlist?

Maybe something that fuels your workday or has inspired you as an entrepr.

Aaron Slodov: I’m pretty weird when it comes to music, so if I’m doing like really crazy, intense work, I just listen to droning cinematic, orchestral kind of music with no words. My favorite composer was Johann Johansson, who did like the soundtracks for.

Movies like Sicario, a lot of his work is really, really awesome and can really put you into that work hole where you’re just like totally locked in. Otherwise, a really [00:44:00] weird song, I will put it on randomly is No Quarter by Led Zeppelin. Not weird at

Ian Hathaway: all. We’re definitely adding that one. What’s a book you’d recommend?

Aaron Slodov: K Land on the Koch Brothers. You wanna know how like a ruthless business empire is built at the weirdest levels of detail. Go read that book. It’s fascinating in a lot of ways and gives you like a really eye-opening view into like how those guys built what probably is still the largest private company on the planet.

Ian Hathaway: Oh yeah. The footprint of that family business is insane. It is orders of magnitude bigger than most people think. Okay, last question. If you could give one piece of advice to someone who’s about to start their founder’s journey, particularly someone who’s a bit of an outsider like you, what would it be?

Aaron Slodov: Congratulations. You’re gonna hate it. Welcome to Hell Yeah, basically. I mean, the chewing glass analogy [00:45:00] is very true. It’s a lot of work and it’s alienating and isolating. So get ready. I mean, it’s gonna be a blast, but also make sure you have a good support structure to like fall back on. So making like group chats with other founders is super, super valuable, especially as you all kinda like grow together.

Ian Hathaway: It’s a great way to end. Aaron, thanks so much for being here. I’m so glad we finally got to do this, and I can’t wait to share it with our listeners.

Aaron Slodov: Awesome. Yeah. Thank you so much for having me. It was really, really a good time.

Ian Hathaway: That’s a wrap for today’s episode of Outsider Inc. A big thank you to Aaron.

Slow off for sharing that candid, hard won story. Curiosity took him from Cleveland to Google X, and the scars from Remesh sharpened his view on control incentives and building for the long term. Instead of retreating, he ran it our broken manufacturing system, all while convening builders through re industrialized and the new American Industrial Alliance.

What stuck with me most is Aaron’s posture. Choose the uphill problem, [00:46:00] respect the craft, and align stakeholders for the long game if we want resilient supply chains in a stronger middle class. That’s the mindset it takes. If you want more from outsider, inc, don’t forget to subscribe to the platform@outsiderinc.substack.com.

It’s packed with highlights from today’s episode. And bonus insights you won’t wanna miss. You can follow Outsider Inc on YouTube, Instagram, TikTok, and LinkedIn at. Outsider Ink Pod. You can also follow me on X at Ian Hathaway Outsider Inc. Is produced by Spellbinder Media. We’ll be back soon with another fascinating outsider conversation.

Until then, thank you so much for listening and remember, great entrepreneurs can come from anywhere. See you next time.

Listen on: Spotify, Apple Podcasts, Amazon Music

In this episode of Outsider Inc., host Ian Hathaway interviews Guillaume de Zwirek, founder and CEO of Artera. Guillaume’s journey from a classical guitarist and world-class Ironman triathlete to a successful health tech entrepreneur is anything but conventional. Inspired by his personal frustrations as a healthcare patient, Gui founded Artera, a platform that unifies patient communication. Through his story of quitting a comfortable job, securing funds from friends, and unwavering determination, Gui illustrates the concept of ‘burning the ships’ with no retreat. The interview delves into his experiences at Google and data platform Graphiq, the decision to move Artera to Santa Barbara, and the challenges faced during the COVID-19 pandemic. Gui also shares his views on leadership, the impact of AI on healthcare, and future goals for Artera.

Show Notes:

(02:20) From Ironman to Healthcare Innovator

(06:40) Early Life and Entrepreneurial Spirit

(11:28) The Google Experience

(16:23) Joining Graphic and the Santa Barbara Move

(28:15) Choosing the Right Business Partners

(29:50) The Joy of Building and Learning

(30:37) A Bold Move to Santa Barbara

(35:43) Embracing AI and Future Challenges

(40:32) Leadership and Personal Growth

(48:10) Final Reflections and Advice

(49:30 Beyond the Bio with Guillaume de Zwirek

✅ Host: Ian Hathway - Co-Founder & Managing Partner, FOVC

✅ Guest: Guillaume de Zwirek, Founder & CEO, Artera

Produced by Spellbinder Media. Executive Produced by Bridge Five Ventures. Copyright ©️2025, Bridge Five Ventures, LLC, All rights reserved.

Listen & subscribe wherever you get your podcasts or at outsiderinc.substack.com.

AI-Generated Transcript

Guillaume de Zwirek: [00:00:00] There’s a story that I reference often about a Spanish conquistador who has a small fleet of men who’s going to colonize someplace. He lands on shore, his men are like getting off the ship and he says, burn the ships. And they’re like, but sir, if we burn the ships, how are we gonna retreat? And he goes, there is no retreat.

Burn the ships, remove any way that you could fall back to something. When I started this company, I quit my job. I had some life savings, and then I got 10 friends to gimme $20,000 each. You talk about burning the ships. There is no going back when your friends is hard. Earned capital is in your business.

There is no other outcome than success.

Ian Hathaway: Welcome to another episode of Outsider, Inc. I’m your host, Ian Hathaway. Today’s guest is Guillaume de Zwirek, founder and CEO of Artera, A platform making it [00:01:00] easier for patients to navigate their care while reducing the burden on staff by unifying communication across text, email, phone, and chat.

Since launching in 2015, Artera, formerly known as well, health has become an incredibly successful health tech company and a leader in patient communication used by nearly a thousand health systems and federal agencies to power nearly 3 billion interactions per year. Gui’s path to building a major tech company was anything but conventional.

He originally trained as a classical guitarist, studied business and music in college, and competed as a world-class Iron Man triathlete. Even ranking number one in his age group. At one point a. He scare during one of those races, pulled him into the healthcare system as a patient, sparking the idea that would eventually become Artera.

In between. He built his career at Google and the data platform graphic gaining a front row view of how to launch and scale products and how technology can transform entire industries. I’m excited to dig into how he turned personal frustration into a [00:02:00] category defining company, what he learned at Google and Graphiq before making the leap as an entrepreneur, how Santa Barbara became the unlikely headquarters of a breakout success in digital health, and where he sees the future of Artera and health Tech heading next.

Welcome to the show.

Guillaume de Zwirek: That was very kind. Thank you, Ian. Happy to be here.

Ian Hathaway: Well, thank you so much for being here. I want to get to the founding of Artera in a little bit, but first I wanna start with what feels like a real inciting incident for the company. As I said in the intro, you were a world class Ironman competitor, but there was one race where things didn’t go as planned.

You collapsed from a heat stroke, woke up in an ambulance. Suddenly found yourself pulled into the healthcare system, not as a technologist, but as a patient. Now you said that. Your experience inside of care was phenomenal, but once you were discharged, you were thrown into this sort of maze of outdated communications and rather than just grit your teeth and [00:03:00] accept it like most people have had to do, you felt compelled to do something.

Can you take us back to that experience? What was going through your head and why was it such an impactful experience for you to ultimately go out and solve that for other healthcare patients?

Guillaume de Zwirek: There was a period in my life. Where I thought if I worked hard enough, I could be the best triathlete in the world.

There’s no way that was ever gonna happen. But I think half the battle is, is believing. You know, Ted Lasso believed that that poster at the top of the door that he hits every time. I’ve just always believed I was raised to believe I could do anything except become President of the United States ‘cause I’m Canadian.

Unless there is like a physical imitation or something that comes up that makes it impossible. I walk into every situation with the art of the possible, and I really, really wanted to be the best triathlete in the world. I have no idea why. Maybe it’s just the competition. It’s really fun. I, I ran long distance triathlon.

I did [00:04:00] Ironman and I just got addicted. Instead of working a hundred hours a week, I worked 60 hours and I worked out 40 hours. I had an amazing first race that was number two in my age group at that race, and my goal was I wanted to break nine hours in the Ironman, which meant I had to run a sub three hour marathon after.

Swimming 2.4 miles and biking 112 miles, and my body just couldn’t handle it. When I started that marathon, it didn’t matter how my body felt. I was gonna run at the speed to go sub three. If that meant collapsing at 20 miles, it meant collapsing at 20 miles. It was when or die trying. And I think if I hadn’t started having those issues.

Maybe a widow maker was in my future. We never figured out what was wrong with me, but I had a family history of heart issues, and this all made it real for me. I passed out at Ironman, Texas, and I was too stubborn. I was like 104 degrees internal temperature. By the way, they do rectal temperature [00:05:00] readings in Ironman’s.

Just so you know, like this is not a fun thing. It is not a fun thing. It’s like real doctors at the finish line and they insisted, not fun. But then I was trying to run a marathon solo to just get that marathon down to like two 40 on its own so I could run sub three and it was a Santa Barbara marathon, I think at mile 20 I lost my vision.

Somebody called the ambulance and I just asked the guy for an IV bag and he was like, it’s a medical liability. If I give you an IV bag, you gotta get in the ambulance if you want it. Time has a way of like exaggerating stories, but I remember the EMT saying. I believe you could be at risk of sudden cardiac arrest.

I’m not a doctor, but I think you could drop dead. You should go see a specialist. So I saw a cardiologist. I saw an ophthalmologist ‘cause of the eye issues, like we had no idea what was going on. I stopped racing, I stopped working out. I cut that outta my life, cold Turkey. And what made it even worse is I’m spending a lot of money.

I’m wasting a lot of my [00:06:00] time. The system wants me to talk to everybody on the phone between the hours of eight to five. It is like literally the least convenient thing possible, and I just looked at it and I went, this is insane. There’s so much opportunity here. Like I’m gonna go join a company that’s solving this problem.

I started doing some research and there was no company solving this. Well, yeah, there’s the long story for why I started this thing.

Ian Hathaway: It’s pretty good motivation solving. The problem that you had for lots of other people, belief in self accomplishing the art of the impossible. I feel like we’re gonna come back to those themes, but if we could, I’d like to rewind a little further back.

Growing up, you were training seriously as a classical guitarist, and you were also highly committed to athletics at that time. It’s a lot of discipline and competition before you even get. To your business career at home. Your mom was a physician, your dad was a software [00:07:00] engineer. So I guess in hindsight, it’s a pretty perfect setup for what you’re doing today.

But other than those experiences, do you ever recall being entrepreneurial? Did you see yourself as someone who was interested in business from a young age?

Guillaume de Zwirek: I do have some memories early on, my dad being a software engineer, like we had every version of the computer that has existed in our house. I remember in middle school I was the only kid in the school.

I had my little black and white palm pilot, and I bought one of those keyboards that folded out and you stick the palm pilot in, and I would take notes on my little palm pilot in class. I was always very forward with technology. I didn’t start. Businesses selling golf balls or anything of that nature, but I always wanted to work.

My first job was actually slinging popcorn at Century Theaters. Got fired from that job for giving popcorn away for free. The interesting thing about movie theaters is the people who spend the most money actually had the [00:08:00] least money, and that bothered me. My second job, I played characters at kids’ birthday parties.

I would show up to like a rich kid’s house in Atherton and like show up as Spider-Man and do a little song and dance. Captain Feather sword was big back then. Prince Charming. I’d also do this in malls. I got paid $60 an hour. My biggest tip ever was 200 bucks. Just controlling my destiny was part of it, so I was always working.

My dad started a business, so I have memories of helping him on the business side. He’d be like, I need a promotional video. And I was like, I’ll learn Adobe after Effects and I’m gonna build like a stop motion video for your business. Those are like the earliest recollections where I always wanted to do something and I would do anything.

From slinging popcorn to playing Spider-Man to sitting in Adobe After effects and learning the whole thing over the weekend to give my dad a promotional video.

Ian Hathaway: So there were always these elements of staying active, doing something, being valuable. [00:09:00] You went to college, you got dual degrees in classical guitar performance and in business, I can’t imagine that many people had that combination.

How did those two disciplines compliment each other and what did playing music at that level, in that style teach you or help you as a founder?

Guillaume de Zwirek: I didn’t want to be a musician. The problem is I was really good at it, and I was good at it because of the discipline. My mom demanded perfection. There was a rigid schedule.

It was, you will all play an instrument, you will all play a sport. I skipped seventh grade, so I got to high school young, which is really bad in the sports world because if you’re young you look like you’re not very good. I was short, I was five foot two I think when I went to high school. So like I quit swimming and I continued with music and I was just really good at music.

And when it came time to go to college, I [00:10:00] actually wanted to be an actor. I did so many acting school interviews, I got into none of those schools. And then my mom made me apply as a music major to some schools. I got into all of those and they all offered me a scholarship. My parents aren’t gonna pay for college, so like I thought I couldn’t go to college unless I had a scholarship, so I had to play music and I suffered for three years.

And then I looked at the syllabus and I went. Holy cow. My scholarship is for a Bachelor of music and classical guitar, but technically I’ve already completed a Bachelor of Arts and Music. I wonder if I could convince the dean to let me switch my major, keep the scholarship, and then just get another degree my senior year.

So I prepared this whole pitch. I went to the dean, I made my case, and she said, yeah, that’s fine. The only degree I could finish in one year was a business degree. [00:11:00] I had a lot of credits from high school. I didn’t have any options, and I finally was having fun. Honestly, I partied harder my senior year of college than any time in my life, and I got straight A’s both semesters and I had a double course load, and I had a 4.0 my senior year.

Ian Hathaway: Wow. Making the most out of a. Tricky situation. Convincing people to change the rules for you or to bend towards your will. Yeah. That’s really what being an entrepreneur is about. Your first job out of college was a good one. Went to Google, which at the time was widely considered the greatest company to work for.

Guillaume de Zwirek: I tricked them into get that job too. I had no business getting that job.

Ian Hathaway: You worked in product marketing for a few years. That’s not an easy job to get, so you convinced them to hire You would love to hear that story also. What did you learn there? How did it change or shape you in terms of what could be done in the business world?

How [00:12:00] to build a successful product in a high scale business?

Guillaume de Zwirek: My first job was as an investor relations intern at Activision, the video game company. I had never played a video game in my life. My mom outlawed video games. We didn’t have a tv, so that was my first job. I like, just kind of fell in love with a different style of work and business and things of that nature.

And then my junior year I was like, my dad works at Google. That seems like a pretty cool company. I’m gonna try to get an internship there. The internship that I applied for was, the acronym was Bold, which was Building opportunities in Leadership and Diversity. It was something like that. It was a diversity internship.

I’m from Canada. I wouldn’t call that very diverse. I am Caucasian. I was squarely middle class, but I did play classical guitar. So my application was all about how I was a musician and that was the [00:13:00] diversity I was going to bring to the program. And to Google’s credit, they recognized diversity in all forms.

There was such a range of individuals in that internship. I worked my butt off my project. I tried to create an algorithm to predict ad spend when advertisers had just started spending based on a bunch of different data sources so that the sales reps would know who to call and who to spend time on. It went nowhere.

We ended up testing it in my last couple of weeks. The algorithm didn’t work, but I think people like valued my work ethic. They gave me a job in sales. I was like, I would like a job in product marketing. That sounds fun. That sounds creative. So I decided I had three options. I was either gonna get a job in product marketing, I was gonna join the Coast Guard as a rescue diver if I passed the physical.

Or I was gonna bring the guitar back and do a touring arrangement with Club Med for two years and spend a couple months at every club med and just play guitar. My mom [00:14:00] vetoed club Med. Because I think the reputation of traveling musicians at Club Med is not the greatest. My parents being Canadians were generally anti-military, so they were very against me joining the Coast Guard, so I needed to get the job at Google.

I was fortunate. I ended up getting it and it was an amazing two and a half years. The amount of responsibility they were giving 20 year olds back then, and probably still to this day, I had a $20 million budget. With almost no oversight. I was flying to LA and shooting commercials with famous directors.

I remember, uh, they put me in charge of our annual zeitgeist. It was a two minute video that they started producing the year before at the end of the year. And my boss was like, we’re gonna get you a spot. And the video’s gonna play when the ball drops on Carson Daly, on New Year’s Eve and the CM O2 weeks before this spot is supposed to air.

Asked to see a rough cut of the commercial. I [00:15:00] sent it to her and I was like, this is nowhere close to ready. It will be ready. Don’t worry. The vision is there. Like I will not fail. This will deliver. And like she wrote back and she was like, this sucks. You need to change all these things. I’m very nervous.

I wrote back to the CMO and I was like, respectfully, I don’t think you’re seeing the vision for this commercial. I will not be making these changes. I think you will be very pleased with the result. And my boss was like, I don’t know what you were thinking, gee, but we might pull the spot on. Carson Daly Lorraine, who’s still the CMO at Google, wants nothing to do with this video.

She doesn’t even wanna see the final cut, and that just put the fire under me to make this thing the best thing that they had ever seen. And I’ll never forget, Marissa, my boss saw it. She cried and she shared it with the CMO and it played when the ball dropped, but like it was a formative [00:16:00] experience. I was surrounded by the smartest people and I left because I looked down the hall and I saw where I could be in 10 years, and I just didn’t wanna be there.

I needed to spread my wings and learn something else.

Ian Hathaway: A lot of good lessons in that. Not too many places where you could pull a stunt like that and not only not get fired, but actually be rewarded. You spent a few years at Google, then you moved to Santa Barbara to join a company called Graphic, a data aggregation and vertical search platform.

Kevin O’Connor was actually a guest on this show earlier, but it wasn’t like a really well-known company outside of domains that were relevant to the company. Within Santa Barbara, it’s a pretty legendary company, both because Kevin himself is a legend and because of the people that came out of that.

But I have to ask, it is an unusual move. Here you are at the center of Silicon Valley, at the top company. At that time, you didn’t wanna stay long term. You left and you [00:17:00] ended up in Santa Barbara at this relatively unknown company, especially early on. So why did you decide to do that?

Guillaume de Zwirek: First thing, I left Google to go work for Strava.

I thought they were missing some opportunities. So I emailed the CEO and said, I’d like to be a product manager at your company. They had no job openings. I was like, I got a 20 slide deck of things that I think you could go after. Can I come to your office and present credit to him? He was like, yeah, come on down.

Show me what you got. And they gave me an offer. So I finished out a bunch of projects, worked my butt off at Google for three months. The problem with the three months notice. Was that my network knew I was leaving at that point, and I had a buddy from my internship days at Google who said, look, I know you have your dream job, but we need somebody like you at this company in Santa Barbara.

It’s founded by this guy Kevin. He’s a serial entrepreneur. You would work directly for him. We work our butts off here. It’s based in a beautiful place. Will you just come out? I’ll fly you out on a Friday if nothing else, we’ll catch up. We’ll go out for drinks. It’s a great [00:18:00] time out here. And I was like, you know what?

I haven’t seen you in a while. I’ll come out, but like there’s zero chance I’m taking this job. He was like, just gimme a shot. So my flight was like four hours delayed from San Francisco. I almost canceled. I was like, the office is gonna be closed. He was like, no, no, we’re still here. I wanna say I landed at like seven or 8:00 PM Kevin was still at the office and that was green flag number one.

I was like, this is pretty cool. Like it’s Friday night, CE o’s still here. And I walked in. I was like, whoa, a lot of people are still here. I talked to Kevin. I had a wonderful conversation with him. I also had no business getting that job. It was a 75% pay cut and that night I also met a girl and I made a spreadsheet after gonna Santa Barbara.

I was like, here are the things that I like. Here are the things that I don’t like, and what tipped the scale was dating life because I had met this girl, but anybody who knows Santa Barbara knows that the dating pool in Santa Barbara is so much worse than San Francisco. Yeah, like my spreadsheet was so biased, but I felt like I needed to think through this logically [00:19:00] and not with my heart.

It’s never been about the money. It was about the experience, the learning, and I always ask myself, what’s the worst thing that could happen? I go back to Google, they told me I could come back whenever I wanted. What’s the worst thing that could happen? They don’t like me here. They fire me. The girl dumps me.

Life is short. Chase excitement. Chase, opportunity, chase learning. That was my mindset.

Ian Hathaway: Kevin said he has a very specific type of employee he likes to hire and founders he likes to work with. He’s asking, do people find more thrill in victory or are they more afraid of losing? He likes that latter group people who just refuse to lose.

I don’t know if that statement resonates with you or reflects what it was like at Graphic, but in general, how was that experience for you? What did you learn? What was it like working with Kevin?

Guillaume de Zwirek: I mean, it was everything I wanted at the time. I was empowered to do anything that I wanted. I, [00:20:00] for the first time in my life.

I had access to the very top of the pyramid, the day-to-day business and strategy behind it. I got to see what worked, what didn’t. I did a lot of things that worked and didn’t, and that’s probably where I realized that I could do this myself if I wanted to. And I think Kevin’s quote is right. I think there’s a component of it that’s just built into some people innately, which is you can’t lose if you have enough grit.

You only lose when you give up. Like I could go back and be a triathlete. I would just have to accept a degree of risk with my personal health, but like I theoretically could do it if I wanted

Ian Hathaway: to. Someone said a startup doesn’t die when it runs outta money. It’s when the founder gives up.

Guillaume de Zwirek: Yeah, that’s spot on.

Ian Hathaway: Well, so speaking of founders, you took the leap, you left graphic. We [00:21:00] talked about early on, the frustrations you experienced as a healthcare patient inspired this idea, but facing a challenge, being annoyed by it, wanting to solve that problem and then actually making the leap to do it is a whole other matter.

Just tell us a little bit about that early inspiration and taking those initial steps to start the company.

Guillaume de Zwirek: There’s a story that I reference often about a Spanish Conor who has a small fleet of men who’s going to colonize someplace. He lands on shore, his men are like getting off the ship and he says, burn the ships.

And they’re like, but sir. If we burn the ships, how are we gonna retreat? And he goes, there is no retreat. Burn the ships. Remove any way that you could fall back to something. When I started this company, I quit my job. I had some life savings, and then I got 10 friends to gimme $20,000 each. You talk [00:22:00] about burning the ships, there is no going back when your friends as hard earned capital is in your business.

There is no other outcome than success. Like the ends of the earth that I would go to to make them whole. I remember turning to my wife, I was like, I want you to understand that worst case scenario, this is the debt from my business degree, I, I won’t go to business school and I will pay back this $200,000.

That was how I approached it from the offset. And it, it’s how I approach a lot of things in business and in life. It makes for a very, very stressful life because you are redlining a lot. Going back to your question, the true story behind founding Artera or Well Health, is that I tell it like I was gonna solve this communication challenge, but the first iteration of the product was an app for people to communicate with their dietician, and [00:23:00] there was no product.

There was a deck. Probably got laughed out of a dozen venture capitalist offices. And the real story underneath that is that I had quit my job, told my wife I was gonna start a company, and two months in, she goes, so what have you been doing? Where’s your company? And I think some expletives were said. I slammed the door of the house, grabbed my computer on the way out, sat in the car.

Stayed up all night and built the pitch deck for the company. The next morning I walk into our little studio and I was like, you wanted to know where my company is? Here’s my company. I had lost my way for a brief moment. I had no money. It was just kinda like living off of her for a couple months. It was funny.

She like was that kick to actually commit and do it and burn the ships and, and make the only option success with the company.

Ian Hathaway: Credit to her. She called [00:24:00] you on your bullshit and got you in gear. So here you are, you are indebted to your friends, you’re indebted to yourself, you’re indebted to your future wife, but you got a deck.

You’re up and going. You had some struggles, fundraising.

Guillaume de Zwirek: Oh yeah.

Ian Hathaway: Obviously you eventually found success, but what was it like early on, kind of stumbling your way through that and ultimately who took the first bet on you?

Guillaume de Zwirek: I had a couple hundred nos. I don’t really remember the nos. When you’ve burnt the ships, it doesn’t matter what anybody tells you, you have no other choice than to be successful.

So you just brush it off and move on to the next person. And when you ran out of those people, I was like, well, now I just gotta build the product. So I went to my friends, built a prototype, rented a U-Haul, went to a conference, got people to sign up. I was like, Hey, I think this thing might work. And then we were really outta money and I was like.

Where else can I find money? My co-founder chipped in. We tried charging our customers that wasn’t [00:25:00] working, which is a bad sign, and then we were like, you know, we’ve never done this before. We could probably learn from an accelerator, and we applied for Y Combinator and Techstars. Why Combinator didn’t even respond to our application.

Techstars had an actual healthcare accelerator, so there was an angle. This gentleman by the name of Matt Savv. I took an interview with me and my co-founder, Joe, and he just saw something in us. Even when everybody else in that program was a hard no on us and he got a wild card pick. We were it. I was like, I’m gonna make this the best wild card pick you’ve ever made.

Wow. And we busted our butts. First one in, last one out. I was asking ridiculous things from the team, like, please introduce me to these 200 people. I mean, I didn’t know what I was doing, so there were no rules. I did whatever I wanted. I did whatever I thought would work.

Ian Hathaway: But do you feel like that served [00:26:00] you maybe by being naive you were actually just plowing forward a

Guillaume de Zwirek: hundred percent.

Well, from

Ian Hathaway: like first principles rather than like, this is how it should be done. Because you didn’t know

Guillaume de Zwirek: 100%. I tried anything that sounded reasonable when, when we started trying to sell. I bought a list of CEO names and I just started calling CEOs of hospitals. The assistants all hung up on me and I was like, okay, well let’s tell them that we integrate with their EMR.

So we started saying that and they were like, oh, that’s Sally. Sally works with the EMR. I was like, oh my gosh. If we just say the EMR name, they’ll hand us over to that tech person. This is perfect. So we started getting handed over to the tech people and then we convinced somebody to try our product and it worked for them.

And then it was wildfire. My first sales hire I hired off the street. The interview was two minutes. What are you interested in? You wanna work for me? It’s 30 k. Does that work? Well, that seems kinda low. Well, that’s what I get paid. I think it should be fair. What do you think? Okay, sounds good. There were no rules.

He lived in the office. [00:27:00] So yeah, it was wild times. We did anything ethical to try to get success and create value in the ecosystem.

Ian Hathaway: Social capital, creating Goodwills, how things get done. So speaking of investors who believed in you. Something you said to me previously was you’ve never taken the highest valuation in a round, which is.

Not a common belief among many founders. They will say, well, I’m really just looking for the best fit. I want value add, especially early on. But when push comes to shove and that term sheet comes across the table, founders end up with suboptimal investors because someone offered a better price, and maybe that’s why they’re offering the better price because they’re not as good of a fit.

You’ve made it a religion for you, and so just tell us a little bit about that and maybe how that [00:28:00] served you. Well,

Guillaume de Zwirek: I always thought about taking money and bringing on investors as a marriage. They have certain rights where you are with them, right? Until they kick you out or they cash out. So it’s even crazier than a marriage.

It’s your boss. I’ve always. I just wanted to work with people that I respect, who I trust, who I think I can learn from. My favorite business partners are people who are honest and transparent and kind. There’s no games, and I always look for the same thing with partners ‘cause I knew I was gonna have to live with them for a very long time.

If you think long term and you’re thinking about building a business that you wanna be part of for a long time, that’s gonna have generational impact. There’s no other choice than to pick the right partner. And if you give up an extra 20, 30, 40% that you otherwise would’ve had, it is a [00:29:00] small price to pay for being around people that you wanna be around.

I’ve met a lot of a-hole investors. I don’t want that in my life. It’s not worth any amount of money. Would you marry somebody who was a dick like. Is there any amount of money that could convince you to, I mean, for some people it does. Well, that’s what people do. Yeah. Yeah. For some people it does. Not for me.

Right. And I like, you know what? I’m happy. I am. I am really happy. I’ve actually had a really shitty week. I’ve had like a very hard week. But I am happy. I like my partners, I like my team. I am so motivated by what we’re working on. If you’re not happy, the founder’s gonna flame out. I’ve just always lived by that and.

Who cares about the money? At the end of the day, we all die with nothing. I think a lot of people become obsessed by the money. I don’t want my kids to get anything. Do you know what the best part of this journey has been? Building it. The stories, the experiences. That is the gift that I have [00:30:00] gotten. Do I wanna rob my kids of that?

No. I want my son and my daughter to have the joy of building something themselves. Money can only serve to f that up for them. Now, we might talk in 30 years and I’m gonna have big regrets around that statement, but that is my philosophy today. That is the biggest thing I’ve taken out of all of this, which is the experience, the friends, the tribulations.

The hardest times are the best times. ‘cause I learned something

Ian Hathaway: in the end. All we have is our stories. Throughout this journey, you are crisscrossing up and down the coast of California. First you were in the Bay Area, then in Santa Barbara you founded Artera Well Health at the time in the Bay Area while doing Techstars in la.

But you made a pretty bold decision in 2017 to leave Silicon Valley because you felt that Santa Barbara would be a better place to build [00:31:00] a digital health company. Tell us

Guillaume de Zwirek: about that

Ian Hathaway: decision.

Guillaume de Zwirek: I think this goes back to that theme of burning the ships. My wife was at Google at the time. We had just raised her seed round and we were celebrating her promotion and I asked her how she liked the Bay Area and she was pretty honest with me.

She was like, I don’t really like it here. And I said, you know me neither. It’s really hard to find talent. Everybody’s getting these massive offers from Meta or other startups that have raised a bunch of money from Sequoia and Andreessen, and we’re a nobody. I don’t have a huge network here. It was pretty nice in Santa Barbara.

Uc. Santa Barbara has great talent. People don’t really want to leave if they can avoid it. It is relatively entrepreneurial. Why don’t we move to Santa Barbara? And it might’ve been the wine, but my wife said, I love it. And I said, honey, we gotta do it now because I’m gonna take this company public one day and if we don’t move it now, we will be here for the next 20 years.

Couple days later, I went to my wife and I said, honey, great news. I got approval from the board. We’re gonna move the company to [00:32:00] Santa Barbara. I let the company know today I got a U-Haul. And my engineers, Donnie and Ruben, are gonna drive the U-Haul from our wedding venue after we get married to Santa Barbara.

I will be moving to Santa Barbara on Monday to my wife’s credit. I, I think our first answer was WTF. Like, I know we talked about this, but we didn’t talk about the timeline. We didn’t talk about being long distance. We didn’t discuss any of this. So going back to burn the ships, it was like. We decided that we were gonna do this.

I just made it happen and I made it so that there was no other option. I’m much more thoughtful with my wife now. She’s my partner, so we do need to decide these things together. Good idea. My wife and I were long distance for two years. She was flying out to the Bay Area on Monday mornings, first flight out and Friday nights, and we’d spend the weekends together in Santa Barbara.

I rented an apartment in a senior living community and we lived there for 18 months. Gotta be close to your customers, right? Yeah. Yeah. Well that’s a great spin [00:33:00] on it. It was good for the business. It wasn’t great for our relationship, but having no distractions five days a week, it was just work and nothing else.

You know? I don’t think I ever was at the senior living community. I was just at work the entire time, and then COVID happened. We had a kid and everything changed.

Ian Hathaway: Well, speaking of COVID obviously affected many industries, affected society deeply. I know it affected our terror in very specific ways. Tell us what it was like responding to that in real time and how it benefited the company over the long run.

Guillaume de Zwirek: There was a massive issue when COVID happened with folks not going into the clinic to get preventative treatment. And hospitals and clinics needed to become digital overnight. There was a rush to buy telehealth solutions for virtual visits, a mad rush, and then there was a rush to buy software that.

[00:34:00] Would create effective communication pathways with patients as it related to their in-person visits, but also to virtual visits, right? If there was an outbreak in a clinic, you needed to tell people not to come. There was just a lot of reasons for, uh, digital and autonomous communication. I remember coming back to the team and I was like, everybody needs something, but no one has money and no one has time.

So like, can we design a version of our software that we could take live in two days? At like very, very low cost, and I remember we called it rapid release and we signed up, I don’t remember how many customers, but it was like 20 or 30 health systems. It was a total bootleg initiative, but that got us a lot of trust in the community.

Almost all those customers converted to paying customers and provided a real impact. Vaccine delivery in urgent clinic communications in interactions related to telehealth visits that patients needed to show up for, and it was a really rewarding time. It was [00:35:00] also a really tough time economically. We had been thinking about raising around.

All of a sudden everything stopped, investment stopped. So then we looked at the business and we were like, we can’t rely on outside investment. We need to cut people in the business to make sure we survive. That was really tough. I’ll never forget that week, worst week of my life, I had a 18 a month son, newborn daughter.

We were living in a 700 square foot house. I had a board meeting. I was firing people, and we all had COVID. Lots of lessons learned during that time. You had to go fast, but you had to be capital efficient because we just didn’t know what was going to happen. We’re facing a similar thing right now in the business.

The entire technology landscape is changing. AI feels bigger than mobile than the internet. Reimbursement is changing. Medicaid’s getting pulled. So it’s a very, very interesting operating environment [00:36:00] right now for healthcare executives. How do you make your business viable for the next decade? How do you anticipate the regulatory shifts?

How quickly do you embrace ai, but how do you do it in a way that’s safe, both a regulatory standpoint, but also like a patient compliance standpoint? I think I thrive in these very messy dynamic situations ‘cause there’s a lot to figure out and there’s a lot to learn. So it ends up being a lot of fun.

Ian Hathaway: It’s been a highly dynamic environment. For lots of people the last five years or so, I’d, I’d say to put it mildly on so many fronts. Sounds like you came out of COVID. Much stronger. The business is doing well. You’re serving hundreds if not thousands of health systems, federal agencies, processing billions of interactions a year.

The company’s on all sorts of lists, which is pretty [00:37:00] incredible given. The humble beginnings, gathering up those 20 K checks and pumping your life savings into the business, but knowing how competitive you are, I’m sure those goalposts are moving all the time. You mentioned some of the challenges you’re facing today.

Where do you want to take things from here?

Guillaume de Zwirek: There is always a challenge. We always need to uplevel. The past two years have been. Tough for the business. The 800 pound gorilla in our space decided to compete directly with us, and that was a huge percentage of our revenue and we’ve had to diversify. We saw it coming, but it doesn’t change the complexity that it adds to the business.

Diversification became very important when interest rates started going up. Our buyers started wanting to buy more from fewer vendors, and we didn’t anticipate that shift as early as I think we could have, and we weren’t in a team [00:38:00] position to be able to build those product ourselves. We have fixed both of those problems.

I think the future is very bright for us, but it has been very painful and very stressful, but. It has made us so much stronger. We launched an AG agentic AI product earlier this year. It is the best ag agentic AI solution in healthcare right now. We would not have been able to build this product three years ago.

Our team was not operating in the right way to be able to deliver this in an agile fashion at the quality level that we needed at the stability level that we needed. We had to change a lot of things to make that possible, and we’re gonna have to build two or three more products over the next year, and we are measuring success in months now.

I believe the future is AI native. What engineers are able to do now with GitHub co-pilot or cloud code is incredible. Those [00:39:00] technologies are creating 10 X engineers just with the technology itself. When you think about Ag agentic ai, when you think about the patient experience, the things that I struggled with, they all become one.

You need to fill out a forum, you need to pay a bill, you need to reschedule a visit. You have some questions about your cast that was put on a few weeks ago. All of those can be handled in a phone or text or RCS interaction, and you never have to log into four different applications. So we’ve had to diversify the business in terms of product set, in terms of markets that we’re going after.

And most recently, we’ve really had to change the way we think about the team and our culture. The fundraising environment wasn’t great. We weren’t the first in AI, and I’m glad we weren’t, ‘cause the technology has changed so much. But those companies raised a lot of capital at very, very high valuations.

And we were kind of sitting in limbo for six or eight months where we were like, we’re a scaled company. Should we operate this for EBITDA and sell out? Or do we see the sparks of [00:40:00] growth and are we ready to recommit? Go back to aggressive growth, change the world mindset

Ian Hathaway: and what was the choice?

Guillaume de Zwirek: Oh, the second Everywhere.

But there was a period, right? When you think about those headwinds, when you think about the competition, the interest rates, the bundling, the way the team is structured, where you really spend some time looking in the mirror going, can we do this? There is self-doubt that no one talks about.

Ian Hathaway: I know that you are a hands-on CEO.

I know you like to be involved with the details, especially as the company, as technology, as software is going through these changes, big moments require leadership. So how would you describe yourself as a leader and how do you think about the importance of being involved? As a CEO in the details. Even at a company, you’ve reached [00:41:00] scale, but you’re still involved.

How should people think about balancing those things?

Guillaume de Zwirek: I am in the details for sure. To me, the EST sign of weakness in an executive that works for me is if I know more than them. And I try to know a lot about each of the individual functions. I have an executive that works for me. Who did not work for me a year ago.

I saw a lot of potential in this person, and I decided to put them into a role that they’d never been in before. You see, the leadership qualities had worked at big companies I knew would be good in this space. But two months in, I had a really stern conversation with them and I said, look, sometimes people ask you about how our, our federal projects are going, and you don’t know the answers, and I know them.

I’ve said, I cannot know more than you about this space. You’re not deep enough in the tactics and you’re not spending enough time and strategy and we have to completely rejigger the way you work. I need you understanding the nuances of what your [00:42:00] team is working on and the nuances of where you need to be so that you can guide the company and your business unit to where it needs to be in three years and credit to her.

It was an instant pivot. She took that feedback so well and we have such a good working relationship now, but I think that story. Is maybe a representation of how I work, which is I used to trust blindly. That was my leadership style early ‘cause I just assumed everyone was like me. I got bit a few times.

There are folks who have worked at big companies who, when you trust blindly, they go out and hire a litany of lieutenants under them. And if those lieutenants aren’t very capable, you end up with a bunch of layers. No one who actually knows what’s going on, and you just go slower because there’s too much process and bureaucracy in place.

And my style now is lead with trust, [00:43:00] but verify. Quickly and deeply, I need to know that you will be deeper than me so that I can take a step back and then you can give me the, the summary every week. And that’s what I’ve tried to do. And I always pick passion areas and I will sit with the developers and like everyone gets scared because if they tell me about something they’re working on, they know I’m the first person who’s gonna ask what developer environment it’s in, give me access, and I will be testing it because I need to know how it works.

I’m in the product every single day. We have, I think like. 30 or so different developer environments that are spun up every single day. I have access to all of them, and sometimes I just log in to see what’s new, not because I wanna micromanage it, just because I need to understand so that I can set the right strategy for the business and align the company cross-functionally.

With that work that’s going on. So I don’t know what sort of leadership style that is. I don’t even know if it’s a good leadership style. It makes my job a lot of fun. But it’s your leadership style, I guess. Yeah.

Ian Hathaway: I feel like you and I have that same way [00:44:00] of approaching managing a business, but everyone has their own style.

You hinted a little bit to your evolution. As a leader, you’ve been at this a decade. Companies change as a result of the leaders, but also the leaders change. How have you evolved as a person by being CEO of our tariff or a decade?

Guillaume de Zwirek: You have kids, Ian, right? Little people, little problems, big people, big problems.

You can’t take a 2-year-old and turn them into an adult overnight. They wouldn’t be able to cope. It’s the same thing with a business. I was a child when I started this thing. My big problems back then were little. My big problems now are also little, but they would’ve been fricking gigantic back in the day.

The things that I have to deal with on a daily basis, I have had to build up scar tissue to be able to deal with [00:45:00] them. When I fired my first executive, I didn’t sleep for two weeks. Do I feel remorse today? Sure. But I feel it for one minute and it’s kind of callous, like my wife has pointed out to me like, you are a less empathetic person now than you were 10 years ago.

And I literally think it’s scar tissue, but I would not be able to do my job without that scar tissue. I think that’s like the fundamental shift that has happened. Under the scenes, a lot of lessons have been learned along the way. You know, one thing that I did poorly was I used to try to be everything to everybody and I wanna make everybody happy.

People were like, you need to stop. ‘cause somebody would tell me something, I’d be like, yes, that makes a lot of sense. And somebody would give me another perspective in a one-on-one and I would change my mind. ‘cause they were also right. They’re like, you need to just pick a point of view. Stick to it. And that has been a big lesson.

I’ve deliberately tried to [00:46:00] do that more. You know that adage, the best choice you can make is the right decision. The second best choice you can make is the wrong decision. The worst choice you can make is no decision. I was sitting in no decision paralysis for a long time, and I think that hurt the business.

Ian Hathaway: I think about empathy as having an ability to understand or relate to someone’s feelings or point of view. So maybe it’s not that you lack empathy. Maybe it’s that you are unwilling to be held hostage by preventing the pain and suffering of other people in terms of running the business, I don’t wanna gloss past this point because there’s a list of things where things can go wrong, but one of them is a founder who’s afraid to hurt people’s feelings.

A founder who struggles with the personal loyalty. And even more than loyalty to the business, it’s a fiduciary responsibility. They’re different things, and so not everyone can make that [00:47:00] evolution, but it sounds like you did.

Guillaume de Zwirek: If I hadn’t burnt the ships, I wouldn’t have felt that responsibility in the same way my co-founder and I parted ways.

Early on it was painful. I might not have made it if I had. 200 grand, Matt Koslow and all these people that I needed to succeed for. I might’ve let the relationship, my love for this guy mask what needed to be done for the health of the business. I really think. That is what started that rolling ball of gradually building stress tolerance and being able to, to your point, turn that empathy on and off very quickly, like a switch and not let it affect my life.

You can’t be a slave to your [00:48:00] feelings. You will wallow in misery like this is not for the faint of heart.

Ian Hathaway: I can definitely relate to that and I think this is a really strong way for us to wrap. But I, I’ve got one kind of big final question for you. With Artera, you’ve done this 120 miles of cycling, you’ve swam your two miles, and now you still got a marathon to go.

You’re not in this to raise money. Or to pump up valuations or even to get to a quick exit. You’re here to build something durable and lasting that helps people and changes the way that healthcare organizations engage with their customers. Flashing forward, I don’t know, another 10 years, what do you hope that you’re able to accomplish?

Guillaume de Zwirek: I hope that when anybody reflects on their experience engaging with a healthcare provider, it is. Incredible. I think care should be at your [00:49:00] fingertips. The phone should get answered on first ring. If you need something, it should get done right away. We shouldn’t be constrained by capacity. We should only be constrained by our imaginations.

I feel like every patient should get concierge level care at Medicaid costs. It’s technically possible. It’s operationally challenging. God, would that feel good to be able to deliver that?

Ian Hathaway: I would love for that vision to come true. Having been interacting with the healthcare system lately, we’ve got a long way to go.

It’s a great way to end. But before we do here on Outsider Inc. We like to finish with a segment called Beyond the Bio. These are some quick hit, quick answer questions to step away from your resume a little bit and dig into you as a person. Sound okay?

Guillaume de Zwirek: Let’s do it.

Ian Hathaway: All right. What’s a quick piece of advice from a mentor that stuck with you on your journey?

Guillaume de Zwirek: A mentor of mine, Hans Burma, a few years ago, was talking about his upbringing. And his dad was a Fortune 50 [00:50:00] CEO, and his dad told him, I’ve been very fortunate in life and you know, I’m not passing anything down to you and it’s because I don’t wanna rob you of the joy of doing it yourself. And I think about that all the time in raising my kids, but also in managing a team.

I shouldn’t want to do the work for the people on my team because the pride is in doing it yourself and coming up with it yourself and executing it yourself and learning along the way. So that’s changed the way I operate as a father, as a leader, as a peer on the team. And I probably think about that more than any other piece of advice I’ve gotten in the last 10 years.

Ian Hathaway: That’s really good. Who is an unsung hero in your life and what’s been the impact they’ve had on you?

Guillaume de Zwirek: This is my wife Katie. She had no idea what she was getting into when she married me. She’s definitely afraid of [00:51:00] flying and she flew on a tiny Pilates twice a week for two years when we had kids. And COVID was running.

She managed everything in the house while having a very intense, full-time job at Google, and now she’s starting her own business, and I could have never done it without her.

Ian Hathaway: Who’s someone in the Santa Barbara startup community or in your broader network who doesn’t get enough credit and deserves a shout out?

Guillaume de Zwirek: I’ll call him My partner, Tom McIntyre, technically not a co-founder, but he started around the seed stage. And he gets all of the work and pressure associated with being a co-founder without getting to claim that he’s a co-founder and he totally is, and he is 10 times a better operator than I am. [00:52:00] Greg Ryan Hussle Energy, he got on a plane at five 30 this morning to go to Tennessee.

For a 6:00 PM meeting with a bunch of physicians in Tennessee. This guy’s a brother to me. He could be the CEO of any company in town. He is so incredible. So probably shouldn’t give that one away. ‘cause Yeah, he needs to keep working with me.

Ian Hathaway: Executive recruiters are reaching out now. Um, so tell us something most people don’t know about you.

Something outside of work could be a hobby, travel spot, guilty pleasure, or maybe even a hidden talent.

Guillaume de Zwirek: I could beatbox and sing at the same time. I learned in high school, there’s a famous beatboxer named Relle, R-H-A-Z-E-L, who did this rendition of if your mother only knew. And I used to do that all the time in high school.

Oh, and I’ll give you one other one. I wrap in the car with my kids. Every day, and my kids have started doing it, and I’m a [00:53:00] really, really horrible rapper. But like in an alternate universe, I would have like a nerdy tech rap career and I’m really bad. But every morning, like they’ll be listening to Frozen and I’ll start dropping a beat on frozen, and my kids are like, stop, dad, stop.

Ian Hathaway: Well, that’s a great segue to my next question, which is, what are one or two songs you’d like to add to our Spotify founders playlist? Ooh. Something that fuels your workday or has inspired you on your journey.

Guillaume de Zwirek: I really like Black Friday by Lost Frequencies with Tom O’Dell. Great song. I’m a big tropical house guy.

And then my favorite reggae song is World On Fire, the remix version with Stick Figure and Slightly Stupid. That is an entrepreneurial song, and the chorus goes, who Set the World on Fire? It was me who set the world on fire. That song is just like, you talk about entrepreneurship, you talk about burning the ships.

That’s it. Um, that’s the one.

Ian Hathaway: I’m gonna listen to that on my way home, without a [00:54:00] doubt. What’s a book you might recommend? Something that’s been valuable to you on your journey, or something you think founders should read?

Guillaume de Zwirek: My favorite book that wraps a bunch of different entrepreneurial lessons together.

Is the right of a lifetime by Bob Iger. I actually fell into a depression after I read it because I realized that it would never be as good of an executive as that guy. Like it actually made me sad. So that’s one that just like wraps it all together.

Ian Hathaway: So look, last question. If you could give one piece of advice to someone who’s about to start their first company today, what would it be?

Guillaume de Zwirek: Do it. You got nothing to lose. Or maybe if you feel like you have something to lose, think about what the worst thing that could happen is. That’s what always got me out of those ruts. There’s one time in my life where I really wanted to quit and I called my dad and I actually told him [00:55:00] I was booking a one-way flight to Fiji.

That was like my worst case scenario. I was like, I could go to Fiji, buy a guitar and play at a beach club and probably survive. What is the worst that could happen now? I have two kids now, so the worst that could happen is a little bit more intense. Yeah, right. I wanna recognize that depending on where you are in life, the worst that could happen could be a little bit more severe than mine was.

But what’s your fallback? If you’re somebody who’s thinking about a starting a company, you’re probably a really capable person who a lot of people wanna employ. So what’s the worst that could happen is probably somebody. Given you a job, there are probably a lot of people that want to give you a job and like, okay, your ego might be bruised a little bit, but what you will learn in that month, that year, that decade where you tried will be worth whatever hit you take to ego along the way.

So just do it, you know? And Phil Knight’s words, just do [00:56:00] it.

Ian Hathaway: Yeah. I like to think of it as, instead of thinking about what you could lose. Focus on what you could gain. And that’s right. That’s a much bigger set of possibilities than what you could lose. So can’t think of a better way to end. Gee, thank you so much for being here.

This was awesome. I had a great time chatting with you and can’t wait to share it with our listeners.

Guillaume de Zwirek: Ian, it was an absolute pleasure. Thanks for the time, man.

Ian Hathaway: That’s a wrap for today’s episode of Outsider Inc. A big thanks to Gee Deric for joining us today. His journey is a masterclass in conviction with consequences.

First, burn the ships, then do the work from collapsing mid race and getting back up. To building Artera outside the valley. He’s shown the resilience to keep going and the discipline to choose partners over price, grit over optics, and action over theatrics. What strikes me most is his evolution. Trust first, verify fast.

Make the call and use scar tissue as a tool, [00:57:00] not a shield. And if his AI native vision lands. Concierge level care at Medicaid cost. We’ll look back and call this messy middle. The moment it all clicked, I’ll definitely be following along and can’t wait to see what he does next. If you want more from outsider, inc, don’t forget to subscribe to the platform at.

Outsider, inc.substack.com. It’s packed with highlights from today’s episode and bonus insights you won’t wanna miss. You can follow Outsider Inc on YouTube, Instagram, TikTok, and LinkedIn at Outsider Inc. Pod. You can also follow me on X at Ian Hathaway Outsider Inc. Is produced by Spellbinder Media. We’ll be back soon.

With another fascinating outsider conversation. Until then, thank you so much for listening and remember, great entrepreneurs can come from anywhere. See you next time.

Listen on: Spotify, Apple Podcasts, Amazon Music

In this episode of Outsider Inc., host Ian Hathaway speaks with Jon Lensing, co-founder and CEO of OpenLoop, a telehealth infrastructure platform headquartered in Des Moines, Iowa. From growing up in rural Iowa to training as a surgeon, Jon’s path took an unconventional turn when he left medicine to build a company addressing healthcare access. Since its founding in 2020, OpenLoop has scaled to more than 2 million patients annually, raised over $120 million, and reached unicorn status while staying rooted in Iowa. Jon shares how constraint breeds creativity, the scrappy early days writing letters to doctors in a grocery store café, and the near-collapse when a term sheet fell through the night before payroll. He also reflects on co-founder dynamics, the lessons of a major pandemic pivot, building a fire-eating culture, and why success stories in outsider places fuel the next generation of founders.

Show Notes:

(07:42) Medical school, entrepreneurial sparks, and building side businesses

(12:06) The decision to forgo residency and launch OpenLoop

(14:03) Scrappy early days: handwritten letters, Hy-Vee café, and Techstars Iowa

(18:00) Capital constraints, rejections, and why scarcity fueled efficiency

(20:01) Meeting co-founder Christian Williams and complementary dynamics

(22:16) Making a high-stakes pandemic pivot into telehealth infrastructure

(28:14) A pulled term sheet, payroll crisis, and lessons on choosing investors

(33:02) Building a “fire-eating” culture and hiring for high-output operators

(38:12) Why Jon chose to build in Iowa and the advantages of staying close to customers

(45:55) Beyond the Bio with Jon Lensing

✅ Host: Ian Hathway - Co-Founder & Managing Partner, FOVC

✅ Guest: Jon Lensing, Co-Founder & CEO, OpenLoop

Produced by Spellbinder Media. Executive Produced by Bridge Five Ventures. Copyright ©️2025, Bridge Five Ventures, LLC, All rights reserved.

Listen & subscribe wherever you get your podcasts or at outsiderinc.substack.com.

AI-Generated Transcript

Ian Hathaway: [00:00:00] If you had been in the Bay Area or New York and been the darlings of the venture capital industry, do you think the company would be as successful as it is today?

Jon Lensing: No, not at all. I think capital constraints. Put some very realistic pressure on companies and that pressure builds diamonds. When you back a dog into a corner, they're gonna fight like hell to get out of it, right?

The same is true in our DNA and I think the way our strategy has evolved, the way that business has evolved. And if you don't have that external pressure on the business to generate the revenue, generate the impact, generate the traction that you need to build a sustainable company, you end up wasting a ton of venture capital dollars on your initial singular mindset, which oftentimes is the wrong product or the wrong pathway, or the wrong business to build.

And so that cap constraints, I think, provided a world of benefit.

Ian Hathaway: [00:01:00] Welcome to another episode of Outsider, Inc. I'm your host, Ian Hathaway. Today's guest is John Lensing, the co-founder and CEO of OpenLoop, a telehealth infrastructure platform headquartered in Des Moines, Iowa. Since its humble beginnings in 2020, OpenLoop has scaled to serve more than 2 million patients annually, with 16,000 clinicians across all 50 states.

The company is raised over $120 million in funding and was recently valued at over $1 billion. John's path to becoming a founder was anything but typical. After growing up in a small town in rural Iowa, he trained as a physician and seemed headed for a career in surgery before deciding to forego residency and build a tech company.

Instead, from recruiting doctors out of a grocery store cafe to navigating a pandemic pivot that completely reshaped the business. John's story is a powerful example of the perseverance and resilience required to build big outside the traditional tech hubs and founder backgrounds. I'm really looking forward to discussing his leap of faith into [00:02:00] entrepreneurship.

The rollercoaster of scaling from the Midwest and what it takes to grow a culture of grit and innovation while tackling one of the biggest challenges of our time making healthcare more accessible. John Lensing, welcome to Outsider, Inc. Appreciate it. Thanks, Dan. It's good to see you. It's been a minute.

I'd like to start from the top with some big news that you have OpenLoop. The telemedicine infrastructure platform you created five years ago recently closed a fresh round of capital that places the company at a valuation of over a billion dollars. I know that achieving lofty valuations isn't why you're in business.

You're doing it to serve your customers and to create this enduring impact. But even so, it's an incredible feat and it's an a testament to your leadership. How does it feel to prove that billion dollar tech companies can be built in Iowa?

Jon Lensing: I think it's a testament to, to the overall leadership and, and all the employees at at OpenLoop who contribute every single [00:03:00] day we're hell bent on making care far more convenient and therefore more accessible.

And when you accomplish both those things, you make healthcare ubiquitous As far as the valuation goes, we're not flashy by any means. We haven't made any announcements about it. We're just heads down trying to deliver the best healthcare experience out there. We started the company, my co-founder and I in the state of Iowa, 'cause he's from Missouri, I'm from Iowa.

We want to do something to get back to the Midwest. We contemplated moving to San Francisco if. New York was calling to us as well, but firmly believed in our roots, and that's the reason why we started it. You know, we wanted to address a lot of the accessibility issues for rural America that just happened to be where we were from.

And so it made sense to live in the middle of the pain while we were trying to build the, the solution for it.

Ian Hathaway: Going back to those roots, you grew up on a farm in Ottley, Iowa, an unincorporated town with a population of just a few hundred people. I know you drive 20 minutes or so [00:04:00] every day to get to school in nearby Pella.

You were a part of a graduating class of 65 students or so. That's a pretty isolating experience for most people, and yet it turns out that it's one of the most critical factors in your journey to building OpenLoop. As a kid, you would see patients drive 3, 4, 5 hours away just to see your dad, who was a local O-B-G-Y-N, and.

That was an experience that you know had an impact on you and sparked your interest in expanding access to care. Your dad urged you not to go into medicine, you ultimately did. How do you reconcile that contradiction of being pulled towards his example of providing care to people who really didn't have too many options, but then also being a warmed away from his path of following the medical profession.

Jon Lensing: I mean, for starters, I've never been a good listener. My dad, who's [00:05:00] now retired, he found medicine incredibly rewarding when he started. But during his lifetime in, in medicine and during his career, he witnessed a lot of changes and a lot of 'em that he did not think were to the benefit of the practitioners or the patients, only to the benefit of payers and other regulatory bodies.

And so what he deemed as fun and rewarding in medicine became rules, paperwork, necessary guidelines, and just red tape after red tape, after red tape. And so having watched me grow up understanding what my personality was, he knew that I would not enjoy the new culture of medicine, but. Part of me still resonated with a lot of what drew him to medicine.

The empathetic side of, of helping somebody, watching people in the grocery store come up to him and say, thank you for saving my child. You know, that was a high risk pregnancy. I I wouldn't be here. My kid would [00:06:00] not be here if it wasn't for you. Watching the joy that that provided him and I in school attended towards the math, the science, the engineering types of subjects.

That all sort of culminated in not listening to his advice and pursuing a, a career in medicine and really decided, I, I liked surgery. Wanted to go down that route. Not a lot of surgeons in rural Iowa to provide those services. So I thought I could give back in that way. So I started OpenLoop is really this passion project during the last year of medical school with the last six months that I had to address a lot of the accessibility issues within rural America.

How do you make care more prevalent? How do you bring it to those people who still really enjoy the agrarian lifestyle, working the earth farming day in and day out, raising livestock, but that are 45 minutes to two hours away from the nearest medical center, and that nearest medical center oftentimes doesn't have the most robust of services they may need to go even further.

And so that passion project slowly morphed itself into OpenLoop. And [00:07:00] when it got to that point of. Do I continue on with my clinical training throughout residency or do I do this full-time? It, it was a pretty easy decision for me. Do I wanna see 20 patients a day in clinic or you know, four to five patients a day in surgery and then up treating the exact same cases for the next, you know, 30 years of my life?

Or do I think that I could have a larger impact reimagining how healthcare should be done? That's more beneficial to the practitioners. And more importantly, more beneficial to the patients and thereby change how we think healthcare is delivered. And once you put those two things side by side, it became a relatively easy decision.

Ian Hathaway: So it sounds like your father loved the practice of medicine, but was concerned about the business of medicine. You went to college in Michigan. You also ultimately went to and completed medical school back in Iowa. There were entrepreneurial signs in you before you got to that point. [00:08:00] Thinking about ways to build scalable solutions.

I know in college you founded a drone company also, while you were in medical school, you worked at what has turned out to be one of the top agricultural tech companies in Iowa, swine tech. So there were always kind of these signs for you while you were pursuing this education in math and science and medicine, you were building companies.

What kind of inspired those early entrepreneurial experiences for you? Do you think those were hints or indications of things to come? What'd you learn from those experiences?

Jon Lensing: Oh boy. Let's see. The first entrepreneurial endeavor that I can remember, I don't know if you remember back in like the early two thousands, you remember those live strong bands, the yellow rubber bands you'd wear. So those were starting to gain some traction. I think I was in like fourth or fifth grade at the time, and I convinced my mom, I gave her like 20 bucks and I said, Hey, I don't have a credit card, but I need to order these online.

Can you order 'em for me with your credit card? [00:09:00] They were a dollar a piece, so she bought me 20 of 'em. I went back through grade school the next day and I sold 'em for like five bucks a piece. Ran out in like two days, went back, got another word of like 50, did the same thing over and over again, and I was like, this is kind of fun, right?

This is like the first sort of endeavor into business. Just some simple arbitrage, but it was supply and demand thing is, nobody else had credit cards at that time Point. The next one that I had was in middle school. It was like a geology science project where you could turn in, you know, a recipe on how to make rock candy.

I ended up like tweaking the recipe slightly, and what resulted was a candy that was a little less solid than rock candy. My classmates loved it, so I started a small candy business in high school. I did something else. I got a landscaping, a lawn company. And then college, like you mentioned, I did a, a drone company.

Everything just sort of followed. Passions are what I found interesting at the time. And then come. Medical school [00:10:00] startups had always intrigued me. It's just like taking an idea from formation level, building a team around it who are so mission driven, that they execute day in and day out to achieve this grand vision.

Right. Seeing Uber success, seeing Airbnb, they had such a lasting impact on the industry that they, people create verbs out of 'em like. Hey, I'm gonna Uber from here to there now, right? Or I'm just gonna Airbnb that. And so, you know, I wanted to get my feet wet in that, and I was like, great. We're in Iowa. Ag Tech companies make a lot of sense.

But this one was working on healthcare for livestock, so jumped into that one with a buddy from high school. Now, the last part of your question, what did I actually learn throughout all that? I learned two things. One, I don't like following rules, so that's why I like starting my own company. And two. I hate monotony, and so being able to sink my teeth into a million new problems a day, that's what was really appealing about it.

So you marry those two things with the impact that healthcare has and the [00:11:00] empathetic side of healthcare, and it's a winning combo.

Ian Hathaway: It all seems to kind of make sense on paper when you think, what's the point of going through medical school just to go and launch a company. But for you, it sounds like it was very obvious that you were not gonna go on and practice medicine.

Was anyone else surprised at your decision?

Jon Lensing: I don't think surprised. Did they have advice against doing it? Oh, absolutely. My mom's a Vietnamese refugee. Met my dad in college who was a son of some very poor hog farmers up in Northeastern Iowa, and when my mom came over as a refugee, she came with nothing.

Dad really had nothing growing up, and so they have this mindset of being very frugal, safe, and secure. Which has afforded me the, the privilege and the benefit of not having that same mindset in a lot of ways, right? Like they've done well enough for themselves. They've lived out their own American dream, [00:12:00] and the thing that they passed on to us kids was you have the ability to do anything you want.

Do it with caution. And so their advice is like, look, you've got all the way to this point. There's a safe, secure lifestyle that is rewarding and purpose building within medicine. You are already at that point, why not finish it? But the other half of me was like, I gotta do this. I'm young enough. Let's take the risk.

The thing that you mom and dad have taught me is that the most valuable skill that we have as uh, individuals is critical thinking. And if it doesn't work out here, then great. I can go find a career back in medicine. I can go find a career in some other field. Like, so I'm not worried. I even thought about dropping out prior to graduating medical school and the administration's like, please don't hurt our numbers.

Like, like just finish it. At least like, we don't know how to handle this situation 'cause nobody's done this. If you go to Stanford Medical School, that's a completely different thing. A lot of people graduate and go into investment banking, do medical startups, et cetera. But University of Iowa, completely different.

I [00:13:00] think my classmates, when I told all of them, I was definitely the black sheep 'cause nobody else is doing that. Everybody else is going on to to residency. But I don't think they were surprised. They also had advice against it. Like, what are you giving up? Are you gonna miss the, the practice of medicine?

And some of those thoughts that they had did come to fruition. There are days where I very much miss the practice of medicine. It's probably one day a week where I miss being in the operating room and actually work with my hands and doing surgery. But at the same time, I meet with our chief medical officer very frequently, sometimes daily, and I still get that inkling of practicing medicine in some ways.

Ian Hathaway: So definitely pressures to not follow. Your path. Ultimately, you finished school, you did forego residency, and you pursued this idea. Early days were not easy or glamorous. I'm sure the naysayers felt validated early on. I know you've talked about writing letters to doctors to get them on the [00:14:00] platform.

Working out of a Hy-Vee cafe, which for listeners outside the Midwest, it's literally like cafe inside of a grocery store. You hustled your way into the first Techstars cohort in Iowa. Let's go back to those very early days. What were some of those scrappy beginnings? What was kind of the initial vision and how did those early experiences really shape the DNA of what the company is today?

Jon Lensing: I've reflected on this a lot. Christian and I were handwriting letters, 300 of 'em to be exact. Went, bought all the stamps, sat there for hours, just getting our initial cohort of doctors to sign up. We bought like a $20 mailing list off of some like list site that gave us the physicians in Iowa. We got zero responses, but we had one person sign up, so I just seemed like all that stuff just went down the drain.

Working at a Hy-Vee Cafe. Beneficial. 'cause if you got hungry, great. You go walk down the aisles, buy a snack, come back, sit down and and get back to work. Then we got our [00:15:00] first office. It was a sublet within a larger office, but our office was 10 feet by 10 feet and we had a mini fridge and an old bun coffee pot for my parents, and we felt like we made it, and then things just started snowballing and growing from there.

One of the things with building companies in non-traditional places like Des Moines, Iowa is. You don't get the same level of interest from external investors. I was not independently wealthy. My co-founder was not independently wealthy. I used student loans to start this thing and build our first product, and so at some point we knew that if we want this thing to have the impact that we want, we need to go raise venture capital dollars and call after call after call.

If we weren't in the bay, nobody thought twice about us. So rejection after rejection, after rejection. Fortunately enough, just through the Midwest community of neighbor helping neighbor got introduced to some wealthier individuals who [00:16:00] took a chance on us. They risked a little bit of money, put up the early capital, but that was not a traditional seed round or even pre-seed round of any sort of Silicon Valley company, right?

We're talking a fifth, the size of a round that somebody else would go raise, or a 10th or a 20th for some of these rounds that I've seen lately and. That became a recurrent theme throughout OpenLoop. The big vc, the name brand, VC firms, even after Growth, even after Traction, still wouldn't invest. And so the underlying premise here is that we've been capital constrained from day one.

Frankly, we still are relatively capital constrained for the size of business and the impact of the business that we've built today. But the only thing that fueled was a very scrappy mentality. How do you do far more with far less resources than anybody else in the space, which means we've had to optimize, we've had to be efficient.

We've had to think about profitability for a lot of other companies would do that and trying to balance high growth with [00:17:00] profitability. That also dictated sort of the, the DNA of the company, right? We are a company of ruthless work ethic, scrappiness and fire eating. Every single day of this company, we have been under-resourced from finances, but more importantly, head count, like the, the amount of work that our team consumes.

Like you have to be able to eat fire, you have to be able to digest five x. The amount of problems that another company built in the Bay or built in New York would have more than enough manpower and resources to handle. And so that's how we still think about different things when we're starting new initiatives or testing different ideas that we have.

It's like limited budget, internal resource is getting dedicated to it and they're hell bent on making it work.

Ian Hathaway: If you had been in the Bay Area or New York and been kind of the darlings of the venture capital industry, do you think the company would be as successful as it is today?

Jon Lensing: No, [00:18:00] not at all. I think capital constraints put some very realistic pressure on companies and that pressure builds diamonds.

It's like when you back a dog into a corner, they're gonna fight like hell to get out of it, right? The same is true in our DNA and I think the way our strategy has evolved, the way that business has evolved, you could view it as a series of some really significant pivots, but then a bunch of more micro pivots along the way.

Some people might call it chasing opportunity. I would say it was calculated. Opportunity, risk taking. And if you don't have that external pressure on the business to generate the revenue, generate the impact, generate the traction that you need to build a sustainable company, you end up wasting a ton of venture capital dollars on your initial singular mindset, which oftentimes is the wrong product or the wrong pathway, the wrong business to build.

And so that capital constraints, I think, provide a world of [00:19:00] benefit.

Ian Hathaway: Constraints lead to creativity. You hinted earlier you weren't doing this alone. Your co-founder, Christian Williams, I know you both, obviously we crossed paths at Techstars, had the opportunity to be a lead mentor for you during that program.

You're so different. The two of you. When I'm evaluating a founding team for investment, it's not just who's the superstar, who's one individual, it's the complete team, and how do they compliment each other? I'd love to hear about how you see those co-founder dynamics and any practical tips you have for founders out there about getting to that early fundamental understanding of who each other is, why that's so valuable, so that you can ultimately build in a high trust environment that's required for scaling at this pace.

Jon Lensing: I'm not sure I'm the best person to give advice on that. The way that Christian and I'S relationship came to be was. Imagine [00:20:00] going on a, a five minute speed date with somebody and you decide 15 minutes later that you're gonna get married. That was how our relationship came about. We had a, a mutual mentor.

We were both building our companies still sort of like business ideation stage. We were both looking for co-founders. This mutual mentor was like, Hey, you two just should meet up. And I, I chased him down and emailed him, I think five or six times before he finally responded back and agreed to meet me at a Starbucks.

We had a. Quick 45 ish minute meeting. Probably shared our business ideas philosophy on a whim. He is like, fine, you know, I'll come join you if you want. And handshake deal, and we're off to the races. One meeting at a Starbucks 45 minutes Now, five years later, match made in heaven. Couldn't have asked for better co-founder.

I think personality dynamics are an incredibly important part of successful founding teams. I'm a less detail oriented person than him. I'm a lot more ahead in the clouds. My responsibilities from the get go. Were always external [00:21:00] facing things, so things like interacting with clients, sales, marketing, roll up.

To me, anything had to do with investor and board relations. So I'm the fundraiser. I'm the one who runs the board meetings, hr, so those were sort of my domains. Krishna's, very methodical, detail oriented, crack the whip kind of guy. And so he was always internal facing stuff. So think about all the operations.

Ian Hathaway: I know Christian to be that way as well. What do you think made him wanna do this with you?

Jon Lensing: There's a loneliness that comes with being an entrepreneur and you want somebody just to share those struggles with. I can scroll back through our Slack channels from the get go, and there's a million instances where one of us is just like.

Dude, what the hell are we gonna do? How are we gonna get through this? Like, I'm worried I'm stressed. Right? And then you always have the counter ballots. It's up to the other person to talk you off the ledge, get you back on track. And I think that's what we give each other in a lot of ways. He had a company that had some really good [00:22:00] initial traction.

He gave it all up because I think he wanted to build something with somebody else. And that's just fundamentally what it came down to for us.

Ian Hathaway: We've talked a little bit about those early days. Today OpenLoop looks very different from that initial vision. Some of that early pushback you got was, are we creating a, a rural staffing platform essentially for healthcare?

Uber for nurses basically was the original vision. Then I distinctly remember, I can picture us on Zoom, having this conversation of like needing to pivot the company. Not in a subtle way. This was a fundamental shift that you needed to make. Tell us a little bit about like going through that it's a risky proposition.

It ultimately worked out for founders out there listening, what's it like to go through a dramatic pivot so early on? Just kind of the thought process for when it's a good idea, when it's not how it worked for you.

Jon Lensing: I think people view pivots as. In [00:23:00] all or none sort of thought process, and that's not the way that we viewed it.

COVID was a massive accelerant to our original business idea during the early stages. Call it the first 60 days. Then post 60 days, it was a massive deterrent to the point where we, we were getting no traction whatsoever underneath that old business. So we had this inkling that we could do some really good work within telehealth or the digital space because it's becoming so much more prevalent during that pandemic era.

So all we said was, let's test it. We have this hypothesis, let's go on and collect some data on it, and then we're gonna make a decision. But in the meantime, we're not gonna drop the current business. So we did that. We went out, we built a business model that was very much akin to what we had been doing originally.

Added in some new elements that we thought would resonate well. We went to market with it. We were signing clients left and right. Sales cycle is much shorter. We could actually get in contact with those decision makers quicker than the hospital [00:24:00] ones. We were. Very quickly, we got to like 50% of the revenue that our traditional business had done in like 45 days time.

What it took us, you know, six months of time to build up in our old business. And so that was sort of the light switch for us. We said, okay, we're going to put all of our new go-to-market stuff in this new strategy. And that's what we did Externally, it looks like a pretty hard pivot internally. It was a calculated test with limited data.

If you are a very data-driven person, startups are not for you. What you have to be comfortable with is having 51% of the information that you'd like to have, and then the other 49% is gut instinct. That same sort of mentality we hold true today. Everybody wants to say that, oh look, that person threw a bunch of shit at the wall and saw what sticks.

I say that we do that internally, but I think it's a little bit more calculated than that. We throw a bunch of shit at the wall and see what sticks. We're looking at the center of where we were aiming and what stuff stuck [00:25:00] around that center, right? That's being strategic about opportunities. You're not deviating too far from your center, but you're picking on the things that are resonating well within the market, that are around that core.

So we still do that today. We may test something within that, and if we get the data that we like limited, we'll make a gut instinct to start putting more resources into that. We're not afraid to shut it down either if it doesn't pan out.

Ian Hathaway: This is a theme for you where maybe a decision may not make sense to others at the time, but to you, you're following your instincts to not go into practicing medicine, your instincts to jump in with Christian, your instincts to make this pivot, but using data.

To inform that decision making process. We had another guest on Wade Foster from Zapier, and he said a lot of the advice I got was wrong, and when I received advice early on that I knew was wrong, it made me doubt all the other things that people were telling me. So how do you make those decisions versus [00:26:00] like what investors might be wanting you to do?

How do you weigh those external factors?

Jon Lensing: That's a really complicated question. That's a really good one though. I like to triage things. So you'll get a variety of different opinions, but if you get a high enough sample size, then you can find major themes in it. Oftentimes, I'd ask, you know, five to 10 people the exact same question.

I get five to 10 different answers on paper, but if you reread 'em, there's stuff that's said between the lines that had recurrent themes, and so you start to pull on those things that you can make better decisions. There's the old adage that time kills all deals, and that means everything from just a sales contract to companies as a whole if you don't execute on a strategy quick enough.

And so it's limited data, but just enough where you get an inkling to then make your own final decision. I think you have to balance that with a level of conviction that you have internally. So as a founder, you have to realize that nobody else is gonna know your particular market. Nobody knows the problems you're trying to solve better [00:27:00] than you.

And so. If your conviction for something is off the charts, but you have absolutely no data on it, you're gonna follow that. If you have a hundred percent conviction on something, and a few people are telling you, eh, maybe that's not a good idea, but you can't get any concrete reasons from them and why that's not a good idea, you're gonna do it.

If people are all telling you it's an absolutely horrible idea and you have minimal conviction about it, you're gonna steer clear of it. I think this is balancing of triaging. The people that you trust around you, and that could be clients, that can be advisors, it could be board members, but people that you trust for your particular industry with your level of conviction on things.

But there's really nothing formulaic about it. There's also a lot of people who will give you advice and startups. There's a million books on how to build startups, but until you actually go through it yourself. It doesn't resonate, it doesn't click. So you know a lot of those things, you think they're avoidable, but you gotta experience them yourself.

Ian Hathaway: You touched on a few different things, trusting [00:28:00] partners, having conviction, even time killing deals. You've obviously been successful raising capital, but I know there were some close calls. There was a story about. Having a term sheet pulled. The term sheet was expiring at midnight. You kind of stared at it all day, signed it at the last minute, maybe against your instincts, wake up in the morning, finding out that that term sheet was pulled.

You were outta money. Talk through that story with us. Why were you reluctant to sign that term sheet? What pushed you over the edge to actually go do it? And then what came next?

Jon Lensing: There's moments of like every startup journey. I think you just will never get a race from your memory. I remember the exact time.

I remember looking at my phone and seeing what time of the night it was. I remember exactly where I was sitting. I remember where Christian was sitting. I remember the conversation that we were having, like it's so visceral and vivid still. It was late one evening. We had a term sheet that had a 24 hour expiration on it.

The. Investor had, it made us [00:29:00] feel comfortable. The partner running it was just not giving us strong conviction, but we were at a point in the company where we had zero other options. We were dwindling cash. This was a Thursday evening. The next morning, we weren't gonna make payroll. We have to let go of like 40 or 45 people and just go back to brass tacks of Christian Island and just try to scrape by and, and get it going.

And so it was that route, or sign the term sheet, get the cash in the bank and keep rolling. I signed with five minutes to spare. Wake up the next morning at like five 30. They were on Eastern time zone, said, Hey, we're actually, we're, we're back on a steel. We're not gonna do it. Thankfully, this wasn't our first round of financing, so we had some.

Individual angels who were very convicted about the company still. And we had already circulated the term sheet with a lot of those folks and see who would wanna participate on that term sheet. And one of them did. And you know, he was our board chair at the time, wealthier individual from [00:30:00] Iowa, who mentored Christian and I early on as well.

And he had already mailed me a handwritten $200,000 check that he was gonna use to participate prorata into that round. And I hate to even admit it without his permission. I went to the bank the next morning, cashed it just to make payroll, even though our term sheet had been pulled. I had a conversation with him that same afternoon and he said, Hey, you should go cash my check anyway.

Like regardless of what comes from this term sheet, I, I want to help the company. He said, we, we will, we will consider a short term loan until you get the next term sheet. And so that's the way we papered it up after I did it.

Ian Hathaway: Do you really think they did you a favor in the end by pulling that term sheet?

Jon Lensing: I think so, I think they did us a favor because the next week, by sheer happenstance, there was a VC group called Spring Tide that happened in a meeting at the University of Iowa. And the chief innovation officer there, John Darcy, said, Hey, you should go look at this, uh, healthcare company in Des Moines on your way through.

So they [00:31:00] rented a car, drove an hour and a half to Des Moines, came and saw us, and then four eight hours after their meeting with us, we had a term sheet from them. It was better terms than we had just had the last week, and these guys were incredibly convicted about our thesis. It aligned exactly with what they were looking for, and they have been some of the best partners that we've had in the business.

When I call up our board member who represents spring Tide, every single time he answers John Lensing support team, how can I help? And so. Incredibly beneficial, helped us in the long run. I think it put a chip on both Christian and i's shoulder to be more wary with the investors that we get into bed with.

And so we're very choosy now and I think that's been to our benefit. I don't know if we would've ended up in the same spot had we had that same investor.

Ian Hathaway: Any advice practically how founders can evaluate their investors? What's worked for you? Or maybe how to think about this feeling like you've got to raise this money or the company's gonna die versus getting.

Into business long term with partners that [00:32:00] don't have a mutual conviction, is actually gonna kill the business anyway.

Jon Lensing: Not all capital is created equal. Investors will pitch you on their value add, what they can bring to the table, what their network looks like. Frankly, it's a bunch of bullshit until you actually see it in rubber meets road.

Like the only thing you can evaluate 'em on is their personality. So there's a couple things that I do. I like to spend a lot of time with the investors. And I want them to mirror what our own internal operating culture is. Is this somebody who's a fire eater? Is this somebody who has their nose to the grindstone?

Are they cut from the exact same cloth that both Christian and I are? So for example, spring Tide, they were first time fund managers. Our series A led by Nava Ventures. Again, first time fund managers. Both of those VCs, their entire. Career depended on making sure their first fund did well. So they work like hell now to make sure that we are successful, bend over backwards to make introductions, leverage any sort [00:33:00] of resource that they can to make sure that OpenLoop see success.

But that's more of a, a lagging indicator, right? Like, so the, the only thing you can assess at the beginning is who are they as a person? What is their personality? Are they aligned with you? And then I like to try a little bit of a test. One of my investors, I happened to be in the area and I asked him, Hey, can you get me in at this restaurant?

And he worked like hell, what eventually got me in at a restaurant that I wanted to go to, and restaurant was outta my budget. But it was more of just a test, how far is this person willing to go to help me? And then we ended up doing a deal and he's, you know, one of my most supportive investors as well.

Ian Hathaway: So let's shift gears a little bit, talk about building culture. So you've got this term eating fire to describe the type of people. That you wanna hire, you need people who can produce incredible amounts of output, highly productive in this constrained environment. How do you create a culture [00:34:00] where you can set the bar really high for people without getting burned out?

How do you index for those types of people at the hiring process

Jon Lensing: and from being transparent? I still don't think we're really good at it. Myself included, it's hard to assess that I was having breakfast with Greg Abel, the incoming CEO of Berkshire Hathaway. He happens to be local to Des Moines where I am and.

Talk about a variety of topics, and I just ask him like, how do you assess and find good operators for your portfolio companies? He's like, I still struggle with this. It's, it's hard. So it resonates across the industry. I think there's certain key personality components that end up contributing to a, a good operator and good fire eater.

Somebody can juggle the madness and do it with grace. What is this person's like? Disposition for learning. So I ask like, what kind of media do you consume and how often? How frequently? And what is it? Is it film? Like are you watching Netflix? And you know, what kind of recommendations are you gonna give me based on your watch list?

Do [00:35:00] you consume news? Where do you get it from? Is it from TikTok? Is it from period articles? What kind of books do you read? What kind of podcast do you listen to, and which ones did you gimme as recommendations? And so from that, based on what their answers are, then that sort of leads me to my next questions of like, okay, let's talk about some random topics.

So if they said, I like the documentary man eater, hunting's fascinating to me, and I'm like, great, let's talk about hunting for 15 minutes. And it's a question of like, can you carry on a conversation about random topics with me for, for 10 to 15 minutes? Like that shows me a level of interest in learning that's far beyond normal day-to-day routine.

That disposition to learn, I think is a very good leading indicator on can this person juggle a lot and do they have the desire to juggle a lot?

Ian Hathaway: You're a comprehensive digital health infrastructure provider. Your full stack covering billing, scheduling, licensing, prescriptions, everything bundled together, you're reaching over 2 million patients a year.

More than 16,000 [00:36:00] clinicians. You're active in all 50 states. The scale is impressive. What are you kind of most proud of today and where do you think things are going next?

Jon Lensing: I think there's three things. First and foremost. The patients that we've had reading and hearing about some of the success stories of, of what we've done, watching the amount of patients that we service on a monthly basis has been incredible.

I mean, we went from celebrating the first patient we saw to then celebrating what we're seeing 10 patients a month to then celebrating what we're seeing a hundred thousand patients a month. Now we're well in excess of a hundred thousand patients a month that we see and treat. The second thing is the team that we built.

I find it a privilege to get to work next to some of those. Smartest people I've ever met, much smarter than myself, and built lifelong relationships as, as part of that. Some of my investors even showed up to my wedding and were there to celebrate that day with me. And the, the third component of it all, I think is just the community being able to give back.

We, we've helped Techstars in some different things. Sometimes I'll, I'll go talk with some of [00:37:00] the local universities and, and talk to their students. We've done stuff and given back to the community variety of ways and I think that's been something we're really proud of as well.

Ian Hathaway: It's a good segue to talking about Iowa.

This show is about outsiders. People proving that you can have success. Building tech companies outside the traditional hubs, outside traditional backgrounds that we're told are what a tech entrepreneur is supposed to look like. You and OpenLoop are an excellent example of that. You've had state support, the venture connections, the company's name is on a building in downtown Des Moines.

Many founders with your. Level of ambition, feel pulled to the coast, or maybe even cajoled by their investor base, but not you. What is so important about it to you and what have been the biggest advantages of building the company

Jon Lensing: there? Living in the pain of what we're trying to fix. Witnessing it firsthand, having to experience it [00:38:00] firsthand.

That is the biggest advantage. Finding and recruiting talent in the Midwest. Very difficult finding and attracting investors in the Midwest incredibly difficult. Fundamentally, there is a pride though for us, Christian and I being Midwestern folks, that we want to build the Midwest into a place where companies want to.

We want to fix a lot of those disadvantages that we've been through in this community. We want talent to be in the Midwest. We want people to move here 'cause it's a lower cost of living. And our way to fix those problems is by making this a hub. And we're trying to do our part in that. But you are the sum of the people that you spend the most amount of time with.

And you know, we're relatively. Mobile culture nowadays, airlines are easy to hop on. So I spend a lot of time in New York. We have an office there. I spend a lot of time in, uh, the bay. We have people there and our investors are there. So it's easy to still get the mindset advantages of the coast [00:39:00] by spending time there.

But if I want to give back and contribute to my home state in the ways that I hope we're gonna build this company into a a world class organization that attracts the best in class talent. We're gonna put I on the map because of it.

Ian Hathaway: Having studied and experienced how thriving startup communities evolve, it requires those initial successes.

And then the people behind those successes to stay involved, to build additional companies to back the next generation of founders. The entrepreneurial ecosystem from a tech perspective is still pretty nascent in Des Moines, but it's evolving. If you could fix one thing today, what would it be? And looking ahead, how do you see yourself contributing to the next generation of entrepreneurs?

Jon Lensing: It's an excellent question, Ian. I think it is still nascent. There's some really good foundational work that I believe is going on. I think Curdy was a part of that, was starting the, the Techstars Iowa [00:40:00] program. The Des Moines Chamber of Commerce is one of the top in the country. It's called the The Greater Des Moines Partnership.

They have a full like startup team that helps provide resources and so there is some really good framework to help bring an ideation to. Initial commercialization, you need to have more people. Like us that, that want to contribute, that want to build a company there because those success stories provide the inspiration for the next layer down.

The people who wanna stay in Iowa who may have opted to leave for the coast 'cause they saw no other former examples of somebody doing something big in the, in this state. So if you get more and more of those success stories, they're great. Funders for the next generation. They're great mentors for the next generation, and it's that visibility of experience from the success stories that help give a leg up to the next generation, right?

If I can inspire the [00:41:00] next 20 companies that come outta the University of Iowa by telling my story, and then maybe one day help fund some of those, and then they can rely on the experience of what OpenLoop went through. Then they're in a much better spot than than we were. They already have a leg up. So my contribution back one day I hope, can be financial.

It's currently right now, mentorship. It's a shared experience. It's advisory, consultative. That's what I can do right now, but hopefully one day it can be more.

Ian Hathaway: A consistent theme that we've had on this show is talking about balancing the demands of building these high growth companies in such an intense environment.

Balancing those demands with being a whole human, how difficult it can be to balance family relationships, finding personal fulfillment, any tips you have, things that have. Been helpful for you to balance that professional life in your personal life, whether it's staying healthy or having fun, maintaining relationships, anything that's worked well for you?

When I figure it out, I'll [00:42:00] let you know. Well, maybe I'll ask it differently. Where do you feel like your falling down most and what do you wish you were doing better?

Jon Lensing: I think startups are all about compromise. It's really hard to build a startup if you. Don't have a spouse that's supportive of it, and oftentimes that support.

Comes from a compromise, right? So there might be a trade off like, Hey, I'm going to bust my ass for the next 10 years on building this company, but in return, once it is over, here's what I'll provide back. Here's what I can do. This means more time at home with the kids that allows us to do X, Y, or Z. I think it's also trying to figure out how to balance the other things that are important to you or weave them into.

This passion of yours, right? Because startups are an all or none kind of thing. If you're gonna build a company and build it to a level of success that you want. It's a full dive into the deep end sort of thing, and so things that have worked well for me, I lose my sanity if I don't do stuff with my [00:43:00] hands every evening.

When I come home, I like to figure out some sort of project. A lot of nights it's just as simple as like doing the cooking myself. So I can work with my hands and then think strategically. Other times, it's doing remodels. I like to flip houses or working on old cars, old motorcycles. But during that time, those are components that don't require my thoughts to be with them.

So I can think strategically about OpenLoop, but am I, am I anywhere close to having that balance figured out? Absolutely not.

Ian Hathaway: It is a compromise. You need to have alignment at home and you need to have something to look forward to outside of work to kind of keep you sane. When you look back at everything that you've accomplished so far, and really when you look ahead to what is still to come and what OpenLoop can be, what do you hope is the impact that you will have had on the community, on your employees, and ultimately your customers?

Jon Lensing: So I think for the people that have worked at OpenLoop, [00:44:00] our culture is not for everybody. I want our employees not to look back and say, oh, that was the best place I ever worked, necessarily. I want them to look back and be like, that was a place that challenged me the most. And that's where I grew the most as a professional for our clients.

I, I'd love for them to look back and be like, we would not have accomplished what we did if it weren't for Open Move, helping us get there. For the average, like patient and consumer out there who's digesting our services. I, I want people to look back in 20 years now and say, OpenLoop redefined how healthcare was delivered.

We think traditional healthcare is broken and it's only broken for one simple reason. That's just that it's highly inconvenient. If it's inconvenient, people don't use it. It becomes less accessible and it becomes a really high cost center because if you don't use it, that means you only then use it. If you are really, really sick, then you go in and actually get care.

Instead, if we reimagine from the outside in. And say, we need to make [00:45:00] it incredibly convenient. Therefore, I make it incredibly accessible, which then leads to ubiquity of it, which lowers costs and oxygens in a new era. Preventative medicine. At that point, we redefined healthcare completely.

Ian Hathaway: I love that we're almost out of time, but here on Outsider Inc.

We like to finish with a little segment we call beyond the bio. These are just some quick hit questions that let us step away from your resume and really dig into you. Oh boy. Here we go. Yeah, it's time. Okay, so what's a quick piece of advice that a mentor's given you that stuck with you throughout your journey?

Jon Lensing: One of the first mentors I ever had, he said the best CEOs and founders I've ever worked with don't care about the dollars and cents. They have a mental picture of the entire industry that they are serving, and they know the piping of it. They know who pays who, and they know why that person pays that person.

They know all the inputs and all the outputs, the industry. [00:46:00] So that's resonated with me.

Ian Hathaway: Who is an unsung hero in your life, and what has been the impact they've had on you?

Jon Lensing: As cliche as it sounds, probably my dad, very risk averse sort of guy, but just a man of the utmost integrity. Willing to go above and beyond to stand by what he believes is the truth, regardless of how people feel about him because of that.

Am I at that level yet? Absolutely not. It's something that I aspire to be and I have a lot of respect for him in that.

Ian Hathaway: Well, I'm sure he is proud of you today and glad that you did not follow in his footsteps. Who's someone in your local startup community or in your broader network who doesn't get enough credit and deserves a shout out?

Jon Lensing: My first investor. And former board chair, a guy named Dick Ferguson at the time that I met him prior to starting OpenLoop, I was in my second year of medical school and he was 78 at the time. [00:47:00] Elderly gentleman who had built up a CT, like the test company that, that you take for a College of Minton's into the behemoth that it was.

He took it from like a company of like five employees and made it the premier college admittance test, and then I've been doing startups ever since then. Now he is 82 or 83, and I still call him and give him updates on the business, but he has been the biggest champion of OpenLoop. He's given me some of the best advice and he gave me the cop, but it's encouraged to take a leap of faith on myself and start this thing.

Ian Hathaway: Awesome. Tell us something most people don't know about you. Something outside of work could be a hobby, favorite travel spot, a guilty pleasure, or maybe even a hidden talent.

Jon Lensing: I love the outdoors. My dream goal someday is to move back to a farm and just be a cattle rancher. Right now I have a chicken coop in the backyard and get the fresh eggs every morning.

But yeah, that's, that's a dream. I think one hidden talent. For some reason I found unicycles really interesting when I was in middle school. [00:48:00] Wow. I'm, I'm a pretty good unicycle rider. I haven't been on one in a few years, but I think I could still do it.

Ian Hathaway: Well, that's original. What are one or two songs you'd like to add to our Spotify founders playlist?

Something that maybe fuels your workday or has inspired you on your journey as an entrepreneur?

Jon Lensing: I got two on opposite ends of the spectrum. If I just need some motivation, this is gonna date me a little bit, but remember the name by Fort Miner. Great pump up song. Nothing gets me more amped up. And then the last one correlates to my ultimate goal of just getting back to the land, and that is buy dirt.

Uh, country Song. Jordan Davis is the artist in that last one.

Ian Hathaway: Okay, got it. All right. Last question. If you could give one piece of advice to someone who's about to start their founder's journey, particularly someone who's a bit of an outsider like you, what would it be?

Jon Lensing: Yeah, I'm gonna steal it from Nike.

I've used this over and over again, but you just do it. You [00:49:00] just gotta do it. I think. There's a million people who have really good ideas. They could be world changing, highly impactful, but it's just a lack of action. So if you're gonna do it, jump on, put both feet in and chase after it.

Ian Hathaway: That's a great way to end.

John, thanks so much for being here. Congratulations on all the success you've been having, and we'll continue to have, I can't wait to share this episode with our listeners. Sounds great, Ian. Thanks again for having me. Really appreciated it. That's a wrap for today's episode of Outsider Inc. A big thank you to John Lensing for taking us inside his journey.

From handwritten letters in a Hy-Vee Cafe to a billion dollar plus valuation today, all while building from Iowa with purpose, John reminds us that constraints create diamonds. That great co-founders are complimentary, not carbon copies, and that the best decisions often come as much from instinct as data, and there's a quieter lesson too.

Success in outsider places doesn't [00:50:00] come with fanfare. It's earned in the spaces between big moments when the term sheet falls through, when payroll's tight or when you decide to pivot before the market validates you. John's story is proof that staying the course in the face of steep odds can pay off big.

If you want more from outsider, inc. Don't forget to subscribe to the platform@outsiderinc.substack.com. It's packed with highlights from today's episode and bonus insights you won't wanna miss. You can follow Outsider Inc on YouTube, Instagram, TikTok, and LinkedIn at Outsider Inc. Pod. You can also follow me on X at Ian Hathaway Outsider, Inc.

Is produced by Spellbinder Media. We'll be back soon with another fascinating outsider conversation. Until then. Thank you so much for listening and remember, great entrepreneurs can come from anywhere. See you next time.

Listen on: Spotify, Apple Podcasts, Amazon Music

In this episode of Outsider Inc., host Ian Hathaway speaks with Jimena Pardo, co-founder of Carrot, Mexico’s first car-sharing platform, and now Co-Founder & Managing Partner at Hi Ventures. Jimena opens up about the rollercoaster of building Carrot, the lessons of operating in a tough market, and how she transitioned from founder to investor. She shares candid reflections on founder identity, resilience after burnout, and her vision for Latin America as a launchpad for globally recognized startups. From raising capital in an emerging market to shaping Hi Ventures into a firm that champions bold, outsider entrepreneurs, Jimena’s journey is a masterclass in grit, adaptation, and long-term vision.

Show Notes:

(03:18) Early ambitions, education, and what drew Jimena into entrepreneurship

(07:42) Founding Carrot and tackling mobility challenges in Mexico

(15:33) Lessons from scaling Carrot and navigating the exit

(22:06) The personal toll of entrepreneurship and founder burnout

(29:47) Transitioning from founder to investor and joining Meta

(36:21) The importance of founder identity beyond the startup

(43:18) Launching Hi Ventures and its mission to back bold entrepreneurs

(52:04) Breaking capital barriers in Latin America and building global companies

(1:01:19) Why transparency, humility, and mentorship matter in entrepreneurship

(1:09:33) Jimena’s vision for the next generation of founders in Latin America

(1:16:55) Beyond the Bio with Jimena Pardo

✅ Host: Ian Hathway - Co-Founder & Managing Partner, FOVC

✅ Guest: Jimena Pardo, Co-Founder of Carrot & Co-Founder and Managing Parter at Hi Ventures

Produced by Spellbinder Media. Executive Produced by Bridge Five Ventures. Copyright ©️2025, Bridge Five Ventures, LLC, All rights reserved.

Listen & subscribe wherever you get your podcasts or at outsiderinc.substack.com.

AI-Generated Transcript

Jimena Pardo: [00:00:00] And at the end, it is not the position you played. It's who you are internally, and that's the only way to solve it. If you're a founder, you probably go into so many lifetimes, you'll become a serial founder, you'll change jobs, you'll have so many faces, but if you have your inside strengthened, you'll be buried.

Suited to be successful in each one of them and to bring a better energy to each one of them, and with your family and friends. Also provide a better you because you know who you are. What I've learned is that I will always do everything I do with as much passion as I can, but at the end, it's about who you are internally.

Ian Hathaway: Welcome to another episode of Outsider Inc. I'm your host, Ian Hathaway. Today's guest is Jimena Pardo, a founder, operator, and investor helping shape the future of Latin America's tech [00:01:00] ecosystem. In 2012, Jimena co-founded Carrot Mexico's first car sharing startup. Becoming a pioneer in the country's modern tech startup movement, and the very first founder backed by all VP Mexico's first institutional venture capital fund.

Jimena led Carrot through six years of growth, navigating infrastructure gaps, cultural and regulatory headwinds, and a rapidly evolving mobility landscape before stepping down and selling the business. After Kara, she made a major shift moving to Silicon Valley and joining Facebook now Meta where she led product growth for Spanish speaking Latin America.

It was a reset in every sense, operating at global scale building inside big tech and launching products across Argentina, Columbia, Mexico, and Peru. In 2022, after four years in Silicon Valley, she came back home rejoining the very firm that had once written hers and their first check alongside her longtime mentor, Federico Anton, she helped [00:02:00] lead the rebrand of all VP into High Ventures, where she is now co-founder and managing partner of the early stage venture fund focused on building global companies from Latin America with a sharp thesis around AI and local data.

Jimena is one of the few people in Latin American Tech who's built from every seat founder, big tech operator, angel investor, and now venture capitalist. I'm excited to talk with her about her journey, the evolution of Latin America's startup landscape, and why she looks for founders ready to scale globally from day one.

Jimena me, amiga. Welcome to Outsider, Inc.

Jimena Pardo: I'm so happy to be here. It's an honor that you invited me.

Ian Hathaway: It's so great to see you, Jimena. Thank you so much for being here. You have such a great story. As I said at the outset, you've one of these few people who's really touched all those areas of being a founder and operator and and investor in the region.

I want to [00:03:00] dive into your journey in a moment. But first I was hoping we could begin by level setting a little bit on tech in Latin America generally, and in Mexico specifically. Aside from Linda Rottenberg, who leads Endeavor, as you know, most of our guests so far have generally been focused on the United States.

You are our first guest from Latin America, and many of our listeners may be unfamiliar with the region, so I just wanna spend a little time digging in there. As you know, I'm quite bullish on investing in startups in the region, but I'd love to have you share your view. Why are Mexico and Latin America great opportunities for tech entrepreneurship and investing right now?

Jimena Pardo: Thank you, Ian. You've been very bullish and you have been one of those investors with a lot of conviction in Latin America, and that's amazing. That speaks highly of you. The Latin American Tech account system, um, it's a young ecosystem. [00:04:00] It began probably 10 to 15 years ago, and back then the region did not have the infrastructure, nor the community, nor the talent.

The dream to have this tech ecosystem. So we were a few that started some startups. We saw some needs, we had some international references, so we brought them to Latin America and it's been great to see this decade because today it's a Latin America that has a lot of needs. So if you go into industries like FinTech, if you go to health tech, if you go to education, there's so many green land for innovation.

Then if you go to the other way, infrastructure is already here. Everybody in Latin America now has a mobile phone. And everybody WhatsApps and everybody has access to the internet. So there's the need, there's the infra, and then now after this 10 to 15 years, we have finally the [00:05:00] talent. So we have engineers that have been coding since forever and have this great expertise.

We have. Already success cases of big companies in Latin America, such as cornershop, which is a high ventures company, or Bezos or Quebec or S or new banks and these big companies, what they have done is that they have created this talent that is already ready to build tech. So if you see it from far away, we have the needs, we have the infrastructure, we have the talent.

Beyond that. It's a great market. It's a huge market. It's a 500 million market with people that are already digitalized. And then there's another additional layer that it's ai. With ai, Latin Americans are able to build. Services and reach to every user and finally realize the over promises that we have seen in the past.

We can break [00:06:00] every barrier that users used to have. It's a low hanging fruit to get. That's how we, we are seeing it.

Ian Hathaway: You touched on a number of points that I agree with. You mentioned I'm high conviction on the region. We really didn't set out to do that. Pulled into the region. The problems are big.

There's so many challenges to solve. You mentioned the talent. The talent is staying home, the talent is going into tech instead of into consulting and banking. You mentioned these high profile success stories that are creating wealth, that are teaching people how to build tech companies. On the challenges side, I'd like to talk a little bit about what still needs to evolve is capital.

One of the things that's clearer to me is that there's a major capital deficit, pretty much at all stages of the venture journey. I could argue that those deficiencies are the [00:07:00] strongest in any one of the phases, whether we're talking about pre-seed and seed, early stage, growth stage, there's all a challenge.

Of course, you know, Latin America had its moment in the late 2000 tens, 20 20, 21, name brand firms from the United States came pouring in, driving up valuations, creating this frenzy, and it's just as fast as they came, they left. And so I'm just kind of curious. After going through this 15 years of progress, very non-linear, some high highs, some low lows.

How do you feel like the capital landscape is evolving and what is the sustainable version of Latin American tech moving forward?

Jimena Pardo: This is such a good question and such a big pain point for Latin America. I think one of the biggest problems is that Latin Americans don't have these. Precede or this angel investing opportunity, and this is what I really like on what you're doing, Ian, because you actually [00:08:00] help us come from zero to one and you give so many people the opportunity to actually build something and start and just execute.

So one is those angel investing that 10 years ago it was zero after 20 21, 20 22. Now we're finally seeing the successful founders. Start this ecosystem in paying it forward and start to playing these small checks to other founders. Usually people that worked in their own companies and then they have seen how they grew and they're ready to, to invest in them.

So it's slowly growing, but growing. Then it comes the perceived series A, let's say, early stage institutional vc. The big problem here is that it depends on the region, but for example, in in Mexico, the, the pension funds have been active in venture capital, but they haven't been long enough to see the returns.

So somehow they're a little bit skeptic. So, and this is our job [00:09:00] to demonstrate them how there's this alpha and this humongous multiple marketing here. But it's been growing and they have already made this bet. And then comes the growth stage that, as you mentioned, there was so many capital being deployed in markets where we had zero interest rates and there was a lot of floating capital.

The only thing that I will perhaps would do some pushback is that. As they came, they left because many of them, they did that. They were opportunistic funds that came deployed. Money made a few bets. Um, of course it went a little bit wrong. Um, valuations were higher. There was not a lot of discipline as in everywhere in the world, not only Latin America, and they pulled back, but some of them did stay.

So, for example, when I was an entrepreneur. It was unthinkable to get, uh, a global fund to see you and invest in you and participate with you. And today [00:10:00] most of the companies in high ventures we're co-investors with the top funds from Silicon Valley and, and practically globally. And our founders and even ourselves, we share the boards with these people and they stayed and they still give advice to their founders and they still help them fundraise.

Help them think globally. So the good ones, they stayed now and this probably from this past six months. I am starting to seeing them very active. In the region. Again, one thing that is missing are the exits. We have a few exits, but those few exits your audience know about Nubank. They know about MercadoLibre.

We're missing more of them more often. So this is a patient's game, and I do believe that the sophistication of the talent and the sophistication of [00:11:00] the ecosystem will bring them.

Ian Hathaway: I agree, the good global investors are coming back. It's exciting. I wanna continue that conversation in a minute, really about Latin America as a stage for global tech, not just regional.

But before we do that, I want to rewind back to the beginning. You were born and raised in Mexico City. In a household where curiosity was encouraged, a mindset that shaped you from a young age. Your grandfather, Rafael founded one of the largest engineering firms in Mexico. He became a significant influence and role model for you.

Was that where your entrepreneurial spark first came from or was it something else?

Jimena Pardo: Wow, Ian, you really did your research. I was very blessed to have that role model my grandfather, and one amazing thing he also did is that he [00:12:00] always treated me as if I was his colleague. I'm also an engineer instead of being a woman or not taking me in account, that always excited me.

Yeah, definitely. That brought the entrepreneurial part with me. In Latin America, when you were in college, you were thought that you had to come into a big corporate, probably an American company, spend 50 years and then you'll be. Perfectly suited for the rest of your life, and that was the path that I was taking.

I had the opportunity to start my career very early in tech at Hewlett Packard, as many of the tech founders that I admire, but I always knew that I wanted to do something bigger than just that corporate ladder. I always also thought that I had to have all the credentials in order to do it, so I was waiting to to go to my MBAs.

And actually in a Sunday brunch, I [00:13:00] met Federico and he was just launching the firm in Mexico. This was back in 2012, and he was the one who convinced me to become an entrepreneur. He actually gave me his first check. Even though he didn't have like an LP commitment yet, so it truly was amazing. I also met Diego, my co-founder in Carrot that I, I know you know well, and I had such a good chemistry with Diego too.

So we were this really too naive. Young Mexicans trying to copycat Zipcar to Mexico. It's very funny today because we leased the first three cars to set them on the streets, and of course the technology would never work because the truly the, the mobile infrastructure in Mexico was not ready. So we had to do a lot of things manually and by phone.

So we were work all all day as any other founder. [00:14:00] And during the nights we will print all the contracts in order to send them the next Monday because the Mexican government back then wouldn't allow like digital signing. So it had to be physical. So I remember these. First two months being in this rush, like no sleeping.

It was not glamorous at the end. Carrot was amazing. It was a roller coaster ride, six years ups and downs as every founder journey. And we truly saw the ecosystem grow in Mexico. And that was beautiful. And I think it, for me and Diego, it was life changing because it gave us us a lot of exposure and a lot of experience.

At the end, what happened to car is what happened to every car sharing company around the world. Ride healing apps came and they provided a better service, so we all downsized and North Diego and I had the dream to have a small car rental in [00:15:00] Mexico City. So we part ways, but it was just an amazing experience.

And I remember the early days of the ecosystem and there were coming into Mexico and there has been a complete. Catalyst in the ecosystem. People like you coming here and also trying to build this community and trying to bring all the knowledge from other communities and teaching us the hacks on how to do it.

It's been fun to see how each element has played its role. There's still a lot, a lot of things missing, but it paved the ground for the first big tech companies from Mexico that now are moving the way to the next outliers for the next generations.

Ian Hathaway: I'd like to unpack a little bit, there are so many valuable lessons learned in there from the beginning.

You said you were someone who believed in credentialing, but you dove headfirst. Into this business with two people you didn't really know that well, and the opposite of [00:16:00] credentialing. So what made you wanna do it? Do you remember that decision of, why don't I just go ahead and make this completely left turn and jump headfirst into building a tech startup in a domain where nothing exists?

Jimena Pardo: Everything was going well in HP at the end, but I knew I wanted to go and do my masters, my MBAI was about to go to NYU, and I also got accepted in LSE in London, and so I was trying to decide that. That's when, when Federico told me like, wait, go launch Carrot and if it doesn't work out, just ask for a referral.

But I remember having this conversation with my father and he still disagree. He is like, I can't believe you never went and do your MBA. And I'm like, dad. I promise you I did the right decision. He is like, well, I'm still not sure.

Ian Hathaway: Yeah. Much better than an MBAI would imagine. But yeah,

Jimena Pardo: definitely the exposure and, [00:17:00] and the way that Carrot accelerated my life and my drive and my purpose.

Uh, I mean, it's incredible. Once you are a founder and you feel the thrill of that founder, it's a little bit masochistic. When I joined Meta, I always called Meta, my entrepreneurial rehab. After Carrot, I was completely burned out physically, emotionally, economically, and I was lucky enough to get into Meta in this amazing company with amazing and talented people, and they treat you so well and they will pampered me and they will fly me first class, et cetera.

But then once you recover your energy, you are masochistic and you want to be in the game again. And I do believe that's one of the founder's characteristics, right? The ability to, to overcome this challenge. And you never know it's possible unless you get hurt a lot of times.

Ian Hathaway: Well, so [00:18:00] the initial vision was car sharing in Mexico, but there were unique challenges, things that founders and consumers in the US may have taken for granted 10 years ago.

Unreliable telecommunications networks, maybe banking practices that weren't as accustomed to dealing with these kinds of companies, insurance challenges, regulation. Just talk a little bit about some of those challenges being thrust into these things broke you mentally, energetically, spiritually, maybe financially, whatever.

Just kind of walk us through that whole journey.

Jimena Pardo: So you already know about the network conditions. I mean, the SMS will never arrive to the car. Um, then digital payments were not quite adopted in Mexico yet. We would have to connect directly to the bank and charge in the credit card, and we would have so many complaints as a car rental that the bank will unplug us anytime.

And of course, [00:19:00] we represented the bank. Basically zero. So there was nobody who would actually take a phone call in order to help us figure it out what was going on. And let me tell you how we have overcome it. Regulation was huge. Pretty quickly. We knew that this was a service for the city, so we tried to get the government to like us and it was very, very funny because Diego and I will dress up to wear a tie and we would stock basically the, the major from Mexico City.

In every event we will see the news and oh, he's gonna be in the presentation of the opening of this thing. So we will show up with an iPad and just trying to get his attention. And one day the mayor looked at Diego, looked at the iPad, and he was like, wait. I was with the major of Paris a month ago and they told me they were doing car sharing such as this one.

[00:20:00] So, and he just turned over somebody and said, get me a meeting with these two little kids. And that helped us not only in the communications, but it also helped us with the regulation, just trying to get the cars on the street. And then there were other complications, insurance. Once we opened the peer tope program, that was a messy thing and there was no insurance that would wanted to take that risk.

So Diego, he had to come into an auto insurance scheme where we will actually hold some money to do our own insurance thing if something happened. So many things against us at the end. Today we will solve another one. We even had a hundred cars in the street and we were growing and we were showing, and we were able to fundraise and we were the pioneers of the next generation of the tech companies in Mexico.

And for me, [00:21:00] that's the greatest outcome that was able to come from Carrot. Today, a founder in Mexico City. Now they have. 200 ways in order to get digital payments. They have the global payments, they have the local payments, they have the subscription payments. Today, the government is willing to go to every founder and tell them, yeah, how can you help me win?

And now I believe every corporate now sees this innovation arm as a must, and founders don't have to fight in order to come in again.

Ian Hathaway: You definitely made it easier for others. Charting that path. Timing is everything. I'm sure it would've been much easier starting that company today. So just to kind of put a pin in the Carrot journey for you in the end, as you hinted, you made this difficult decision to step down to sell the company.

Maybe it was really made for you, but this was so much of your livelihood and [00:22:00] your identity. In prior episodes, we've had guests, jewel Burke, Solomon, Sean, o Sullivan, talking about this challenge of, on the one hand, needing to be all in on this idea, this all consuming building, this company, doing this really hard thing.

But on the other hand, being a human and being distinct from that, and these things can get intertwined, that can create problems of mental health, happiness, wellness. What was that like for you and what were kind of the challenges as you let go of that? Period of your life of maybe not fulfilling the vision that you wanted to achieve in the beginning.

Jimena Pardo: Yeah, that is so right, and I, I think it happens so many times to entrepreneurs and when you go all in into a project and on some days when you're, when your family, you keep talking about it and they see you step up from dinner, to take a call and make another call, and on holidays to plug in, et cetera.

And you [00:23:00] get obsessed in what you're building. And truly, I think that's the way a founder should be. But it comes with a big, big prize. I started to be Pime from Carrot. People call me Pime. It's my nickname because my, my sister wouldn't say Jime and we'll say Pime when I was younger. So I, I was Pime from Carrot.

So you start to Pime your personality to what you do and suddenly I was the mobility expert and the female founder image and so much exposure. And when I took the decision to leave Carrot I mean it was very painful to leave your work, be behind. But I did have this identity problem as well. If I'm not Pime from Carrot who am I now?

And that's when I joined Meta and, and I, I truly loved my time at Meta, but somehow I always thought that I was in a shadow. Because I [00:24:00] was another product manager as another 10,000 product manager. Sorry. You try to compensate with other things and, and yeah, I'll be the product manager from Latin America, et cetera.

And at the end, it is not the position you played, it's who you are internally, and that's the only way to solve it. If you're a founder, you probably go into so many. Lifetimes, you'll become a serial founder. You'll change jobs. You'll have so many faces, but if you have your insight strengthened, you'll be better suited to be successful in each one of them and to bring a better energy to each one of them, and with your family and friends, also provide a better you because you know who you are.

What I've learned is that I will always do everything I do with as much passion as I can. But at the end, it's about who you are internally.

Ian Hathaway: That's beautifully said. Easier said than done. After being Pime from Carrot, you became [00:25:00] Pime from Silicon Valley, you moved to the Bay Area to work at Facebook as a product lead for.

Spanish speaking, Latin America, Mexico, Columbia, Peru, Argentina. I have to think that's a job that a lot of people would want. But maybe for you, you were still healing, recovering, mixing this identity from Carrot. What did it feel like to be in Silicon Valley, to be at Facebook, to be in this very different environment, and ultimately, why did you do it?

Jimena Pardo: This has always been in my story. I'm super, super lucky and I was lucky to get this role that it is a product manager that it is based in, in Menlo Park. But it's also international. So I was able to live both worlds from Menlo Park, but also Mexico and travel all around in, in Latin America. After Carrot, I knew that I was not gonna go into a conventional [00:26:00] enterprise.

So when I was looking and I found this position, I was mesmerized because it was one of the only product. Manager positions that will allowed me to still be international. And it was amazing. I still believe that Meta is the best product company in the world. They invented the growth hacking, basically terminology.

I was so much into product and Alex Schultz basically was my hero. So for me, it was inspiring to be part of the group of somebody that I had admired so much and, and to have been able to meet him and work with him. That was. Amazing Meta was a company that will pamper me. Definitely. I was gonna learn a lot and it will allow me to still be in the tech ecosystem.

And one of the key things that I learned is that even though we have the same products, how [00:27:00] different its region is. Southeast Asia is so different from the US but at Southeast Asia is so similar to Latin America, for example. And you would have never thought that. Right? And then in our own Latin America, there are some nuances too that are important.

They're T like Argentina do not behave the same way digitally as So even though we're this global world, there's so many similarities. But at the end, there's so many nuances and building for the people that you're giving a solution is what matters.

Ian Hathaway: I know you and I have had this discussion before about this deficit of product managers in latam.

Really, it's a craft that, you know, you learned it in the best place, bringing that knowledge home. It was a healing place to be. You were pampered, but it probably felt a little slow and the entrepreneurial itch came back. I know you. Return to Mexico in [00:28:00] 2022, and you paid a visit to your longtime mentor, Federico.

What happened next?

Jimena Pardo: I was able to do so many fun things inside Meta. For example, we launched the dating app in Colombia, then we did the role in Brazil and that had a lot of impact. Then COVID came and everything slowed down because of course, the priority was everything that was COVID products and for all international PMs.

The politics with the engineering teams, I mean, we were deprioritized, so I became more a PM without execution because I was only doing analysis, and suddenly that felt a little bit boring. So I started to look into new things. And I had a friend who was launching an office from a BC pyramid here in Mexico, and he was like, Hey, you could do this job.

BC is not that hard. You already know you have fundraised [00:29:00] before and, and you, you know, all the ecosystem, you know all the VCs. And I was like, yeah, I guess I can do that. When I said I had to. To to call Federico. By the way, Federico, who was previously my investor, our relationship had changed as a mentor and as a friend.

And I would probably go and have, have lunch with him every six months or so. And when I told him like, Hey, I got this option. I had this project into going into another big tech. The other thing is I have this opportunity to go into VC and the other one is I can be an entrepreneur again. And Federico, who is actually very, very funny, told me like, no, no, no, no, no.

Let's see. If you go into a big tech, you're just like ki kicking the can six months and you come with the same problem in six months. If you're doing busy, you have to do it with me. So go upstairs because we actually had lunch in a restaurant that is below META'S offices here in Mexico. Go [00:30:00] upstairs, quit your job and I'll see you on Monday at High Ventures office.

And I was like, wow, this is like my godfather. Sometimes when you want to take a risk, you're always as afraid that you will fall. Alone. And suddenly I had the opportunity in my mid-career to try to do whatever I wanted with a bit of backup with somebody who said, yeah, I will push you forward. So for me it was a no-brainer to take it.

I came into a Monday and on Friday it was like, you will be a busy with me. Federico and I, we have been working now for 15 years together and the trust we have within each other. It's. A hundred percent trust. And I do think that even as a founder, as a bc, et cetera, when you found that sort of partnership of admiration, respect, and trust, and a true friendship, I [00:31:00] mean, that makes the work so much easier.

Ian Hathaway: I cannot emphasize that enough, how in this line of work, especially, how much easier and actually really more than that, how necessary it is. To be able to lean into your partners. You coming home to all vp, that was the thing that was supposed to happen. You did that in 2022. Shortly after that, that's actually where you and I first crossed paths in early 2023.

New company for you. New identity for the firm, rebranding as high ventures with a very clear thesis around AI and data for regional innovation. I've seen you explain a little bit the intentionality behind high being friendly, ambitious, signaling a high bar. What did that rebrand mean to you and to Federico?

How did you come about that and what do you want it to signal to the world? [00:32:00]

Jimena Pardo: I came back home to, to what had been my entrepreneurial house. That was all VP back then. And yeah, that's when I met you. And I guess I asked you for advice because I was also in that ship, right? Like from founder to investor, et cetera.

And I remember you were generous enough to give me your book, the Startup Community Way. I love that story from our friendship because it came out from a lot of humility, and you truly helped me into understanding how nascent Latin America was as an startup community and the role players each one should have.

And I'm really thankful because when you're transitioning from one point to another. You need people to be nice to you and that have a lot of experience to actually give you this sort of advice. Like, Hey, you're building something. You'll be a great investor because you've already been an entrepreneur, so keep on doing what you're doing, keep the empathy, and that was your message.

So I'm truly [00:33:00] thankful about that because people like you helped me, became an investor.

Ian Hathaway: Wow. I did not know that. Thank you for sharing that. I feel very flattered and glad that it worked out,

Jimena Pardo: and it truly was a shift. I always thought that my operational experience was the one that was gonna bring value to the portfolio companies, and then it, I realized that portfolio companies don't want their investors within.

I thought I was gonna spend days in the offices and, hey, let's see your marketing strategy and your pipeline. They don't wanna share that with investors. They don't want you in their offices. So for me it was a mind switch. In order from me wanting to be there and thinking I could add value there into adding value when they actually wanted it and when they actually needed it.

And that was a huge learning. And after that, I remember speaking with Federico and telling him like, well, you know what? I'm not a financial person. [00:34:00] I'm a product person. And he was like, yeah. We're gonna build the tech fund for Latin America, and I was all in into that. So we took that decision and everything came together.

I was with Federico at the GSB and we went to to a class together just when Cha g PT had launched, when we came into that lecture. We both were like, this will change everything. I don't know how, but this will change every corner of every business. It will revolutionize this. So we came out and we were like, well fund four, which we were actually fundraising, will be the AI fund for Latin America.

So ever since we've been obsessed in learning on AI and understanding the true value. Proposition to our region and to our specific needs and to our portfolio companies. And it truly has been the most exciting time of my life. I have never been as [00:35:00] thrilled as I am today, and I have never worked harder.

And the rera came into it. We were called the RVP and at the end we didn't invest it in all. And then VP is what is VP Venture Partners, but it sounds like Vice President. It was not that memorable. So we wanted this fresh new look with a new partnership that will actually symbolize our partnership together.

And that's why we, we came up with Hi and High came as, as altitude too. We climb together mountains. And we do it not only figuratively, but also literally we, we have done that with the team. We have done that in Santiago de Chile. We have done that in the us so we wanted to reflect that high and also become more a technology company and not a legacy firm.

And I guess we've been able to share that We're both marketers too. So we, we craft everything together [00:36:00] and I think we have been able to share that spirit.

Ian Hathaway: It's a great story and something you touched on that I would like to explore a little deeper, which is you said that you thought your operating experience, your founding experience was gonna help you be a better advisor, a better value add investor, but I think it also probably gives you a level of empathy and understanding to be more self-aware around when is the right time.

To engage those subtle nuances. I think we all have come up against investors that completely lack empathy and how they engage with founders, and you're having this level of self-awareness, which is, Hey, maybe I should back off a little bit, or maybe they don't need me right now. Whereas maybe some other investors would not take that for an answer and be very heavy handed.

Do you agree with me that. That founding experience has given you a level of empathy or maybe some other softer skills that unlock [00:37:00] a special cheat code for you as a value add investor for your portfolio founders.

Jimena Pardo: When you're an investor, it takes a long time to know that if you're a good. And then if you're a good investor, you know that luck plays a great part on it.

So you can be super bad investor and still have moonshots that have gone well. Yeah. And you can be a great investor and have zero outcomes. So having that humility, I think the only thing you can do is be of help. To the founders, yes, we are all ambitions and one of my big, big purpose, of course, is returning to my investors multiple times their money.

But with founders, the only thing I can do is. Be nice to them. I see so many colleagues like take this for granted just because they have the big pockets. For me, it's the wrong way to approach it and it's also the best way to enjoy it by being of [00:38:00] help. By knowing that you were able to give them some advice, some motivation, some coaching, some hard lesson, and I'm not speaking about being their friend and always agreeing with them.

No, I'm speaking like true value. And for me, at least this years, it is the only thing that I have as a validation and as a. A North Star as I'm doing well, and I wanna continue doing that for the rest of my busy career because it's also the, the easiest way to enjoy it.

Ian Hathaway: As investors, we control very little except our own actions.

Brad Feld, as you know, is a mentor of mine. He was on this podcast a few episodes ago. He wrote a book called Startup Boards, which is really written for founders about how to have an effective engagement with your board members. I think board members can read it as well, but his main point is. Your job as a board member is to support the CEO and to find ways to be supportive and it's nothing more than that, so couldn't agree with you more.

Maybe last question on [00:39:00] high ventures and really kind of tying together where we began. One of the things that I think about as the region evolves and matures. Is local. So in the case of Mexico, a large ecosystem for the Latin American region, a lot of founders from smaller countries will move to Mexico to go to market scale.

Their companies. Traditionally scaling regionally has been the focus, but of course, as the ecosystem matures, those companies will begin to be global. And so I'd love to get your take on companies starting out today, especially in the era of ai. Is it enough to say we are the X for Mexico, or the X for Spanish speaking, Latin America, and maybe even those that go one step further, which is we're the X for Spanish speaking Latin America, and we're gonna move into the United States one day after series B or C or whatever.

Do you think companies today can and should and increasingly will be [00:40:00] global focused from the beginning?

Jimena Pardo: This is an amazing question because I have changed my thought on this. I always thought that the advantage from a Latin American founder. Was to build a solution for Latin America and that Latin is a big enough market, which it is, but today in the post Chad GT era, my mindset has changed into Latin American founders building global since day one.

And if you look into our current portfolio, it's basically divided in two. One is these founders that are solving. The hard problems of developing Latin America in the region with the networks and the contact, and of course, building them super lean, super fast, super efficient with ai. And in the other hand, we have the founders that we give them a check and they move [00:41:00] immediately to the Bay Area and they are not a day behind as their peers from the us, from India, from Canada, Orran, Argentina.

They're all in in same set. Is the beauty about ai. AI launched in Latin America that was already digitalized and with a lot of tech. Talent. So the CFO from a Latin American company and the CFO from a US company, they all started to use Chad G, PT and Cursor the same day. So AI brought Latin America in a same standard that with the internet we did not have that same conditions.

With mobile, we did not have that same conditions. But with AI, we're finally in the same time. At the same moment, so it makes sense for talent to go into Lounge Global. One of the most beautiful examples [00:42:00] is Atlas. These are two founders, female founders, tech female founders. You know how hard that is to find in Latin America.

Of course, we founded in a remote place. Which is the Argentian, Patagonia, and they are now headquartered in San Francisco. Karen is the next Mark Zuckerberg. Her platform, it's for benefits for remote employees, is live in more than 60 countries today, and she serves American clients, Mexican clients, French clients.

The other one, it faces app. That it's basically a five coding notion. You'll be able to publish something beautiful with a two minute prompt. I spent the summer with them in the Bay Area and, and you see what other ais are building in San Francisco, which is the Mecca. And these Chilean [00:43:00] engineers are not a day behind on what the others are doing.

So it's like, yeah, believe it. Latin American. Can build global and can build from the mecca of technology, and that is exciting to see and that's something that thrills me to be able to see that glass ceiling has been completely broken for the whole world.

Ian Hathaway: You hinted at one glass ceiling, which still needs to be cracked a little bit, is female founders.

Tech is male dominated industry. I know we're looking back to, you know, 13 years plus you were a female founder. I can't imagine. There were too many people who looked like you in the engineering department at your university building startups. I know you've also talked about it not being necessarily this handicap for you, that there were advantages and maybe some disadvantages, but really.

How you've kind of seen your role as being an example to show other women that they can also be tech [00:44:00] entrepreneurs. Really, that's what this entire show is all about, is encouraging, inspiring outsiders that if they don't look like the prototypical Silicon Valley tech entrepreneur, if they come from the wrong geography or the wrong background or whatever.

There's actually a lot of people who have come from similar backgrounds and have done great things, and I think that's part of you as a symbol. And so to your comment about, you said there's still not that many technical founders who are women in the region. What do you think? Is still holding that back.

Do you think things have improved in the last nearly decade and a half since you were a founder? What do you wanna see happen?

Jimena Pardo: Although it has improved very slowly and sometimes I, I feel that we give three steps forward and then two back. One thing that has played me well is partnering with people.

That actually go forward into supporting female talent. [00:45:00] Federico is more a feminist than I am in my entrepreneurial years. It did played a good exposure look, because imagine this, if we had an event with the president, who will you see next to the president? Well, the only female founder. So Jimena, you'll be next to the president and you'll ask the question to the president.

So it gave me a lot of of exposure. Nevertheless that it's not the usual. And also I have always had male partners in venture capital. Even though you should think it's less aggressive for female, it's more the financial world. It's even more male driven than the tech world. What I love is that I got this Doman, which is Federico behind me.

So whenever we're fundraising together and, and, and he'll be like, Hey, that answer will be taken by Jimena, who's my co-managing partner, and you should be looking at her. So [00:46:00] one, you need people that will give you your place and that step forward for you. That actually bridge that gap. So I guess what I want to ask from your audience is go and find the outsider, make them feel at home so they can build a different thing.

That will be the alpha, that will be the multiplier. That will be the asteroid on whatever you're doing, because you'll build more diverse, you will bring a wider vision, you will bring another point of view, you will bring another idea. So go and look for the outlier and step up to him to make them home.

Ian Hathaway: I love that last big question for you then. I know it's your mission for Latin America to be the greatest version of itself for using innovation to solve some of the region's biggest challenges, but really it's about being a launchpad to solving global challenges to building. Name brand companies worldwide.

If you [00:47:00] fast forward a few decades from now, what do you wanna see for the region in terms of tech, in terms of entrepreneurship, innovation? What do you want to be true that maybe seemed impossible when you were first starting out with Carrot?

Jimena Pardo: The best FinTech in the world is Latin American, and that's nubank.

I want to see the best e-commerce. I want to see the best health tech. I want to see the best prop tech, and I want every founder in Latin America to have the opportunity to build us as in the us. I want them to have the resources so they won't be limited by capital. For testing their products. And, and whenever we do that, the next e-commerce, the next health tech, the next prop tech, the next ed tech will come not specifically from Latin America, but also from Southeast [00:48:00] Asia, from Africa, from all around the world.

So I want to break the capital barrier to our regions.

Ian Hathaway: I want that too. I want you to fulfill your mission. I wanna be a part. Of that reality becoming true as well. So look, we're almost out of time, but here on Outsider Inc. We like to finish with a little segment we call beyond the bio. Which is just a couple of quick questions that let us go beyond your resume and dig into you as a person.

Shoot. Okay. What is a quick piece of advice from a mentor that has stuck with you throughout your journey?

Jimena Pardo: To be successful, you have to do the hard things. There's no shortcut.

Ian Hathaway: Definitely not. Who is an unsung hero in your life and what has been the impact they've had on you?

Jimena Pardo: I would say Federico Federico has worked with me in my entrepreneurial and investor life, and I do believe he's the best VC in Latin America, and it's been an honor to build with him, [00:49:00] not only Carrot and, and now high vc, but also my professional life and me as a person.

Ian Hathaway: Who is someone in the local startup community or in your broader network who does not get enough credit and deserves a shout out from you?

Jimena Pardo: Andrea Campos from Jana. Jana is that, uh, mental Journey app that I invite you to download since it's live in the us. She's a girl from Cancun University Dropout that learned how to code in order to help her with her depression.

She has helped 15 million people by building Jana, and she should be helping a hundred million. So go and get your checks and send it to her.

Ian Hathaway: Tell us something most people don't know about you. Something outside of work. Could be a hobby, a favorite travel spot, a guilty pleasure, or maybe a hidden talent?

Jimena Pardo: Yes, I'm a huge basketball fan.

Ian Hathaway: And [00:50:00] why is your favorite team the Lakers? That's the only option.

Jimena Pardo: I'll skip that.

Ian Hathaway: Well, we could talk about that sometime. We both have a love of basketball. What are one or two songs you would like to add to our Spotify founders playlist? Something that you use to fuel your workday or maybe has inspired you on your journey as an entrepreneur?

Jimena Pardo: Whenever I need motivation, I am a huge fan of Eddie.

Better, so rise up from Eddie better and, and that will be in my soft side. And then when I need my energy up, it's definitely unstoppable from Siia.

Ian Hathaway: Okay. Last question. If you could give one piece of advice to someone who's about to start their first company today, particularly someone who's a bit of an outsider, what would it be?

Jimena Pardo: Start, do not compare yourself to others. Just start. I always [00:51:00] thought that I needed the certifications in order to be able to build something, et cetera. You don't need anything just to start, and whatever makes you unique is a superpower.

Ian Hathaway: Yeah, I can't think of a better way to end. Jimena, thank you so much for joining me today.

I had a great time catching up with you.

Jimena Pardo: I have one more thing to say. For those founders and investors coming to Mexico, there's a tech ecosystem. Here that it's already built and we also have great gastronomy and we have a great night live and we have beautiful streets. So coming to Mexico and just meet people and I'll be happy to help you plan this adventurous trip and also working group.

Ian Hathaway: Yeah, I have a very unnatural love of Mexico City, as you know Jimena. It is a truly world class gem. I. Encourage [00:52:00] anyone listening to go check it out. So thank you again, Jimena. So great to have you here and great to see you again.

Jimena Pardo: It was amazing. Yeah, and I'm truly honored.

Ian Hathaway: That's a wrap for today's episode of Outsider Inc.

A big thank you to Jimena Pardo for sharing her wisdom. Journey one defined by exploration, ambition, and constant reinvention across every seat in the startup world. What struck me most is her humility and ability to stay grounded in who she is. From pioneering Mexico's startup scene to building inside Big Tech to backing the next wave of Latin American founders, her journey is a reminder that great ecosystems are built by people willing to take risks.

Help others and open doors for the next generation. I left this conversation inspired by her conviction that Latin America can build not just regional champions, but name brand global tech giants. If you want more from outsider, inc. Don't forget to subscribe to the platform at. Outsider, inc.substack.com.

[00:53:00] It's packed with highlights from today's episode and bonus insights you won't wanna miss. You can follow Outsider Inc on YouTube, Instagram, TikTok, and LinkedIn at Outsider Inc. Pod. You can also follow me on X at Ian Hathaway Outsider, Inc. Is produced by Spellbinder Media. We'll be back soon with another fascinating outsider conversation.

Until then. Thank you so much for listening and remember, great entrepreneurs can come from anywhere. See you next time.

Listen on: Spotify, Apple Podcasts, Amazon Music

In this episode of Outsider Inc., host Ian Hathaway chats with Melodie van der Baan, co-founder and CEO of Max Retail. Melodie shares her unconventional journey from skipping college to diving into real estate, losing everything in the housing crash, and then transforming into a mobile designer clothes distributor. Her challenges and experiences eventually led her to start Max Retail, a platform for converting unsold inventory into revenue, which now serves over 2,000 retailers across the U.S. The discussion highlights her perseverance, customer focus, and innovative approach to the retail industry.

Show Notes:

(02:41) Skipping college and diving into real estate as a teen

(05:22) Losing everything in the housing crash

(08:14) Life on the road: selling designer clothes from a Sprinter van

(12:49) Launching a retail shop and confronting the inventory problem

(18:56) Starting Max Retail during the pandemic

(25:03) Breaking into Techstars after multiple attempts

(32:17) Scaling to 2,000+ retailers and raising $20M+

(41:09) Lessons on persistence, resilience, and customer focus

(47:56) Beyond the Bio with Melodie van der Baan

✅ Host: Ian Hathway - Co-Founder & Managing Partner, FOVC

✅ Guest: Melodie van der Baan, Co-Founder & CEO of Max Retail

Produced by Spellbinder Media. Executive Produced by Bridge Five Ventures. Copyright ©️2025, Bridge Five Ventures, LLC, All rights reserved.

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Melodie van der Baan: [00:00:00] And that's why when I talk to founders and they reach out to me and they say, I really wanna start a business, I'm like, err wrong. I really wanna be a founder and raise capital. Terrible, terrible idea. And I say to them, you will know when the time is right. When all you can do is eat and sleep and breathe and dream of the problem, and it haunts you day after day, week after week for me, year after year, and at that point, you know, come hell or high water.

You're gonna figure it out.

Ian Hathaway: Welcome to another episode of Outsider Inc. I'm your host, Ian Hathaway. Today's guest is Melody Vanderban, retail entrepreneur, tech founder, and CEO of Max Retail, a platform helping thousands of independent retailers efficiently turn unsold inventory into new revenue. Melody's Path defies the usual [00:01:00] script.

She skipped college to start her career early diving headfirst into real estate in her teens. When the housing market crashed, she lost everything, but instead of playing it safe, she hit the road loading a sprinter van with designer clothes and driving 36 weeks a year selling to boutiques across the country as a distributor on the go.

That experience and the dream of starting a family eventually led her to settle in South Florida and open up her own retail shop where she came face to face with the crushing financial weight of unsold inventory. In the back room of that store while raising two kids. During the COVID pandemic, melody launched what would later become Max retail.

She started by brokering small inventory swaps between retailers, but quickly realized she was solving a much bigger systemic problem. After four attempts, she finally got into Techstars, one of the many steps that helped her scale max retail into a venture backed platform. Now serving over 2000 retailers across all 50 states with more than $20 million in venture capital raise from investors like [00:02:00] Noar Capital, rethink Impact the RMS fund.

And M 13 Melody's story is about perseverance, customer obsession, and building from lived experience. I'm excited to talk with her about betting on yourself, breaking into tech on her own terms, and refusing to take no for an answer. Melody, thank you so much for dropping by. I

Melodie van der Baan: think we could just drop a mic right there.

Ian Hathaway: Well, it's good to see you. It's been a minute, but I'm thrilled to have you here. This is a show about outsiders, entrepreneurs who don't necessarily fit the mold of what we're often told that founders of high flying tech startups are supposed to be. You've more than earned that label. And your story to me is one about resilience, possibility, and making the most of every situation.

I wanna start with one of those early moments where you clearly zigged while others zagged. You made the decision to forego college and start your career early. You said that your [00:03:00] mother was always supportive of you and that she was not really worried about you because she knew you were gonna be okay, that you were a natural born leader.

That's not a typical reaction. What gave you the confidence to make that call so early and what do you think she saw in you that made her believe that you could pull it all off?

Melodie van der Baan: Well, I would say that it is not something I would recommend to my children to do so. Off the bat. I think that there is a lot to be said for college.

Not just what you learn, but who you meet, and just the ability to grow up. But I grew up pretty fast to begin with Ian. I moved out of my house when I was 16 years old, living on my own, paying rent, going to high school, still managing to work two jobs, do track yearbooks. So I've always kind of been built on this really high momentum.

Pace. That's just been my way of being. So I think in some ways I've, I've just kind of been built this way to do [00:04:00] hard things and carry more than a normal person might bear. And so by the time I was 18, graduating high school, my sister had already been in college six years, hadn't made up her mind what she was gonna do.

I thought to myself, oh, I, I don't think I could make it one year. Nevertheless, four years, nevertheless, six years. I just don't wanna do this. And so it was a really hard thing to tell my mom. Everybody did go to college, and even in my high school class, they wouldn't even say like, you're not going to college.

They would say undecided when you rocked across the stage. That's how taboo this was. Now when I reflect back on something that's been a constant theme in my life, it has always been setting a goal and not even knowing I was doing it, reverse engineering my way to the outcome. So I would say if I wanna make this much money a [00:05:00] month, for instance, real estate, that was easy.

Two days, and you get your license. That's all it takes to get a real estate license in Florida. But I knew if I wanted to make X amount a year, I needed to sell this many houses at this price to sell this many houses. At this price, I needed X amount of leads. And so I found my way to success in real estate just by breaking it down.

And yet what I hated about real estate was that you would sell someone something and then. Had the house, that was it. There was no sustained relationship and I didn't like that. Although I was a, a great salesperson, I loved relationship building, and so I just didn't feel like it was right for me and everything really came crashing down.

In 2007 and I ended up having a bankruptcy and all the houses that I had acquired with that money that I had earned, and I was completely insolvent by the time I was 21. And so, you know, I can imagine as my mother, [00:06:00] by the time most of the other students are graduating college, her daughter. Is moving into a bedroom in a rental house with no dollars to her name and no assets.

Now let's be honest, most college kids also have about the same. They just don't have the bankruptcy. I had learned a lot, but I think the gift that I was given that many never receive is realizing that it's okay to fail and you don't die of failure, Ian. And so by 21. I had already thought I gained so much and lost so much, and it was fine.

And that just really built me from there on out to keep trying. And it's funny because if you look at my personality assessment from the predictive index, it says, undaunted by failure.

Ian Hathaway: It's very on brand. From what I know about you, you tied together kind of these early experiences Your mother [00:07:00] didn't have that typical reaction.

Was part of that, her example and her encouragement about being independent, having a sense of responsibility, or do you think this was just something that was innate in you from the beginning or maybe a little bit of both?

Melodie van der Baan: It's who she is, for sure. Even sometimes I'll call her these days. I'll say, mom, it's just so hard.

And her response is just, Mel, you do what you gotta do. No pity, no sympathy. When I was a young child and I said, mom, can you drive me to my friend's house? No, I can't. But go figure it out. You can go. I'm just not gonna bring you. So I learned how to take the bus. If I wanted to go somewhere, mom, can I go on that ski trip?

Sure. Go wash a bunch of cars. Go write a bunch of letters. Go knock on a bunch of doors. There was never a no. It was always go figure it out,

Ian Hathaway: which is really what being an entrepreneur is all about. Setting those goals, [00:08:00] finding your way to that conclusion and just figuring it out. You hinted at it before.

You skipped. College went into real estate, things were booming. The crash hits, you lose everything. But you've talked about these silver linings, you learned a lot, and you've also talked before about that experience being freeing for you, maybe you were chasing the wrong things. What do you mean by that?

How does someone say a bankruptcy was maybe the greatest thing or the most freeing thing that ever happened to me?

Melodie van der Baan: A gift I was given around the age of 27 was this. You are already more valuable right now than anything you will ever do or accomplish. And if you can receive that as a founder, you need to know your self worth and you need to know who you are outside of what you build.

But you also need such a deep rooted passion for the problem you solve, that nothing will veer you off [00:09:00] course. And for me, it was not just. Working through my twenties to say what drives me? Who am I, what is my value? My val, I'm Melody. I have a hat that is a founder. I have a hat that is a mother. I have a hat that is a wipe, a hat, that is friend.

But take off all the hats. I am me. Okay. And no one can take that away from me. And, and that is the first thing you need to win at this game because you gotta be able to take your hats off and be you. Every day at some point. You can't keep the hats on all the time. It is not sustainable. And you are not a hat, you are a person.

But the second thing is you need a reason to stay on course. And that's why when I talk to founders and they reach out to me and they say, I really wanna start a business. I'm like, eh, wrong. I really wanna be a founder and raise capital. Terrible, terrible idea. And I [00:10:00] say to them. You will know when the time is right, when all you can do is eat and sleep and breathe and dream of the problem, and it haunts you day after day, week after week for me, year after year.

And at that point, you know, come hell or high water. You're gonna figure it out. So you have to know who you are and know why. Why it's so important for you to solve it, for you to have enough of the endurance and wherewithal to see through the mission.

Ian Hathaway: This is really important. I, I want to double click on this for a second.

This is the third consecutive episode where we've talked about aspects of identity, personal identity being wrapped up in the business where you simultaneously have to hold space for having an obsession with solving a problem in the world, but not letting that [00:11:00] consume who you are as a person. Why do you think that is such a challenge for people to separate those things, and what are some practical tips that founders who are maybe their identity is being too closely attached to the business?

Melodie van der Baan: I think the first way is how can you check yourself? How can you pulse, check, Hey, how far am I into my business versus being a person? And I think you can look at your circle of friends on your day-to-day and throughout your week, how many of your friends are not work related? How many people do you talk to about other things besides your business now?

Yes, during Workday, believe me, I don't talk to my husband or children from 9:00 AM to 7:00 PM because there is no place for my family in the workplace. There's no place for my work at home, and I believe that when you surround yourself with people who don't care what you do, they don't even [00:12:00] know what you do.

Maybe you are gonna talk about different things. You're going to have other experiences, and it's gonna allow you to pull yourself out of where you are now. Yes, there's gonna be other people you confide in that you can talk about work. Things that you don't talk about with the people at work, but there's different buckets.

You need a bucket of people who don't care what you do at all, and I have that every Friday night we have a thing called Pizza Friday at my house. My husband makes homemade pizza. We've been doing this for five years and it's an open door policy. You never know who's gonna walk in on a Friday night at my house.

No one cares about what I've just done from nine to seven Monday through Friday, and it is every Friday night that I am validated, that I am melody, that I am loved and supported outside of what I built or what I don't build. 'cause no one cares.

Ian Hathaway: I love that. Very clear boundaries, having [00:13:00] rituals to separate that.

One of the things we did on my house is Friday night digital Sabbaths, where we're just focused on being a family, and I think environmental things are a factor too. I remember when I first got married, we moved from San Francisco to London and we went from going to dinner parties or house parties, and every person was in tech.

To no one being in tech but us. And it was like this really nice feeling where we thought, wow, people don't really care about what we do or understand it. And so. I can resonate with all of that. Shifting back to your journey after the real estate crash, and as you're pulling yourself outta that situation, you didn't go and get a safe salaried desk job, you started another company.

Melodie van der Baan: I think I rolled it out, Ian. Yeah. When you don't go to college, you rule out going and getting a normal job, you know, you're kinda like, okay, like this is where I am and most companies. Don't wanna hire someone [00:14:00] without a degree if we're being honest. Not like real jobs if we're gonna call 'em real jobs, but I'll tell you what I found out very quickly.

If you pitch yourself as a company, no one asks where you went to college. So what I learned is you don't apply for a job as an employee. You are a company that pitches services a company. People only care what you can do,

Ian Hathaway: even if it's a company of one. That's a very good insight. Now we're moving into designer clothes.

Melodie van der Baan: That's right.

Ian Hathaway: It's you. That's right. It's you, your company. My company

Melodie van der Baan: Quotations. Let's put those flying quotations out there. I got these business cards made. And they said, designer boutique clothes, showroom. And I took these business cards to the local art institute where there were graduate designers with nothing to lose.

And I said, I'm Melody from DBC showroom, I will place your brand into stores for a commission. And they said, well, I'm not in any [00:15:00] stores today and she's only gonna charge me if she does something. So, sure. So they gave me the samples and I did not know what I was doing, Ian, but I knew I could pick up the phone.

And so I just started calling, oh, it's Melody calling from such and such. And they'd say, what are the price points? I'd say, let me call you back. Hang up. Go look up what a price point was made. The next call, melody calling from so and so, price points are 69 to 1 29 wholesale. They'd say, what are the deliveries?

And I'd say, I'll call you back. And I learned this industry one phone call at a time. One mistake at a time.

Ian Hathaway: This also leads to you jumping in a sprinter van

Melodie van der Baan: That's right,

Ian Hathaway: and schlepping clothes around the country selling into boutiques. This is like a remarkable transformation from real estate to picking up the phone, to now driving around the country and knocking on doors.

Tell us about that entire experience.

Melodie van der Baan: It was absolutely wonderful. 14 hour days. On the road and [00:16:00] before you'd ever hit the road, you had to call and schedule these appointments so that you had enough booked so that you could cover your hotel, cover your gas, and make sure you're making enough money for this all to be worthwhile.

I was selling products that retailers had not heard of, and I'm asking them to take a financial risk to buy it and try it out. Now you can imagine how much easier it is to sell max retail, which helps them sell what they can't sell and get their money back. It's like a cakewalk. But as I was doing this, I didn't have anything to compare myself to Ian.

All I knew was what I believed excellence to be. And so as I was selling to a retailer, giving them customer service, helping them with their buys, and if something wasn't selling, I was creatively helping them exchange with other retailers. Everything that I was doing, I had no idea, but I was going above and beyond what all their other reps were doing simply because I had no comparison.

I didn't even realize how great I was [00:17:00] as a rep until I became a retailer and I actually started interacting with other reps and I, I was like, oh my God, these people are terrible. Like they are not motivated, they don't care. And it actually wasn't till about six or seven years later that I realized that's why they kept buying from me.

That's why they would take my call and see me because my standard was so much higher.

Ian Hathaway: I feel like this is now the second time where I'm seeing first principles thinking, just figuring it out, finding problems, solving them rather than looking at what other people are doing first. I know this is a term that's thrown around a lot.

In the startup world, but I feel like there is a lot of consensus thinking rather than genuine first principles thinking. Do you feel like that is the right way to attack problems? It seems like that serve you well.

Melodie van der Baan: I still do that today, Ian. The processes that we have here at Max retail, more often than not, I will [00:18:00] walk into a room.

As I put it, I wipe everything off the table and I start fresh and I say, stop knowing what you know. 'cause obviously something about it doesn't work. So I am not gonna put band-aids all the way down. I am not gonna try to constant improvement my way out of this one. I am gonna start fresh with a clear mind and I'm going to start by asking questions.

And I learned that from my co-founder Damon, who's an engineer. The early years when we were first building, you know, our first marketplace swap retail, I'd be on the phone with him and he would be thinking out loud, and he always thought in questions. And I have learned to never think in a statement. And when I interview top level executives, they always think in questions.

So I wiped the table clear and I start by saying, what is the problem we're solving? Who are we serving? What have they said? What have they communicated? And, and I just start asking [00:19:00] questions and filling in answers. And eventually a couple hypotheses come together. Not an answer, never an answer, but enough of a list that I can then run down and say, well, one of these five things work.

And when they don't, ah, that didn't work. Next because it wasn't a fixed decision ever.

Ian Hathaway: Speaking of fixed decisions after five years on the road of figuring it out and having a blast with these 14 hour work days, you made a big life shift. Mm-hmm. Right? You wanted to get married, start a family, and the lifestyle you were living just did not compute with that.

So you moved home, you opened your own retail store. What was that transition like from calling on boutiques around the country to actually running one yourself? It

Melodie van der Baan: was extremely hard. Oftentimes, I felt like I was trapped in a box, but where I found my groove was in community, being a part of the Junior league, so that I was part of a community of young [00:20:00] women who wanted to grow and give, being a part of the local foster care organization place of hope, which was making meaningful impact into the lives of a third of our county's youth.

And I was able to take my store Blessed Boutique and plug into these and give, and we grew my boutique through community. And when you take care of the community, the community takes care of you. And that was how I built a very successful retail business and got outta my funk of, Hey, this is a little more boring than being in a different city every day.

And that worked for about four years. But every time I looked at my sale rack, I knew that someone out there wanted those goods and they just couldn't reach 'em into my store and grab it, and it just drove me nuts. So finally in 2016, pregnant with my first child, [00:21:00] I said, I have got to try to solve this.

Ian Hathaway: And so you did tell us a little bit about that. It's the merging of these two experiences, knowing the landscape of inventory and boutiques around the country to now facing a problem that maybe you were feeling more acutely or personally because this was your problem. Now, connecting these dots is a step in itself, but then deciding to do something about it.

Is another thing entirely. So tell us how you went from this spark, from I've got this problem, I know other people do to, I should do something about it, and here's the steps I'm about to take.

Melodie van der Baan: So I knew the problem existed because when I was a rep, the retailers would always point out what didn't sell.

So I knew it was their problem. But it wasn't until I had my own sale rack that I understood it wasn't $2,000 of sitting dresses. It was a hundred thousand dollars a year of financial losses. And that really hit home. The first step that I took in solving [00:22:00] this problem was calling back the retailers that I had serviced and I said, Hey, it's Mel, your favorite rep.

What have you been doing about your unsold inventory? And they all said nothing. Nothing, Mel. I'd keep it on my sale rack and I just keep marking it down. And in seven years, nothing had changed in store. But what had changed is point of sales were moving to cloud-based Azure and New Order had brought our retail industry online.

Retailers comfortable with doing digital transactions. Shopify had moved retailers to having online storefronts. Consumers work more comfortable purchasing online. So nothing had changed with the unsold inventory problem, but the infrastructure and behaviors associated with the retailers and with consumers had moved forward.

And it's interesting because I have one advisor who says to me, Mel, be [00:23:00] careful that you don't plant your seed in the desert because the rain might not come fast enough. And when I look at my journey. When I first identified this problem and how long it's been haunting me and when I became a retailer, and how many years I felt it, and even how long I bootstrapped it before I ever took venture capital, the timing was right.

It couldn't have gone faster because the world wasn't ready sooner. Somehow I found myself right where I should be in the spring of 2020 launching what was swap retail when the entire country was now closed due to a pandemic, and everyone became acutely aware of their unsold inventory.

Ian Hathaway: So you are launching swap retail out of the back room of your shop.

Yep. The middle of a pandemic. That's right. Two kids raising two. Two kids. Two kids under

Melodie van der Baan: three. Yep.

Ian Hathaway: Piece of cake. You were onto something, [00:24:00] but maybe. The focus was a little off, right? You had this vision about, oh, well people are gonna be tracking inventories in real time. We're gonna swap inventory. It didn't quite work out like that.

Tell us about kind of the early stumbles and how it eventually evolved from a peer-to-peer marketplace to what max retail ultimately became.

Melodie van der Baan: So, I loved the idea. Retailers being able to sell, buy, and swap inventory with one another. Now, if you really do right by our industry, you have to protect brand distribution.

What people, most of the time don't know is that a retailer pays a significant amount of money to be able to carry a brand and have no one else have it within a 10 mile radius. So in order to make swap retail a safe place for retailers to transact, it had a lot of rules. About who could get inventory, and it was not built [00:25:00] in a way that could easily scale.

We needed to partner with brands. Brands needed to tell us who was authorized to sell their products. The retailers then would need to be proactive enough to list their products when they weren't selling. But these were all the things that I thought. Was going to make the business safe for the industry and successful for the retailers.

And the year of 2020, we called over 600 brands. 15 of them said, I see what you're doing. It makes sense to me. Yes. Here's my retailer list. Go help them. 585 brands said, I don't care about my retailers. I only care about my own inventory. Can you help me with my inventory? We hadn't built a platform for brands to sell inventory.

I as a previous rep, knew how hard it is to sell brand inventory to a retailer that's a current account, nevertheless, a prospect. Since our audience on this show is founders, one of the most important things you're gonna have to do is bend. Know [00:26:00] where you need to bend on your idea and also know where not to bend, and that is the hardest.

Judgements calls that you will make as a founder. And I'm speaking of this because I had really amazing advisors say to me, Mel, you gotta get past this brand thing. If you're waiting for the brands to partner with you, you're gonna be waiting till the cows come home. How else can you move forward? And I had to look at that and say, you know what?

The retailers are saying to me, why can I only list these five or 10 brands on your platform? Why can't I list all my brands on your platform? So I was hearing it from my advisors and I was hearing it from my primary customer, the independent retailer. So I said, I'm gonna leave space for more here than what I think.

And I let retailers list whatever they wanted to on our platform. And we did see more transactions between the retailers, but it still wasn't enough. So then I had to go back to the drawing board of, okay. The what that we're [00:27:00] trying to provide is liquidity for independent retailers. We want to help them get money back for their unsold inventory because they keep saying to us, I don't wanna swap.

I don't wanna buy. I just need to sell. My brands are waiting for payment. My brands have more deliveries to send me, just help me sell my inventory. So once again, okay, Mel Swap. Retail is not what they truly want. They want money. All right. Well that was kind of funny 'cause here we are calling, Hey, it's Melody calling from Swap Retail, but you don't have to swap.

I was like, this name ain't gonna stick.

Ian Hathaway: Is that kind of like the main insight is that you thought you were solving a problem of. They wanna get rid of unsold inventory, but you were maybe over-engineering where that inventory should go. Really? They just wanted the hell outta there. Yes. And they want some money for it.

Melodie van der Baan: Yes. I will say that my utopia. Was [00:28:00] inventory optimization at the highest level where it never gets marked down in store, where it can make it to the right destination to be sold at full price. But the truth is that wasn't possible then. And maybe I can get there in 10 years, but it's still a long ways away.

Today

Ian Hathaway: you've talked about prioritizing what the customer wanted, not necessarily what you thought they wanted. Elements of growth. You're also evolving at this point. In the early days, it's just you and a spreadsheet at best in a phone and a Rolodex. But as you know, building a tech company, building a scalable company, it's not the same thing as building a bigger version of a small company.

It's an entirely different thing. You have this vision of software is at the heart of this. I need to build something that scales nationwide. What were kind of those early inklings for you about, okay, I'm potentially building [00:29:00] something really big and I need to think differently. I need to learn about different things and I need to pull in different types of people.

Melodie van der Baan: So I have two co-founders. I have Damon, who's my technical co-founder. Damon is an engineer. He's never wanted to be CTO. He knows who he is, and we've always had, as we grew amazing technical leaders come in and let Damon continue to do what he loves to do. Morgan, my other co-founder, she's an executive recruiter by trade.

I can tell you at this stage now that is a superpower. In early years, Morgan wore every hat that needed to be worn. She wore a finance hat. She didn't know finance, right? She wore like a data entry hat. She wore every hat that that needed to be put on right before she could really get to her center of genius, which is where she is today with hiring, recruiting.

Managing hr. She is absolutely top notch, and I can tell you if any of you get lucky enough to have an executive recruiter who [00:30:00] will hang in there for the early years, you will never be so grateful. But to answer your question, Techstars helped with that learning curve a lot, Ian, because what I knew. Was that I could grow a business.

What I knew is I had the grit and the wherewithal to figure out a problem, but what I did not know was metrics. What I did not know is org charts, because I'd never worked for a company. I never went to business school, and Techstars was my bootcamp.

Ian Hathaway: Status, of course, where we met in early 2022 at Techstars la I was doing Mentor Madness.

I remember telling an investor friend of mine, I know nothing about retail tech, but this person is amazing. So I definitely remember those early days of meeting you. But tell me a little bit about like. Why you decided, hey, I should go do this accelerator thing. It [00:31:00] should be Techstars, it should be in la.

That whole process and then ultimately what you got out of it.

Melodie van der Baan: My husband had been a fan of Techstars already for at least five years. I think he might have even applied with one of his startups. Okay. So we knew what Techstars was and I applied many times and got shut down. When I first started swap retail, I applied.

They didn't accept me. Believe me, I applied even to like the Minnesota one. I was willing to go to Minnesota in winter if they would have me. Thankfully they didn't have me. So Matt, the managing director at Techstars la. Got to know me and said, sorry, Mel, I just don't see it. I said, that's okay. Let's just talk every month.

And then I continued to call him. And that's something that I've been really consistent at and most founders don't do that. So if you are a founder and you wanna say, how can I stand out? Very few people follow up. Very few [00:32:00] people say they're gonna do what they're gonna do. And even if they do it, even fewer of them go back and tell the people that they did it.

I would just go back to Matt month after month and I would just say, Hey, here's what I'm doing, here's how I'm thinking. And I, I raised a pre-seed round before I ever entered Techstars, and I think Matt was like, geez, if that girl can raise 2.45 million not knowing anything about anything, what could she do if we poured into her?

Her and I think he saw how bad I wanted it and that I wasn't gonna let him down, and I told him that and came in the program. Ready to learn. Putting in the time, packed my whole family up. Husband kids in the Prius, drove to California, Airbnbed our house, got a little apartment and the whole family was in it to win it.

And that's what it takes too. So if you're a founder, the single most important decision you will make will be your life partner. They gotta be all for it. If they're only a little for it, [00:33:00] you ain't gonna have everything you want. You're not gonna have the fulfilling life that you desire. If I look at my fellow founders who have achieved great success, they rave about the person they married.

And Ian, I'm sure you know what this is like.

Ian Hathaway: Thankfully I do. I definitely want to dig into Family Community Partnership, something we like to talk about here. But I wanna just reaffirm something you said for founders who are listening, which is. Investors like to invest in lines, not dots. And what I mean is the ability to track something over time.

It's not just tech risk. We're evaluating. It's not just market risk that we're evaluating it's execution risk. Who is this person? I don't know what they've done. I don't know what they can do. And to just validate. Another thing of what you said is how many founders? I've said I'm not quite there yet. Can we please catch up in a quarter offering mentorship, right?

I come from that [00:34:00] Techstars DNA, where it's a genuine offer and almost no one takes me up on that offer. That's an easy win. You can't control outcomes, but you can control what you're doing. And so it's what got you into Techstars. It ultimately led to the next phases for you, which was raising a seed round from M 13, a premier fund based in la.

You would later go on to raise a $15 million series A round from nos. So here you are from building. This scrappy spreadsheet business out of the back of your retail shop to moving the family across the country for Techstars LA to raising over 20 million in venture capital. Tell us how you did it

Melodie van der Baan: Every day I pray for favor and wisdom.

That is my secret because at the end of the day, I might not have the wisdom, but it doesn't mean it can't be gifted to [00:35:00] me, and it doesn't mean that I can't go find it. And no one should ever underestimate the power of praying for favor, the amount of incredible people who give me their time, who allow me to ask them questions and to have guided me on this path.

Is why max retail exists. There is just a stirring in you when you're just focused on doing the right thing every day, having the awareness. When you're doing the wrong thing, and I find that max retail grows more from me identifying things I'm doing wrong than knowing what to do. That's right. It's okay.

It's gonna sound terrible, but at max retail, we call it bed shitting. And so every day in the organization, when we find we're doing something wrong, we point to it and we go, that's bed shitting, and we're gonna stop doing that. [00:36:00] It's these moments that are so exciting, Ian, because the second we know it's wrong, great.

We can change it, we can improve it, right? And, and along this journey. It's like I'm getting this education as I go, but my professors are my advisors and my investors, and I am counting on them, and I bring them on the journey with me. And when I find bed shitting, oftentimes I tell them, Hey, this is not working right, but I am aware of it.

And a lot of people are not comfortable doing that with their investors, Ian. They're not comfortable saying, Hey, like, this hire is not the right person anymore, but I know it and I need to figure out what this looks like for the next chapter. And you know what the I Investor will say, let me know if you need my help.

Right, but it's scary because you could be [00:37:00] like, what if they think I'm not this? What if they think I'm not that? Well, once again, if you know who you are and you're separate from your business, you can be transparent. Transparent must be your favorite color, and I joke that I treat my investors like they're my priest half the time, and I tell them everything that I am aware that we are working through because then Ian.

When I solve it, when I fix it, when I finish it, they have deeper conviction in who I am and what we can do. So you almost rob your investors of learning how you think and how you work through problems and building greater trust in you when you don't tell them what's going wrong, and then it's accountability to fix it.

But most of the time the investors know something's wrong. You just ain't fussing up to it.

Ian Hathaway: So you've built. Trust through vulnerability, through transparency, through including all of your stakeholders throughout [00:38:00] the process. What is it about that water's edge moment where you have to jump into that abyss of this fear around not being those things?

There's. Bed shitting happening, but I'm too afraid what happens if they fire me or if they're mad at me. So you've broken through that. Maybe you haven't done it perfectly every time, maybe you have. But what can help people push through and do that at that critical juncture? What would you say to people who are kind of at that water's edge moment right now and.

Maybe need a push to break through.

Melodie van der Baan: I think it starts a little more upstream as founders, especially the earlier you are on, you are so hyper-focused on getting capital that maybe you might just be willing to take a check. You just want it so bad that you'll take the money. You gotta know who you're getting in bed with when I hear horror stories.

[00:39:00] It's because people did not do their diligence on who they were partnering with, with the capital they received. And I have been extremely blessed here, Ian. I love everyone on my cap table and. I have the ability to feel comfortable being transparent, and I go to some of the biggest name funds, go to their offices in New York, go to their offices in San Francisco.

I sit with them and I, my investors gotta think I'm crazy 'cause they'll call me after and say, Hey, how'd it go? Uh, there was no chemistry. It's a non-starter for me. So for me, Ian, I look at someone and I am ranking them. Before I ever am willing to go and talk about money, how long do I know them? Ian? I would take money from you any day of the week.

Right? Because there is enough of a relationship here and trust here, and I know what you stand on [00:40:00] to say, I would call you with good news or bad news, and that is step one. If, if it is the right investor for you, the diligence process is like flow. You know what I mean? Ian, like you're mm-hmm. You're going back and forth and like the conversations just.

Really interesting. And then you move to the term sheet and you're negotiating the terms. And even that is a thought partnership. It's not at odds when it's the right fit. It feels right. And you are, you're collaborating. So you can often know if you're making the right choice or the wrong choice through diligence and a term sheet negotiation.

But be careful who you take money from is the moral of my story.

Ian Hathaway: Or who you partner with or get married to or whatever, right? All of these, all of these important life decisions. So I know if you wanna spread the credit around, but I'm not gonna let you off the hook that easily. You are definitely the driving force behind the company.

Melodie van der Baan: I know that as well. 'cause when you and I talk about transparency and I tell my [00:41:00] investors all the bed shitting and I tell them what I'm fixing, I know they're not gonna throw me out of the seat because I know I'm the right person for the job. I can share with them. I'm not afraid of of that because I know that I've continued to grow with this company and I will be who it needs me to be.

Wherever we are.

Ian Hathaway: Well, wherever you are, seems to be everywhere. You're serving over 2000 retailers today in all 50 US states. You're moving inventory across the network that touches more than 400 million online consumers, clearly a success. What are the things that you're getting right? What are you excited about?

What's the future hold?

Melodie van der Baan: Our go-to market is really working well right now, and that is the product of a year. Of dissecting, tearing it apart, putting it back together. So it feels really good to have focused the efforts [00:42:00] and be producing the results. Our leadership is incredible and the talent that we've recruited is amazing, and I think for us, the focus is creating a sustainable future for our customers, our company, and our employees.

And that is, that is the word that I probably meditate on more than anything is sustainable growth, sustainable future. As a founder, you drowned from opportunity and just knowing where the focus needs to be and that discipline. I'm past the point of idea. Idea, idea. What's the idea? I'm past that and what this company needs right now is laser focus and execution.

Ian Hathaway: Very well said. A big part of focus and execution is a complete and whole person. It's the support around us. You [00:43:00] mentioned earlier your supportive husband, Jan. It sounds like there's separation from work and family and friendships on the one hand, but really. It's also hard to untangle that, right?

Because it is a big part of your life and you do have a support structure, a family structure that wants you to be a complete and whole person. And so how have you been able to build a successful, fast growing company in the midst of managing demands of a family, of maintaining yourself as an individual and having young children?

Melodie van der Baan: Well, I would say my co-founder Morgan, is a big source of inspiration for me. I love her balance and she's always been one to love a good routine. And we joke that, you know, she's Morgan, I'm Melody, we're Mel together. I now have routine. She now talks into her phone instead of texting. That's how we're blending together.

Atomic Habits is a great book. How can you remove the [00:44:00] need to make decisions as much as possible by creating just consistency in in who you are? So for me, it's waking up. At a certain time, making my coffee, putting on that three minute song and hopping in a cold plunge, like knowing, okay, I'm gonna get in my zone, I'm gonna put on my hype song, I'm gonna do something I don't wanna do, just to remind myself that I'm willing to, I'll do it for the health benefits, I do it for the mental fortitude.

Wake up and do something I don't like every day. Another great book, win the Day. Mark Batterson. Great book about doing what you don't wanna do first, and then just being consistent with a routine. Okay. Now I get my kids ready for school. I don't check my phone. I don't do anything work related until I'm going to work.

As I mentioned, there's no room for work there. My home, because my children get such little time with me. If I'm gonna be honest, Ian.

Ian Hathaway: They

Melodie van der Baan: [00:45:00] get 7:00 PM to 7:00 AM Monday through Friday, and so I will give them that hour before they get on the bus, and then a mama's going to the gym. I'm gonna go to the gym, I'm gonna go to Orangetheory.

I'm gonna compete. I'm gonna whoop someone's ass that I don't know. I have no idea who they're, but I will be the winner on the leaderboard and I will give myself more evidence that I will win today. And then I will go to work, but I've already done multiple things for myself, for my family, and then I go to work and I crush it.

I don't think about any, anything all day on the home front. Right? Come home at seven. I'm with my family. We have dinner, we do bedtime routine. We are just all in with one another. There's a really important saying. Your children will only remember you when they woke up, you when you came home from work and you when you put them to bed.

Just nail those three moments a day. Don't save your [00:46:00] scraps for your family. Come home and have something for them. And you know what? Even if you gotta fake it, that's fine. You only gotta fake it for an hour and a half. All right. But give it to them.

Ian Hathaway: I love that. I feel like children are less bothered by you not being there than they are with you being there, but not really being there for sure.

You know, when the day, getting the hard stuff outta the way first, just getting it behind you. We had Brad Feld on a couple episodes ago. He wrote a book with his wife called Startup Life, but it was basically they had to create some structure and some rules for engagement because Brad would be distracted or onto the other thing.

And the big picture was you say, I'm the most important thing to you. Your actions do not convey that. And so they created a system around engagement in the household, and so I always recommend that to founders as well. I guess last big question for you, what is it about your story that you hope could in influence somebody or inspire them to take [00:47:00] that first step into building the company of their dreams?

Melodie van der Baan: I find that your testimony is normally more powerful. Where you failed than where you've succeeded. No one needs to hear another success story. And a success story is only a good one if it is wrought with trial and failure. So if my story can allow someone else to confidently fail and keep going, I will have done my purpose.

If that person can be brave enough to share their failure with another and create more of a ripple in this life to inspire someone else to do the same, we'll all have done. Well.

Ian Hathaway: That's a beautiful thought and a great note to end on. But before we. Break. We like to end with a segment that we call [00:48:00] beyond the bio.

These are just some quick hit questions that let us step away from the resume a little bit and get to dig into more about what makes you you. All right. So what's a quick piece of advice from a mentor that stuck with you throughout your journey?

Melodie van der Baan: Ooh. I would say run the process. Don't let the process run you.

Anna Barber.

Ian Hathaway: That's a good one. Who is an unsung hero in your life and what has been the impact they've had on you?

Melodie van der Baan: My girlfriend Deanna, because she is such a good wife and such a sweet mother, and she reminds me to be gentle.

Ian Hathaway: Yay, Deanna, who's someone in your local startup community or maybe in your broader network who doesn't get enough credit and deserves a shout out.

Ooh,

Melodie van der Baan: gosh, there's so many. I'm really rooting for this girl. Harriet Noya. She's building a startup right now in [00:49:00] London, and what she's doing is brand excess inventory to college students, and I think that that's really cool. Solving the excess inventory problem overseas.

Ian Hathaway: Tell us something most people don't know about you.

Something outside of work could be a hobby, a favorite travel spot, a guilty pleasure, or maybe even a hidden talent.

Melodie van der Baan: Oh, I love karaoke.

Ian Hathaway: Well, that's a good segue to our next question. I'll maybe ask it a different way now. What are one or two songs you'd like to add to our Spotify founders playlist?

Normally, I would say something that fuels your workday or has inspired you as an entrepreneur, but in this case it could also be one of your favorite karaoke songs to sing.

Melodie van der Baan: I'll give you two. My Shot from Hamilton and Astronaut in the Ocean.

Ian Hathaway: I love it. Amazing. Okay, last question. If you could give one piece of advice [00:50:00] to someone who's about to start their first company today, particularly someone who's maybe a bit of an outsider, what would it be?

Melodie van der Baan: It's supposed to be hard. It's supposed to be hard early on. The later it gets, it shouldn't be that hard, but early on, it should really consume you night and day. All the time require sacrifice. It should be something that you love enough to not drive a nice car, something that you love enough to not live in the fancy house, something you love enough to shed.

Everything that comes with the American ego to get.

Ian Hathaway: Wow. That's a awesome way to end. Melody, thank you so much for being here, sharing your story and your wisdom. It's so great to see you.

Melodie van der Baan: Thanks for having me. Good luck everyone.

Ian Hathaway: That's a wrap for today's episode of Outsider Inc. A big thanks to Melody Vanderban for sharing her story.

One built on lived experience, bold choices, and a [00:51:00] refusal to be defined by limits. What stands out to me most is how she succeeded by betting on herself, solving real problems, and thinking from first principles. Her advice to know who you are beyond business, protect your focus and be radically transparent is a powerful counter to today's cultural obsession with highlight reels.

Melody reminds us that the messy middle, the hard days, and even the failures can be what shapes us most. Being an outsider isn't a setback. It's an edge. If you're willing to work, live your values and keep showing up. If you want more from outsider, inc, don't forget to subscribe to the platform@outsiderinc.substack.com.

It's packed with highlights from today's episode, and bonus insights you won't wanna miss. You can follow Outsider, Inc on YouTube, Instagram, TikTok, and LinkedIn. Outsider Ink Pod. You can also follow me on X at Ian Hathaway Outsider Inc. Is produced by Spell Binder Media. We'll be back soon with another fascinating outsider conversation.

Until [00:52:00] then, thank you so much for listening and remember, great entrepreneurs can come from anywhere. See you next time.

Listen on: Spotify, Apple Podcasts, Amazon Music

In this episode of Outsider Inc., host Ian Hathaway interviews Jewel Burke Solomon, a founder, investor, and community leader based in Atlanta. Jewel shares her experiences of co-founding PartPic, a startup designed to identify and replace industrial parts through visual search technology, which was later acquired by Amazon. She discusses her challenges in raising capital as a black female founder and how those experiences inspired her to become an investor. Jewel highlights her work at Google for Startups, where she helped launch the Black Founders Fund and Latino Founders Fund. She also talks about co-founding Collab Capital, a venture fund focused on building long-term wealth and trust in underserved communities. This is a story of turning hard-earned lessons into purposeful action and reimagining who gets backed in venture.

Show Notes:

(01:17) Jewel’s Journey with PartPic

(06:27) Navigating Identity and Overcoming Bias

(10:16) Early Influences and Entrepreneurial Roots

(15:00) From Google to McMaster Car

(20:25) The Birth of PartPic

(27:28) The Decision to Sell to Amazon

(30:26) Handling Post-Sale Depression

(36:55) Founding Collab Capital

(38:37) The Atlanta Startup Ecosystem

(40:23) Mental Health Initiatives at Collab

(42:10) Reflections on DEI and Future Goals

(48:15) Beyond the Bio with Jewel Burks Solomon

✅ Host: Ian Hathway - Co-Founder & Managing Partner, FOVC

✅ Guest: Jewel Burks Solomon, Co-Founder of Partpic & Managing Partner, Collab Capital

Produced by Spellbinder Media. Executive Produced by Bridge Five Ventures. Copyright ©️2025, Bridge Five Ventures, LLC, All rights reserved.

Listen & subscribe wherever you get your podcasts or at outsiderinc.substack.com.

AI-Generated Transcript

Jewel Burks Solomon: [00:00:00] What I'm really hoping is that the trust gap closes. People didn't believe me and that interfered with their ability to evaluate my business. I'm hopeful that through my work I will have been able to prove that you can trust people in business. And give people the benefit of the doubt. Um, of course, do your due diligence, but ultimately invest in people, not just because the pattern matches, but because when you hear them and listen to them and really see them, you.

Get excited about the vision that they want to pursue. So I'm hopeful that through my work, through the people that I invest in, through the great things that they do, we're able to [00:01:00] get to a point where the trust gap is closed.

Ian Hathaway: Welcome to another episode of Outsider Inc. I'm your host, Ian Hathaway. Today's guest is Jewel Burke Solomon, a visionary, founder, investor, and community leader based in Atlanta. Jewel co-founded Part Pick a startup that let users identify and replace industrial parts with just a photo. It was a deceptively simple idea, rooted in real frustration.

Jewel experienced firsthand. Against the odds, she raised $2 million in seed funding before selling the company to Amazon, and a deal that made her one of a small number of black women founders to lead a venture-backed startup to successful acquisition. Amazon went on to integrate the technology into its visual search and product identification tools, bringing her innovation to millions of customers worldwide.

After the sale, Jewel took a step back to reflect, and in that space found a new kind of purpose. She returned to Google where she had once [00:02:00] interned during college and spent several years in her early career to lead Google for startups in the United States. There she launched the Black Founders Fund and Latino Founders Fund, deploying over 45 million in non-dilutive capital to underrepresented founders.

At the same time, she was quietly laying the groundwork for something even bigger. Collab capital, a venture fund, rooted in Atlanta and built on a different model, one that centers trust. Ownership and long-term wealth creation in underserved communities. Jewel's story is one of vision, persistence, and deep intentionality.

She brings a rare mix of tactical clarity and personal openness, reflecting on everything from the roots that shaped her to the raw emotions at her hardest moments, to the values guiding her now. And on a personal note, Jewel is someone I admire deeply, not just for what she's built, but for how she's moved through the world while building it.

I'm excited to talk with Jewel about building investor trust from scratch, navigating identity after a major exit. [00:03:00] Rethinking how capital can work for those left out, and designing institutions that foster community wealth now and for generations to come. Jewel, thank you so much for stopping by.

Jewel Burks Solomon: Thank you so much for having me, and that is the best introduction that anyone's ever done for me, so I'm like, I need you to sue me.

That, that's so good. Amazing.

Ian Hathaway: It's great to see you again. I'm happy to have you here today. I had a lot of fun digging through the details of your journey, and somehow I'm walking away more impressed by you now than I was before, which is saying something. I'd like to start with some big news that you have.

Collab Capital, the venture capital firm you co-founded in 2019. Just announced the closing of its second fund, a $75 million seed and early stage vehicle. Wow. Congratulations on that.

Jewel Burks Solomon: Thank you. Thank you so much. Yeah, it was not easy, but [00:04:00] we're super excited to now have fresh capital to deploy and some really great companies.

More investing to go, more institution to build. It's a fun time.

Ian Hathaway: Well, it's really a testament to your ability to execute. This is. Not just a difficult time to raise in venture capital. It's a generationally terrible time, and yet you did it successfully. This follows your debut fund of 50 million, which launched in 2021, so you're now managing over a hundred million in assets.

I'd like to dive more deeply into the firm's thesis later on, but just at a high level, what is your mission at Collab Capital and maybe how are you different from other venture capital firms?

Jewel Burks Solomon: Sure. So my mission at COLLAB was really born out of my experience as a founder. So I had a really difficult time as a founder raising capital.

I had really challenging experiences with investors, [00:05:00] and I made a, a vow to myself while I was still building my company part. Pick that if I ever got on the other side of building that business, that I would become the investor that I wish I had. So I started Angel investing first, and then knew that I needed to be writing bigger checks to more people in order to make the impact that I really wanted to make.

Menzo founded collab with this idea that investors can be aligned with founders, and that takes communication, that takes transparency, that takes understanding, and so that's really kind of the core principles that we use to form collabs. We're now deep into fund two deployment. We've made seven investments so far out of fund two, adding on zip 38 investments that we made in fund one.

Um, but we really just thought about how could the experience have been different if we had better communication, better alignment with our investors as founders. And my partner and I, Barry, we both were founders, so kind of had [00:06:00] that shared experience. And now we're really fortunate to be able to use our experience, the, the good and the bad to kind of make an experience better for the founders that we support at collab.

Ian Hathaway: Wow. What a novel thought that founders and investors can actually be aligned. That seems obvious to me, maybe less so to others, but having empathy for the entrepreneur's journey, which is, as you mentioned, is based on your own journey. You made it a big part of your mission to support founders of color, especially women, and that's something that you've approached with both purpose and your personal experience.

We talk a lot on this platform about what it means to be an outsider in tech, and I think part of that is acknowledging that the playing field just isn't the same for everyone. For founders who don't fit that traditional mold. The hurdles can go beyond product and fundraising. They're personal. They're emotional, and they're systemic.

And [00:07:00] what you've spoken about is what it's meant to navigate this world as a young black woman building a tech company and raising venture capital to just kind of level set to ground us in reality. Before we dive into everything you've built and everything you've accomplished. What's something that you wish more people understood about what the experience of being an outsider is?

Actually like

Jewel Burks Solomon: when people talk about their experiences, majority of the time it's real. And I think a lot of times people listen with the desire to say, oh no, it's not that bad, or it couldn't be like that. I think something that's different about how I approach conversations or listening to people's experiences is I just assume that they are 100% telling the truth and what they are sharing is true to their experience.

When I reflect back on my journey and some of the things that I experienced, particularly as a young person [00:08:00] in Silicon Valley, so I moved out to Oakland, worked in Mountain View, straight outta college, and it was definitely a culture shock. Being one of very few black women on the teams that I was on initially in a new environment far away from home, that gave me a set of experiences that really would follow me for the better part of my career as a founder and my experiences with investors and how they saw me, and the types of ridiculous conversations I would have to have about the fact that my team was capable of building this kind of novel technology.

I, I so vividly remember investors simply not believing me. One of the stories I share is that I had an opportunity to read an investment memo that was written about part pick, and in the memo, the word alleged was used four different times to describe things that were very obviously true. The funniest one [00:09:00] was, this was a, an investor that we were talking to towards the end of our journey Amazon was, was circling around and.

The investor wrote as sort of the closing part of the memo that Partpic has allegedly received an offer to be acquired by Amazon. Just the facts of what was happening at the time they didn't believe, and that I think was really indicative of what my life and career looked like. Honestly, probably to this day in terms of always having to prove something, always being second guessed.

And I think that is not a unique experience for many people who are outsiders. And so just having people be more mindful of the fact that when you're hearing someone's story, just kind of take it for what it is, take it for face value, and not always being so skeptical of people who maybe look different from you or have a different set of experiences than you.

Ian Hathaway: Wow. That's foundational to everything we do [00:10:00] is to be believed, to be heard. Right. I was not expecting that answer, but I am gonna be pondering on that for some time to come. You hinted at some of the challenges you faced in building part pick, but let's rewind a little bit to your early years. You were born in Alabama.

You grew up between Nashville and Mobile. Mm-hmm. Your journey started not among a family of tech executives, but a family of successful local entrepreneurs. Your mom and insurance, your dad in real estate and retail, and your grandfather building numerous businesses in mobile. During the 1960s, you started working in those family businesses as young as five or six.

How did those early experiences shape your view of work responsibility and entrepreneurship at an early age?

Jewel Burks Solomon: I love talking about this and really using this as an anchor for everything else that's come after in my life, because those [00:11:00] experiences early with my parents and my grandparents were so formative for me, and I think they gave me a sense of I can do anything.

'cause I saw my parents working in varying degrees of success in terms of how the businesses turned out. But what I saw was their work ethic. I saw that they got up early, they worked all day into the nights, and they had me right by their side. And that for me as a young person, made me want to become an entrepreneur because I honestly, that was like the only thing I saw.

I always knew that I wanted to build something of my own. I didn't know what form that would take, but I did know that it was important to me to build a business and have that business be community driven. I remember going to the bank with my granddad and my dad when I was really young and everyone knew them, and [00:12:00] they were really central figures in the community, and that made an impression on me and made me.

Wanna have that same impact when I grew up.

Ian Hathaway: You've spoken before about that example, your grandfather, William Burkes, Jr. He seems like a particular model of influence for you. So what about him Do you most wanna try to compel unto others? What did you learn from him?

Jewel Burks Solomon: Man, don't make me cry on here. Um, so I, I have, it's okay.

Ian Hathaway: It's happened before.

Jewel Burks Solomon: I have to say, I, I have. Two grandfathers, both named William. One is still living. He is known as Papa Bill, and he is really central also to this, to my story. But the grandfather that you're referring to, William Burkes Junior, he passed away when, when I was senior in high school. But the impact that he made on my life and the fact that I, I'm still in conversation with him to [00:13:00] this day, I, I feel like.

He taught me so much about business, about life, about how to conduct yourself, about how to be a person of integrity and how to be focused on family as a core. So my grandfather, he was a civic leader. He was a jack of all trades. He was amazing, and I think just about. Those formative experiences, and what he taught me was just not to put any limits on myself, and I have so many vivid memories of the way that he treated people and how he was so grounded and so confident.

If you think about this context of a black man in Mobile, Alabama, who is a business owner and has started from. A life in very rural Alabama. [00:14:00] Very, very humble beginnings. I mean as ascended to being a business owner, being a person whose four kids all went to college and really making a, a beautiful life with my grandmother married over 60 years before he passed.

Like all of that I think were the critical foundational ideas in terms of what does a good life look like and what should you. Focus on in order to get there.

Ian Hathaway: Wow. He sounds like an incredible man. I hope you see that you're a living example of him. I know he'd be proud of you today. The year he passed, you went on to college, you excelled in school, went to Howard University to major in business.

Once you got there, you landed a summer internship on Wall Street. The next summer you had an internship. On the other coast at Google in Silicon Valley, which sparked your interest in [00:15:00] technology. What were your early impressions of Google and maybe how did that contrast with Goldman Sachs?

Jewel Burks Solomon: My first impressions were, wow, this is so different from anything I've ever experienced before.

It was fast paced. I was challenged. I had an amazing manager, Marcella Butler, who I'm still in touch with today. And she saw something in me that, you know, I didn't at the time see in myself as far as my potential and what I could do. And she really encouraged me a lot because I was definitely experiencing the shock of being in California for the first time and, and being really far away from home.

And she definitely. Gave me confidence to really perform and and shine there, and I also just fell in love with how wealth everything worked. That seems weird, but I was just like, wow, the systems work. I [00:16:00] can reliably do all the things that I need to do, which was a contrast unfortunately, from my experience in college where at that time there was a lot of friction in terms of the systems.

My PE curiosity was sparked because I was a business major and I got in conversation with some of the engineering interns, and I found out that they were making twice what I was making as a business intern, and I was like, wait a minute. So that made me more curious about building technology and what that could look like, and contrasting that with Goldman Sachs, which honestly was also a really amazing internship experience for me.

The learning from that Goldman Sachs internship was. Also about pace. I remember going to New York and everything was just much faster pace than I was used to. Coming from Nashville, Tennessee. It was about pace and it was about excellence that was demanded from the folks who are managing me, and it just [00:17:00] brought everything up a level for me and I.

Quickly understood what was gonna be required. So I feel like those were so formative experiences for me and it really was just a matter of the timing. I interned on Wall Street in 2008, that internship was gonna look quite different.

(both): Yeah.

Jewel Burks Solomon: And so I remember Stacy Brown Philpot, who is still a, a friend and mentor to me today.

She actually called me when I was contemplating if I was gonna go back to Goldman for a second summer or go to Google, and she was like, you need to come to Google. This is the place to be. She was, by that time, an executive at Google. She had previously worked at Goldman Sachs and now she's an investor.

So we were looking at deals together, so it's so funny how they come full circle, but I appreciate that so much because it, it gave me exposure to technology and obviously I fell in love. Never look back.

Ian Hathaway: Yeah. The rest is history. Yeah. Sounds like continued theme in your life. Mentors [00:18:00] guiding you at critical junctures, something obviously you are to other people now.

So after graduating from Howard, you did in fact follow that advice. You went to Google in California, you worked in enterprise sales. After a couple years, your grandmother was diagnosed with cancer. Your younger brother got sick. You decided that you were too far away from home. Yep. Google denied you a transfer to the Southeast, so you took a job at a company called McMaster Car, an industrial supply company of all things, and you moved to Atlanta.

That decision eventually became consequential and shaping your entrepreneurial journey, but at the time, I'm sure many people around you and possibly even yourself may have perceived that. Move as a step backward. So just tell us a little bit about your decision to leave the tech world in Silicon Valley working at this company that many people deemed to be the greatest company to work for, to leave that world and to move closer to [00:19:00] home and working in industrial supplies.

Jewel Burks Solomon: It was a crazy decision at the time, but it, it was a decision about. Being close to family. As you mentioned, my grandmother was going through a difficult time. I have four younger brothers. One of them was sick at the time and I was just stressed about being so far away, and so I really wanted to get back closer to home.

And also at the time I was 23, so I was young enough where even if it was a bad career decision, the impact was gonna be minimal. I could just, you know, find a different job or. Start over. In my eyes, the risk was pretty low. When I got to McMaster car, I was like, oh no. What have I done? This is awful. At the time, it felt like a, a potentially big misstep in terms of the trajectory and how I saw my life, but obviously it, it all worked out.

It was the right at the time. I was able to be [00:20:00] close to family when they needed me. I was able to kind of reset. I was able to experience what would become the foundation for partpic. So it, it

Ian Hathaway: all

Jewel Burks Solomon: worked out.

Ian Hathaway: Yeah. Well you were putting family first and what didn't make sense, maybe immediately actually made much more sense later on.

So there's a valuable lesson in that for everyone. At McMaster Car you were managing customer escalations and constantly dealing with people who couldn't describe. The part they needed. Around the same time your other grandfather Bill had his tractor break down mid harvest, and you struggled to help him find this replacement part.

Was that the aha moment? You had these two experiences that clicked together in your head where maybe you thought there has got to be a better way to search for parts and I'm going to be the person to go and build that.

Jewel Burks Solomon: [00:21:00] Yes. That is what happened. I would say I am probably the only person in the history of the world who would leave Google to go to McMaster car.

So that unique juxtaposition of careers where I was for a few years, seeing technology being built in a really efficient and fast way. And then I go into this totally different environment. Still serving a huge market industrial part. It's a massive market. But what I saw there was that they were not using technology in the same way my brain put these things together.

What if this industry that is printing money, making billions of dollars, but wasting a lot of money because they're not necessarily leveraging technology in the ways that they can to serve the customer. What if you could bring technology into this space? And then I was kind of already [00:22:00] ruminating on ideas when Papa Bill called me and was like, I need your help.

And I was able to put it all together and, and that experience with him is what put my heart in it when he needed this part. That is what made me say, oh, okay, if he needs it. I'm sure there are many others like him who need an easier way to find parts, and that is what I'm motivated to solve. I would like to get up every day to figure this out for him.

And so that's really what made me go from this could be interesting to, no, I have to do this. Um, that, that was the catalyst for sure.

Ian Hathaway: I wanna call out the way you frame that. I think it's really important. Some of the most successful founders I've talked to, including on the show, have talked about literally naming that ideal customer persona, making it as narrow as possible in the beginning as a key to success.[00:23:00]

So you did that, you had the Papa Bill problem you were solving. Yeah. So just tell us a little bit about what Park Pick was. You've launched it in 2013, you left McMaster Car to build this company. Who else was involved? What was the founding like that early vision in In early operations?

Jewel Burks Solomon: Sure. It's, it's funny 'cause now we're over a decade removed and reflecting on those early days.

It was rocky. It's really rocky. But I did have a clear vision pretty much from the start that I wanted to solve this problem of part search. Use image recognition technology to do so. I knew the words, but I didn't know how to build it. But those early days, I would take extra, will call shifts at McMaster car to talk to customers and ask them questions about, you know, if you could find products with an image, would you search that way?

And of course they would say yes. And so I was able to validate my [00:24:00] idea. We went from. Just the idea in my head, in late 2012 to a accelerator in New York in 2013 to pitching at TechCrunch, which is kind of like the official launch in 2014 to raising a seed round in 2015 to selling the business in 2016.

So that was the timeline of everything. In the mix of that, lots of ups and downs. Got really great customers. Had built a database of over a million parts by the time we sold to Amazon, and obviously had a, a hard time with investors, but learned so much in that experience. I mean, even further, you know, spent three years at Amazon integrating the technology into the Amazon mobile app, so a total of seven years working on Partpic.

And got a lot of great information, hard [00:25:00] knocks, lessons, learnings that I now get to share with entrepreneurs.

Ian Hathaway: And now you're the industrial parts nerd of the Southeast. So

Jewel Burks Solomon: also that I know way too much about nails, screws, bolts, washers, pipe fitting.

Ian Hathaway: Yeah. Wow. Okay. I think I just fell asleep listening to this.

No, it is an amazing story. You did talk about the seed round that you raised. You were told no by almost everybody. That's not uncommon really, and for early stage founders. But what feels different for you is the reasons that you were told. You hinted at a few of them already. You weren't believed. I can imagine you were some claims too young.

What were some of the additional reasons that you were

Jewel Burks Solomon: given? Big reason, which I think people sentiment about has, has changed to a certain extent now, but a big reason was I, I was based in Atlanta. Many of the investors I was speaking to were in [00:26:00] Silicon Valley, in New York, in Boston, and the philosophy at that time was, as a seed sage company, I should be close to my investors.

And so, you know, a lot of people would say, well, if you move to Silicon Valley and moved to San Francisco. We'll look at investing and I felt it was important for me to be close to customers and most of the industrial companies are in the south and the Midwest, so I didn't understand why I would move to San Francisco.

So that was one piece of feedback I got a lot. The others were just, we don't know a lot about this space. Is it really big enough? But like I said, industrial parts is a trillion dollar industry. It's huge. And technology for that space was not a big category, but obviously growing. So yeah, I don't think that the reasons were very good, but people certainly gave me reasons why they couldn't or wouldn't invest.

Ian Hathaway: Yeah, sounds like [00:27:00] Atlanta was definitely fertile ground for you and finding a co-founder, finding talent, and I think it's insane that investors would say, we want you to be close to us, not close to the customers. You eventually sold the company to Amazon in 2016. You built this amazing breakthrough product push through all kinds of naysayers and bias, and ended up getting acquired by one of the most powerful companies in the world.

Huge accomplishment. Tell us about your decision to go through with the sale to Amazon, and what was kind of the driving force behind making that sale?

Jewel Burks Solomon: Yeah, I mean, the headline is great. The reality didn't feel as good when it was happening. I definitely felt that my back was up against the wall because the offers that I was receiving for our Series A were not good.

And then the offer from Amazon was better, still not my [00:28:00] dream of billion dollar exit. That was my dream, but didn't get there. However, it did allow me to accomplish goals that were. Core for me. So when I looked at the offer and was able to say, okay, we're gonna give our investors a return and do it, you know, in really a year's time from when we raise the seed round.

So they should all be happy. We're gonna be able to take care of the team, make sure everyone gets great high paying jobs and gets some money because everyone had equity in the business, and then have a, a life changing event. As the executives as well, and really just have a platform to be able to build from here.

I think those were all the things that I was optimizing for at that time. What I believed was that the road wasn't gonna get any easier for me from a fundraising perspective. It was clear to me that there were some obstacles that I probably could press on around, but you know, it was just gonna be really, really challenging in terms of finding investors [00:29:00] who believed in me and believed in the team.

And so I made a decision at that time that the best option would be to sell to Amazon. That was a decision. It was hard as well, the negotiation process, the integration, the feeling that I had to fight for everything that that carried on through my time at Amazon. But again, I think now that I've had many years to heal, heal and lick my wounds, I feel like.

It was all building toward, you know, what I'm doing now and, and my ability to know what happens at each and every stage so that I can help coach founders as they

Ian Hathaway: go. I know that outcome did not meet your billion dollar aspirations, but. It was definitely a success. You handled it in the right way. You negotiated that deal yourself.

Yep. Not easy. And you took care of the people that meant the most to [00:30:00] you. I know your CTO is still at Amazon, so you know the product is reaching millions of people and so I just want to call that out. I know that's something that founders have to grapple with more often than not. Yeah. Is not meeting that expectation.

But it was definitely a success. I know it was hard at the time. I'm glad you went through that because it has made you the person you are. The headlines were great. People were celebrating, but inside you were hurting. You kind of had a little bit of an identity crisis. You actually experienced clinical depression, which you've been open about, and which I'm grateful for you being open about that.

How did that feel going through those ups and downs? And what would you say to founders who might be experiencing that right now?

Jewel Burks Solomon: It felt so strange to experience. It was a, a big deposit into my account and literally not be able to get out of the bed [00:31:00] because I was so sad. It just, it didn't matter. It's like you're supposed to be happy.

This thing that you have been working really hard for, you have sacrificed a lot. You have postponed a lot in your life. For this moment and you are devastated. What is that about? And it really took me going to therapy and also thinking about what would make me feel like that experience and all the things that I went through was worth it.

And what I landed on was I need to share with people what I learned. And so I kind of put out a post. If there are any founders who wanna talk about what they're working on, I'm available. So I started to turn outward to heal. At the time, that was the best thing I could think to do and, and mostly to make sure that other people didn't repeat some of the mistakes that I made.

And [00:32:00] that's really what started me on the journey to become an investor, because once I started having those coffee meetings, I began to get really excited about the companies and the founders that I was meeting with. And I was like, oh, you know, I have a little extra change right now. I can, I can write some checks.

Um, so that's really how I got into investing initially. Yeah. But it, it, it did take time also, it, it just so happened that I went on a blind date with my now husband, a weekend after I sold my company. So that also was a pick me up. Oh, wow. I'm

Ian Hathaway: sure, I'm sure he heard it all. Okay.

Jewel Burks Solomon: He heard it all that first day.

The fact that he did not run is. It is why he's my husband now because I had so much to say. I, I just unloaded everything on him.

Ian Hathaway: Did did he get to talk at all during that first

Jewel Burks Solomon: day? Probably not, no. He's the type of person that ask lots of questions and he just asked all the right questions and I had, I had a lot to say so.

Ian Hathaway: Well, so ga with founders is what you thought to do and it's what kind of [00:33:00] brought you back to life? Interesting. Sean O. Sullivan, he's was just on the show and he went through a similar depressive episode after what was an objective failure of a company. And I kind of asked him, you know, what? What's the best way for founders to pull themselves out, you know, if you're feeling depressed or burned out?

And he said, engaging through the mentorship model is really the best way to enliven that spirit again. And that's what you did. So now you're back in action. You're writing angel checks. I know that eventually leads you to collab Capital. But before we get there, I wanna talk about your return to Google.

(both): Yeah.

Ian Hathaway: So not long after the sale, you came back to Google, not as a junior hire or an intern, but to lead Google for startups in the us. For listeners that don't know what is Google for Startups?

Jewel Burks Solomon: Google for Startups is now, I think it's been around for maybe close to 15 years, but historically it [00:34:00] was looking at how can Google show up in emerging startup ecosystems and really provide the best of Google, whether that's the platform, the people, the products, to startup communities.

Historically, there were campus locations and places like London and Tel Aviv and Japan. And at the time when I was recruited back to join, there had not been a concerted effort around emerging startup ecosystems in the US or you know, a team focus on that. So I was really brought in to look at how can we show up in the US for emerging startup ecosystems and emerging founders, um, and really bring the best of Google to those folks.

Ian Hathaway: One of the big things you helped create at Google was the Black Founders Fund. The Latino Founders Fund. Since 2020, those initiatives have deployed over 45 million

Jewel Burks Solomon: now 50,

Ian Hathaway: 50 million. Yep. In non-dilutive capital to underrepresented businesses. [00:35:00] What was the focus of those funds? What are they doing now?

How can founders benefit from that?

Jewel Burks Solomon: Yes. I'm so proud of that work. I saw an opportunity. In the age of COVID and everything that was going on in 2020, I saw an opening to help Google better leverage some balance sheet capital and use it in service of startups and founders. I saw that PPP loans were not being equally distributed, and I thought that many of the founders and companies that we had built programs around were not going to exist if we didn't do something.

So I made this proposal around we need to put together a essentially emergency fund to help these companies that are struggling. And that kind of morphed into what became the Black Founders Fund. What became Latino Founders Fund, and what now I would say [00:36:00] is known as a Founders Fund model, which has been used across the globe.

It's been used for founders in Ukraine. It's been used for female founders in Japan. It's been leveraged now as a template to be supportive of founders in various communities. It expanded, it grew. Now over 500 founders have been recipients of that funding and that funding was catalytic. So that $50 million has gone on to, I think we're close to a billion dollars in terms of what those companies have gone on to raise post the funding.

So Google being their first check and then them leveraging that stamp if, if you will, to go on and raise substantial follow on rounds.

Ian Hathaway: That sounds incredible. The impact is enormous. You mentioned the word catalytic also feels like that applies here to you, catalyzing what would come next. Collab capital.

What are you most excited about now? [00:37:00] What are you looking for in founders and how can folks get in touch?

Jewel Burks Solomon: We're preparing for our fourth annual founders retreat and. For me, it's so enriching to be able to be with the founders in person and have them be together. This is like the thing that I look forward to planning every year, and I also am excited about the fact that we have companies that despite all of the challenges in the market and, you know, tariffs and all, all the things are still performing and doing amazingly well, I'm really happy about that because things are working, my debts are are paying off it seems.

And I'm just excited about the fact that from a quality perspective, I feel like the founders that we're finding and meeting are just incredible people who are choosing to start businesses right now. In the midst of all the things that are happening, they're special breed of people. So I feel like we're finding really great opportunities and, and chances to [00:38:00] get on.

With amazing people on their journeys.

Ian Hathaway: So I love how you answered that question. I think most people would get into investment thesis ideas. What I heard you talk about is community. You're building a community around an investment firm. A big part of that is of course, Atlanta investors early on doubted your ability to build it in Atlanta.

They were wrong. Many high profile successes in Atlanta later continues to prove those folks wrong. Atlanta is a very different place now than when you were building. What does Atlanta represent to you for the work you're doing, and just tell us a little bit about where Atlanta is today. Atlanta,

Jewel Burks Solomon: I've been a really big advocate for Atlanta because I think that Atlanta has so many assets.

It's a great city. You can get to anywhere. Atlanta's the busiest airport. You have great universities, you have talent, you [00:39:00] have major corporations, so many Fortune 500 companies here. So from an assets perspective, Atlanta has it all. But I really have taken on Atlanta in terms of building up the ecosystem as a personal mission, and I don't think I'm done yet.

I still think that there's a long ways to go. The mayor of Atlanta, mayor Andre Dickens has put out. Goal of Atlanta becoming a top five tech hub, and I feel personally responsible for making sure that that, that that happens. And I honestly think that there's still a ways to go. One kind of sad fact is of the $125 million that we've raised over the last five years for collab across funds, one and two, maybe 5 million of that has come from Atlanta.

So it's still an effort to get local dollars to move even to someone like me who's spent a long time here doing what I would say is [00:40:00] pretty good work. I'm hoping that when we go out to raise fund three, people will say, okay, there's enough proof points on the board that we should get involved more than we already are.

But I think that there's just so many good things here and when you think about community and who can be impacted. If these things work out, um, that's just a story that I wanna be a part of, so I'll continue to work on it.

Ian Hathaway: Something else that you have been in front of that has impressed me about collab, you've been outspoken on mental health issues, the importance of that.

I know you've made it a part of the offering for founders at collab. You've even put a therapy group on retainer. I am a big believer in therapy, in coaching and founders taking care of their mental health. It's strange to me that investors encourage people to take good care of their physical health, but there's not enough on the mental health.

And yet you're leading on this. Tell me about that decision to make that [00:41:00] offering available. I'm not aware of any other firm that does that.

Jewel Burks Solomon: Yeah. This was actually born out of me putting that mental health offering into our founders fund at Google. Getting feedback from founders that this was by far the most impactful part of the offering.

Maybe in some cases even beyond the dollars. Having access to free therapy and coaching for them was the most impactful thing. So I was like, oh, okay. This already works. It's proven. And candidly, I knew that in my own life, therapy had made such a difference. So I wanted us to take a portion of our management fee and put it towards giving every single founder in the portfolio access to therapy.

And that's something that we've continued into fund two. And again, we, we continue to get this feedback that. It makes such a difference and that the founders would not have done it in some cases. They never had been to therapy and, and they wouldn't have been able to either [00:42:00] afford it or just make the time and space for it had it not been an offering from us.

Ian Hathaway: I love that. Obviously you talked about the motivation for founding collab. It came from your own experience as a founder that was driven in part by experiences you had from identity. It's not lost on me in this environment, DEI initiatives, um, are under attack, not just in governments and corporate boardrooms, but also in courtrooms and litigation.

And yet in my view, the work is as important as ever. Given your experience, how do you contextualize these developments within what your larger mission is? Not just at collab, but you Jewel the individual, the human. And do they at all affect how you're doing things or is it just business as usual?

Jewel Burks Solomon: This is a, a big one.

I look at it in terms of history and [00:43:00] what I recognize is that every period of progress has been faced with backlash throughout history. That has always happened. And so if we think about the last. Let's call it 10 years prior to the past two, we could say that was a period of progress in terms of people receiving more access or more rights.

And historically periods of progress are gonna be met with hostility or backlash. So I think if you consider it from that standpoint, it's not terribly unexpected. And for me, someone who was doing a lot of work in the 20 20 20 21 time period where a lot of initiatives were put out there that were seeped in what could be considered a moment, and I'm [00:44:00] referring to 2020, George Floyd being murdered.

I knew that any initiative that it's rooted in someone's murder cannot be. Longstanding that is fragile ground to to root an initiative in. So with that knowledge, I think it is to be somewhat expected that there would be a shift in perspectives orientation around what does progress look like, who deserves access?

So that's the backdrop. That being said, what has been the next step for me understanding that background. Is, what do I want to continue to do and what is the core of why I get up every day? And the answers to those questions remain the same as they've always been, which is, it's important to me that more people have access to the innovation [00:45:00] economy.

More people have an ability to build wealth in this space, and more people know kind of the road to get there. And so. In my opinion, nothing that's happening in the macro environment. Nothing that's happening politically should shift me from that mission. Now, what I have had to do is adjust how I talk about the work.

That's a reality because I do not want to be at risk. I do not want anyone to sue me. I just wanna be able to do good work. That's, that's really it. And I, and from an investment standpoint, I still believe. That there is alpha in the places where no one else is looking and no one else is investing. So from a competitive standpoint, which I'm a competitor at heart, I want to win.

I believe that every single day we're finding incredible opportunities that most people are either [00:46:00] not looking at, not looking for, or maybe they're seeing and just deciding not to invest, but. For us, we now have proof points to say that looking in places where other folks aren't looking and then building an engagement model and a support model that helps these companies get to the next level.

That is a winning strategy. At the end of the day, we're in business to generate returns, and we believe that our strategy is going to lead to strong returns.

Ian Hathaway: That was very well said. It's what this platform stands for. It's what my mission is in the world as well. We come from different backgrounds. We might be pursuing that differently, but it's the same goal, which is to democratize access to opportunity for systems that are famously closed.

And so I applaud you for that and thank you for the work. Last question, many, many years from now when you're [00:47:00] back on your life and.

What do you hope will be easier for others that was more difficult for you at the time you were building?

Jewel Burks Solomon: What I'm really hoping is that the trust gap closes. People didn't believe me and that interfered with their ability to evaluate my business. I'm hopeful that through my work I will have been able to prove.

That you can trust people in business and give people the benefit of the doubt, of course, do your due diligence, but ultimately invest in people, not just because the pattern matches, but because when you hear them and listen to them and really see them, you get excited about the vision that they want to pursue.

[00:48:00] So I'm hopeful that through my work, through the people that I invest in, through the great things that they do, we're able to get to a point where the trust gap is closed.

Ian Hathaway: Yeah, that's a beautiful note to end on. But here on Outsider Inc. We like to finish with a segment we call Beyond the Bio, where we do some quick hit questions that go beyond your resume and let us get into you.

So what's a quick piece of advice from a mentor that stuck with you throughout your journey?

Jewel Burks Solomon: One piece of advice, and I don't know who that exactly attributed this to, but I, I reflect on it a lot, is to keep the main thing, the main thing.

Ian Hathaway: Hmm. Oh, just a proverb. I love that. Who is an unsung hero in your life and what has been the impact they've had on you?

Jewel Burks Solomon: I talk so much about my grandfathers in interviews that I think. Enough credit isn't given to my grandmothers who equally [00:49:00] have influenced my life in in different ways. I would say I owe a lot of my faith and my devotion to my grandmothers making sure that I was in church at an early age. So those are two beautiful, strong women who I've tried to model what they've taught me as well.

Ian Hathaway: Who's someone in the Atlanta startup community who doesn't get enough credit and deserves a shout out from you?

Jewel Burks Solomon: I'll say, Joey Wilmack is a person who has done consistently great work with a great heart, great integrity for many, many years.

Ian Hathaway: Tell us something most people don't know about you, something outside of work.

It could be a hobby, a favorite travel spot, a guilty pleasure, or maybe even a hidden talent.

Jewel Burks Solomon: I feel like this is my go-to, so a lot of people probably do know this, but I love art. I grew up painting, drawing, [00:50:00] and now I don't get as much time to do that, so I love collecting.

Ian Hathaway: Oh yeah, I'm with you on that.

Love art as well. What are one or two songs you'd like to add to our Spotify founder's Playlist? Something that Fuels your Workday or has inspired you on your journey?

Jewel Burks Solomon: There's a song called Look At God by Corinne Hawthorne that I love, and I think it's a great reminder of blessings, so I'll give that as a good, inspirational song to play.

Ian Hathaway: Okay. Last question. If you could give one piece of advice to someone about to start their first company today, particularly someone who's a bit of an outsider like you, what would it be?

Jewel Burks Solomon: Envision yourself in 10 years and work backwards from there. Think about what ultimately you're working toward and try to put together a plan based on what, what you want that end to look like.

Ian Hathaway: I love that. I'm also reminded of [00:51:00] another quote that I've heard, which is, you are today where you wanted to be 10 years ago.

(both): Hmm.

Ian Hathaway: And so to be grateful for the progress you have made because the goalposts have now shifted. Well, look, jewel, this was an amazing conversation. I'm so glad that you came on. I learned so much about you and had a great time.

I can't wait to share this with our listeners.

Jewel Burks Solomon: Thank you so much. This was awesome.

Ian Hathaway: That's it for this episode of Outsider Inc. A huge thanks to Jewel Burke, Solomon for being with us today. Her journey as a reminder that resilience isn't just about pushing through, it's about staying grounded in what matters most.

Jewel didn't just build an innovative company. She built it with care. She stayed rooted in her values. Stood firm in the face of doubt and kept community at the center the whole way through. What stuck with me most is how she leads with heart, with integrity, and with a vision that's bigger than herself.

She's not just making space for the next generation of founders. She's showing them what it looks like to lead on your own terms. I can't wait [00:52:00] to see where she takes things from here as she's empowering future entrepreneurs in Atlanta. And beyond. If you want more from Outsider, inc, don't forget to subscribe to the platform@outsiderinc.substack.com.

It's packed with highlights from today's episode. And bonus insights you won't wanna miss. You can follow Outsider Inc. On YouTube, Instagram, TikTok and LinkedIn at Outsider, Inc. You can also follow me on X at Ian Hathaway Outsider, Inc. Is produced by Spellbinder Media. We'll be back soon with another fascinating outsider conversation.

Until then, thank you so much for listening and remember, great entrepreneurs can come from anywhere. See you next time.

Listen on: Spotify, Apple Podcasts, Amazon Music

This episode of Outsider Inc. features Sean O’Sullivan, Co-Founder of MapInfo & Managing General Partner of SOSV. Host Ian Hathaway leads the conversation with the digital mapping pioneer, deep tech investor, and humanitarian, as he shares his extraordinary journey from co-founding MapInfo, a revolutionary digital street mapping system, to his role in creating the term 'cloud computing' with Net Centric and beyond. Sean's path includes a stint as a freelance war journalist in Iraq and the founding of Jumpstart International, a humanitarian organization. He later launched SOSV, the most active deep tech venture capital firm focusing on climate and human health. The discussion covers the importance of mission-oriented leadership, resilience, reinvention, and the significance of purpose in driving meaningful impact.

Show Notes:

03:26 Early Life and Resilience

07:58 The Birth of MapInfo

15:01 NetCentric: Pioneering Cloud Computing

23:15 From Tech to Humanitarianism in Iraq

27:11 Tragic Losses and Leadership Lessons on Purpose and Service

32:32 Transitioning Back to Tech and Investment

40:07 Building a Global Startup Ecosystem

42:51 Beyond the Bio with Sean O’Sullivan

✅ Host: Ian Hathway - Co-Founder & Managing Partner, FOVC

✅ Guest: Sean O’Sullivan, Co-Founder of MapInfo & Managing General Partner of SOSV

Produced by Spellbinder Media. Executive Produced by Bridge Five Ventures. Copyright ©️2025, Bridge Five Ventures, LLC, All rights reserved.

Listen & subscribe wherever you get your podcasts or at outsiderinc.substack.com.

AI-Generated Transcript

Sean O'Sullivan: [00:00:00] Get out of your own head, connect yourself with others. I get wrapped up sometimes in, oh, how do I advance my career? Actually, just advance the mission of the company and you're advancing your career. If you care so deeply about that mission to company and the success of your customers, you are gonna be advancing.

Be very mission oriented and be thinking of the impact that you'd like to have and the. I think that you can live a very empty life without connecting to the needs of others and to the needs of the community. That's why you have so many unhappy people on the planet because they're not thinking about serving others.

They're thinking about beating others or beating others up. Or finger pointing at others. The other is not the enemy, the other is just ourselves.

Ian Hathaway: Welcome to another episode of Outsider Inc. I'm your host, Ian Hathaway. Today's guest is Sean O. Sullivan digital mapping pioneer, deep tech, [00:01:00] investor, humanitarian, and one of the most relentlessly original minds in venture capital.

His career has defied every template. In 1985, Sean co-founded MapInfo with three college friends at the Rensselaer Polytechnic Institute in Troy, New York, and took the company public at just 28 years of age helping put street mapping on computers Before most people had even used one, he helped coin the term cloud computing with his next startup net centric.

Then after some soul searching, Sean walked away from tech and took the mother of all left turns, buying a bulletproof vest, forging, press credentials, and sneaking into Iraq As a freelance war journalist originally intending to film a documentary, Sean ended up launching Jumpstart International, a humanitarian organization that cleared, rebel and rebuilt destroyed buildings.

Back in the States after making early bets on companies like Apple, Netflix, and Harmonics, he then went on to start what became SOSV, now the most active deep tech venture capital firm in the world. He later relocated his family and business to Ireland, [00:02:00] calling it the Silicon Valley of Europe. There he became founding chairman of the Irish Entrepreneurship Forum and brought his outsider energy to the world of televised entrepreneurship on Ireland's Dragons den, their version of what we know as Shark Tank.

Now back in the US, Sean has backed thousands of startups through indie bio hacks, mocks, and orbit startups. Today more than half of sos v's. New companies are focused on climate or human health. From humble beginnings, mopping floors, and working in the fields to mapping the world and investing in the future, Sean's story moves through invention, conflict, and capital.

And today we'll unpack how those numerous reinventions shaped a life of purpose and impact. Sean O. Sullivan. Welcome to Outsider Inc.

Sean O'Sullivan: Ian, thank you for that very generous introduction. You didn't leave out anything, I think, uh, from my background.

Ian Hathaway: Well, Sean, you have lived a full life. I hope we can get through it all today.

I'm so thrilled to have you here. It's great to see you again. I [00:03:00] really think you are kind of an in of one type of person. I'm reminded of a quote from a recent guest we had, Doug Song who said, when faced with two choices in life, do whatever makes for the better story that describes the path your life has taken, whether intentionally or not, and your story is one of continual learning, adaptation and reinvention at times foundational transformation.

You were born in New York City, the eighth of nine children at three years old. You, your mother and your siblings were abandoned by your father, both physically and financially, leading the 10 of you to flee to a small village of Sharri, New York in upstate.

Sean O'Sullivan: Yeah.

Ian Hathaway: There you endured extreme poverty for a number of years, freezing nights, an empty belly and scraping by doing odd jobs.

What do you remember? Most vividly from those early years. And how do you think they shaped you as a person?

Sean O'Sullivan: Well, actually, you know, one thing about being a [00:04:00] kid growing up is your lived experiences, what you think you're going through, you think maybe everyone else is going through. I didn't know I was poor growing up.

I did know we had to get hand-me-down clothings from other neighbors and things like that. I, I knew that the water would freeze at night. You know, I'd wake up in the morning with a glass of water being frozen next to my bedside. But I didn't know that other people weren't having that in their own houses.

You know, it's just like, uh, isn't that what everybody goes through? So it's okay. You, you adapt as a kid and you lived through those challenges. I can't say that those were bad things. In fact, you know, we lived through it all and we got through it. My brothers and sisters and I went to college. My mom was very dedicated towards education and made sure it was a priority for all of us to concentrate on self advancement.

Ian Hathaway: I'm sure there's elements of resilience translates to entrepreneurship of course, and building with what you've got, not what you wish you had, [00:05:00]

Sean O'Sullivan: and creating something from nothing. I think that's what all entrepreneurs have to be able to do from the start. Building something out of very little.

Ian Hathaway: Yeah, I'm just putting one foot in front of the other.

Sean O'Sullivan: Mm-hmm.

Ian Hathaway: On that note, as a teenager you were put to work a janitor in your own school through a government jobs programs, but it's not something you just decided to, to live with. You instead found a way to get that same government to reassign you to a data processing office where you started programming county computers at the age of 14.

Sean O'Sullivan: Yeah. I had to find that job. I had to basically. Go to the central data processing department in Sharri and ask the guy would, would he take me on if he, if I worked for free, effectively getting paid for the Civilian Employment Training Act, which is really a program to help kids. Get meaningful careers, but the jobs that they gave you were like working in fields or mowing lawns or being a janitor at the high school.

It's not really that much of a training act. [00:06:00] So I, I actually was lucky enough to find somebody who would take me on and that worked out.

Ian Hathaway: Was it an interest you had in computers at the time? Were you just looking for something more than working in the fields or being a janitor?

Sean O'Sullivan: Yeah, well, I, I'd say that computers were very mysterious back in the day.

My only exposure to them was seeing some printouts from my older brother who had gone to SUNY Buffalo and had some printouts of him doing programming and, and playing games on the computer. And I thought, wow, this is amazing. You know, that you're, you're having an interaction with a machine. I was just fascinated by that and I thought it'd be great to learn how to program a computer and have some control.

One of the things about programming is that if you tell the machine to do something unlike people, it actually does what you ask them to do. Do, and so it provided a certain. Level of security and in my life where I otherwise didn't [00:07:00] have that control.

Ian Hathaway: Well, on that note of people not doing what they're told, when you're asking for more, was that the first time you realized that you could bend systems to your will if you asked the right questions?

Sean O'Sullivan: Well, I have to say I've learned that lesson through a lot of different Great. Mentors through life is that if you don't ask you, you won't get an answer. So you have to be a bit of a, a little bit of a squeaky wheel, but like you do it in a friendly way or a helpful way, you figure out how you can be helpful by asking and then you'll be amazed at people how much they'll help you.

So I was able to find situations where I would be willing to work for free or, or, or do whatever in order to advance myself. And you know, people appreciated that and they gave back.

Ian Hathaway: That's a good lesson that I'm sure we're gonna come back to numerous times throughout this discussion, but flashing forward from that first exposure to computer programming at 14.

You graduated from high school at the [00:08:00] age of 16, went to the Rensselaer Polytechnic Institute nearby in Troy, just outside of Albany. You studied computer and systems engineering, ultimately graduating with a bachelor's degree in electrical engineering. You and three college friends founded MAP info. A pioneering street mapping system on computers in the early days of the pc.

Can you describe to listeners what MapInfo was? What was the problem you were solving and what gave you and your co-founders the confidence to go and do that at such a young age?

Sean O'Sullivan: Just to so people get the picture of it. Putting street maps on computers wasn't actually done up to that point in time. It was very early in 1985, but effectively typing an address into a computer window and seeing the street map and being able to show how to get from one place to another, that's what we invented on PCs, and this is back in 19 80, 85.

We were the first to do it. And we did it in a way that was extraordinarily fast compared to even [00:09:00] what many computers could do. We invented a new form of database that allowed the information to be retrieved extremely quickly, and everybody now does this all the time. There's billions of people that use the technology every day, but we were the first to do it and it, we grew to a couple hundred million in revenue after we became a public company.

Ian Hathaway: And where was that original inspiration from?

Sean O'Sullivan: There was two things. One is that I would just be walking down the street in Troy and people would sort of pull up to me and they would just ask me, Hey, do you know how to get to here or there, or whatever. They were always lost and so I was just thinking, okay, there's a problem that people need to have solved and paper maps are.

Okay, but paper maps really don't tell you how to get from one place to another. So just actually putting all that information in the computer to make it instantly retrievable was just something I thought that there'd be a need for. And then secondly, there was this culmination of these three technologies at the time.

One was CD ROMs, which had the ability to store 640 megabytes or [00:10:00] something of information. Myself and my co-founders, John Haller and uh, Andy Dressel and Lasso Bardos. We figured out a way to put all of the US street maps on one CD rom. We figured out how, how to compress that and be able to re retrieve that.

The graphics resolutions were increasing at, at a rate that it was obvious that it would eventually be able to display maps pretty well. And then you had, of course, the processor speeds being able to do things much faster. So we just thought that if you could create this combination of different technologies.

That all solved a problem that had not been solved before. That well, for one, you'll be the first in the market to do it, and by definition, the first in the market is actually the best in the market because you're the only one in the market. So we very quickly had the best product in the world for, for doing this.

And then we just. Took that and we sold it. And we sold it and we sold it. And this is very newsworthy. Back in the [00:11:00] day, AP covered us in the Sunday papers and many of the, the biggest regions in the country. And we were on television stations and, and we were on PC week and the covers of. PC magazine and all this other media sources because we were doing something that had never been done.

And so the way it started was simply just looking at it from a technology point of view and saying, this is something that could be done with these new technologies at the cutting edge. And we didn't really have, initially, one target market wasn't so customer focused. We figured that there would be a lot of customers for it.

And in fact, there, there were, and we. Within, I don't know, three or four years, I'd say we had maybe 200 of the Fortune 500 companies using our, our product for a variety of different applications.

Ian Hathaway: You mentioned the massive growth of the company, the success, the accolades, notoriety. It's not like you were building this from the halls of Silicon Valley.

You were in Troy, [00:12:00] New York.

Sean O'Sullivan: Yeah,

Ian Hathaway: but it's not the type of place where there's this permissionless experimentation and high growth entrepreneurship happening. So what kind of gave you the influence or the confidence to go out and build this company from a place like Troy?

Sean O'Sullivan: Well, yeah, so it definitely was not the center of of finance.

RPI is a very great school. There's a lot of yes, great engineers that come out of it. The inventor of the television, the inventor of the microprocessor. Ferris Wheel, Mr. Ferris went there, blah, blah, blah. There's loads of great engineering people that graduate there and lots of talent. So it wasn't a technology issue that was a challenge.

The challenge was getting financed and we did that. We basically bootstrapped the business. We didn't really need that much venture capital. You've already disclosed. I have eight brothers and sisters. I got, so they all invested a thousand dollars, uh, each and my sister invested $5,000 that, you know, several years later, that $5,000 [00:13:00] was worth over a million dollars after we went public.

So she did well, extremely well, and my brothers and sisters did well. So we, we, we, uh, made it go. We, we made it work. We raised, I think $75,000 was our first f and family ground. We were nearly profitable with that, and I think we raised a total of $300,000 or something before we were profitable and never looked back.

Ian Hathaway: That's amazing. So the key to a robust friends and family round is being born into a large family. Yeah. Well, Las Laslo

Sean O'Sullivan: actually had 11 brothers. Oh.

Ian Hathaway: Oh, you're a lightweight compared to that, I guess. Yeah, exactly.

Sean O'Sullivan: Hungarian Wells.

Ian Hathaway: Yeah, so look, the company was very successful. As you mentioned. It did go public in 1994.

You were just 28 years old at the time. You became quite wealthy overnight making something like $17 million, which in today's terms would be double that, at least. Looking back on that arc of your life up to that point, [00:14:00] what was the emotional ride like growing up in poverty to now being a multimillionaire in your late twenties?

Sean O'Sullivan: It gave me a sense of financial freedom, so that allowed me to take risks. I wouldn't otherwise be able to take Maslow's hierarchy of needs, right? It made me able to know that I had enough money to feed myself, to house myself, and that it helped me to think about. How to live a more meaningful life once you pass through that and how to have impact beyond just taking care of myself and, and my own needs.

And so that allowed me to sort of focus on trying to make an impact and live a meaningful life in other ways.

Ian Hathaway: Later, of course you would. But by the time of the IPO, you had been out of the company for a couple years. You spent your time as a singer songwriter of a band called Janet Speaks French.

Hopefully we can pick up that [00:15:00] thread a little bit later on. But next I, I'd like to talk about a company you found a called Net Centric.

Sean O'Sullivan: Yeah.

Ian Hathaway: Which you launched to pursue a new frontier in internet based software. You helped coin the term cloud computing. What was the opportunity that you were seeing at that time about the future of the internet that maybe others hadn't caught up to yet?

Sean O'Sullivan: At that time, most software ran on the personal computer. Uh, and you accessed it. And there was this other thing called client server and local area network based computing. And we just thought, well, okay, if you can do. You know, client server computing or whatever, you can certainly do the software in the cloud.

And so we called that cloud computing. My, myself and George Falor, uh, coined that term and I trademarked it back in 96. So the idea was to create some sort of first applications that were universally appealing and could scale well with the internet that was at that stage. And so what [00:16:00] we worked on was telephony services at Net Centric and we.

Created fax over the internet and we had a, a product called Fax Storm that was the most highly ranked way of sending faxes through the world instead of using telephone lines to do it, using the internet to do it, bypassing long distance charges and things like that. That was an initial way that we got to about 10 million in revenue at the time of, you know, about 2000, 2001.

Ian Hathaway: Okay, so you, you quickly grew to about 10 million in revenue. You raised around 17 million from top tier investors. You were a rising star in the software and cloud computing worlds and. Net. Citrix had this vision that was ahead of its time. Despite all of that, it didn't work out.

Sean O'Sullivan: That's right.

Ian Hathaway: What went wrong and how did you, how did you personally deal with failure after, you know, having had so much success early on?

Sean O'Sullivan: Yeah, that was a really clear indication [00:17:00] of the kind of bravado that I had. My first company had gone public. I thought, geez, I could do anything. The next company, it should be easier the next time. And in the second go around, we were burning through a lot more cash. I think we were doing 10 million in revenue and 12 million in expenses.

But it was also the dot bomb crisis was happening and you couldn't spend a dollar more than you were taking in or else you'd be out of business. 'cause nobody was funding anything that wasn't profitable after 2000, 2001. So the company ended up. Losing money and then selling to a much bigger company that bought over the, the remnants of the idea really.

And, and nobody made money on that transaction. I lost millions of dollars of my own money as well. So the wake up call to me was like, Hey, you're a failure. You don't know what you're doing. You couldn't keep it together. You couldn't get the team to function well. There was too much divisiveness and it really challenged me.

I got very depressed about the situation and frankly, I [00:18:00] thought. I was a failure, and that is a thing when I counsel and mentor startups these days is to sort of separate the business from the personal. It is not about you assigning the label of the co company being a failure. You being a failure. I have to say it's something that's very difficult for founders.

We have backed about 1200 companies, probably about 3000 different founders. And there have been, uh, I'd say three or four suicides by founders who have had their companies fail and then committed suicide after that. And that is something that I think is endemic. People taking personally, the failure of the company to such an extent that they think of themselves as, as failures and worthless, and they, they think about.

The obligations they made or the promises they made to people, and they think their only way out is [00:19:00] to get out. It's a sad, sad situation. So I felt that guilt and that sense of responsibility, uh, to the people that I had committed to building the business when the company failed. And there's no question I was responsible for it.

I was the CEO of the company for years. But on the other hand, you have to basically just recognize the business is incorporated for a good reason. It is separate from the individuals that are building and trying their hardest to, to build a meaningful company. And so the failure is something you have to try in every way to prevent, but if it happens, that's just part of the game and you have to get over it.

Ian Hathaway: How is it then that. We can encourage founders to thread that needle in a healthy way where. The business may be a failure, but the person is not a failure. Mm-hmm. I have found that there's a lot of [00:20:00] pressure, and maybe it's internal, maybe it's external, it's probably both. Where the identity of the founder becomes wrapped up in the company.

Sean O'Sullivan: A hundred percent.

Ian Hathaway: If the company is a failure, I'm a failure.

Sean O'Sullivan: Exactly.

Ian Hathaway: How can we best encourage founders to balance those things? Or what would you say to folks about how to, on the one hand, be ambitious enough to be bringing forward life-changing innovations? And on the other hand, being a healthy and whole human being.

Knowing that we are here for this one life, how do you talk to them about that?

Sean O'Sullivan: I think it's helpful to even think about it from the viewpoint of sports, right? You're out there, you're playing your hardest out, you're, you're leaving blood on the field, et cetera. But you know what? You, you win a game, you lose a game.

It's okay. You know, just, just try your damnedest to play the game as best you can, and really just not fully identifying your success or failure [00:21:00] with the, the company's failure and frankly, the company's success. You're neither as good as your best company that you start and that you run. And as bad as the worst company that you start and you run in terms of just working with people, it's just a matter of getting people to, to play their best game without over identifying with that and, and then being mature about coaching them.

And for some people after many years, they really need help. They really need good coaching to get through that.

Ian Hathaway: One of the other lessons that came out of net centric is why you should get into any business to begin with. You've talked about this as being a mistake that you made because your motivation was to make money.

Mm-hmm. That the pursuit of wealth is a dangerous thing and it's an empty pursuit. Why do you think that lesson is so hard earned, especially in the startup world?

Sean O'Sullivan: I think people are looking at it, uh, from a, a viewpoint [00:22:00] too often. They think of business as a get rich quick scheme or they, they think of it as a way to have freedom to go be the boss and be on charge and, and, and all those other things.

When you actually go and start a business, is you, well, no, Ian, you're not the boss. Everybody else is the boss of you. Whether it's just Oh yeah. Whether it's your shareholders or, or your customers or your staff. You know, you have to get everybody on board and you really. It's, if you're thinking about it from an ego perspective, you have to recognize you're there to serve and not to be served by their, uh, your various constituencies.

I know there are ego filled megalomaniacs who feel differently, but I don't think that's how you grow a, a regular successful business.

Ian Hathaway: Well, I know that the net centric experience was painful for you at the time. Mm-hmm. I'm glad it happened because of what would happen next, what you learned over the long term.

I'm glad you came out alive. I know you talked a little bit about your [00:23:00] experience with founders contemplating suicide. I know you had your own brush with that at one point. Take us back to that time. What led you to pull out of that and then ultimately this next phase of your life pursuing journalism and humanitarianism?

Sean O'Sullivan: After Net centric, I went to film school and I really love the idea of actually creating films and really comedies and just light, light stuff, right? But life didn't take me that way. My mother ended up having a diagnosis for Lewy body disease and she was dying of that disease, and I did a documentary film on my mom.

She died in the process of the, of that film that is actually sort of. What freed me to go at that time, take further risks with my life. Iraq War was starting in March of 2003. My mom had died a couple months before that. I was editing the film, but I decided, you know what? I'm gonna go and see [00:24:00] what this whole Iraq war is about.

So I volunteered to be, uh, part of a peace, uh, activist group and documenting that group, the Washington Post gave me a nice letter of reference. And I got some fake credentials that I used to get into the war zone, but I got into Baghdad just as the war was getting going. And then I was there for the shock and all campaign and, and lived through that experience.

Ian Hathaway: So you're this computer engineer, successful tech entrepreneur. You leave that behind to go to film school. You take a war zone journalism class, get a bulletproof vest, sneak some press credentials into Iraq, and you live through the shock and awe campaign. What were you doing sort of on a day-to-day basis?

What were you trying to accomplish and what was daily life like in wartime?

Sean O'Sullivan: Well, I was doing it because I really identified myself as an American and I, I wanted to see what America was [00:25:00] doing with my own eyes, and I'm very proud of America in general. I wasn't proud of what we were doing at that time. I thought it was just a, a terrible mistake, so I wanted to at least be there and, and to see what was going on and then try to document it.

That's why I was there. I was in the middle of, of Baghdad while the shock and all campaign was going on. And I have to say I was surprised at how accurate it was. The bombs landed precisely where they were supposed to land. Honestly, there was not that much death from the actual bombing campaign. All the problems happened afterwards with the, the whole country in chaos with no leadership and no law.

And so that's what I lived through for. The next effectively year and a half in Iraq. And, uh, eventually after a couple, three, five months, I created a humanitarian organization called Jumpstart International. And we started clearing and cleaning and building [00:26:00] some of these bomb sites and these destroyed facilities.

And when I say destroyed Facilit. Most of it was actually from looting and burning by the population or by gangsters, you know, that were just taking advantage of the situation. They would go in and they would steal what they could, and then they'd set the Ministry of education on fire or set a college on fire or set a hospital on fire after getting what they could out of it.

So we went in and we started with the one location, and then we expanded to, you know, two or three locations. And then after a couple of months we were doing 70 locations at a time, about 3000 people working to clear those sites and restore those sites for the hospital or for the national museum or whatever it was.

Ian Hathaway: So you come to Iraq as this freelance journalist. You evolve. You see this problem putting that entrepreneur's hat on, needing to clear rubble, build homes. You ended up employing over 3000 Iraqis in this effort to help [00:27:00] rebuild the country. And while this time was successful for you, certainly important and.

I'm sure fulfilling. It was not without tragedy. Uh, you said that one of your best friends and co-founders of Jumpstart International Moham Al Sfar, was assassinated during this time. You also had a worker who was kidnapped for ransom. I mean, these are the kind of pressures that make. The pressures of building a company frankly seem small, the kind of pressures most people will never face.

So looking back on that whole experience, what did Iraq teach you about purpose, about leadership, and about the kind of work that actually matters?

Sean O'Sullivan: I will say that it was important work to be done. It was helpful for me to do that work, and it was somewhat restorative to me as well. I felt like after the failure of my second company, that I was leading a sort of a meaningless life, honestly, [00:28:00] and so I was able to jump into something that had a lot of meaning and purpose that was of service and where service was needed.

About a year after the war, you know, had kicked off the Civil War started, and that was when it got really, really, really messy. Lots of gangsters running around and warlord type people and secret police and mujahideen the various terrorists and and whatnot. We were living in this absolute chaos, but it did have, in many ways, at least, gave me a greater faith in my ability to.

Do something meaningful and purposeful and be able to attract others to that mission. It felt really soul destroying when my co-founder was assassinated. Hammond had worked alongside me every day and was just traveling from one place to another, and in the car that we, we drove together all over the place and then they, they took him out and I felt a lot of sorrow and I felt a lot of [00:29:00] guilt, uh, survivor's guilt, I guess you'd call it.

Normally I would've been in that car as well. He was also supposed to get married. I was getting married at the end of the year. He was supposed to be my best man at my own wedding. And he was a, a very, very great and gentleman, and it wasn't only him. There were other people that were on our work sites and our, on our locations, there were bombings and there were terrorist attacks.

There was a lot of people that were getting injured and then of course kidnappings and, uh, torture of workers. So it was really, really hard. And as you said, like the problems that we have in a normal startup, you don't have to worry about your management team getting death threats. It gave me a lot of appreciation for the life that we do have and the importance of having a, a good government and having a civil society.

And I think we never can take those things for granted. I think we do take those things for granted. I think we're electing [00:30:00] people that are not. Thinking about those things right now and how fragile democracy and how fragile civil society is. All my senior management team were all given death threats by Al-Qaeda.

One of my managers was told they were gonna kill his daughter unless he went to the markets and said that he renounced jumpstart. And so he had to quit, and he was crying when he was telling me this because he loved the work that he was doing for the country and for for the organization. But you know, you live in a place where you are being terrorized or manipulated.

Or there's false narratives that are going on and people are at risk. So we have to actually really work for a great civil society in our own country as well. We're seeing some, some degradation to that right now and some real division in our. Countrymen. But that to me was one of the greatest lessons of the thing, was to [00:31:00] appreciate what we do have and to take seriously what we, what we have.

And then just to, to actually get through it was, was, uh, difficult enough. Eventually the chaos got worse and I had some other things that happened to me. I, I went blind in my left eye and I had some. Skin cancer that developed with the hot sun, et cetera. And so I basically figured I was getting a lot of signals directly from God that I needed to get out the hell outta the country.

Ian Hathaway: Yeah. Well you did. And listen, thank you for sharing that. My heart goes out to you for having experienced. All of that hardship. As I was thinking about what theme we would follow in this discussion, the word that kept coming to me was reinvention for you. You've reinvented yourself so many times, and while that might just feel normal to you, like when you said when you were a kid, this was normal to me.[00:32:00]

Reinventing yourself in drastic ways is normal to you. It's not normal to most people. I don't think that enough people reinvent themselves, but really more than reinvention, it's about doing so with purpose and a deep focus on the humans involved. That's how I know you. It's clear that that's how you've been successful is reinvention through purpose, through connecting with people.

So thank you for sharing that. It means a lot. Switching gears, you said God was telling you to get the hell out of Iraq. You did that and you went back to the tech world, not through the operator's lens, but as an investor, right? You had made some early angel investments that had done well. You had some big wins.

Before we get into the SOSV chapter, what were some of the things that you had seen in founders that marked for good [00:33:00] investments, and then was there an investment or an experience or a thought where you decided, you know what, I'm gonna go ahead and do this full-time?

Sean O'Sullivan: Well, I was doing well from the investment side for, for quite a few years, even when I was in the war zone.

I placed some bets before I went in. One of the companies I invested in is a company called Harmonics, and they created this game, guitar Hero and Rock Band. And when I came out, I discovered the, the investment was worth like a hundred times what I'd put in. So I, you know, it was worth tens and tens of millions of dollars, 30 or $40 million, and became the world's most popular game for a couple years in a row, 2007, 2008 or something.

Billion dollars a year in revenue. And I had a couple of other companies that I'd invested into even before going to film school that ended up selling or to public companies or becoming public companies. So I had a good enough track record at picking good founders and, you know, getting through to them [00:34:00] and, and being able to invest in their cap tables.

And then at that point I said, well, I, I should. Make some more investments and I like the investing at the very earliest stages. And so I decided to do that and I brought on a couple of other partners to help me deploy the capital in in new ways. And actually when Techstars was founded. One of the founders that they chose to, back when they expanded from Boulder to Boston, which was their second city, uh, was Sean Broderick.

And Sean Broderick was a founder of Hide Back previously who'd done well. And so I reached out to Sean and I. I helped back Techstars in, in Boston when they were getting launched, and that was a super interesting model. And I said, you know what? This is a great idea. Let's do something like this, but in a slightly different way in, in places where it's not being done already.

I, again, I don't like to exactly copy things, but I did like the model. So I did it in China where it, no one had ever done an accelerator at the time, [00:35:00] 2009, 2010, and that's where we launched China Accelerator. And then from China Accelerator, we launched hacks and after hacks we launched Indie Bio and we started out doing accelerators.

We don't really do accelerators anymore, per se. It's more like a studio model now. We just invested in 70 new startups a year at AT SOSV, but that's how we got started in how I started building a team.

Ian Hathaway: I'd like to unpack that journey a little bit. You said the initial vision was to scale yourself as an angel, to invest in more companies, to have a broader reach to go to under.

Capitalized regions, but I think a big part that's missing here is your transformation, your investment focus. Your background was in software, and then you're doing deep tech, focusing on climate health and a number of different domains. Was that the initial vision you had or did that evolve from what you were seeing in [00:36:00] the market?

Sean O'Sullivan: As you kind of, uh, picked up, I like to take on the world's most challenging problems, like going to Iraq. Why did I go to Iraq? Well, at the time, the whole world was focused on Iraq and I thought, okay, well it's the world's most challenging problem. Why not go after that? And so going into China, that was a interesting challenge as well.

I like to do difficult things. Going into the deep tech area was a natural extension of our interests, and also just the idea of going after some of the world's most pressing issues and for life sciences. When I think about the problems that need to be solved, and you know this and you I'm sure have relatives and whatnot that have.

Passed away due to some disease or some condition. My mom died of Alzheimer's in the end. My son has autism. You know, my sister recently died of cancer. So these are, these are pressing, pressing, pressing, [00:37:00] personal challenges that everybody faces in the area of health, and so biology is a solution to that.

And going after biology as a solution to the, the challenges that we face made sense from a human health perspective and also from a planetary health perspective and with climate change. But I would say that that's why we go after these. These areas because they're some of the world's most and individual's most pressing challenges.

And if we don't solve these issues, if we don't have the capability or the resources or the the leg up for startups to be able to compete in these areas, then we are not gonna make the change that we wanna see in the world. We really need startups to be. Empowered to be able to compete in these spaces.

Before, in the early two thousands, it was like, oh, to do a startup in hardware, you need to. Raise at least $50 million or something that would never work. You know, you can't do that at [00:38:00] scale. So we've, we've enabled startups to start with just a half a million dollars and then sort of go from there and then prove themselves and then be able to raise more money as they need to expand.

And we've done that in hardware and we've done that in life sciences, and we've been successful at raising several billion dollars for our companies to be worth many tens of billions of dollars over the last 10 years.

Ian Hathaway: I'm certainly appreciative of that focus, you know, taking your expertise, your experience, building companies, producing investment returns, raising capital, matching that with subject matter expertise.

And these technical domains also feel you on diseases that are frustratingly have not been cured, like Alzheimer's. My grandmother, who I was very close with, lived with that for 14 years. My father died of incurable heart disease from agent Orange exposure in Vietnam. And so. These are things that I'm glad folks like you are putting money to work.

I think one of the big criticisms of deep tech has always been it costs too much. It's too [00:39:00] uncertain. You're proving that wrong, and so my hat's off to you for that.

Sean O'Sullivan: I do think these are solvable problems. I just wanna say that all of these health problems, they are actually solvable and it's not gonna be easy.

Biology is extremely hard, but these are areas where we can make a big impact. In the next decade. You know, I do think we're gonna solve a lot of these issues from cancer to autoimmune diseases in a variety of ways. So I, I think there is hope coming in, in a big way, and I can see it in the, the hundreds of companies we've backed in those spaces.

Ian Hathaway: So last point on SOSV founders that are building in these spaces, what's the best way for them to get in touch with your team and pitch you on what they're working on?

Sean O'Sullivan: sosv.com/apply is the answer.

Ian Hathaway: Okay, done.

Sean O'Sullivan: So if we get about 5,000 applications for deep tech founders every year and we, we back 70, and if you don't get in the first time, try again.

Hopefully we'll give you a [00:40:00] feedback on a milestone you need to hit before we. We can back you and then hopefully you can hit that milestone and, and get in the next time around.

Ian Hathaway: So switching gears, I'd, I'd like to talk for a minute about Ireland. Not only because we have Irish heritage in common, it obviously means something deeply to you as it does to me, but you helped shape national policy, support local founders, and even created an entrepreneurship forum.

Where was Ireland then? Where do things stand today and what are some of the practical learnings you've had from building ecosystems in Ireland to China, to Taiwan? How do you kickstart innovation in these hubs outside of Silicon Valley?

Sean O'Sullivan: In the case of Ireland, there was a challenge in that Ireland did a very, very good job of landing US multinationals.

They have a great educated workforce, they speak English, they're in the Eurozone, et cetera. And so it made a lot of sense for us multinationals to put themselves there. But the [00:41:00] problem is that the US multinationals basically sucked up all the talent. And so what we did to help improve the playing field for indigenous Irish businesses is we.

Recommended like, uh, 68 policies. The government implemented like around 45 or 55 of them. They did a really, really good job, and one of them was simply actually dealing with immigration issues, which is something I'd like to see the US do a much better job on, is if you have an engineering degree and you want to work in Ireland, it's basically you pay a thousand dollars fee for your Visa and you're in.

And it's, it's a great, great, great way of thinking about what we should be doing in the United States rather than whatever we're doing, shutting down the universities that we have. So I do think that helps the Irish industry grow. There's a lot more vibrant tech sector, even though that it's always been strong by the multinationals and now I think it's, it's just getting better for startups as well.

There's several companies that have [00:42:00] sort of hit that unicorn level in, in Ireland finally, but it has a long way to go still. Creating that ecosystem. There's a great book, Brad Felds Startup Communities book that I actually, I bought like 20 copies of his book and I gave it to all the Irish ministries and a lot of different people in the tech ecosystem and the universities There.

That is a great way of thinking about how to do this. Brad's already solved that problem in terms of educating people as to how to do it, and I think those are the approaches, getting people, universities, startups, you know, successful founders to reinvest in in the uh, community.

Ian Hathaway: I couldn't agree with you more on Brad's thinking.

The challenge of course, is there's putting knowledge out there, educating people, and then there's the actual behavior change that needs to happen. Mm-hmm. That's a lot harder. So on that point, I wanna ask you sort of a two part question here. First, for founders who might feel like they've lost their way, they're in it for the wrong reasons, they're feeling burned [00:43:00] out, how would you recommend they go about.

Reconnecting with themselves and finding that purpose. And number two, for founders who may be experiencing that and looking to reinvent to do something new, how do you launch yourself into doing something that's so vastly different than what you had been doing before or had been doing throughout your whole career?

Sean O'Sullivan: To the first question, I think the thing that's always helpful is if you can just get out of your own head for a little bit. People are naval gazing and thinking, oh, woe is me. You know when you actually get out in the field and you start helping other people, and I found this in Iraq and I found this in helping startups is, boy, that is an.

Absolute energizing event. Just work with other founders, give them advice, be mentors to to them, and be engaged, helping connect them with ways that they can advance themselves. And to me, that is an [00:44:00] extraordinarily fun thing to do, and that's why we do what we do at SOSV. People love to do it. Our people, our general partners, our staff.

We just love working with founders and that I think is something that applies to Techstars or anyone else who's in this business of helping founders. Like it is fun. I mean, it's challenging too, but it's fun. So like get out of your own head, connect yourself with others. I get wrapped up sometimes in, oh, how do I advance my career?

Actually just advance the mission of the company and you're advancing your career. If you care so deeply about that mission, the company, and the success of your customers, you are gonna be advancing. Be very mission oriented and be thinking of the impact that you'd like to have and the meaning and purpose.

I think that you can live a very empty life without connecting to the needs of others and to the needs of the community. That's why you have so many unhappy people on the planet because they're not thinking about serving others. They're [00:45:00] thinking about beating others or beating others up, or finger pointing at others.

The other is not the enemy. The other is just ourselves.

Ian Hathaway: Spoken like a true humanitarian. I couldn't agree more. So look, uh, Sean, we're almost out of time, but here on Outsider Inc. We like to finish with a little segment we call beyond the bio. Mm-hmm. Just some questions to step away from your resume and dig into what makes you you, you ready?

Sean O'Sullivan: Yep.

Ian Hathaway: Okay. So what's a quick piece of advice from a mentor that stuck with you throughout your journey?

Sean O'Sullivan: Well, I think about my mom. She always used to say, uh, finish what you start. So I think that's a great lesson for all of us. Don't leave things hanging. Be responsible for what you create and see it through, or at least hand it off to the next person who will see it through.

Ian Hathaway: Love that. Who is an unsung hero in your life and what has been the impact they've had on you?

Sean O'Sullivan: Warren Brueggeman, he was a senior vice president at General Electric when I was starting my [00:46:00] very first company. He became an angel investor into the company and he used to take me out golfing on Saturdays, and I was a terrible, terrible golfer.

And I would keep driving things into the woods and things like that, and he'd be very patient with me, but he was coaching me through the beginning years of map info, and I just think of that. Model of mentorship and coaching, which made me very, very grateful to him and others who gave it themselves really for node advantage to himself.

Ian Hathaway: Who's someone in your local startup community or broader network who doesn't get enough credit and deserves a shout out?

Sean O'Sullivan: I think of Maria Gooch. She is the head, uh, person over at, uh, the partnership for New York City, and they brought. Indy bio, uh, to New York. They hunted us down and they said, we need this in New York City, and she convinced me she's really a, a fire starter.

Not only does she bring us to [00:47:00] New York City, she also has brought a lot of other things to New York City. She started, I think, the first FinTech accelerator in New York. She works on working with the state and the city and with the corporations to make it a. Hospitable place for investors to be doing startups.

Ian Hathaway: Awesome. She sounds incredible. Tell us something most people don't know about you. Something outside of work could be a hobby, a favorite travel spot, a guilty pleasure, or maybe a hidden talent.

Sean O'Sullivan: Hmm. I think he disclosed most everything, uh, you could find, well, I did like my time as, as a singer songwriter.

We had to, I think 150 radio stations that played our, our music at one point. But we were top 40, I think, on 70 or so, and we were number one in New Hampshire for one weekend.

Ian Hathaway: So that's, Janet speaks French for listeners out there.

Sean O'Sullivan: Yes. Yeah.

Ian Hathaway: How do I get a hold of, I don't think it's possible.

Sean O'Sullivan: I, we only sold like.

I don't know, 8,000 CDs. [00:48:00] Uh, so it was nothing. It was like a little dot on the charts, uh, for a couple of weeks.

Ian Hathaway: All right. Well, I'm gonna try to hunt that down. That's a good segue to my next question, which is, what are one or two songs you'd like to add to our Spotify founder's playlist? Something that maybe fuels your workday or has inspired your journey as an entrepreneur?

Sean O'Sullivan: Well, I'd say for just a random song that pops into my head is Salibury Hill from Peter Gabriel. But I love a lot of Peter Gabriel stuff.

Ian Hathaway: Yes.

Sean O'Sullivan: And a second. I just like listening to these playlists and these grooves when I'm working. Because it just frees my mind to whether I'm writing or doing, doing something in depth, or when I was coding, I always used to be coding to like Michael Jackson albums or just some groove tracks, some trance tracks.

And today I, I do that with things like cotivity.com or, or Brain fm, you know, as apps that sort of put you into this activated neural state.

Ian Hathaway: Love that. Okay. Last one. If you [00:49:00] could give one piece of advice to someone who's about to start their first company, particularly someone who's maybe a bit of an outsider, what would it be?

Sean O'Sullivan: I think it's just being aware that this is not a one man or one woman show. This is always about building teams. If you're gonna do anything scalable, you have to be really, really mature about building a senior management team to build that business. And activating those people means giving them loads and loads of responsibility.

So stop. Trying to be the one person who can solve every problem, make all the decisions, uh, empower your people and create and share that wealth with your co-founders and, and that senior management team.

Ian Hathaway: That's a great answer. I can't think of a better way to end. Sean, thank you so much for being here, sharing your incredible story and insights, and I'm looking forward to seeing you here in a few weeks.

Sean O'Sullivan: Excellent. Thanks, Ian. Looking forward to meeting up.

Ian Hathaway: That's a wrap for today's episode of [00:50:00] Outsider Inc. A big thank you to Sean O'Sullivan for sharing his fascinating story and wisdom. Sean's life is a masterclass in reinvention through purpose. From digital maps to war zones, IPOs to humanitarian aid.

And from early internet breakthroughs to the frontiers of climate and health tech, his journey reminds us that purpose is not something you find. It's something you build often in the aftermath of failure, tragedy, or deep reflection. Whether as a founder, investor, or mission-driven human being, Sean has shown that the most powerful legacy isn't just innovation.

It's impact. I hope that listeners are as inspired by Sean's story as I am. If you want more from outsider, inc, don't forget to subscribe to the platform@outsiderinc.substack.com. It's packed with highlights from today's episode and bonus insights you won't wanna miss. You can follow Outsider Inc on YouTube, Instagram, TikTok, and LinkedIn at Outsider Ink Pod.

You can also follow me on x. At [00:51:00] Ian Hathaway Outsider Inc. Is produced by Spell Binder Media. We'll be back soon with another fascinating outsider conversation. Until then, thank you so much for listening and remember, great entrepreneurs can come from anywhere. See you next time.

Listen on: Spotify, Apple Podcasts, Amazon Music

In this episode of Outsider Inc., host Ian Hathaway speaks with Shegun Otulana, co-founder and CEO of TheraNest and Harmony Venture Labs. Shegun shares his journey from arriving in Alabama from Lagos, Nigeria at 18, to bootstrapping his first consulting firm, and eventually scaling TheraNest into a national leader in mental health software. The conversation covers his unique approach to pricing, building a remote team, and the importance of eagerness and passion in serving customers. Shegun also discusses his transition from the CEO role, the creation of Harmony Venture Labs to support the next generation of entrepreneurs in Birmingham, and the influence of his faith and family in his career. Throughout, Shegun emphasizes the impact of creating intentionally and staying aligned with one's values.

Show Notes:

(05:09) Shegun’s Transition to the US and Early Impressions

(08:28) Founding Zertis Technologies and the Entrepreneurial Drive

(11:26) Identifying the Right Problem and Market

(13:18) Building TheraNest and the Mental Health Focus

(18:45) Differentiation and Pricing Strategy

(21:59) Remote Work and Team Building

(26:06) The Challenges and Benefits of Being a One-Man Band

(29:50) The Founder Mentality: Building a Culture of High Performance

(33:30) Scaling Up: From TheraNest to Therapy Brands

(40:33) Transitioning Out: From CEO to Board Member

(43:26) Harmony Venture Labs: Building a System for Startups

(46:55) The Importance of Family and Partnership

(50:43) Faith and Leadership: Guiding Principles

(53:14) Beyond the Bio with Shegun Otulana

✅ Host: Ian Hathaway - Co-Founder & Managing Partner, FOVC

✅ Guest: Shegun Otulana, Founder & CEO, TheraNest & Harmony Venture Labs

Produced by Spellbinder Media. Executive Produced by Bridge Five Ventures. Copyright ©️2025, Bridge Five Ventures, LLC, All rights reserved.

Listen & subscribe wherever you get your podcasts or at outsiderinc.substack.com.

AI-Generated Transcript

Shegun Otulana: [00:00:00] I think what is more important is the eagerness to learn, the ability to put yourself in the shoes of the person you're trying to solve the problem for, and how quickly you can get yourself up to speed in a space. The most important factor around how quickly you can get yourself up to speed in a space is how eager you are to serve that customer.

How excited you are. To save that customer. So if I'm looking at two founders and I see one that's the expert and has all the experience in the space and everything, but they've lost the fire, the energy around the customer and the problem, and they just feel like I'm the expert, I know it all. I would not bet on that person over somebody.

Who I feel is green, but it's just fired up about the customers.

Ian Hathaway: Welcome to another episode of Outsider Inc. I'm your host, Ian Hathaway. Today's guest is Shegun Otulana [00:01:00] extraordinary founder whose journey spans continence industries and billion dollar outcomes. He's best known as the creator of TheraNest and Therapy Brands, the behavioral health software platform.

He launched in Birmingham, Alabama in 2013. He scaled the company into a national leader, culminating in a $1.2 billion acquisition by KKR in 2021, all after raising a modest $250,000 in angel capital. However, that success was anything but conventional. Born and raised in Lagos, Nigeria. Shegun arrived in Alabama at 18 with no network, no safety net, and no blueprint.

He bootstrapped his first consulting firm, launched products with his own credit cards, sculpted and scaled a remote workforce, and quietly built one of the most significant tech companies the state has ever seen. Then rather than cash out and disappear, he doubled down founding Harmony Venture Labs, and taking a leadership role in the startup community in Birmingham to help other outsider entrepreneurs build scale and own the next wave [00:02:00] of category defining companies.

I'm looking forward to speaking with Shegun about what it takes to build a billion dollar business outside the usual power centers, how to lead with purpose and overlooked markets, and why betting on Birmingham isn't just a hometown play. It's a long-term thesis. Shegun Otulana, thanks for dropping by.

Shegun Otulana: Thanks for having me, Ian. That was a wonderful intro. The intro makes me wanna take notes on myself.

Ian Hathaway: It's a real pleasure to have you here. A big thanks to Jewel Burke, Solomon for connecting us. She's the one who clued me in about you, and when I read your story, I knew immediately I, I wanted to have you on this show.

This is a platform that celebrates outsiders. You're an immigrant to the United States. You build a very successful software company and an industry that. You didn't have the experience in and, and it's one that's notoriously difficult for navigating as an outsider. You did it as an inexperienced founder and you built the company in Birmingham, [00:03:00] Alabama, which is probably not the first place people think of for building large software companies.

And now you're spending your time helping the next generation of entrepreneurs coming up behind you. That's really what this show is all about. So there's plenty of things to cover, but first I'd like to start with a concept that originated with you. When most people hear LA they think of Los Angeles, but the term LA means something different to you.

Tell our listeners what is a LA accent and how does a person get one?

Shegun Otulana: Oh my goodness. You've done your research here. So you've heard me say this before. Uh, it's a joke I have where I say, Hey, this is an LA accent, and people are like, what is this guy talking about? And I mean, this is a. La, lower Alabama or Lagos or whatever you wanna put it.

Accent. So that's what this is, which means listen carefully people.

Ian Hathaway: Yeah. Oh, I love that. Well, so you grew up [00:04:00] in Lagos, Nigeria, a family of 10 children.

Shegun Otulana: Yeah. So my mother had, uh, 10 of us and I was the fourth of 10 children.

Ian Hathaway: So 10 children, parents were entrepreneurs, certainly influenced you. What was it like growing up in Lagos and how do you think that prepared you for eventually coming to the US and becoming an entrepreneur?

Lagos is pure velocity.

Shegun Otulana: It really teaches you how to solve real problems with limited resources. That's anybody who comes from that part of the world, you really learn to create without waiting for permission. And that's a big part of. Growing up in Lago, it's the, it's the re it's the figure it out with limited resources.

Create your own momentum, figure life out. And that just translates very well to the entrepreneurial journey, which is probably a true story for many immigrants. So if there is one thing I would say that I did growing up in Nigeria, growing up in [00:05:00] Lego ship me, it would really be figure things out, create without permission, you know, move

Ian Hathaway: on that note of building things for yourself and moving.

You left Lagos at the age of 18 to attend the University of Alabama Birmingham. I know you followed your older brother who was already a student at UABI believe the journey of migrating to another country and resettling your life is in itself an entrepreneurial act. It requires that kind of entrepreneurial mindset and spirit, and maybe this is one of the reasons why so many immigrants.

That come to the United States, go on to launch companies. But before we get into your company building journey, I just would love to hear about your decision to come to Birmingham and maybe what some of those early impressions were or what those first few years were like for you.

Shegun Otulana: I think you are 100% correct that there is something entrepreneurial about packing your bags, leaving your family behind, and moving to a place where you have to [00:06:00] figure it out for yourself.

So it's not uncommon that you see a lot of entrepreneurs be immigrants, and I. For my journey. I think my transition was probably smoother than many people's transition, if I'm being honest. And like you said, that's because my brother was here, his friends became my early community. It did not mean that there were no changes and transitions that happened.

Obviously always moving from Lagos to. Birmingham, Alabama has its transitions, changing schools, all that stuff. But the thing I'll tell you is coming from Lagos, I was like, where is everybody? Because you're coming from a city of 20 something million people to a Birmingham metro of 1.2 million also. So I did love the quiet.

It felt like going from the volume of a market of marketplace to the stillness of a library. Yeah. And then the transition in terms of people understanding you and [00:07:00] dealing with preconceived ideas of what it meant to come from Nigeria was something you also had to deal with. In some cases it worked for you.

In some cases it worked against you, and you learned and you adapt over time. So, uh, from a personal standpoint, the transition was smoother than for many people, I'm sure. And then from a cultural standpoint, there were some things that you had to get used to, but having come from one big city to another city, I would say it probably wasn't as jarring as many people would expect.

And I. The people here were just very kind. That's the thing I see all the time. You know, there's this talk about southern hospitality. It is real. Is it real for everybody? No, but it is real for enough people that it's actually great. And I tell people all the time, if you are transitioning to the US from anywhere, you should definitely look at the South as a place to consider that.

That's just my opinion, given my experience.

Ian Hathaway: So look, you went to UAB, you have this kind of early impression, tap into an [00:08:00] existing community. Studied it systems. TheraNest is obviously the, the main event in your career thus far, and. I wanna get there in a moment, but I also wanna talk about how you got there.

I think it's really foundational to the way you built the company that you did. After graduating from UAB, you spent about eight years as an IT systems administrator for two local companies. Along the way, you started a software consultancy, Zerus Technologies. In 2011, you left your job and you decided to go all in on Zers Technologies.

What was the motivation for going all in on yourself at that time and what was appealing to you specifically about the consulting model?

Shegun Otulana: Right after college, I actually started this side gig with a couple of friends and eventually paired down to a friend and I, very smart guy, and the driver for me was always just.[00:09:00]

Entrepreneurship. It was all I knew. It's all I grew up with. I think it was in my blood. I just couldn't help myself. But when that first transition of erti didn't work out, I went, I took a job, a regular job, but the fire always burnt in me, right? And eventually at the urgent of my wife. Who looked at me one day and said, we all know what you really want and what kind of life you want.

We know you're an entrepreneur at the core. Go give it a shot. Give it another shot, and if it doesn't work, that's fine. I'm gonna be here. So that's when I restarted my entrepreneurial journey. And this time I wasn't waiting for inspiration. I had. Evolved enough. I kept studying entrepreneurship. I was kind of plugged into everything that was happening around startups that when I picked up that journey again, I had created a filter for myself that I was gonna use to evaluate ideas.

And those ideas I felt could come from looking for real problems. And I [00:10:00] couldn't think of a better way to go find real problems than consulting. So the approach I took was I was gonna be a software consultant. Talking to various businesses, small, mid-size businesses around town, and eventually I would find the thing that checks all the boxes that I could build a product around.

So that was the idea behind starting Erti as a consulting firm. Of course, I was also trying to kill two birds with one stone. I was hoping Zerus would also generate income for me. While I did that, the income side wasn't going all that great, to be honest with you. But I was seeing a lot of opportunities and problems, and my filter was kind of simple.

I needed alignment. I, I wasn't necessarily looking for. Building a unicorn. I was just looking for something that aligned with me and the way I thought entrepreneurship had a bigger chance of success. You look for tailwinds. Back then, I thought the, the thing was the movement towards SaaS. So I was [00:11:00] looking for an idea that could tap into the SaaS tailwinds.

I wanted it to be a very large market. I wanted customers, I could enjoy serving for a long time. I wanted it to be someone that could build a team around, and then I just did not consider myself a very good salesperson. So if this idea was going to require me selling door to door, like enterprise sales or stuff like that, I typically just eliminated.

So those were the things I was. Using as a framework, as I ran into different problems and eventually I consulted for a mental health clinic. I saw the chaos firsthand. I liked the people. The problem checked the box. It was they were looking for moving to SaaS platforms, so they kind of checked the tailwinds.

So the thing I would say is. If you get the timing right and the problem fits, the founder momentum feels inevitable. And that was a little bit of what I was looking for.

Ian Hathaway: So you hit on a couple of things there. Using the consulting model to find real [00:12:00] problems. Customer discovery is such an important part of a product oriented entrepreneur's journey.

You found a way to get paid for it. Another way to think about it also is getting real revenue. An earlier guest we had Doug Song, who built an iconic cybersecurity company, commented during the episode that it was his experience in consulting that got him more addicted to making money than raising capital from investors.

And so that framework was always working in the front of his mind about how do we actually make money from this business rather than, you know, raising lots of outside capital.

Shegun Otulana: I told my wife when I started in 2011, I said, Hey, I really don't want to do the consulting thing. You know, that's not my thing, but if you give me five years, I'll do the product thing.

I'll come to the product. I'm gonna spend 10 years building and doing something with. That was what I told her When I really went back and started dessert thing. Thankfully it didn't take me that long. By 2012, I had stumbled into. This was the idea. [00:13:00] And then we launched, uh, thoroughness in 2013.

Ian Hathaway: Wow. So you had that vision from the beginning.

You mentioned some of the factors you were looking for in building a product company. What felt different about this particular client project that made you decide, this is the one, this is the thing I'm gonna go after?

Shegun Otulana: So back then, I would typically be looking at two, three ideas at the same time.

Looking at the market, looking at the problems, talking to customers, and. When I first went to talk to the first customer, my design partner back then the counseling center, they wanted me to build them an EHR software. And I was looking at them like, what are you people trying to do? It's 2012. You don't need anybody to build you an EHR software.

You should just be able to go buy one. But I liked the people. I saw the problem, I saw the impact they were having. So in my head, I'm, I'm like, it checks that box. That's good. And it became clear to me that what they were looking for was not just an EHR. I [00:14:00] have to give you context. Back then, a lot of the EHRs served more of the enterprises and there were lots of crappy ones that kind of saved everybody.

Uh, but you had to install a cd or you maybe had a server in the back. And some of them were SaaS like, but not the experience people were beginning to get used to. These were the days when Gusto started coming out and QuickBooks Online started coming out. So it became clear to me that that was the experience they were looking for.

And I told them, lemme go find something for you to use and I'll come back to you. But when I went to look for something for them to use, what I also saw was a large market. A lot of people searching for this solution, I could see who my competitors would be that were kind of doing it right. So that got me really excited and that was when I started telling myself, is this it?

I like the people. It's checking the box of a large market. I. There's clearly a tailwind here, not just from taking advantage of the SaaS tailwinds, but there was also a regulatory tailwind around [00:15:00] the idea, because remember, this was HIPAA compliance High Tech Act. A lot of these people were really trying to get HIPAA compliance software without them having to deal with all the technical stuff around that.

So those were all the things that were checking my box as I was talking to this person and trying to help them solve the problem, and that's when. I looked at my wife, Ian. It's very funny because I was in the hospital with my first child. We were having our first child, and I looked at my wife and I said, baby, I think this mental health thing is it.

You know, this is the thing. So this was December, 2012, and that's when I felt like. This really checks the box. I think this is what I need to double down on and go build. She, you know, with a baby in her hand, she looked at me like, oh my goodness,

Ian Hathaway: what did I do? Yeah,

Shegun Otulana: yeah, I know.

Ian Hathaway: Exactly. So, so yeah, that was, that was it.

Well, it's never. A good time to do this. You just gotta do it, uh, when you're called. So you hit on a couple things there. Why this, [00:16:00] why now? Why you, why this big market? A lot of people searching for it. You talked about some of those macro tailwinds. Let's talk about the why you didn't have experience in the industry, given it's highly context specific.

You know, that's something that can be valued, having that experience, that network. When we talk to. Vertical software founders we're looking for founder market fit. Right? So deep industry experience or wisdom, and you were an outsider. Do you think that helped you do things differently? Did it give you an advantage versus maybe some folks who had been too close to the problem and didn't see it a certain way?

Shegun Otulana: I think being an outsider. Gives you an advantage in certain things. I think the person is more important than whether they're insider or outsider. Of course, context is specific for everything, so I'm always very careful about giving people, this is how you must do X. Like, like I'm always very careful with that.

I. I think what is more [00:17:00] important is the eagerness to learn, the ability to put yourself in the shoes of the person you're trying to solve the problem for, and how quickly you can get yourself up to speed in a space. The most important factor around how quickly you can get yourself up to speed in a space is how eager you are.

To serve that customer, how excited you are to serve that customer. So if I'm looking at two founders and I see one that's the expert and has all the experience in the space and everything, but they've lost the fire, the energy around the customer and the problem, and they just feel like I'm the expert, I know it all.

I would not bet on that person over somebody. Who I feel is green, but it's just fired up about the customers. We've even seen this in my own journey as an investor. When you are looking at a founder that wants to do something because they think there's a financial opportunity there, I. But they don't really love the people they're gonna be working for or [00:18:00] working with.

So what happens is when they hit those difficult points, they do not have the momentum and the energy to keep going versus somebody that's just excited about the space they found themselves. So. What helped me was my excitement about the space, my eagerness to talk to these counselors and psychologists and psychotherapists all day long.

That sped up the ability to gain knowledge. Did I make some mistakes because of my inexperience? Of course I did, but at the pace at which I was moving, I could quickly overcome the mistakes and still have an advantage, and I think that's really what matters,

Ian Hathaway: the tenacity of the entrepreneur. I think having that beginner's mind can actually be really helpful.

One of the things that you did that was different, which could be tied to this is your pricing model where a number of your competitors were charging on a per seat basis for the clinicians. Pretty much all my competitors. Yeah. And you did something [00:19:00] different. What was that and how did you get to that insight?

Shegun Otulana: One of the lessons I, I learned, and I still believe in strongly, and I talk about all the time. Ease. You have to be differentiated for a particular person. Like you have to find that customer that you're differentiated for along at least one dimension. It could be the way you deliver the solution that's pretty unique and makes life so much, much easier than how other people are delivering the solution.

It could be pricing, you know, all kinds of ways. And for us, at the beginning, we were trying to find what our differentiation point was. In talking to all these customers, it became clear that for the nonprofit sector, they were not as excited about paying for every seat. As the private practice folks and the private practice folks had a lot of choices in the market and everybody priced per seat.

But I would talk to a nonprofit and they'll be like, well, we [00:20:00] have 15 people on the team, but you know, half of them are part-time, so you know, is there a discount for that? We would keep getting those kind of questions. So they liked our software because we thought about certain workflows they had as, as nonprofits within the context of delivering care.

So what we did was we decided, you know what? We're getting a lot of very interesting excitement and conversation with the nonprofit counseling centers, especially the larger ones. So let's not charge them per seat. We're gonna charge them per active customer. So whoever they're seeing scheduling and billing for is the only person they're gonna pay us for, and they loved that.

So that's started getting traction among the mid-sized nonprofit counseling centers. And I think as an entrepreneur, you always have to look for this entry points that gives you a differentiation in the market. Differentiation is really how you win at the end of the day, and that was one of the differentiations that [00:21:00] helped us.

And it came about just because, again, we were having so many conversations, and when I say we, honestly, it was just me. Back then I didn't have anybody else. But in all those conversations that just kept coming up and that gave that first. Momentum to the business because now you're closing a deal. Every day you are closing customers every day.

The selling process gets easier. You're excited about that next conversation. Yes, you're still closing the private practice good folks, but you're also able to really get momentum in this particular side of the market, and you keep going from there.

Ian Hathaway: So it was sort of this engagement with a potentially underserved segment of the market that you had a differentiation around, not just the product offering, but how you positioned and priced it, which was ultimately larger contract values for TheraNest.

Important lesson there for founders. Something else you did differently, which was not common at the time, is more common now, which is you built. The [00:22:00] team remotely. We had an earlier guest, Wade Foster of Zapier who talked about all the advantages of building a remote first team. He wrote a book on the topic, but that there's other things you have to think of, right?

It has to be the right fit for your company's culture. There's a lot more intentionality that needs to be said in additional planning that's required. What was the motivation for you building? Fairness remotely and maybe what are some of the lessons that founders today can take from that example? The motivation for me was I had no choice.

Shegun Otulana: That was the, that was the first motivation. You have to find a segment of the business where you can, if you do not raise a lot of money, which we didn't, you know, we couldn't raise money. It took us 10 months to get our first investor dollar, so. My ability to recruit was very limited. That was one we've talked about Birmingham.

It's not, it's some large. [00:23:00] Market with talent all over the place. Has it gotten better since my journey started? Yes, by a lot. But if you think about 2013, it was much harder, right? So I had to think about talent globally. I had to think about where can I find the best people at the cost that I can afford.

So that was one of the things that I was thinking about. That led me to go the remote first route. That was a big motivator back then, and I think the quality of people you could get back then that were remote was very high because remote then was a deliberate choice. You literally designed the company around it.

You designed the team around it. You designed your hiring process and your hiring practice, and your onboarding process and your onboarding practice around it. You could also pick and choose, or you could choose to say, this person doesn't fit the mold of somebody that we think will be very, very successful as a remote person.

So we're not gonna pick [00:24:00] them. We're gonna pick the next person. Because one of the filters back then was I would ask, have you done remote work before? And if you said, no. The threshold for getting hired went up. Like, now I'm really testing for your ability to have a lot of agency by yourself. And is this somebody that's gonna really not just be task oriented, but think broader?

Because one of the challenges about remote work is remote employees sometimes can become just task oriented, which is not the way to build a startup. They just do the thing they have to do and then they move on. The challenge you now have today is if you ask somebody, have you done remote work before?

Almost everybody's gonna tell you yes because COVID happened. But how do you now test to make sure this is not somebody that's just gonna be. Task oriented in everything they do, and once they do their tasks, they're done. Thinking about your company or your, or your customers, how will you nurture thinking, broader thinking across the whole business?

How will you turn somebody to be project [00:25:00] oriented and company oriented within the context of a remote work versus just being task oriented? So how do you navigate that is something that founders have to be much more deliberate about. I think companies like ours that started long time ago, Zaia that started long time ago actually had an advantage to being remote.

That I'm not sure is still an advantage today. And everybody's gonna come at me and make, get mad that I'm telling them to stop doing remote work. I see a lot of companies, I see a lot of founders. We have a lot of investments. I'm just telling you from what I see that. It is pretty clear that unless a company is very, very deliberate about it, remote work used to be an advantage, and I'm not so sure it's an advantage anymore.

Ian Hathaway: I agree with that, especially early teams, especially in product and engineering. It's important for that pace, that proximity, trust building and so on. You know, you [00:26:00] mentioned before when you said we were engaging with customers, it was just you. You talked about things like agency with some of those early remote hires because you were sort of a one man band in many different domains.

When it came time to hire, you knew the details, right? You knew who you were looking for because you had done those jobs before, but ultimately there's a transition that needs to occur. You, you have to give those people power. You have to give them decision making authority. You have to give them that agency.

How do you feel like being the one man band for a time period set up your leadership approach over the longer term? Maybe secondly, do you think that this is something that founders can overlook early on? That they don't spend enough time building out critical functions themselves and that they can at times hire too early?

Shegun Otulana: 100% constraints. Lead to [00:27:00] creativity. That's the thing here, right? And you doing a job within the constraints of being a one man band helps you think about efficiencies within that job that you can then pass on to the next person that comes in to take that job from you. If you take my story, I didn't have any resources, but I knew the bigger challenge for the.

In those early days was not the ability to build the software. I could build the software. It was my ability to sell the software and market the software that that would be my biggest problem. So what I did was I found a really great engineer because I knew what a great engineer would look like and I passed on a lot of the engineering work, even though I was still the product owner and the owner of the vision and helped do a lot of the, what is the customer's experience like what will be magical for the customer.

But I left the engineering work and I really started focusing on [00:28:00] how do I become. Somebody who would drive traffic into the website and do marketing. And one of the things that really helped me then was a book by Rob Walling that he had written for engineers who were starting companies called Start Small, stay Small.

We didn't stay small, but we did start small and took a lot of lessons from that book and put it into practice from a marketing and growth marketing standpoint. But like you said, the constraints actually helped us. When I now got a little bit of funding that we knew exactly where to put the money from a marketing standpoint to significantly drive growth because I had been doing the marketing work.

So when October came around and we ended up operating a a seed round, we knew this works, this didn't work, this works, this didn't work. Let's double down on what works. Those are some of the benefits of doing the work in that early day. As a founder, by the way, this is one of the challenges with. Repeat founders [00:29:00] who have had a lot of successes, because what ends up happening, of course, is you now can go hire people to do the work, and maybe your learning velocity slows down because you're not the one doing the thing.

You're not doing it through other people and the rego that you bring in and all that may reduce. So it's kind of weird, but this is it. If you are a repeat founder, it is much more important for your early team. To have that founder mentality more than if you're actually a first time founder. 'cause if you're a first time founder, you are doing everything and you can really condense what you pass on to the team.

If you're a repeat founder who's who's had a lot of success, especially if you've not a lot of money and you can hire people, you are delegating that to these people. And now you need people that will have that same mentality as you had when you were a founder with everything they're doing so that you can learn faster.

Because you cannot [00:30:00] avoid the learning phase, and it's the quick iteration that really helps. So now you need those people to think like a founder because you're now not in all the details versus the first time when you did the thing.

Ian Hathaway: So you talked about that founder mentality, which I think is often a challenge for founders, right?

You're on a mission and your employees may not be. So you either need to filter for that as you're bringing people on, or you need to create an environment for that, or hopefully both. So I guess that kind of veers into conversations around. Culture, creating that sense of mission requires creating trust, which requires vulnerability.

I can imagine it was compounded by the fact that you were resource constrained and building remotely. How did you create that sense of culture? Obviously the company was successful, so you were certainly able. To create a culture of high performance. I'm sure some [00:31:00] mistakes were made along the way. I'm sure there's things you wish you had done better, but I'm sure there was also a lot you got.

Right. So just talk a little bit about how you went about building a culture in that unique set of circumstances for fairness.

Shegun Otulana: So culture is ever evolving. It means different things to different people. For us, culture never meant keg parties. Or things like that because we didn't have the funds to do that.

Culture for us meant really alignment of values, doing whatever we had to do to make the customer happy. Culture meant, since we're not all in the same room, you have to be able to exercise good judgment, and here are the rules and the guardrails for exercising. The good judgment. Now go around with it.

Culture. Men move fast and. We rewarded that. And culture also meant learn and share. So even though we're a small company, we didn't have a lot, we still had a learning stipend for [00:32:00] everybody. And then we wanted you to say what you learned. The place where I would say we didn't do a good enough job as we got bigger was we didn't ritualize enough of those things.

Because the way you reinforce culture is through storytelling and ritualization. As a small team, we weren't a hundred percent distributed anymore, but we were primarily distributed. As we got bigger, we didn't have a lot of rituals that were easy to have in person, and that probably created some issues for us later on as the team kind of grew.

So I, I would say culture is the values you share, the things you reward, and the way you really sustain it is what are the rituals and the reward systems around it. That would scale for your own context, whether it's in person, whether it's remote, whether it's hybrid. We got it right in the early days and then we didn't scale it properly as we got bigger and then we had to keep going back to try to fix things.

When we realized, oh, there, there is a [00:33:00] challenge here. My own individual interactions with people was a lot of what sustained the culture in the early days, but that is not going to scale. One of the things I had to learn about myself as a founder was to learn how to scale my one-to-one conversation, which I felt I was very effective at, to a one-to-many conversation that you need as a company gets bigger and you have to build the engine around that.

Ian Hathaway: That's a good segue to the company scaling things. Were going quickly about three and a half years or so from launching TheraNest. You evolve the platform into therapy brands. I. Which again was maybe an unconventional move, right? We talked a lot about for vertical software founders staying as narrow as possible for as long as possible.

Maybe you had done that, but the decision was made to expand into [00:34:00] more verticals. What was the thought process behind evolving the company into this larger platform? And maybe before you dive into that, could you just level set a little bit about where the company was at that stage in terms of headcount or revenue or anything you're comfortable sharing about how fast things had grown up into that time?

Shegun Otulana: Yeah. So if you think about fairness, we started in 2013. The first year was a wash. I was barely surviving. There was no resources, but we're making it work, adding customers, everything else. So October we got funding, and 2014 we started growing. That growth continued into the end of 2014, so that by 20 15, 20 16, we were several, several million in a RR.

And I could just see the trajectory. So by 2016, we're north of 5 million. I'll just put it that way. In era growing high, triple digits. So you could just see what was ahead of you. Yes. And that kind of growth is pretty [00:35:00] exciting. But now I, I see what's possible. You, you have to remember, our ambitions change with time and everything else.

So as the company grew, my ambition actually really grew with it. I had two personal priorities I was trying to solve for. Even though this thing was growing very, very fast, I still really had nothing to show for it personally, right? Mm-hmm. It's not like I was just paying myself a gazillion dollars and everything else, and I felt a strong sense of obligation to the angels that I put money in it.