Mercedes Bidart left New York on a humanitarian flight during COVID, moved to a country she’d never lived in, and started lending $10 to people no bank would touch. Here’s what she’s learned building Quipu into a breakeven fintech that wants to become the credit bureau for Latin America’s informal economy.

In Latin America, nine out of ten businesses are micro-enterprises — fewer than ten employees, often a single person with a food truck, a sewing machine, or a box of handcrafted bags. Together, they face a funding gap of more than $1.4 trillion. They are the engine of their economies. And the financial system pretends they don’t exist.

Banks won’t lend to them because they have no credit history. Traditional microfinance institutions struggle to serve them at scale. And the alternative? Predatory lenders charging 20% interest — per week — who show up at your door if you don’t pay.

Mercedes Bidart, an Argentine political scientist who grew up in a family of small business wonders set out to change this. She built Quipu, a fintech that uses alternative data to assess creditworthiness for people the traditional system has left behind. Starting with $10 loans and a dataset they built from scratch, Quipu reached breakeven this year — and now has its sights on something much bigger.

This interview was full of lessons I think every social entrepreneur, impact investor, and business builder needs to hear.

1. The Best Ideas Don’t Arrive — They Emerge

Quipu didn’t start as a credit scoring company. It started as a community marketplace with its own digital currency… and it didn’t work.

The original concept, called Quipu Market, was a platform where informal businesses in underserved neighborhoods could upload products and transact with each other using a local community currency — money that stayed in the neighborhood. Mercedes and her co-founders spent a year going door-to-door, uploading businesses onto the app. “The app was shitty, like it was terrible,” she laughs. “So it took two hours uploading each business and helping them take the pictures of their products.”

It didn’t work. But what they saw while doing that grueling fieldwork changed everything. What micro-entrepreneurs needed most — especially post-COVID — wasn’t a marketplace. It was working capital. They had the equipment. They had customers placing orders. They didn’t have money to buy supplies.

“We noticed that actually what they needed after COVID was working capital to buy supplies again and start selling again because they had their fridge, their oven, the food truck, but they didn’t have the final supplies to start cooking the hamburgers again.”

Mercedes references Otto Scharmer’s Theory U from MIT — the idea of “leading from the emerging future.” Rather than clinging to the original plan, the Quipu team followed what the business itself was telling them. “No, let’s be the credit bureau. Like this is even bigger. It’s not just lending. And when we understood that, then it was like, okay, this is what it’s emerging.”

The takeaway: Your first idea is a vehicle, not a destination. The founders who build lasting companies are the ones who stay close enough to the problem to see what’s actually needed — and brave enough to follow it when it points somewhere unexpected. As Mercedes puts it: “I don’t think that you just know. Rather, you are passionate about the topic, then the solution comes by implementing different ideas.”

2. When There’s No Data, Build the Dataset Yourself

Here’s the chicken-and-egg problem at the heart of financial inclusion: you can’t assess credit risk without data, and the people who most need credit have no data because they’ve never had credit. Most institutions look at this and see a wall. Mercedes saw a research project.

“To build a data set, as this is an informal economy, there’s no information, there’s no data available. We needed to build the data set ourselves.”

Quipu started giving out loans — beginning at just $10 — specifically so they could generate the data needed to train their risk models. They captured unconventional data points: photos of businesses (originally uploaded for the marketplace), videos showing inventory and stock, answers to onboarding questions. Then they watched what happened.

“You need to capture as much data as you can, allocate the capital, and then see which type of data was actually predicting risk and what is not working.”

They even designed the experiment like researchers: 50% women, 50% men. And they needed some people to default. “We needed people not paying us because that’s the way you train the model.”

Today, Quipu has allocated more than 40,000 loans and uses this proprietary dataset to sell credit scores to banks, microfinance institutions, and digital wallets — proving that the people rejected by the traditional system are bankable when you measure the right things.

The takeaway: If the infrastructure you need doesn’t exist, build it. The most defensible moats in emerging markets aren’t built with code — they’re built with proprietary data and user trust that nobody else was willing to go collect and build.

3. Protect Your Mission with Math, Not Just Documents

A lot of social enterprise advice focuses on legal structures — benefit corporations, mission lock clauses, third-party certifications. And those matter. But Mercedes offers a more practical (and arguably more effective) approach to mission protection, especially in the early stages: don’t give any single investor enough power to change your direction.

“I think because we don’t have one big investor. We have about 20 investors. So then none of them are able to move our decisions.”

Quipu has raised across SAFEs (Simple Agreements for Future Equity), which means no priced round yet, no formal board, and governance control stays with the founding team.

But that doesn’t mean she’s being casual. She’s being strategic. By raising from many smaller investors instead of one large lead, she’s created a structure where the founders make the decisions — and the investors can recommend and suggest, but can’t dictate.

This echoes a finding from Harvard’s Noam Wasserman: 65% of high-potential startups fail due to co-founder conflict, often triggered by misaligned incentives from investor pressure. Keeping control distributed is one way to prevent that dynamic from taking root.

The takeaway: You don’t need perfect governance documents on day one. But you do need a capital structure that keeps the founding team in the driver’s seat. Sometimes the best mission protection isn’t a clause — it’s a mission-aligned cap table.

4. Build an Advisory Team with Skin in the Game

Most startup advisory relationships are polite fictions — a name on a website, a quarterly coffee, maybe one useful intro. Mercedes decided she needed something different.

“Now I’m bringing industry leaders that went through some of the things that we need to do.”

She built a formal advisory share structure — equity that vests not just with time, but is accelerated based on hitting specific milestones. An advisor on risk? She hired someone who spent ten years at a bank buying credit scores. Someone who knows the buyer’s side of the exact product Quipu is selling.

The milestones are concrete: generate a certain amount of revenue, deliver a specific number of bank partnerships. If the advisor contributes to growing the company’s value, they vest faster. If not, the equity stays on the table.

This approach was informed by a peer — a fellow Cartier Women’s Initiative fellow named Komal — who shared a negotiation framework that changed how Mercedes thinks about all her stakeholder relationships: “Negotiation, you need to make the pie bigger. So it’s not about how much you get and how much I get, but actually is how much we can grow the pie.”

The takeaway: Advisory relationships only work when there’s real accountability. Design advisor vesting around the specific outcomes your company needs to unlock. And remember: the best advisors aren’t the most famous — they’re the ones who’ve been on the other side of the table you’re trying to reach.

5. The Fundraising Playbook Is (Mostly) B******t — Learn from Peers Instead

Mercedes has no patience for conventional fundraising wisdom. She’s heard it all in accelerators and incubation programs. Her verdict?

“All the theory that I’ve learned in accelerators… I think it’s b******t.”

The problem? The Silicon Valley-exported playbook — create FOMO, close the round in a month, or you’re a failure — doesn’t map to reality for most founders. “It makes you feel that you are the loser because they you need to make the FOMO and people need to invest in a month. And if you don’t close the round in a month, then you are lost.”

What actually helped her? Talking to other founders going through the same thing. “The best is talking with peers, not just learning from the “experts”. And in the end, is learning by doing.”

Mercedes also shared her conference strategy, which is far more methodical than most founders realize is necessary. She researches attendees a week and a half before, connects on LinkedIn with a personal note, pre-books meetings, leaves room for serendipity, and tries to speak at the event whenever possible. “If you’re a speaker, then you are positioned in a different way. Even if they don’t go to your panel, they might talk to you because you are a speaker.” This reminded me of the podcast with Minhaj of Drinkwell, who outlined the extensive research and outreach that went into every event.

She also noted an uncomfortable truth about fundraising dynamics for women: happy hours and after-event drinks — where many investor relationships get cemented — feel fundamentally different for women founders. “It’s easier for men to at a happy hour where there are drinks. For women it’s not as easy. We can still do it and we show up, you know, but it’s not as easy.”

Her workaround: she sets the terms. Coffee meetings. In-person conversations during the conference itself. And she raised her first round through exactly these types of interactions — “not talking, like I was not known by anybody, nobody knew me, but it was just in-person conversations.”

The takeaway: Fundraising is learned by doing, not by reading someone else’s playbook. Build a peer network of founders at your stage. Be methodical about events. And if the standard networking environments don’t work for you, design your own.

6. Have the Hard Founder Conversations Before You Need Them

When Quipu reached a crossroads — should they become a large lending company or pivot to becoming a credit scoring platform? — the founding team realized they hadn’t had some critical conversations. So they forced them.

“We started these conversations this year when we needed to decide if we were going to grow, if we wanted to be the huge lending company or if we wanted to be the huge scoring company.”

The conversations went beyond strategy. They talked about what happens if someone wants to leave. What equity terms would apply. What’s required of each founder. What happens if someone needs extended time off.

“Things like that that are really practical, but if you never talked about them, then they get complicated at the point that you need to make the decision.”

This is backed up by the data. Remember the research from Noam Wasserman, 65% of high-potential startups fail due to co-founder conflict — not market conditions, not product-market fit, but the relationship between the people building the thing. The research shows that the most successful teams tend to be ones who’ve worked through hard decisions together before crisis forced them to.

The alignment process led Quipu to its most ambitious vision yet. They unified around a single mission statement: “Our mission is for capital to flow into the hands of people that have been historically left outside of the system.” And once that was clear, the strategic choice — to build a credit bureau for the informal economy rather than just a lending company — became obvious.

“When we were aligned on this, we said, we are really ambitious, right? So if we are ambitious, let’s go for the most ambitious solution.”

The takeaway: Founder alignment isn’t a one-time conversation at incorporation. It’s an ongoing practice. And the conversations you most need to have are the ones that feel premature — exit terms, equity scenarios, what-ifs. Have them before the business forces your hand.

7. Confidence Is a Lagging Indicator — And That’s OK

One of the most honest moments in the interview came when Mercedes described how her approach to fundraising evolved as she evolved.

“I will be completely honest. I think at the beginning, I was open to whatever, you know, it’s what happens. Like when you need the money, it’s like, okay... If I’m talking with an impact investor, I will tell you my impact story. If I’m talking with a market driven investor, I will tell you how big is this market.”

She calls it being a chameleon. And she’s not ashamed of it — it’s what early-stage founders do to survive.

But something shifted. After closing her most recent round, after reaching breakeven, after building something that demonstrably works — her posture changed completely: “I’m not open to just money anymore because I know how valuable this is to the company.”

She started being more selective about who she brings in, prioritizing investors who will actually work alongside her. She found one — an ex-entrepreneur who built and sold a B2B software company to banks — who she describes as the first investor who truly works alongside her. “What’s happened is that if you don’t say exactly what’s going on, people know this. They need to know the bad and the good before they get in.”

Her advice to early-stage founders? Don’t beat yourself up for being a chameleon at the beginning. But know that the goal is to grow into a position where you set the terms. “Mercedes of 33 is not the same one of Mercedes of 28 when she moved to Colombia, you know, trying to make this happen and accepting whatever was coming.”

The takeaway: Founder confidence isn’t something you should fake — it’s something you earn through survival. The early days of accepting whatever comes? That’s not weakness. That’s the price of building the proof points that later let you say no.

The Vision: An Equifax for the Informal Economy

Where is this all heading? Mercedes has a vision that should make every impact investor pay attention.

“I see the organization going to be the Equifax equivalent of the informal economy where people, we give back the power of data to the people and they decide with whom they want to share their data and the banks bid to give them better conditions.”

Read that again. She’s not building a better lending product. She’s proposing to invert the power dynamic of the entire financial system for the bottom of the pyramid. Instead of micro-entrepreneurs begging banks for products designed for someone else, Quipu would transform their informal economic activity into credit data — and let financial institutions compete for the privilege of serving them.

The hypothesis is straightforward: the funding gap exists because there’s a data gap. Bridge the data gap, and you bridge the funding gap. It’s the kind of theory of change that makes commercial sense and solves a trillion-dollar social problem. That’s rare.

One More Thing: People Are Good

There’s a moment in the interview where Mercedes is asked what drives her belief that the world can be different. Her answer is disarming in its simplicity.

“I think that people are good. I don’t think that people are bad. And some people just think that people are bad. I think that people actually are good and that the system, it’s making them selfish in a way.”

It’s a worldview that echoes the thesis of Rutger Bregman’s Humankind: A Hopeful History — the idea that humans default toward kindness and cooperation, and that the systems we build either amplify or suppress that nature. When you design a financial system that excludes 90% of businesses, you’re not just creating an access problem — you’re creating a self-fulfilling prophecy about who deserves to participate in the economy.

Mercedes is building the opposite kind of system. One that starts from the assumption that a woman selling handcrafted bags in Barranquilla is worth a $100 bet. And that bet? It’s already paying off — for Rosa, for Quipu, and for the 40,000+ borrowers who are building credit histories that didn’t exist three years ago.

Follow Mercedes on LinkedIn. Follow Quipu on LinkedIn

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Transcript

Mark Horoszowski: Mercedes, welcome to the Helping Billions podcast. I am so excited that you’re joining us today.

Mercedes Bidart: Thank you, Mark. I’m really excited to be here. Thank you for the invitation.

Mark: I got to learn your organization, your business through the Socap Network, but I’ve also heard about it. Another Cartier Women’s fellow was a previous guest on the episode as well, so I’ve heard your name a couple of times. And I want to start this podcast by jumping into the problem that you set out to solve many years ago. From there, we’ll jump into the business model and all these pieces, but can we talk about the magnitude of the problem that you have set out to solve?

Mercedes: Yeah, of course. So I will concentrate in Latin America that it’s where we are solving the problem. The beginning, we hope to be a global company, but we are starting in Latin America. There’s where we are from. There’s a gap of funding to micro businesses of more than one point four trillion dollars and micro businesses are one over 10 businesses — sorry, nine out of 10. So we are talking about a really big percentage of the businesses that are micro, micro being less than 10 employees. So if nine out of 10 of the businesses are micro and the gap is of more than 1.4 trillion, then we have a really big opportunity to serve these businesses.

Mark: Wow. I’m based in the United States, and I think one of the biggest employers is actually small businesses. But as individual entities, they don’t have enough lobby power or finance power or anything. And so they’re often kind of put on the outliers of support. And I think that’s what you’re really countering across Latin America too — these micro enterprises in order to grow need capital, but it’s very hard for them to get capital to keep growing. Tell us a little bit more about the problems that they’re facing, why that capital is so important, and then ultimately what capital does for them when they’re able to access it.

Mercedes: Yeah, of course. So, you know, financial services are usually serving the people that have or that already have money. Like if you already have money, then it’s easier to access financial services or get in debt. I always say that debt can kill you or it can save you. So it’s not always good. But when we talk about productive activities like what micro businesses do or independent workers do, because we work with both of them — usually it’s money that comes to grow what they are already selling or to make them available to buy more supplies in months where they don’t have enough or they have an order and that they need to accomplish and then they get paid how they can get funded to buy the supplies they need to serve that order that they are having. That’s usually the problem that we are seeing, the lack of funding to buy supplies in order to even serve the orders that they are having. So there’s where we see that this access to productive or to working capital can be detrimental. It can even like, you know, if you don’t get it in the right time, then your business can die. We are talking about businesses that live usually month by month. And they are the engine of our economy. So that’s why if they have the access to capital then they can grow and then they can also exist and not die and they can employ more people in their community usually.

Mark: Can you give us an example here? I don’t know if you have like a favorite story, if you’re allowed to have favorites. But can you give us an example of one of these enterprises and even more like how capital enabled them?

Mercedes: Yeah, so we have a customer that’s called Rosa. She sells handbags, handcrafted handbags. She lives in Barranquilla, which is a city on the Caribbean coast. And when we met her, she was working with her daughter. They have a brand. They even have like an Instagram account where they sell their handcrafted bags. As she never had a credit history, her only option is the informal lender, the predatory lender, shark loans, these people that payday lenders, like this type of loan that usually is very expensive and violent. And what she got to know was then she started building her credit history. We assess her creditworthiness based on other type of data. And she was able to start with a hundred dollar loan. Now she got more than six loans with us, more than $4,000. And because of this, she was able to access a bigger fund from the government of 10K that allowed her to open her workshop. So now she’s having five employees. She’s having a store in one of the main malls in Barranquilla in the city. So, you know, we’ve seen how she progressed because she was able to access this capital. Usually she has people order her the bags. But then she needed money to buy the supplies in order to create the bags before getting paid. And that’s why these hundred dollars were really important at that point. And yeah, then she started growing, growing, growing. That’s one of our favorite stories.

Mark: For people that aren’t as familiar with microfinance or these small loans — $100, up to $1,000, $4,000 — to micro entrepreneurs, like how catalytic it can be and how it can pull people out of these really business detrimental debt cycles, but even personal cycles depending on where capital is pulled from. So you mentioned predatory lenders or informal economy lenders. Can you give us an example of what type of percent somebody like Rosa was paying for her debt prior to the work that you do at Kipu?

Mercedes: Yeah, so it could be 20% per week. Yeah, which is very expensive, very expensive.

Mark: Wow. So we’re talking nine out of 10 organizations fall into this category, paying interest rates of like 20% per week. Even for a year, 20% is expensive.

Mercedes: Yeah, in the US, of course, in Latin America, not so much, but in the US it is. But actually, right now, credit cards in the US are charging more than 20% annual. So capital is expensive right now. Money is expensive right now. But for this type of population, it’s even more expensive. And it’s not coming just in how expensive it is in terms of the money they need to pay. But also, they are violent. If you don’t pay, they will go to your house. And like they’re literally violent. So people fall in this trap and then it’s really difficult to get out of it. They get into a loop of debt to pay debt and debt to pay debt. And it’s very difficult to get out of this trap. And what’s happened because microfinance existed for many years — what is happening is that microfinance institutions are not being able to serve this type of population because either they ask to do the community groups, the Grameen kind of style of solidarity groups where your group members are your warrantors, or they look at the credit bureau and if you don’t have a credit history or that credit history is damaged, then they will reject you. And the building of the groups is very expensive. So then capital is very expensive. It’s not like microfinance institutions are not providing capital at good rates because the operation of maintaining the groups and having people on the ground, it’s not cheap. So we are seeing that as banks and neo-banks were able to in a way challenge the traditional industry of banking, we can do the same in microfinance. And these new neo-banks are not getting to the bottom of the pyramid in a way. So there’s where we saw that there were a lot of things to develop and to do.

Mark: I’d love to kind of get into that story. You mentioned the Grameens, other microfinance organizations that do serve the bottom of the pyramid. Many of these are philanthropically funded, and even philanthropically funded, their cost of capital is still high because of some of the programmatic interventions or they’re not utilizing systems that already exist within some of these economies. So I’d love to hear from you — how did you come to tackle this problem, but with a purpose-driven business model, as opposed to a philanthropic business model? How did this idea come to be?

Mercedes: Yeah, I think what’s different now than when this MFI system started to exist is that people have digital wallets and digital payments, mostly in most of the global south. This trend started in Kenya with the M-Pesa, but we see this all through Latin America. Each country has its main digital wallet that started to be used mostly after COVID because subsidies were disbursed through digital wallets. So then we are seeing a high penetration of wallets and also because of COVID, a high penetration of smartphones. And that’s what it’s allowing us to actually make the allocation of capital cheaper and starting using data that was non-existent before. Before it was impossible to trace the payments or people were just using cash. Or was it impossible to trace business if you were not going in person to check the business. So we said there might be a way right now with the technology, we started in 2021. So with the technology that existed at that point and now more than ever, and the information that we can collect online, there should be a way where this market can be tackled from a market perspective. I mean, this problem could be solved from a market perspective and not just from a philanthropic perspective. And that’s what we have demonstrated in the last years, you know, that there was another way to prove risk and there was a more efficient way of disbursing capital and collecting capital to the bottom of the pyramid in a way.

Mark: Even more on like a personal perspective, bring me on the personal journey here. Especially coming out of COVID, out of all the problems to solve, all just the self-care that had to be taken — you went for a very, very challenging one, one that organizations haven’t been able to solve yet. Tell us a little bit more just from the personal side of what motivated you towards this sector specifically and to take the first steps into social entrepreneurship.

Mercedes: Yeah, of course. I’m originally from Argentina. So I was born and raised in Argentina. My parents have a small business, medium sized business in Argentina. So I grew up in a family of entrepreneurs. But I decided to study political science. I didn’t want to be as my dad. I was doing the opposite, saying I want to change the world and I will do it through policy. So I started working with cities in Argentina on their policy to serve the informal economy. And at the same time, I was volunteering for five years at a microfinance institution inside an organization called Techo. And I saw this connection that there was not a good connection between what people needed on the ground and these small businesses needed and what policy was doing.

At that point, I decided I wanted to do a master’s and I got a fellowship and a scholarship and I went to do my master’s at MIT in cities. So it was like focused on how we can solve problems in cities, specifically the informal economy in cities. But I went with this background on policy. Like I didn’t know what was a startup, I didn’t know what was a social company. I didn’t know that until I got there.

And I started learning about not just about technology and how technology could solve problems, maybe broader than policy in a way. But at the same time, I started learning about startups and how a business could be a way to scale solutions. I was really accepting of that. Like I was coming from working at NGOs, think tanks, coming from another area.

And as I started learning, I started saying, okay, I want to solve the problem I saw in the neighborhoods where I worked at the microfinance institution. And I think that there might be something that we can do more that can scale more than the group lending that was a model that I was implementing. And technology can be useful for this. So the first idea was not the one that I’m doing now. The first idea that I had was actually called Kipu Market, which was a marketplace where informal businesses in these popular neighborhoods, informal settlements, can upload what they were selling and transact with one another using a digital currency, a community currency that was just useful for each neighborhood. So this was like quite crazy. I met my co-founders and I got a grant from school from a challenge inside MIT. And then we got into an incubator.

And we started working on this idea. We launched this idea and it didn’t work. And then, but the process that we got into what we’re doing now, it’s not that I woke up one day and I said, let’s build an alternative credit scoring and then try to give working capital. No, the first idea was different, was more utopic actually. Like I’m really a utopic person and I want to really change the economic system. And at that point I was like, okay, let’s try to launch and implement this. And while we were implementing the first idea is that we understood that the main problem was the access to working capital. That was 2021 because the first idea was 2018. So then while I was studying and then I went to New York to work for the mayor’s office, working at the office of minority and women owned businesses. So I was always on the same kind of topic, but then it was 2021 when I moved to Colombia, I started to try out the pilot and then we found out the idea was not working, but the idea that we needed to develop was different. So I don’t think that you just like, you know, you could be passionate about the topic, but then the solution comes by implementing different ideas.

Mark: So many threads to pull on. One that I want to grab on first, because I think it’s what connects us social entrepreneurs together — you used the word a little utopic here. “I believe we can change the economy.” I think that’s part of the theory of this podcast — by featuring entrepreneurs that believe that we can exert this positive pressure on the economy to exist and business exists to really solve deep lasting social and environmental problems. Bring me inside of your person and character a little bit more. What gives you hope? Why invest so much in that more utopic vision that you have?

Mercedes: Yeah. I actually don’t know where it comes from. Like I have no idea. But since the beginning, I was like this, you know, that’s why I decided to study political science. My dad was like, why are you studying that? I don’t understand what you can even work after studying that. Like I’m the first graduate from my family, from university. So I was the first one that had the chance to study. So my dad was like, why aren’t you starting something that can help the family business? And I was like, I want to run away from family business. Like, I don’t want to do that. I hate business. But then I ended up doing business, right?

But in the end, I don’t know. It was like something inside me of wanting to see things differently and feeling that I have the power to change it. Because I think that most of us want to see a different world. Like there might be few people that are happy with the world as it is. But then I think that few of us feel the drive and the conviction that we can do something better and we just take the risk. So I think I don’t know from where it’s coming from, but I know I’m a risk taker. I moved to the US and then I moved to Colombia. This is not my country. I just came here because there was the opportunity to build the startup. But yeah, I don’t know. I’m a risk taker and I’m a believer that things can be different and that I can do something different. I’m not just staying on how bad the world it is, but I’m seeing how the world could be. And I think that people are good. I don’t think that people are bad. And some people just think that people are bad. I think that people actually are good and that the system, it’s making them selfish in a way.

Mark: I love it. Thank you so much for sharing. On just the personal reflection, I read a book during the depths of COVID by Rutger Bregman called Humankind. He set out to say like all these books portray humans as being at the end of the day evil beings, and he’s like, but is that true? What does history say? And actually his thesis is like, really, no — we default towards kindness. We default towards goodness. But there are systemic problems that of course stand in the way of that. But at the end of the day, humans are always trying. Very uplifting kind of book for me. And seems like you got there just naturally on your own. Let’s jump back into the business side of this. So you launched the first model, which was a little bit more of a utopic community marketplace. You said it didn’t work. How did you move through that pivot into the early days of the Kipu business model?

Mercedes: Yeah, while we were implementing the marketplace, so we launched the marketplace with community marketplaces. Each neighborhood had its own marketplace with its own currency because we wanted the money to stay locally and foster transactions inside the communities. We took this idea from thousands of community currencies that are around the world. And it’s not that we created the concept of community currencies. No, we just copied what was out there, but tried to scale it in a startup way. So by doing so, we were like, literally this was 2021, was still COVID. I moved to Colombia in a humanitarian flight going out of the US.

So like, I’m quite crazy. So then I got here with my co-founders and we started going to the neighborhoods, uploading people into the app. The app was shitty, like it was terrible because that’s how apps work at the beginning — they’re terrible. So like two hours uploading each business, helping them take the pictures of the product and description of the products, and explaining the currency. And then we tried many ways and we spent like a year doing this. Something good — it was that we had a grant at that point. This is something that maybe we can touch on later of what type of funding is good at the beginning to really innovate and iterate a product. So we iterated. That was not working, was really difficult to scale, was difficult to monetize.

And we noticed that actually what they needed and mostly after COVID was working capital to buy supplies again and start selling again because they had their fridge, their oven, the food truck, but they were not having supplies to start cooking the hamburgers again. And as in the informal economy, if you don’t work, then you don’t get paid. You depend on your hands. If all your family got sick, then you didn’t make any earning. So at that point, a loan to buy again working capital was really crucial and nobody was giving out loans to them, not even the microfinance institution. At that point, we started working with a microfinance institution. They were not accepting them. And we saw that the predatory lender was there. And we started thinking, how the things that we’re seeing with our eyes, because we’re here in the businesses uploading them into the app, how we can transfer this offline data into online data and start seeing if this data can help us predict their risk. And the first data point that we captured were the pictures that actually they uploaded into the marketplace to sell the product. So that was the first data point. And then we started asking them to upload more. So they uploaded videos of the business, showing the inventory and stock. They started answering questions that we were asking them in the onboarding process. Then a lot of those data points were not working later. You need to capture as much data as you can, allocate the capital, and then see which type of data was actually predicting risk and what is not working. And that’s how we got to the point of the loans and the risk assessment. So that was the process.

Mark: Wow. And so in the early days, you were actually giving out loans. You were assessing risk and you were giving out — and you still are?

Mercedes: We’re still giving out loans. Yeah. So at the early days we needed to do that because we tried to do a partnership with an MFI and their process was so slow and still with our data, they were using their same process. So it was very difficult to scale the solution. And we said, you know what, let’s start giving out $10 loans short term. So then we can build a data set faster. We literally did a research. We gave 50% women, 50% men. We needed people not paying us because that’s the way you train the model. And then when we built enough, we started growing the loan allocation up to the point that now it’s completely profitable and has like good unit economics. So we are still allocating capital based on our data. But our theory of change is that if we are able to prove ourselves that this data is useful and these people that were rejected now can be accepted by us — if someone else uses our data to accept them, then we change the rules of the risk assessment in the traditional banking system. And that’s what we want to do.

Mark: So you’re proving the model works, you’re proving the economics of it makes sense — you yourself as a mission driven, but still profitable enterprise. And then you’re able to take that model and say, hey, existing banks, MFIs, existing fintechs — you use our model, you can get essentially more customers.

Mercedes: Exactly. Yeah.

Mark: Very cool. You mentioned funding and so I’m so curious here because it seems like you went from an organization that was using technology to support a marketplace, to then improve lending, but it really sounds like you’re on the road to more of a data and tech company. And your background is political science. I’d love to hear more about this journey and tie it to the fundraising aspect as well. You had your first grant, I’m assuming at some point that kind of started to run out. How did you capitalize the business once that grant was running out? And even to a point where then you were able to lend money yourself?

Mercedes: Yeah. So when we started and I was able to move to Colombia — when I was in New York, we were already having a prototype running in Colombia and the IDB, the Inter-American Development Bank, they have a lab of innovation where they developed a line of funding for existing prototypes in Colombia. And the first one they chose was our prototype.

You know that in this journey there’s luck. There’s points when we are like, okay, we will die and then something happens. You don’t know how. Well, that happened a lot of times to us. So at that point, this woman told me, you know what? We chose you and we will give Kipu a 150k grant to start. We’re like, okay, this is amazing. I will move. I’m leaving the US and I’m moving to Colombia and we’ll make this happen.

So then, we were like four people. We were not a lot of people at that point. And we used that funding to try out the model for a year. At the end of that year, we were already uploading the people to allocate loans. So all that grant helped us to prove the model — sorry, to prove that the first model was not working and to prove that there was another possible model. Like that was the result.

And at that point, that was the end of 2021, beginning of 2022. At that point, the market was really good. So I started fundraising from angel investors. So we got two investors. One was the MIT Design X, the incubator that incubated us. They said, okay, we will give you like a first check, really small check. And then we got another investor from Mexico that I met through an incubation program, another incubation program, because we are in all the programs and that’s how we meet people. So those two were the firms that believed in us. And then when we started showing traction, we did a pre-seed round of a million. This was 2022. So it’s like, 2021 it didn’t work but we were grant funded, 2022 we got a first angel round of 100K and then we were able to raise the pre-seed from other type of investors. And then there was a seed and now there’s another round. It was like building year over year. This year we reached breakeven. So we are at a different position. But still like funding was always an issue.

Mark: One of the areas that we see entrepreneurs struggle with — especially if they are setting out to tackle this very systemic social problem like access to finance — is protecting your mission and staying true to your founder’s mission and why you started this in the first place as you start to raise funds. That can sometimes be challenging depending on who you take capital from and what type of capital you take and what type of instrument. How have you been able to protect your mission as you’ve been growing here, as you’ve been getting more investors?

Mercedes: I think it’s because we don’t have just one big investor. We have like 20 investors. So then none of them is able to move our decisions. They don’t have enough power, none of them, to move where we are heading. They can recommend or they can suggest, but we do whatever we want at this point — if we are able of course to show results. But it’s not that they are here telling me, no, you need to do — they don’t have the power to do that. So as we raised on SAFEs, I didn’t — at this point, we haven’t done a price round. So then I don’t have a board. So then we make the decisions. And we are expecting to stay like this up to a Series A that is the next step that we hope to do in 12 months more or less. So I think we need to keep the decisions in the founding team as much as we can. And the other thing that worked for us is that none of them is the majority, has majority and kind of guides our decisions in a way because we have many investors.

Mark: For those not familiar — SAFEs, Simple Agreement for Future Equity — so you’re essentially staying away from valuation conversations and board control. And importantly, you’ve retained governance control at the board level, and in the leadership team level. And so I’m imagining there’s also a lot of diligence of these investors also being very mission aligned, very flexible and open here. Is that accurate? How do you suss out for mission alignment and impact alignment?

Mercedes: Yeah, I will be completely honest. I think at the beginning, I was open to whatever, you know, it’s what happens. Like when you need the money, it’s like, okay — if I’m talking with an impact investor, I will tell you my impact story. If I’m talking with a market driven investor, I will tell you how big is this market. And that’s what we need to be as entrepreneurs — we are chameleons.

But depending on the stage, right now — and I can say this after I close this last round — my position was completely different. First, I feel more confident about what I have built. I feel confident that we have really developed something different and that I was confident about the value of the company. And I was more confident of who I want to bring on board because I’ve seen how it is to bring people on board that they give you the money, but they never come back or they never call you.

And right now to make the next step, I need people that are working along me and that really believe in the mission. And I really believe that this can be a huge solution. I’m not open to just money anymore because I know how valuable this is the company. But I think that as entrepreneurs, we evolve. And as people, we evolve. And I’m 33 right now. Mercedes of 33 is not the same one of Mercedes of 28 when she moved to Colombia, trying to make this happen and accepting whatever was coming. Because I didn’t know that I was going to make something happen. So it changes. Right now, I’m really aware of who I’m bringing in. I think at the beginning I was not.

Mark: One of the other emerging trends that we’re seeing is also protecting mission within some governing documents — whether that’s board governance or even legal incorporation documents or third party certifications, like people and planet certifications. Is that something that you all have talked about or done or thinking about?

Mercedes: We haven’t, to be honest. I’m not thinking about these governance problems of the future. But of course, when it comes the time, which will be like, as I told you, in the next round, then we will need to think about it. At this point we are trying a lot to be aligned between founders, making a lot of effort towards having all the discussions we need to have before we face the problems — in a way that are not now, but like...

Mark: That’s such an interesting point. The world that I’m surrounded by talks about how do you protect organization mission through fundraising, through acquisition, through merger, through growth, through leadership transitions. And so there’s this growing movement towards benefit corporations or social purpose corporations or people and planet first certified organizations that really do embed that in their governing documents. But those conversations actually aren’t even possible until the founding team is aligned at the human level. So I’m so glad you brought that up. How do you — what types of conversations do you have with each other? What types of checkpoints do you have? Do you document anything?

Mercedes: Yeah. We didn’t do that up to now. We are going through these conversations and we started these conversations this year when we needed to decide if we were going to grow, if we wanted to be the huge lending company or if we wanted to be the huge scoring company. And we decided that because of what drives us, because we were born as a tech company and our backgrounds are — beyond political science — our backgrounds are more focused on the product. We are product driven and we want things to scale. And we needed to get aligned in the mission. Even though we had it written there somewhere, it’s important to bring it back.

So this year, we said, okay, our mission is for capital to flow into the hands of people that have been historically left outside of the system. And that means being Kipu the one that provides the capital or any other institution providing the capital. And then when we were aligned on this, we said, there’s like, we are really ambitious, right? So if we, because we are ambitious, let’s go for the most ambitious solution — which will be, let’s build a credit bureau for the informal economy. Let’s challenge the risk industry, not just the lending industry. And there’s where all the energy started to also flow. Like it was not just us, but also all the energy of the team, all the energy of the goals that we were seeking.

And then the other type of conversations that we’ve been having is what happens if someone of us wants to leave before the company has a value, for how much would you be leaving. What will be required from each of us? What happens if someone needs to take some months off because of whatever reason? Things like that that are really practical, but if you never talked about them, then they get complicated at the point that you need to make the decision. So that’s the type of conversations that we are having right now, actually.

Mark: How did this come to be? Is there any startup guidance that you got or people that you follow that really encouraged you to have these conversations? Or did it just come out naturally?

Mercedes: Yeah, no, it actually came naturally because the business took us there. The business took us to the point where it was asking us in a way — like Kipu was asking us, okay, decide, you will grow the lending or you will do the other one because the raising capital is different if you go for the B2B SaaS scoring, or if you go to the lending one. Which one will you want to be bigger?

And so it was the business that was leading us there. We call it like — here in Colombia, there’s an author of a method called the emerging strategy. And there’s another author from MIT called Otto Scharmer. He talks about Theory U, and he talks about leading from the emerging future. And it’s basically how you start leading from what it’s emerging. And that’s what happened to us in this process of saying, no, let’s be the credit bureau. Like this is even bigger. It’s not just lending. And when we understood that, then it was like, okay, this is what it’s emerging, and what’s all the possibility that it’s out there.

Mark: Incredible. Let’s keep on this thread of possibilities. Where do you see the organization going? What do you hope to accomplish — let’s say 2027, 2030, whatever horizon you’re looking at right now?

Mercedes: Yeah, so I see the organization going to, as I said, to be this Equifax equivalent of the informal economy where people — we give back the power of data to the people and they decide with whom they want to share their data and the banks bid to give them better conditions. So it’s the other way around. It’s not that they need to go and beg each bank to the products that the bank is already having. But actually, it’s people — by the data they are having, we transform that data into risk assessment data, and we are able to match them with the best opportunity that can be out there. And we make this segment that now it’s excluded, we make this segment attractive to the traditional financial system. And we think that — why it’s not attractive right now? Because there’s a gap of data. That’s our hypothesis. And if we are able to bridge the gap, then we can also bridge the gap of funding. So we see ourselves being that connector by being able to understand data in a way that can be helpful for banks to make a decision and for people also to access the best conditions that they can in the market.

Mark: I want to go back to fundraising a little bit. I know it’s been through angels, but earlier I mentioned that there’s another Cartier Women’s Initiative guest on the podcast — Claire from Farm to Feed — and she had shared about some of the bias that she encountered as a woman fundraising, building a business. Here, one thing that stands out is you present female, and you’re also a tech business in a country that is not your own. Have you encountered much bias on the entrepreneurial journey, on the fundraising journey, and if so, how are you able to counter that?

Mercedes: Yeah, so we raised from all the types of investors. We have VCs, we have social impact, we have corporate investors, we have the IDB. So it’s not just angels, it’s everybody.

And I think that — I don’t think it was a barrier, like to be honest. I think sometimes we say, no, I didn’t get funded because I’m a woman. I never felt that. I actually felt okay in all my conversations and in all my process. Maybe at the beginning I didn’t feel okay, but because now that I see it in retrospective, it’s not because I was a woman, it’s because I didn’t know how to fundraise at all. And I was just learning as I was doing.

But I don’t think it was because I was a woman. Some questions that they ask me that are not comfortable — they are like, who did you get married with that you live in Colombia? They never thought that, okay, you moved to Colombia because you wanted to build a business. If there’s a man, they will never ask a guy if they got married and that’s why they are there. Like who cares?

So that’s the type of questions that I get. And then the other issue is that where usually investors or like the meeting between investors and founders happen — it’s like in the happy hour or maybe after the event, going for drinks. I don’t like that. I feel very uncomfortable at those spaces. But I don’t know if it is a disadvantage because then I have conversations in a coffee store instead of in the happy hour. But I know that the bond that they create between the male co-founder versus the women co-founder — it’s different. It’s kind of like we have a professional relationship. It’s difficult for me to build a friend relationship. That’s very difficult for me. So that’s because most of our investors are men. That’s the difference, I think. And then it’s like how we can learn — we need to learn since the beginning to be professionals at this, at fundraising. And nobody taught us how to do it. Most of us just learn by doing and that’s something that we should be changing and mostly for women, of course.

Mark: Were there any tools or frameworks or guides or anything that you used or people you followed that you found were the most helpful, or was it really trial by fire?

Mercedes: I just — all the theory that I’ve learned in accelerators or in like, you know, whatever, I think it’s b******t. Like it was not useful at all because it makes you feel that you are the loser because they are like, you know, in Silicon Valley, the method is you need to make the FOMO and people need to invest in, I don’t know, a month. And if you don’t close the round in a month, then you are lost. And then you feel like, I’m the loser. Like I’m taking more than a month, like I’m the worst. And then you speak with the other guys or women and for all of them is the same. So I think the best is talking with peers, not just learning from the experts. So for me was talking with peers and yeah, in the end is learning by doing.

Mark: When you’re at events, before the happy hour — how do you move very strategically through these events to find the right people to talk to and grab time with them?

Mercedes: So yeah, I’m an expert on this. Because I learned by doing. But basically, before going, I look at the list of who will be there. I add them on LinkedIn. I’m really active on LinkedIn. So then if you get connected with me on LinkedIn, you kind of know who I am before you talk with me. And that’s very important — trying for people to know who you are before they meet you. So I connect on LinkedIn, send the message in the note. I’m not even paying LinkedIn premium. I’m just traditionally LinkedIn, just send the note when I connect saying, I will be at this event, this is what I do, I would like to talk. But I take the time to do it like one week, one week and half before and not the day of the event. That is when usually people are connecting through those apps of the events.

So then I set up my agenda before going. Then I leave space for serendipity because there’s a lot of serendipity that happens in the event. And if you have the full agenda, then you don’t have space for serendipity. So I leave some space for serendipity and I try to be a speaker in the event — that changed completely. If you’re a speaker, then you are positioned in a different way. Even if they don’t go to your panel, they might talk to you because you are a speaker.

But at the beginning when I was not a speaker, because nobody knew me, I was just chatting — sending requests like crazy and setting up half hour meetings. And that’s how I raised our first round actually, in these type of events. Not talking — I was not known by anybody, nobody knew me, but it was just like in-person conversations and that works for me. When I have in-person meetings, that’s better I think than Zoom.

Mark: Let’s shift gears to present day. You mentioned that based on when the show is going to publish, your numbers are going to be quite a bit bigger. Talk to me about as you’re growing and the pace of growth is quickening — change starts to happen within an organization. You’re onboarding new people. There’s more issues, lots of unknowns. How are you, as a leader of your organization, preparing yourself for this next stage of growth?

Mercedes: Yeah, so something that happened this year to me is that it was super positive. Two things. One is that one of the investors that got into this round is an ex-entrepreneur that he went through all the process of building a company and selling a company of B2B software to banks. So he’s from the industry. He understands exactly how this works.

And it’s the first time that someone is actually working along me. I feel him like really close and I feel that it’s someone that I can share everything that is going on. And he’s enjoying the work with us. So I feel so grateful for this person that I met. So I feel that those type of people are the ones that are helping me grow as an entrepreneur and as a leader. And he’s introducing me to others — entrepreneurs that went through all the process. Maybe they are not really known, but they are people that make it happen and had really huge exits actually. So I’m having these people around me and I’m feeling more confident and I feel that I’m looking more and more to have these people around.

Mark: Is he an investor?

Mercedes: He ended up — yeah, he started like, he wanted to meet me, he started helping and then he invested.

Mark: And then you mentioned some of these other people — have you built something formal, like a formal advisory team, or is it just informal?

Mercedes: So yeah, he got in as an investor. And I share everything. I share everything. There’s no sense to hide what is going on. He already invested, he’s already in, he’s on our side. So I share absolutely everything. And I think that they also enjoy that. They are people that love to operate. They’ve been on our side. So they want to be there working on the bad things, not just on the beautiful numbers. And before he invested, I also shared everything. And that was what actually built trust among us. He was like, this woman is just involving me. I love this. And she’s just saying exactly what’s going on. And what’s happened is that if you don’t say exactly what’s going on, people know this. They need to know the bad and the good before they get in.

And then I’m bringing other investors and I’m structuring advisory shares. At this point, yes, because now we need people who are super active in the advising. Before, if we had some mentorship or one hour, now and then. But now I’m bringing people that went through, like industry leaders that went through some of the things that we need to do. For example, an advisor on risk that she was like 10 years in a bank and she bought scores from the bank. So she knows the other side. So I needed to have someone like her and we brought her in with advisory shares and she’s dedicating a lot of time. So yeah, I think this is really useful. We need that. If we want to grow, we need that.

Mark: Financially, you’re not compensating them with cash in the short term, but they do have equity in the company?

Mercedes: No, just by vesting. So they have like a traditional vesting with time, but also the vesting can be accelerated if they fulfill certain milestones.

Mark: Wow. That’s very robust from an advisory relationship organization.

Mercedes: If not, they don’t work. If not, they are just like there by time and then you’re like, did they do something or not?

Mark: Is there any framework or tool or thing that you’ve read about that we could share with readers about how you did that?

Mercedes: Yeah, no, it was us creating the model. And for me it was very important to put on the table the what Kipu needs for the next step. Beyond your role as like your role as an advisor — what Kipu as a whole needs. So if you are able to contribute, I don’t know, X amount in revenue, for example, or four partnerships with new banks, whatever, then that’s how you start converting your equity.

But actually there’s one entrepreneur that you should connect with her. She’s also a Cartier fellow, but her name is Komal. She’s based in Chile. And when I was trying to negotiate with a term sheet with an investor and I called her and she told me, you know what, negotiation, you need to make the pie bigger. So it’s not about how much you get and how much I get, but actually is how much we can grow the pie. If because of your actions, we are growing the pie and people is valued more because the pie is bigger, then it’s fine if you get a bigger chunk. But we need to make sure that the pie is getting bigger. And that’s what we defined in each of the advisory relationships.

Mark: I love that thinking. I want to steal that. We are running low on time. I know I interrupted you — you said “first” and talked about the advisory thread. Was there something else you wanted to share?

Mercedes: Yeah. Because it’s connected even with what I was telling you about Komal, the women entrepreneur I called. This year also, I put a lot of energy in building more relationships with female entrepreneurs that are at the same stage that I am or a little bit on top of where I am. And this was key. Making friends with other women entrepreneurs that have been through the same problems that I can explain whatever is going on and they will get it — was amazing. I’m really happy that happened this year.

So yeah, it has a lot to do with how we build relationships with peers and being honest, not trying to sell what we don’t have and sell — in Argentina we say “sell smoke.” It’s like how we don’t sell smoke, how we are saying and being vulnerable about what actually we’re facing. And then it’s when the friendship happens and that’s really helpful and we need that.

Mark: How did you start to have some of these peer-to-peer conversations?

Mercedes: Yeah, it’s a funnel, right? Like everything is a funnel. So at the beginning, you make a lot of connections and then you click with some people and then you stick with two, three people. So it was through the fellowships. The Cartier Fellowship is amazing. There’s where I met a lot of women where I feel I can tell them or ask them whatever. That was really great.

And then when I moved to Medellín, where I live now, I didn’t have friends. So I needed to make friends. So I started to build a group on WhatsApp where I was putting interesting women I was meeting in this group. And then I started organizing some breakfast or places where we can meet. And that’s how we started connecting.

I think that it takes a lot of energy to make friends. And when we are more than 30, it makes more difficult — years make making new friends more difficult. But if you are an immigrant as I am, and you live in a place where you were not born, and I don’t have my friends from school here — you need to put that effort of going out. And at the beginning is a lot of energy, then they give you energy. They are not — so yeah, it’s a curve, but it’s worth putting effort.

Mark: In the pre-talk, we talked about mental health a little bit. I’m trying to imagine this — you move to a city and country that’s not your own, to build a business, which is a stressful undertaking. There’s a big pivot. How did you care for yourself? Your own mental health in those early stages?

Mercedes: Yeah, so I changed the therapy depending on the moment where I am. At the beginning, when I moved to Colombia, I was still having my therapist. Then I started doing coaching with a coach that is expert in social entrepreneurs. He helped me a lot to go through a lot of stuff. Then I started to get connected to holistic kind of therapies. So I love tarot, astrology, and everything that has to do with energies. So I did a tarot course. I go to my astrologer every month. So yeah, I find different tools that help me. But all the tools, whatever you pick, they start by knowing yourself.

So it could be astrology or it could be human design or it could be therapy. It starts by getting to know yourself and how to deal with yourself. So that’s a journey that I’ve been through. And I’m still — you never stop learning about yourself.

Mark: Very cool. Well, we are getting to the end. We’re going to jump into the impact round here, where I ask five questions, shorter answers, little more rapid fire. What is one mistake that you’ve made that you really hope future entrepreneurs will not make?

Mercedes: It’s bringing co-founders that are not aligned.

Mark: That’s a big one. Tell me about your biggest challenge in fundraising and based on that, what is one thing you want all impact investors to know?

Mercedes: I think impact investors usually — they ask for really detailed metrics on impact that require an external assessment that usually you don’t get up to a certain point of the company. So then there’s a gap on impact investing funding at the beginning. It’s easier to fundraise from traditional VCs than funding from impact investors because of the metrics that they are asking to collect and how strict they are with those methodologies. Sometimes you don’t have the bandwidth to start a super strict evaluation process.

So yeah, that’s what was one of the difficulties I had in fundraising because our product is obviously impact oriented. So for the VCs, I would be really impact oriented and for the impact investors, I would be really VC oriented. So then it was like we were in the middle and that was a little bit difficult.

Mark: A niche from without, which is episode number one, talks about this — as a social entrepreneur, you bear more costs, not only by being a more sustainable and equitable company solving a problem for people at the bottom of the pyramid, but then you also are asked to have all these additional costs around impact measurement, but you’re still supposed to compete in the same free economy.

Mercedes: It’s a lot. And you need to make the business profitable. It’s like, wait a minute, this is a lot. Yeah, that’s my recommendation to really try to build impact investment models that can support pre-seed and seed funding. There’s a gap there.

Mark: Next question. What is one leadership or management skill that you wish you could turn on? And if you could, it would make you a more effective team leader.

Mercedes: Follow people’s — like each people’s KPIs. I haven’t found a way to put specific metrics that are actually working per employee. That’s something that I’m finding really challenging and I would love to find a way to do it.

Mark: When you get that figured out, come back on. We’ll do a follow-up. It’s such a common struggle at this stage. What is a quote, ritual, or activity that you turn to for strength when things are super hard?

Mercedes: Right now it’s talking with these other women. That’s like really working. And also it’s thinking that if I made it through here, then I can make it again. And it’s putting sometimes — just trusting in the flow of life and putting it out to the universe. There’s a point where I say, okay, I made everything I could and now it’s just the universe that will help me because there’s nothing else I could do, I cannot control. So it’s coming back to these practices on more spiritual practices. It’s really thinking that if this needs to exist, then I cannot control all the outcomes.

Mark: But you’re doing all the super hard work to give it the chance of success. Who is another entrepreneur that you think you’ve learned from and you think we should interview on this show?

Mercedes: Yeah, so I think Komal would be great. I think Marlene from Elsa, she’s another Cartier entrepreneur, doing things around sexual harassment in the working place. It’s great what she’s doing. And I get really inspired by her. And then there’s a really good friend of mine. She built a tech company — it’s not just impact. Her name is Pamela. She built a big company called B2Chat in Colombia. I think I will stick with those three at this point.

Mark: And last question. Where can we follow you? Where can we learn more about your incredible work? How can we support you?

Mercedes: Okay, yeah, I’m on LinkedIn. I told you that’s my favorite social media. I’m Mercedes Bidart with B as a boy. And you can follow Kipu — Kipu Latam — in LinkedIn and Instagram. I’m also Mercedes Bidart on Instagram. I have a public profile. And yeah, I think those two are where I always publish what I’m doing.

Mark: Perfect. We’ll add those to the show notes as well, along with everything else, references that we’ve kind of talked about here. Mercedes, so wonderful to talk to you today. I felt like I’ve learned so much. And I know certainly our listeners as well. Incredible work that you’re doing. I love following the journey. Kudos to all your accomplishments. And just very, very grateful for the time that you gave us today.

Mercedes: Thank you. Thank you, Mark. Thank you so much. Bye bye.

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There’s a scene in Julia Taylor’s story that I can’t stop thinking about.

It’s October 24, 2018. She’s sitting on a plastic sofa in an RV parked in Moab, Utah. Her parents are visiting. She’s refreshing a screen, waiting for her very first sale — a $97 course she built in real time for a beta group of women who wanted to learn what she’d taught herself: how to code, how to build a website, how to start a business from scratch.

The sale comes through. Then another. By the time she sits down for breakfast, over 90 women have signed up. That’s $13,000 in revenue for a product that didn’t fully exist yet.

Today, Geek Pack has trained over 10,000 women entrepreneurs in digital skills, reaches more than 150,000 through its community and platforms, and is marching toward a vision of equipping 1 million women by 2030. Julia is a 2024 Cartier Women’s Initiative Fellow, has landed close to half a million dollars in non-dilutive grant funding, and built a brand partnership with Verizon that started with a shared vision and a post-conference handshake.

She’s done all of it bootstrapped. Profitable from day one. No VC. Four people on the team.

In our conversation on the Helping Billions Podcast, Julia was refreshingly honest about every part of the journey — the parts that worked, the parts that didn’t, and the gut-wrenching moments in between. Here’s what stood out.

1. You Don’t Need VC to Build Something That Matters

Silicon Valley has done an incredible job of equating ambition with fundraising. But Julia’s story is a reminder that massive impact doesn’t require outside capital — it requires a clear problem, relentless customer listening, and the willingness to start before you’re ready.

Julia launched Geek Pack by selling a course she hadn’t built yet: “It’s gonna be a beta launch. It’s gonna be a ridiculously low price and I’m gonna build it in real time.”

That’s not sloppy. That’s lean startup methodology in its purest form — validate demand before you build the product. And the economics tell the story: that first beta turned into a multi-million-dollar program.

This matters for impact entrepreneurs especially. Research from Capchase found that bootstrapped SaaS companies outperformed VC-backed peers across nearly every financial metric in 2022, including growth efficiency and margin. And only about 3% of startups ever secure venture capital. For the vast majority of founders — especially those in social enterprise — bootstrapping isn’t the backup plan. It’s the actual plan.

Julia put it plainly: “I love being for profit and I really love owning my entire business because I get to make all the decisions. If I want to create 10 scholarships for people to go through our program, I get to do that. Just like that.”

That’s the kind of agility VC-backed founders trade away.

2. A Big, Scary Vision Is a Business Strategy — Not a Poster on the Wall

In late 2021, Julia enrolled in a program about transitioning from small business owner to CEO. The first assignment was to articulate her mission, vision, and core values.

Her initial reaction? “Come on, like that’s so corporate, that’s so fluffy. Let’s get on to the meat of it.”

She was wrong. And she’ll tell you herself it was one of the most important things she’s ever done for the company.

Her coach gave her a deceptively simple framework for building a vision: include a number and a period of time. That’s it. Not a paragraph. Not corporate jargon. A number and a deadline.

Her first vision was to support 100,000 women in five years. She was terrified to say it out loud. They hit it in two years. So they went bigger: equip 1 million women by 2030 to build profitable, sustainable, impactful businesses.

What makes this powerful isn’t just the aspiration — it’s the operational discipline it creates. Jim Collins and Jerry Porras called this a BHAG (Big Hairy Audacious Goal) in Built to Last. Their research found that visionary companies using bold, clear goals outperformed comparison companies in fourteen out of eighteen cases studied. A good BHAG is tangible, energizing, and requires no explanation. People “get it” right away.

Julia’s version of this? She literally tracks how many times per week she says the vision statement out loud. Her team can rattle it off in seconds. Her community members email to say they’re proud to be part of it.

“One of my KPIs as a CEO is how many times a week do I say our vision statement.”

That’s not vanity. That’s alignment.

3. “Talk to People” Is Not Cliché — It’s the Entire Strategy

We all know the advice: talk to your customers. What Julia actually demonstrates is how — especially when you’re starting from zero.

She didn’t have a research budget. She didn’t hire a consulting firm. She used Instagram stories, a free Facebook group, and an email list. She told stories about her life — traveling in an RV, building a business — and then asked questions and listened to the answers.

“I built this ecosystem where my ideal audience is coming to me telling me what their problems are, and I’m able to talk to them one-on-one.”

The insight wasn’t complicated: women wanted to start businesses but didn’t know how to do the tech part and felt too intimidated to ask for help in existing spaces. Julia had lived this exact problem herself. When she was learning to code, she went to forums for help and got mocked.

So she created the opposite: “I’m going to create a community where there is no such thing as a silly question and where mean people are not allowed.”

The lesson for entrepreneurs isn’t just “go talk to people.” It’s: create a low-friction way for your target audience to talk to you, add value before asking for a credit card, and build in public so people can self-select into your community. What Julia describes is essentially a modern version of the Lean Canvas process — problem discovery through direct engagement, not assumptions.

4. The Hardest Part of Mission-Driven Leadership Isn’t Growth — It’s Contraction

Here’s where Julia’s honesty made the conversation extraordinary.

After explosive growth in 2020-2022 (fueled by a perfectly timed free event called Geek Week right when COVID hit), the business started contracting. Ad costs rose. Consumer spending shifted. Revenue strategies that had worked for years stopped working. By the end of 2023, Geek Pack was six figures in the red.

Julia tried everything. Workforce development. Nonprofit partnerships. Grant applications. She called it the “spray and pray method.” The team went from ten people to six, and then she hit the wall.

“It was April 1st of this year, sitting here at my desk, my husband walks in and I think it had just hit me. And he’s like, oh, how’s your day going? And I just fell apart because I realized that I had to — I literally did not have another option except to let people go.”

What made the layoffs even harder: the team members she had to let go had come from her own community. Women she had trained. Women who believed in the mission.

For mission-driven founders, this is the gut punch that Silicon Valley’s “fire fast” advice doesn’t fully account for. When your team members are also your community members, and your mission is about empowering people, letting someone go isn’t just a business decision — it’s a contradiction of everything you’re building.

But here’s what Julia did right that every founder should learn from:

She was transparent about finances from the start. When the hard conversations came, “no one was surprised because I was transparent with the whole team about the financial state that we were in.”

She knew how her team members preferred to receive bad news. Through personality assessments and direct conversations, she’d asked team members early on: how do you want to receive difficult information? Some preferred reading it first. She honored that.

She kept explanations factual, not emotional. “Very little of it was emotion or feeling. It was all data points.”

She didn’t regret fighting to keep people. “On the people side, I don’t think I would have done anything different because I am very confident knowing now that I literally did everything I could to keep them as long as possible. And that I’m proud of.”

If you lead a team, here’s your takeaway: the investments you make in transparency, trust, and understanding your people during good times are exactly what carry you through the worst times. You won’t know when you’ll need them, but you will.

5. Your “Competitor” Might Be Your Best Partner

One of the most surprising turns in Julia’s story happened at a conference. She was on stage, sharing Geek Pack’s vision — 1 million women by 2030 — when someone from Verizon approached her afterward.

“No way, that’s our vision too.”

Verizon runs a program called Small Business Digital Ready. Julia had always assumed they were competition. Instead, they became one of her biggest revenue streams through a brand partnership.

That one conversation reframed Geek Pack’s entire business model. Julia realized that brands — banks, fintech companies, insurance companies, software tools — wanted access to her trusted community of women small business owners. This created what she calls a “double flywheel”: individuals come into Geek Pack for training and community, while aligned brands pay for access to that audience.

“My audience trusts me. If I say go and use this tool, they probably are.”

The lesson: if you’ve built trust with a specific audience, that trust is an asset. And your biggest growth opportunity might come not from selling more to your existing customers, but from partnering with organizations that want to serve the same people.

6. Invest in Coaches, Even When You Think It’s “Hogwash”

Julia was candid about dismissing the idea of business and mindset coaching early on: “I heard like a business coach and mindset coach and I remember thinking to myself, that is complete hogwash.”

She was wrong about that, too. Her business coach and mindset coach — both of whom she’s worked with since 2017 — have been two of the most important investments in her journey.

“I really thought that was hogwash when I first started. But now I know — I’m very self-aware. I know what I’m good at. I know where my strengths don’t lie and where I can rely on other people.”

This extends to her team. When one team member needed upskilling to manage brand partnerships, Julia invested roughly $8,000 in coaching for her. That investment led directly to a $35,000 contract.

“I’m a big believer in hiring for passion because skills can be taught.”

Research backs this up. As James Clear outlines in Atomic Habits, sustainable transformation isn’t about willpower — it’s about systems and environment. Julia has built both: coaches who expand her thinking, habits that ground her (make the bed, empty the dishwasher — inspired by Admiral McRaven), and a team culture that values learning over credentials.

7. Grants Are Real Money for For-Profit Impact Companies

Here’s a number that should get every impact entrepreneur’s attention: Julia has secured $445,000 in non-dilutive grant funding as a for-profit company. Ranging from $5,000 to $250,000. No fiscal sponsorship required. Cash in the bank, use it how you want.

Her advice is practical:

Look for grants specifically for for-profit impact companies. They exist, and the pool is growing as more funders recognize that profitable businesses can drive social impact at scale.

You need to prove impact. The vision, the data, the women whose lives changed — that’s what makes the application compelling. Julia notes: “We already had the evidence to kind of say this is what we have done; with grant funding, we can do more.”

Hire a grant writer — or at least learn from one. Julia’s first grant — $250,000 from the state of Colorado — was written by a copywriter who knew how to tell the story in narrative form. “She wrote this in story, like a story, and we got the grant.” Julia has repurposed that language for every grant since, including the Cartier Women’s Initiative fellowship.

If you’re a purpose-driven for-profit company and you haven’t explored grants, you’re leaving money on the table.

The Bottom Line

Julia Taylor’s story isn’t about a unicorn exit or a mega-round. It’s about something arguably harder and more instructive: building a profitable, purpose-driven business through sheer resourcefulness, brutal honesty, and a willingness to grow — personally — alongside the company.

She went from teaching herself to code in a vacuum, to building a community of tens of thousands, to surviving the kind of financial crisis that ends most businesses, to emerging on the other side with a leaner team, a clearer strategy, and a partnership model that could scale the mission further than she ever imagined from that RV in Moab.

The through-line? She built it the hard way, on her own terms, and she owns every piece of it.

For the impact entrepreneurs, funders, and business leaders reading this: Julia’s path is proof that scale isn’t the only way. Sometimes the most powerful thing you can do is build something small, purpose-driven, and profitable — and let the impact compound from there.

Want to Learn from Purpose-Driven Founders?

Subscribe to the Helping Billions Podcast.

Have a founder we should interview? Have them apply here, or nominate them here.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit helpingbillions.org

In 2014, Vriko Yu was diving weekly off the coast of Hong Kong when she watched a patch of coral community she knew intimately disappear in just two months.

“That is the moment when I realized what is really happening in the water is no longer what I read about the books,” she says. “It really is happening at a much faster phase than I’ve ever imagined.”

That moment launched a decade-long journey from marine scientist to social entrepreneur—one that includes four consecutive years of failure, a pivot to 3D printing, and a company that’s now grown 19x to break $10 million in revenue.

But here’s what makes Vriko’s story worth studying: she built Archireef without a traditional business background, without a refined founder’s playbook, and with what she cheerfully admits was “delusional optimism.”

And that, it turns out, might be exactly what ocean restoration—and most hard-tech climate solutions—actually require.

“This Is Probably Where We Stop”

Before Archireef existed, Vriko spent eight years as a coral restoration researcher. She studied coral physiology, genetics, connectivity. She published papers. She moved the science forward.

And she hit the same wall every academic eventually faces.

“Our mission as a scientist is basically finding the problem, find a solution, publish, and then we move on,” Vriko explains. “I wasn’t satisfied at that point.”

The gap between discovering a solution and scaling it haunted her. Conservation nonprofits and government advisors were doing critical work—but there was something missing in how solutions actually spread.

“I think when we really, really want to make a change to reverse the damage, it really needs to get all hands on deck,” she says. “And I think that kind of opportunity and the pathway to really get everybody together was kind of missing.”

So she co-founded Archireef as a vehicle to close that gap—turning academic innovation into commercial traction.

The 4-Year Failure That Made Everything Possible

Here’s the part of the founder story that usually gets glossed over.

Before the 3D-printed reef tiles that made Archireef famous, Vriko and her collaborators tried the conventional restoration methods: coin grid blocks, metal rebar, standard approaches used across the industry.

They failed. For four years straight.

“What is really painful to see is actually a year after, in year two, you see that the survival rate dropped down to 20% and years of work just gone to essentially nothing.”

That consistent failure forced a fundamental question: What do corals actually need to survive?

The insight was elegantly simple. Trees have root systems that anchor them before they grow upward. Corals don’t—they only grow upward without that stability.

“So for us, what we really want to do is essentially using these 3D printed reef tiles to essentially function as the root for corals,” Vriko explains. The tiles give coral fragments elevation from sandy bottoms and the stability they need to establish themselves.

The results speak for themselves: 95% survival after three years, with older sites retaining 90% survival at five years.

The lesson? Four years of failure wasn’t wasted time. It was research and development disguised as disappointment. The failures taught them exactly what traditional methods couldn’t provide—and pointed directly toward what would work.

“I Was Delusionally Optimistic”

Here’s where Vriko’s honesty gets refreshing.

Building a hardware company in a nascent market—ocean restoration as a commercial enterprise—doesn’t pencil out on a spreadsheet. At least not in the early days.

“If I were an accountant and look at every possibilities, I was like, the conclusion is your success rate is probably 0.0001%. Don’t do it.”

She did it anyway.

“I guess in a way, most founders also out there believe in your own and your own effort and your team’s effort in changing that possibility,” she says. “It’s no longer just if you’re looking at this paper and just on the stat, yes, it doesn’t really make a lot of sense, but I think at the end of the day when it comes to implementation, it’s a lot about people.”

The research backs her up. According to Harvard Business Review, experienced founders with strong teams consistently outperform their statistical odds. And first-time founders have an 18% success rate—not great, but far better than 0.0001%.

The difference? Betting on people rather than projections.

Vriko’s team now spans 17 nationalities across 20+ team members. They went from a painted warehouse in Abu Dhabi—”we were vacuuming the floor with a lot of dust, so we essentially built it our hands”—to scaling toward industrial-grade manufacturing.

The math didn’t support it. The humans made it happen anyway.

Find Your Local Champion (They’re Not Who You Think)

When Archireef expanded from Hong Kong to Abu Dhabi and Saudi Arabia, Vriko needed to build trust in entirely new markets. Different cultures, different regulatory environments, different stakeholder networks.

Her advice is counterintuitive: don’t just target the domain experts.

“The champions that I found are usually not necessarily the one from a domain expert,” she says. “The super connectors are usually the ones that are sitting in the peripheral.”

These peripheral players—often from embassy backgrounds or cross-sector roles—understand how to navigate different stakeholder perspectives. They know the politicians, the business leaders, and critically, they understand everyone’s incentives.

“They could be coming from an embassy background where they know how to talk to the politicians, they understand the perspective of different stakeholders and understand what are their pain points and what would be their incentives to be part of this solution.”

Her approach: lead with mission, not money.

“Be genuine. There’s no hidden agenda. We are all doing this, lay everything out. Here’s the mission, here’s the toolbox. If you buy into that, if that’s something that is persuasive, somebody will come onto you, be on your side and make it happen because they believe the mission that you’re driving.”

The result? “Mission first and implementation just comes very naturally.”

This aligns with research from McKinsey on public-private partnerships for nature: successful collaborations require trust and alignment before they require contracts.

“Don’t Assume There’s Common Sense”

Managing a team of 17 nationalities means throwing out the standard HR playbook.

“In something like that, it’s extremely difficult to lay out an HR handbook that says what you should do. There’s no way that you can operate that way.”

Vriko’s framework is deceptively simple: don’t assume common sense exists.

“There’s no common sense because people coming from different backgrounds, different experience would have a definition of common sense. So don’t assume everything—just lay it out very clearly.”

This isn’t pessimism. It’s practical humility. When you stop assuming shared context, you start communicating more explicitly. Expectations become clearer. Disappointment and frustration decrease because you’ve front-loaded the alignment work.

For management resources, Vriko recommends Scaling People by Claire Hughes Johnson (former Stripe/Google executive). It’s packed with frameworks for understanding different working styles without stereotyping—and practical templates for feedback and performance conversations.

Her biggest personal growth edge? “Don’t talk about logic all the time. Be empathetic.”

For a scientist-turned-founder, that’s a significant admission. And it points to one of the hardest transitions any technical founder faces: moving from being right to being effective.

The Business Model Hidden in the Science

Here’s where Archireef’s model gets interesting for impact entrepreneurs trying to figure out revenue.

They don’t just sell reef tiles. They’ve built a four-stage product cycle: site assessment, habitat modeling, hardware deployment, and ongoing monitoring and reporting.

The scientific method became the business model.

“All of our clients actually work with us for a minimum of three years for data subscription,” Vriko explains. This recurring revenue isn’t just good business—it’s responsible science. You can’t claim restoration impact without long-term monitoring.

But why do corporations pay for this?

Regulatory pressure. Frameworks like TNFD (Taskforce on Nature-related Financial Disclosures) and IFC Performance Standard 6 are pushing companies to disclose and manage their nature footprint. Banks, developers, port operators, commodity companies—they’re all facing increasing scrutiny on biodiversity impact.

“We’re primarily focusing in the geographies and the industry that are at the forefront of having the nature risk,” Vriko says. “These are really the pioneers and also the ones that are really at risk if they don’t manage nature risk well.”

The alignment is elegant: Archireef helps companies demonstrate genuine impact (not greenwashing), while building a sustainable revenue model that can actually scale ocean restoration.

Visitors in Your Journey

One of Vriko’s most honest reflections is about people leaving.

“There are visitors in your journey. It sounds very cliché, but it really is. There are people that will be with you from point A to point B, and there will be different group of people to come with you and to join your journey from point B to C.”

Firing people—especially early team members who believed in the mission—remains one of her hardest challenges.

“Firing and saying goodbye to team members who really has been with the journey with you, especially since the early stage, it has been and still is one of the most difficult lesson.”

Her approach: honesty over comfort, but always with the mission as the anchor.

“If somebody’s not doing great, then don’t sugarcoat it, but also don’t make personal comments. Just focus on the fact. If it is working, it’s working. If it’s not working, I think that person would need to know as well.”

And here’s the surprising part: she’s still in touch with most of them.

“Once the emotion is gone, the reason why they were with the company in the first place is because of the mission. A lot of people actually see that this was probably the best outcomes for the mission.”

The Cat Test for High-Stakes Conversations

When emotions run high in difficult conversations, Vriko uses an unusual mental technique.

“I have two cats, and at times I just want to be like, okay, what would my daughters, my furry daughters, like Gaga and Asab would be thinking if they are in the middle of this conversation, almost like force myself to be the third person.”

It sounds whimsical. It’s actually a powerful reframe.

By imagining a confused outside observer, she pulls herself out of the urgency and frustration of the moment. It creates the distance needed for empathy—especially important when your instinct as a scientist is to lead with logic.

“It’s like, okay, look at those cat faces. They’re just confused. They just don’t understand because in their head, in their mind, one plus one is not two.”

The Takeaway

Vriko Yu didn’t set out to become a founder. She set out to restore coral reefs. The business became the vehicle, not the destination.

That ordering matters. It explains why she could tolerate four years of failure. Why she bet on 0.0001% odds. Why she leads with mission when building partnerships.

Her parting thought comes from Jane Goodall: “No matter how small the little things that you’re doing, multiply by millions times, billions times, it matters.”

Ocean restoration won’t happen through one company. But it might happen through the model Archireef is proving: that you can build commercially viable solutions to ecological collapse, attract private capital to conservation, and still stay true to the science that started it all.

Sometimes delusional optimism isn’t delusional at all. It’s just the appropriate response to problems too big for spreadsheets.

Connect with Vriko: LinkedIn | Archireef

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Have a founder we should interview? Have them apply here, or nominate them here.

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Two years ago, Ella Peinovich wasn’t sure her company would survive.

Today, Powered by People—her platform connecting 500,000+ artisans across 100+ countries to retailers like Nordstrom, Bloomingdale’s, and West Elm—just hit its first million-dollar revenue month. They’re on the path to profitability. They recently became B Corp certified.

What happened in between is a masterclass in what it actually takes to build a world-positive business that lasts.

The Conviction That Started It All

Before Powered by People, Ella built SOKO—a jewelry brand employing 2,500 artisans in Kenya to produce high-quality pieces for the US market. She sold into major retailers, built sophisticated supply chains, and eventually exited.

But she kept seeing the same problem: a single brand can only create so much demand. If she really wanted to maximize impact, she needed to build infrastructure that could serve thousands of brands like hers.

The deeper conviction came from watching what technology typically does to workers. On a visit to a watch factory in China, she saw one person managing six CNC machines—doing work that used to employ 36 people. The productivity gains went to the owners. The workers were left out.

“Why does that have to be?” she asks. “Technology and the gains of technology really need to be shared with everyone... you’re benefiting people with technology, you’re not displacing them with technology.”

That belief—that technology should amplify human creativity rather than replace it—became the foundation for everything she built next.

The Weight of Purpose

Here’s what rarely gets discussed about social entrepreneurship: it’s actually harder than building a regular business.

Not just because markets are tough. Because when you claim to stand for something—sustainability, justice, dignified work—everyone holds you accountable. Your investors. Your customers. Your own team.

“Most businesses that are just for profit don’t have to defend why they call themselves the best of something,” Ella observes. “It’s a sales pitch. For us, it’s not. It’s how we work.”

Her team, she notes, are smart, passionate people who “keep us accountable to this mission.” They challenge the company constantly—which is an asset, but also means every decision carries extra weight.

This is a feature, not a bug. But it makes the hardest decisions even harder.

When Everything Changed

Post-COVID, Powered by People was thriving. They were the go-to online destination for global artisan supply. Their wholesale model—buying inventory, attending trade shows, acquiring customers—was working.

Then came logistics nightmares. Tariffs. Anti-globalization sentiment. A retail sector contraction that squeezed everyone.

The business that had worked stopped working.

Rather than abandon the mission, Ella rebuilt the vehicle for it. In January 2024, they completed a full transition: from wholesale (buying inventory, customer acquisition costs, physical trade shows) to a pure digital marketplace (no inventory risk, no CAC, retailers integrate directly).

“We were doing a lot of hedge bets in the early days,” she admits. “We’ve just been shrinking and focusing on what actually worked.”

This is true for so many scale-up founders: subtraction leads to scale, not addition.

The new model is leaner, stronger, and more scalable. Artisan products appear directly on Nordstrom.com. Orders flow through automatically. Powered by People takes a cut without ever touching inventory.

Same mission. Radically better execution. According to Ella, “I feel better in the business. It’s easier, it’s stronger.”

The Framework That Keeps You Focused

When you’re a purpose-driven founder navigating hard times, the temptation is to compromise. Chase a different market. Dilute the mission. Just survive.

Ella’s protection against that drift? Jim Collins’ Hedgehog Concept—a framework she returns to for every major decision.

The idea is simple: find the intersection of three things—what you can be best in the world at, what drives your economic engine, and what you’re deeply passionate about. Then ruthlessly stay inside that intersection.

For Powered by People, that means: technology that empowers people (not displaces them), beautiful products consumers actually want, and the independent artisan sector they love serving.

“We don’t want to be disingenuous to any one of our sort of critical values,” Ella explains. Every opportunity that doesn’t pass all three tests gets a no—even if it would make money.

This discipline saved them when the market turned.

The Hardest Decision

To fund the pivot—to survive long enough to prove the new model—Ella had to make cuts. Two years in a row, she led layoffs at a company whose entire mission is providing dignified work.

“When you’re a business that takes a lot of pride in employing people and providing dignified work,” she says, “that is the hardest bit of the job.”

She felt the weight of it personally. These were people who believed in her vision, who invested in the culture she built.

“It just made you feel like, wow, I let them down, I let myself down.”

But the math was brutal: if the company dies, the mission dies. The only way to serve 500,000 artisans long-term is to survive short-term.

“You have to fill your cup before you can overflow for others.”

She wasn’t asking anyone to sacrifice more than she would. She wasn’t the highest-paid person in the company. She took haircuts before asking others to. When the cuts came, she led from behind—heads down, doing the work, giving space to a team that needed time to process.

“There was a period there where, to be honest, I don’t think they wanted to see me around.” She was leading from behind, heads down, and she told herself: “This is also okay.”

The rebuild wasn’t about rallying speeches. It was about results.

“Success honestly is the only thing that allows us to really replace any of the sort of shared trauma in an organization.”

She kept her head down, kept working, kept producing. And eventually, the numbers turned. The people who stayed saw the million-dollar months arrive. They saw the model working.

“People have actually said, ‘You were right. This was the right decision.’”

The Proof

Today, Powered by People serves over 3,000 businesses representing roughly 500,000 artisans from more than 100 countries. Their products reach 200 million consumers monthly through partners like Nordstrom, Bloomingdale’s, West Elm, and Anthropologie. Over 65% of their network is women-owned. 60% serve rural populations.

They hit a million-dollar revenue month in July. Profitability is guaranteed.

And that freedom matters—not just financially, but philosophically.

The path to speaking truth runs through sustainability. You can’t be radically honest when you’re always fundraising.

What Ella Wants Founders to Know

A few things she shared that stuck with me:

On vetting investors: Every conversation is two-way. If an investor sees your focus on impact as a limitation rather than a competitive advantage, “that is a clear signal to me that you’re the wrong person.”

On managing your board: Keep them informed, but don’t ask permission. “I’m going to let you in on everything that’s happening, but pretty much as I’ve already solved it.”

On finding honest feedback: “I don’t want people to just tell me what we’re building is great. I think that’s a disservice actually to entrepreneurs.” Seek out people who will tell you the truth—then keep pushing until you hear the hard stuff.

On who you surround yourself with: “Be ruthless down to the friends that you choose, the partner that you have in life, the investors that you surround yourself, the advisors that you have.” Find people who inspire you and want to build you up.

The Mission Never Changed

Ella didn’t pivot away from her purpose. She pivoted toward it.

She found a model that could actually sustain 500,000 artisans for the long haul—instead of burning out trying to do it the hard way. The marketplace flywheel is faster, lighter, more scalable. More artisans can participate. More retailers can access the catalog. More consumers can find products that align with their values.

“We’ve never steered away from our mission,” she says. “How we deliver that has evolved a lot.”

That’s the real work of building something that matters: holding the mission constant while letting everything else evolve.

The mission is the constant. Everything else is variable.

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Transcript

Mark Horoszowski (00:13:26):

Ella, welcome to the Helping Billions podcast. Really excited to have you on the show today.

Ella Peinovich (00:13:40):

Great to be here. Thank you, Mark.

Mark Horoszowski (00:13:42):

Yeah. So we’ve stayed in, I’m going to say in touch over the years, but it’s been kind of like, oh, I know a lot. And then we don’t catch up for a while and then we kind of catch up again. And so from afar, it’s been really cool to see this evolution, not only of Powered by People, which I really want to dive into, which is of course your current work, but even the journey of how you got here, before Powered by People, you were working in this space as well of helping smaller artisans and producers find and access markets for their products so that they can grow more sustainable livelihoods. At least that’s my interpretation, but can you kind of talk me through of like separate from the actual business that we’re going to dive into, what here gives you the kind of personal fire to chase this mission that you’re on?

Ella Peinovich (00:14:36):

Yeah, you’re right.This has been a life mission and I appreciate, Mark, that you recognize you’ve been probably dotted my life in many ways along that journey. So it has been an evolution from Soko when I built my own independent jewelry brand and then to ultimately building Powered by People, which is a platform for other independent brands like Soko. But it has all been built from a singular mission. I came out of MIT, I studied systems design and I really believed that technology needed to be used within the creative sector to enable human capital rather than displace it. I kept wanting to build a business that I wanted to see in the world. So it was very much driven by my own sort of personal mission to have more sustainable options, local options. As a consumer, I wanted product that ultimately represented my values. And so I created my own brand, saw how difficult that was to sort of build your own market opportunity, be the financier, the logistics manager, the quality manager, and then ultimately decided after exiting and selling Soko, I wanted to build a platform for other independent brands so that ultimately there was a bit more consolidation in the space.

(00:15:41):

And all still with this mission of how do we use technology to, in Soko, it was really in the production management, the quality management, the traceability of supply chains within that product. We were able to produce mostly on demand product for our consumers and we’ve translated that into Powered by People by creating a marketplace platform for independent brands to digitize their businesses, get them online, bring them visibility, finance those transactions, and ultimately support their fulfillment and competitive nature into the US retail market today. So all still very much with this mission of how do I support other independent brands and artists who I love and appreciate. And that’s kind of from my own personal sort of family history. My parents are both artists, but kind of bringing in my skillset and something that was uniquely what I believe to be missing in the world, which is how do you apply technology and robust supply chain systems and innovative business models within this sector to really scale?

Mark Horoszowski (00:16:37):

I love that you brought your parents into it. I want to click just like a little bit deeper because one thing that’s always interesting to me is like, like you say some of these things, like I wanted to buy products that align with my values and were more sustainable and like I knew who made them and where they were made and how they were made. I think a lot of people want that, but you took this like very big step of being like, “I’m actually going to go produce that. “ What is it about, I don’t know, do you have like an experience from back in the day or what was the thing that got you to go out and actually take such a big

Ella Peinovich (00:17:11):

Leap? Yeah, I do think there’s a value set that I learned very young and that came from my family that ultimately if you identify a problem, then you’re likely the best one to solve it. It is in identifying a problem that oftentimes you recognize that there’s a gap. And so I think that that is something that I’ve taken through everything that I do. I think actually this is summarized very well when I’m an Ashoka fellow and Bill Drayton, he actually had basically said this and I’m going to miss interpret, but how I interpreted really this Ashoka Fellowship is that you learn at a young age, at some point between 12 and 14, that you have agency, that you learn that you are the change maker, you’re the one that can implement the change in the life that you want to see. And I do think that that’s something that has continued to stay with me from my childhood, whether it was mission trips or it was ultimately just working and volunteering in my local community, that I wanted to bring my skillsets and something that was uniquely my ability to something that I was passionate about and ultimately something that could make a big change.

Mark Horoszowski (00:18:14):

Yeah. Thank you for sharing that. It’s fun to kind of like go back in time just a little bit. There’s probably a whole podcast just about that, but what we really ultimately want to get into is like, how do we build these businesses that kind of live in this tension between like purpose and sustainability and profits. But before like really getting into the current of Powered by People, your story to me is so interesting because you built a brand and that is hard. You did this once and I’m sure you have some battlescars from that experience and then you were like, “Cool, there was this bigger problem that I saw and like I’m going to go back into a bigger yes market, yes, potential for impact, but also bigger challenge.” What for you was like that impetus to go, “Okay, I saw all these challenges that small producers have.

(00:19:09):

I want to go build a platform in order, make it easier for them to get bigger and mass distribution.” What motivated you to take that leap into this bigger opportunity and challenge?

Ella Peinovich (00:19:22):

Yeah, I think you even said it, right? I thought building a brand was the best way to support a network. And actually inside Soko, we had 2,500 independent artisans that were producing for our brand and I’m wearing some of it today. So it was a jewelry brand selling into the US market, all handmade in Kenya, now gold plated, it’s a high quality product that was made in volume and it was made to highest quality, but from this distributed network. And I have so much pride in what we built in that organization, but it did meet a point where the demand is limited for a single brand. And I had actually built the roadmap inside my last year in Soko for what is now powered by people, which is how do you take a platform and a manufacturing solution is what we had inside Soko. And ultimately, how do you open that up to other brands?

(00:20:13):

How do you create more of a platform and a technology platform where the efficiencies that we kind of learn again were able to be then applied in a larger and bigger way. And as an entrepreneur, I think Mark, we all sort of ask ourselves like, “How’s our time best spent?” We are visionaries, we’re seeing where it’s going, we see and we can feel the pulse of traction and momentum. And I think there’s a level of ambition there. I want to also apply myself to being and having as large of an impact as I possibly can in the world. And I saw a limitation to that within a single brand. And so ultimately decided I had to exit my own brand in order to not be a competitor, perceived as a competitor starting a platform, but ultimately as an asset to the sector that I could build this consolidation and resource sort of platform for other independent brands like my own in order to achieve the same level of success that I had in my own business.

(00:21:05):

And so I do think there’s a lot of battlescars in that, but I think there is just this, how do you pick a problem big enough? And again, where you feel that you want to apply yourself to that problem and it’s a big enough market, there’s enough independent artisans around the world, there’s a big enough consumer market that can really hold this mission at a really global scale. And so that was something that was really interesting and challenging to me.

Mark Horoszowski (00:21:31):

Yeah. You labeled something there, which is like, as entrepreneurs, there is a lot of effort that goes into building these things, right? And like if I fast forward in life, what do I really want to be known for? What do I want to accomplish? What do I want to look back and know that I at least gave my best effort to try? And I think there’s a theme of that that I think I’ve heard in these conversations and it’s a cool kind of like imagine the future and then look back, right? You’re going to regret the things that you didn’t do and here’s just like another story that you’re sharing of like, I went for it and I did it. And now let’s talk a little bit about like current reach and volume. So talk to me, how many different artisans are you supporting and also like what are some of the measures that you kind of look at to say, “Yeah, this platform’s really working.”

Ella Peinovich (00:22:26):

Yeah. Well, ultimately I think we today support over 3000 businesses. We estimate around 500,000 individual artisans from over a hundred countries around the world are currently represented in Pard by People’s Digital catalog. We then provide US distribution for just a handful of those brands in our drop ship distribution into Nordstrom’s Anthropology, the West Elms. We’re just launching with Bloomingdale’s right now. So some of the biggest retailers across the US market are ultimately our distribution channels for this global, so artisanal

(00:23:01):

And really handmade and independent, I would say. So it’s really a bridge of independent brands from a sustainable home. We look at clean beauty and then ultimately independent fashion as kind of our core categories of brands from around the world that we want to provide retail distribution for them into the US. And so it’s about, we estimate around 200 million consumers that actually can view our products based on our distribution network today, every single month. And that’s now with this kind of global network that we’re able to really provide this digital access for. But I think back to success, it’s always, I think the reason why I’ve chosen a for- profit business model in many ways, as much as I’m purpose driven and I think that that is ultimately what gets me up and motivates me every day is really supporting my community, my people, the artists, the creatives, the designers of the world that I think just really express humanity.

(00:23:53):

They are the people that I think deserve the most, right? And I’m a technology person, I’m an engineer, a builder, and a designer in my professional career. And I think ultimately that’s what I’m bringing to the equation here. And so I think ultimately at the end of the day though, it’s around providing economic inclusion. It’s around providing sort of business growth for these individual businesses. And I’ve always believed that, again, if I can help other people to be bigger and sell more and be more profitable, ultimately we can be successful. So that Venn diagram of our impact and our business success are 100% aligned. But ultimately, it is sort of a monetary incentive that is a magnet that pulls people through adopting new business tools, adopting new financial services, buying a mobile phone maybe for the first time, or implementing and utilizing a new technology platform like Powered by People.

(00:24:51):

They’re willing to do that if they know that there’s a monetary incentive. And so I think it is a motivator for everyone. I don’t think I’m misaligned with my community and my impact goal because we have a for- profit mission. I think it’s actually what they expect from us as well is that they’re able to build their business and be successful. And so I just think commerce and consumer driven, demand driven solutions, market driven solutions are a great way to sort of test and validate our business model, but also that the products that we have are ultimately the most desirable in the world and there’s just not that option and choice. And so we provide that to consumers as well. And I think that alignment is something that I think fuels everyone, that the pride that we get from having this beautiful product listed on Nordstrom.com is incredible.

(00:25:31):

And that’s very motivating for me. Yeah.

Mark Horoszowski (00:25:33):

Yeah. I could see how it would be. And I mean, I think if you go talk to your average consumer, right, I think they would say, “Yeah, I’d rather have something that aligns with my valueses sustainable and I know who made it. “ If that choice is often not there, right? You introduce points of friction and then drop off is there. So it seems like you’re really getting rid of that friction. And if you go to these, you said over 500,000 artisans. I know that’s through a smaller number of brands, but it’s still a massive reach. Similarly, like these artisans, these producers, this is their livelihoods, right? They’re generating income here. And so of course they want to grow sales. And I think one thing that strikes me about your business model as well here is that, and if I understand it right, is that the producers, the artisans, you benefit when they benefit.

(00:26:19):

They have to actually make sales in order for you to start recognizing any profit. That’s correct?

Ella Peinovich (00:26:24):

That’s right. Yeah. So our business model, they’re able to use the technology for free. And actually this was kind of learning from being a global social entrepreneur is that really having a SaaS solution and subscription model in a market where a lot of our artisanal network when we first started out was very much the handmade artisan, they didn’t have a credit card to go online and pay for a subscription. And so it was entirely success based. We now are global. We now also represent US independent brands and Canadian independent brands, these small women owned businesses across the globe, indigenous based businesses, just independent retail is really what we focus on. So there’s now more of that capability of online subscriptions, but ultimately that wasn’t where we started. And so I think we just tied it to success. They’re able to access this market and when we get a sale, we take a portion of that sale and distribute that to them.

(00:27:12):

But we provide the distribution, listing digitally, cataloging their product, getting them up online. We then manage payment solutions for global artisans as well and even manage the logistics solution. So it’s quite a bit of value addition that I think we’re doing that ultimately would not be possible as an independent brand on their own, just really cutting down costs and consolidating where we can.

Mark Horoszowski (00:27:32):

Yeah. Well, and I think what’s so interesting here is you live that, right? And I think that’s such a entrepreneurship fundamental is like those that have experience facing the problem are the best positioned to then actually build the solutions to those problems. And I think that speaks here to business as well. I’d love to go back in time a little bit to like, I don’t know, first dollar, right? Do you remember when you got your first validation that this business model was really going to work?

Ella Peinovich (00:28:12):

Yeah. Ultimately, our first customers were really our friends. I ultimately was a brand owner and then came back and was trying to build a platform for brands. And so it was my own business partner was my competitor in the market. And so we went out into the market and we asked people to join our platform and we said, “We have access. We’ve built a brand. We know what it takes to sort of build this market access, have faith in us.” And we actually had a lot of early, our first 500 brands that joined us ultimately were those that were through our personal networks. It’s now expanded beyond that, but ultimately it was in building a reputation and maintaining good relationships with either people in the sector or investors that five of our investors in my last business came in and seeded this business. So I can definitely say that it was through building good relationships and having had a level of success and trust that was built up in the market that ultimately allowed us to kind of get a kickstart into this one, which is why you are able to take on that bigger challenge I think in many ways and kind of continue to go to the next level because I wanted to solve the problem that I had when I was running

(00:29:20):

Business. And so I knew how to pull in other brands that were having those same challenges. There wasn’t one thing I think that kind of kicked it off. I do love still, I would say going to trade shows because all the brands that are there, they’re trying to break into the US wholesale market. And I do remember going to my first trade show when I had not my own brand, but I was representing many brands, just the amount of pride I had in having all that product there and that they were bought in

(00:29:46):

On this platform together. But then trying to get people to understand this as a technology platform was probably like the retailers that were passing by, that was a little bit of a harder sell. And so I definitely think it took us a little while to figure out the product market on the retailer side, but we We’ve done that now and again, have some of the best sort of retailer enterprise level retail partners in the market today, Nordstrom’s, the Bloomingdale’s. So I think we’re quite excited about just those proof points continue to bring more. We just launched with Design Within Reach as an architect, professional architect myself and designer. I think that was something that I was really proud of. So I think seeing this all kind of come full circle has also been really exciting from those kind of early days and those early conversations.

Mark Horoszowski (00:30:30):

Yeah. Very cool. Can we kind of go, because I think it’s easy to say like, oh, I went and I built some trust and I got some of my friends or peers in the industry on board. But really like in the weeds on this one, because it’s still a big ask, right? You’re putting yourself on the line. They’re like, “Well, even if I know you trust you, it’s still like an unknown thing.” If you kind of look back, what made you successful at building these early partners when Proof was not there yet?

Ella Peinovich (00:31:02):

Yeah. I think marketplaces in particular I think are very challenging because you have to build ... The question is always which side are you building first? Is it the supply side or is it the demand side? And I think where’s the biggest bottleneck? I think everyone’s looking for demand, so it was a little easier to get our friends on board to join the platform. But ultimately it was, I think there are always those early adopters, those visionaries. I remember my mother ran a retail shop. She was an artist and she had a retail shop. She was our first customer in my brand, in my Soko jewelry brand. Similarly, actually empowered by people. One of the retail shops in my hometown was the first one that bought wholesale from us. And so it was a great way for us to sort of have that personal dialogue with them and say, “How’s the product selling?

(00:31:47):

Did the platform work? What were the challenges that you had? Did the payment reconciliation happen in the way that you thought?” And so I definitely think that they were a lot more honest getting into a conversation. I think as an entrepreneur, one, we always are trying to understand really the root cause of whatever problem you’re trying to solve. I don’t want people to just tell me what we’re building is great. I think that’s a disservice actually to entrepreneurs is just to tell them, “Oh, what you’re doing is amazing.” Because I think a good entrepreneur is curious. Good entrepreneurs really trying to solve a real problem. And so I’m always like, “Who’s incentivized to actually tell me the truth?”

(00:32:23):

Okay, one of my family friends who ran retail shop in my hometown, I’m going to give her $500 of credit to buy the first order of goods and see how she likes it. And what she picks and what she chose to pick and what she didn’t choose to pick, understanding that, having too large of images that didn’t load when she was in this small town, rural town that the internet that she had didn’t allow her to load our services and the best user experience as well. So all these little nuanced things that ultimately came out of having really a hands-on personal experience in like small buyer circle with our first kind of users was I think really, really critical. But also I think just finding those people around you that one wants you to succeed. And ultimately I think that that was the case, this was a family friend, but that also want to tell you the truth, that aren’t just going to tell you what you want to hear.

(00:33:13):

And one as entrepreneurs always look at incentives, like who’s incentivized to tell you the truth and then ask hard questions and expect to get bad feedback. Don’t actually persist until you get bad feedback because that’s when you’re getting to the honesty of it. I love that. And then ultimately being able to pivot on it, act on that, change things, go back and tell someone, “Hey, I listened to you and I improved on this. How is this experience now?” And actually I’ve always said running a consumer business, that’s when you really get a customer for life is actually when they complain about something and you solve that problem for them and they see that you listened and you cared, that alone will build more loyalty with the customer if you solve their problem than the fact that they had the problem in the first place. So lean in to those that are your probably biggest opposition in the early days because they can be your biggest fans as well and your biggest advocates.

(00:34:02):

And I think that’s always been, I think something that I’ve kind of thrived on is the good and the bad feedback.

Mark Horoszowski (00:34:08):

Yeah. Yeah. I love that. I think there’s that, it might be a Bill Gates coat where you learn the most from your most unhappy customer

(00:34:16):

And if I remember from, there’s like a Disney principle in the theme parks, it’s like the staff is like specifically trained to be on the lookout for when things go wrong, like a kid drops an ice cream, that’s where you can insert like moments of magic. And so yeah, really interesting to see you kind of applying that obviously in a very different setting than a theme park, but using that as like really an opportunity. But I think just to emphasize that point of like curiosity, it seems like you had so much curiosity really on both sides. And here is where I’d actually like to switch a little bit, kind of talking about getting some of the first brands on the platform, but then you had to go convince Nordstrom and Etsy and these others to be like, “Hey, distribute this. Let us put these products here so that your consumers can do that.

(00:35:02):

“ In those like very early stages, how did you get your first like big name brand to agree to that?

Ella Peinovich (00:35:10):

Yeah. I think we were very good about building a brand from day one. My business partner, Allison, is phenomenal at this. She actually has built brands, sold them within Club Monaco and sold Ralph Lauren. She has had a lot of experience at this very large scale kind of retail level brand experiences. I think we really, from day one, acted really big. And I think that how we showed up at trade shows, we publish our own magazine, the way that our website is, it is entirely curated. And I have to say Allison has that beautiful touch to everything, right? And we try to catch up to that with our service level and our technology implementation. Those things take a little bit longer, but the brand is something that we were very intentional about who we brought in and who we partnered with on our supply side, high quality, very well curated in a sense.

(00:36:04):

And we’ve been able to expand beyond that, but it allowed us to build this incredible foundation. And so I think the trust was there just visually upfront and then we were able to deliver on that. So that gave us West Elm as our first major client. They actually were the ones that tested out our first sort of drop ship implementation. We then bought all the product to curate that experience for them. We no longer buy product from our suppliers. We actually now just landed in our fulfilling that through kind of a warehouse sort of Atlanta. But ultimately in the early days, we wanted to control one side of the transaction to make sure we had really heavy retail customers. And so I think that was something that we were always kind of ... Which side of the coin were we really trying to leverage or build with?

(00:36:45):

And in the early days it was build a technology platform and distribution and catalogs for our maker community and consolidate this incredible catalog. And then it became about retailer acquisition. And that was kind of the marketplace, kind of double sided piece of this. And now it’s been a natural flywheel. We also had to convince some of our early brands that were partners of ours. “Hey, where are you already getting orders? Can we somehow support you with financing? Can we support you with the logistics, the payments,

Mark Horoszowski (00:37:10):

We’re

Ella Peinovich (00:37:10):

Not going to charge you commission, but can we somehow get embedded into these transactions?” That was ultimately also where we found that because our tools were more effective, they started bringing on their buyers into our platform for use order management, ease of payments and logistic management as well. So that was kind of the flywheel for us to be able to say, “Okay, we get on great brands. We did that very well in the day one, but then how do we get them to help us attract great retailers?” And now that we have great retailers, we’re only getting more amazing brands. And it’s that the marketplace flywheel, good assortment attracts good buyers, good buyers brings on great assortment. And then now we’re just really on performance optimization. So it’s just an evolving, snowballing, really incredible flywheel that we’re on right now in our scale.

Mark Horoszowski (00:37:57):

Yeah. Gosh, so many places we could take the conversation, but I think the one that I want to start moving towards is some of these tension elements. And I think the ... I want to use the retailer as an example, right? Where from the impact side, I could imagine that you have a couple uphill battles here, right? It’s like, hey, there’s this really strong mission that you have to support these artisans and more sustainability into products and you are fighting uphill because people don’t totally understand like, wait, are you yourself a producer? Wait, but you’re a tech platform and how exactly does it work? And then there’s like a novel, I think one of your innovations as well is how money is exchanging hands and where you’re inserted in that conversation. So you’re kind of doing a lot of innovations at once in order to bring this to market.

Ella Peinovich (00:38:55):

Yeah.

Mark Horoszowski (00:38:55):

What was the hardest part about that? And ultimately, how did you end up navigating probably the confusion that some of these brands would have in terms of like, wait, but what are you actually as powered by people?

Ella Peinovich (00:39:10):

Well, one, I think it was never about us. I think as much as our brand kind of speaks to a sector and an ethos, I think we’ve always led with what problem are we solving for you in our partnership? So admittedly, we’ve made a lot of evolutions. We’ve never steered away from our mission. Our mission has always been, how do we provide independent brands, mainstream retail access? How we deliver that has evolved a lot. And so to your point, we actually, in our organization early on, like again, we had to be the first buyers so that we could acquire our supply side. Once the supply side was really consolidated, we had to, to get on that big major retailer, as I mentioned West Elm, we had to buy the product and we had to be the supplier. And so it really became proving out both sides.

(00:39:59):

Now they’re starting to really ... Now we’ve removed ourself from the equation and our technology does all the work and ultimately that has allowed us to have no customer acquisition cost. We have no inventory risk in our current business model, but that wasn’t the case in the early days. We had to take some of that on to kind of prove it out. So I do think it was, in the early days, it didn’t look super scalable. And I think if anything, it was less of a ... I think our value has been understood by both of our customers, maybe not holistically by any one of them, but I think our value proposition to each side of the market has always been, I think, pretty well understood just by, do you want sales? Great. We can help you grow your sales and allow you to grow your sales through sort of our solution.

(00:40:41):

But I think ultimately it is through, on the retailer side, it was really around compliance, high quality supply, and building that trust on the retailer side was I think super important. I wanted to say though, I do think that for us, I’ve always believed that technology access really should be shared. So again, this notion of our mission has never changed. How we deliver has changed. And I think we continue to simplify this business model. And I want to get back to tensions, but I think it is important for me to say that like, when it comes to sort of how do I apply myself to something that I really believe in. Technology is something that I personally am a huge fan of. I believe that technology needs the productivity gains that we have and the access to technology should really be shared with more people around the world.

(00:41:31):

And ultimately this creative artisanal sector is one that I’m super passionate about, right? So I think that ultimately the benefits of that though, oftentimes when we think about technology, I went to China and I went to see a fossil watches factory and I saw them with CNC machines that had replaced each one of them was doing the work of six people and there was one man that was managing six machines. So there’s one person that was employed where there used to be 36. And you’ve seen this evolution of technology in many ways and really benefiting ultimately the corporations and the mass production, that productivity gains going to the owners of those businesses and leaving people out of the equation. And I’ve always said, why does that have to be? Technology and the gains of technology really need to be shared with everyone. We need to make that more accessible so that you’re not ... Ultimately you’re benefiting people with technology, you’re not displacing them with technology.

(00:42:19):

And I think that has been something that’s always been, for me, just a personal mission in life is like finding those dichotomies, artisanal and tech, putting those together and trying to say like, how can we make something really special out of that? And ultimately where’s the gap? And I think that’s interesting to people that’s also, there’s such a massive opportunity that’s been unaddressed. We estimate that there’s 300 million individuals that are in this sector and largely they are left out of technology and kind of the online e-commerce space. And if you’re not on e-commerce today, you don’t exist. So we’re really trying to bridge that gap of like digital inclusion. I just think that’s a big problem and a fascinating problem. Now when I go to some of our sort of early conversations with investors, and the investors I have, let me tell you, are incredible, but a lot of the ones that I didn’t let into this business really wondered why I was choosing to apply this thesis to really benefiting humans and why I spend the time there when there’s not efficiencies.

(00:43:16):

I’ve been told that my business model, there was someone who came in and did thesis research on my business model in SOCO and said, why are you working with artisanal community? Go to China and go do mass production. You can take all those beautiful designs that you make and you make so much more money. And I’m like, I think they missed the plot of like why we’re doing what we’re doing, which is actually to build communities, support them, have better product out in the market that ultimately brings humanity together. I really do believe artists are sort of the best mirror of our society. And so how do we make that more accessible? And I think that’s always been the thing for me that I continue to try to solve. But definitely it’s from a commercial perspective. I definitely think there’s a big enough opportunity and commercial opportunity, but is it the easiest?

(00:43:58):

No. And is it the easiest way to make money in large amounts of money? Absolutely. If you want to do that, please go to mass production in China, but that is not what we’re trying to do here. And I think there’s enough consumers that are starting to react to the sheens, the tamos of the world and are saying, no, we want an alternative to this

(00:44:15):

Mass produced crap really in the world that’s filling our landfills. We always say when you’re buying something, you know if it’s cheap, I’m sorry. If you’re not paying the price tax, someone else is. And that might be someone that is being paid less than fair wage or it’s the planet because it’s being raped of resources that ultimately is being used in the making that product. So support your local community, support buying from independent brands that aren’t doing this in a way that is not scalable and sustainable for the community and the people that we’re in with the world and the

Mark Horoszowski (00:44:44):

Planet that

Ella Peinovich (00:44:44):

We’re in.

Mark Horoszowski (00:44:46):

Yeah. It’s so well said. I’m like, yes, this is why we’re having this conversation, right? This is why we started the show is there’s so much advice out there for entrepreneurs to say like, “Yeah, this is how you go set up that plant in there, right? This is how you go sell on there.” And I think there’s a lot that you just said right there that I just want to emphasize and I love the fact of like, why are we doing this? Is it just to get a ton of money or is it actually like fulfill this deeper personal mission? And I think there’s a lot of supporting evidence and anecdotally we’re seeing it across almost every interview on the show. It’s like the purpose that comes from standing for something more than money is like even when things are hard, it really keeps us going.

(00:45:31):

And the other piece, and I want to reflect this back to see if like you agree or like if I’m hearing this right and if the reflection is right, but when you were building up this marketplace and like you knew that you needed to use technology in order to like bring this to scale, but nobody out there, it seems like on the artisan side and on the distributor side or the retail side were like necessarily shopping for a software solutions, but you knew their problems, like you were intimate with like what they were trying to do, like get more novel products in front of customers or distribute to more customers in an American market as an example. So it seems like you were really, really tapped into not what you were building, but what they needed and what they were looking for. And you were able to then like translate your value to them in those terms and then you’ve just stayed laser focused on those and you’ve been continuing to innovate in the backend.

(00:46:34):

And I’m curious, is there a mental model? Is there a framework? Is there something that you’ve like used to help you and your team stay focused on understanding what they’re actually willing to buy versus what you are building?

Ella Peinovich (00:46:54):

Mental model for our consumer pitch, for me, it is always understanding the pain point of whoever I’m talking to. I do think that that is something that, and what motivates people and what incentives are there for people. I don’t know what that comes from exactly, to be honest. I think it’s more just curiosity and as a designer, I think I’m always trying to find solutions and build for problems. So maybe I’m kind of constantly seeking those out. But as a business, I can say that we set this out in ... I actually did, I knew you were going to ask this question or it was one of the potential questions. So I pulled out what I believe is sort of my great framework I always go back to when I’m starting a business. And in both of my businesses, I would say I would encourage any social entrepreneur to pull this Jim Collins Hedgehog Theory out.

(00:47:40):

I’m sure this is referenced before, but I did pull it out so that I didn’t kind of misrepresent it, but really this is about building that clarity and simplicity and knowing that one big idea and the whole concept of the hedgehog, there’s a story behind it and you can read the book, but ultimately the Fox, they’re really good a lot of things, but the hedgehog is good at one thing, which is defense actually, but ultimately it is just what is that one thing? What is that one big thing that you can be really good at and you can win at? And I think just being so laser focused as a business on that, I think is sort of the guiding principle. So even when it comes to customers, I think that we don’t want to be disingenuous to any one of our sort of critical values.

(00:48:21):

And so the hedgehog theory really has, it’s a Venn diagram of three basic things, which is, what are you the best at in the world? What is your unique skillset? And I’ve talked about this a little bit already. For me, that is, how do I bring technology solutions to really enable people? That is the thing that I’ve always believed in. Supply chains that are empowered by technology. How can technology be used to really amplify the human spirit and creativity rather than, again, displace it? That is implied in our business because we are ultimately a technology platform. What drives our economic engine? We sell beautiful, great product. That is our brand that I talked about, the thing that we’re selling, the products that we believe that the consumer market really wants, and we can deliver on that. And we’re uniquely positioned as a team to ultimately do that as well.

(00:49:06):

And then what are we deeply passionate about? And that’s our artisanal sector. That’s our supply side. That’s our unique independent brands. That’s that independent fashion, that’s sustainable home, it’s that clean beauty that we want in the world. And so you bring these three things together and you just need to make sure that you’re not giving up one of them. And so you ask yourself, it becomes guiding principles as well. How do you kind of remain true to that? So can I make a lot of money selling this product, which might be non-organic polymer based skin product? Maybe though it’s not aligned to my values or it’s a product that someone else ultimately can get to market, so it’s not uniquely positioned to us. So you ultimately kind of try to find where is that kind of sweet spot between all these three things. You don’t give up on your impact or you don’t give up on sort of building for a really unique solution through your technology just to make the money.

(00:50:02):

It has to be sort of balanced by these multiple things. And so, I do think there’s also people that come in and are bleeding heart about it and they say, “Okay, we need to only work with the most disadvantaged artisans around the world, but we can’t get little up on our technology and ultimately the product isn’t desirable and we can’t sell it. “ So there’s also the downside of also being an impact oriented business is like it has to be balanced between profits, purpose, and ultimately that thing that we’re passionate about.

Mark Horoszowski (00:50:29):

Yeah. I love that. So I want to reflect that back and we’ll add it to the show notes as well, but what are you best in the world at? What drives your economic engine? And then what are you deeply passionate about? Where do you have a deep sense of purpose around? You find the middle of those concentric or the middle of those circles, that Venn diagram, and then that’s powered by people. I think we sit here. That’s it. Cool. I love it. That’s it. Okay. I want to shift gears a little bit and talk about company building. You mentioned investors a little bit, some saying, “Why don’t you just go to China?” Similarly, I can tell you that some of the ... I swear some of the worst advice that I’ve consistently received over time of the journey is from the investment and finance community and some good advice.

(00:51:19):

I don’t want to totally talk trash, but yeah, I remember we got something that was like, “Why don’t you become a website maker for nonprofits?” Which is very, very different than our business model, which was already had real validation points of getting Fortune 200 brands and engaging their employees in this whole sector. But aside for another show, so I want to come back to investors. You said something which I love to hear, which is like, there are some that I didn’t let into my business.

(00:51:50):

And I’ve seen you at different stages of the fundraising journey and one thing that stuck out to me, it seems like you almost have a definition of what investors you’re willing to bring in and you take steps to get to know them and make sure that there is mission alignment, not just belief in your business model. How do you do that? As you’re kind of going out, how do you start to think about that and what become your red lines of saying like, “Yeah, we can become a good partner or no, and we should go separate

Ella Peinovich (00:52:29):

Ways.” I 100% believe that every conversation with an investor is a two-way conversation of, we’re vetting them as much as they’re vetting us. And I think every entrepreneur, one, it does start with, do they have a belief in the vision and are they aligned in the big opportunity, right? And not just a financial one, but like ultimately, why are you building this? You can make money in so many different ways, but ultimately, why are you building it and do they feel aligned to that in some way? And do they see our purpose, which can be perceived as niche of working with independent brands. It’s not mass produced in China. Do they see that niche element as a competitive advantage and a moat because we’re uniquely capable at it or do they see it as something that is a disadvantage because we’re limited in their eyes?

(00:53:18):

That is a clear signal to me that you’re the wrong person. But ultimately, I have to say, I have not in this business let in many impact, purely impact oriented investors. We have a handful of them, but I find you also have a, it’s a double edged sword on that side as well, where I already know that my business is based with a massive amount of impact. And if you’re going to not believe in the incredible scale of my business and I have to small myself down to fit your geographic mandate or your impact narrative, I’ve also found that that doesn’t work with me. And so there’s this natural balance of like, let’s be honest, investors are people too. I want to make sure I’m working with people that I enjoy, that believe in what we’re building, that want us to win, and ultimately are also believers in both our purpose, but also in our grand ambition.

(00:54:12):

And I think those investors, whether they’re impact investors or traditional BC investors, we’ve found them on both sides of the table, but I would say they’re the rare breed and those are the only ones I’ve led into this business today. So we have a great cap table and I really enjoy our board and I’ve been very intentional as a second time founder having built and sold a business before and had managed a board in the past. I think I did build this business with a lot more intention for sure.

Mark Horoszowski (00:54:40):

Yeah. I want to come back to some of these points about investors, but just on that last thread, I’d be remiss to not kick on it. Any just like real quick, almost early stage lightning round of like, when you talk about building that board, like what are some of the maybe lessons learned from the first part that led you to say what you just said there about like, “I’ve been super intentional about this go around.”

Ella Peinovich (00:55:01):

Yeah. I always think don’t formalize the board too early, but lean on your investors and let them into your business. I think the lesson I had from my first business to my second business was that I felt that I needed them for money and therefore I didn’t always let them into my big hairy challenges. But on the other side of that, I would say don’t also bring a big hairy challenge without already a solution. So I think there’s an element of keeping them informed and keeping them updated and keeping them engaged that I think is so important in having a successful board that I think we as entrepreneurs maybe either fully dismiss them or fully engage them. I think there’s this heavy middle where you’re like, “I’m going to let you in on everything that’s happening, but pretty much as I’ve already solved it and I’m not asking for permission, I’m just letting you know so that you understand my state of mind, you understand how this business is evolving and you’re feeling part of that.

(00:55:53):

And if you have a big challenge, like we can discuss it. “ But for the most part, I think I’ve found that there’s always a lot of support for that, the good and the bad. And I’ve always been surprised at how much support there is actually as well, which I think is an incredible feeling when they back you and when things get hard or there’s a difficult challenge and you need to solve something quickly for them to support you and not challenge you, I think that is the testament of an incredible board.

Mark Horoszowski (00:56:17):

Yeah. Yeah. It’s great. Minaj from Drinkwell, so earlier guest on the show talked about some of his board relationship and there’s actually a lot of resonance between you two of like actually share quite a bit and during like times of crisis, which they had, I know you’ve had as well, like they become like a strategic force beyond capital that’s really

Ella Peinovich (00:56:39):

Important. You need them on your side when things get hard. You absolutely need them on your side. And so them to be informed is incredibly important, but don’t assume they’re working for you, right? Like they’re to be informed and they’re to help when you need them. Have a clear ask when you go to them, but don’t assume that they’re just going to take a ball of problems and solve it for you. That’s not really their

Mark Horoszowski (00:56:59):

Thing.

Ella Peinovich (00:56:59):

Yeah.

Mark Horoszowski (00:57:00):

That’s yours. As nice as that would be sometimes, but yes, that is our job’s what we sign up for. Okay. So then you mentioned something else, which is, I wasn’t expecting to hear it, but I’m glad I did, which is, okay, on the investor side, there’s two spectrums, right? There’s the organizations that are overly focused on profit, they’re not right, but then sometimes some impact focused investors become essentially almost too limited or create their own extra cost by saying like, “Oh, well, only in this geography or only this specific thing in order to do it, “ you have to then fold your business and your metrics and your reporting to meet this kind of obscure thing that got created because, I don’t know, somebody on the board of that investor just cares about that area or something like that. So I think that’s actually really important to do and to suss out and to find.

(00:57:48):

And it seems like you have these conversations, like you’ve got your hot list of items to make sure there’s business alignment, to make sure there’s impact alignment, and as you’re talking to investors, you’re going through both of those. Now,

(00:58:04):

There is an extra weight when you are trying to tell a business story and a impact story, and I’m wondering if you have any like ...

Ella Peinovich (00:58:19):

I was waiting for this part of the conversation. There is. Okay, there we go. Starting to sweat now. No, I’m just kidding.

Mark Horoszowski (00:58:26):

So in terms of maybe what’s working right now or in retrospect, maybe even mistakes that you made or lessons you’ve learned, what are your tips here? It’s like if you’re an entrepreneur and you’re going out and you’re looking for funding, when you have to tell both a profit story and an impact story, what are the biggest challenges you’ve encountered and then how did you work through those?

Ella Peinovich (00:58:47):

Yeah. I don’t actually make a distinction of like those things being independent of each other. We are what we are, we’ve built a business that we think needs to exist. It has this incredible impact. It also has an incredible potential to be a for- profit, scalable technology platform. And so I think in many ways that part of it’s easy for us in how we explain our business. Now on execution is where I think it always, that’s really where it gets challenging. And I think whenever you put yourself out there and you say, “We stand for something. We are standing for sustainability, we’re standing for justice, we’re standing for a diversification of supply chains, and you’re working with vulnerable people, you are then ultimately going to be held accountable to explain, well, how are you doing that? “ You have to be able to answer that.

(00:59:37):

You have to be able to defend these things that most businesses are just for profit don’t have to defend why they call themselves the best of something in their industry or the most of something. It is not something that ... It’s a sales pitch. For us, it’s not. It’s how we work and it is ... Our business is called Powered by People. We believe that ultimately the people that are in our business business and that are in our community are ultimately what drive us and the decision makers, the consumers are what drives us as an organization. And we believe that has to flow not only to the beneficiaries and the participants and the consumers of our platform, but also our team. And so I find our team are some of these smartest, most passionate people and keep us accountable to this mission. We’ve brought them in, they’ve really invested in this culture and this mission as well.

(01:00:25):

And I think that is an incredible achievement, but also something that I think is an asset to us as an organization, but also something that we have to maintain that a lot of other organizations don’t need to maintain. We have incredible people that are constantly challenging us as an organization as well. And then I think on the investor side, we do have to explain how maybe there are what they perceive as a vulnerability in the business and we could see it as an asset. And I do think that I touched on that a little bit, but we do a lot of philanthropic work where we’ve received grant funding in a large portion of our business. So about a quarter of our funding actually is intended for what we call pipeline development or capacity development in our communities, but it has no commercial benefit to us today, but we believe it builds the ecosystem that in five, 10 years might, right?

(01:01:19):

It also allows us to retain this incredible team. Sometimes on the commercial side, we’re also very commercial where we’re now supporting for profit, US based businesses that maybe don’t need us as much as an organization that we would want to find in Kenya that wants to have that same market access. So we’re always trying to kind of bridge this bigger world of like the commercial. I want to get to a place where we’re just profitable. We had a million dollar in revenue month the other quarter. We’re hoping we can continue on this path to profitability within the next six months. That then gives me the freedom to continue to double down and invest on the more philanthropic components or impact oriented components of our business, which we believe is just good in ecosystem development. But it can be perceived as a distraction. And so I think that it is a challenge that we oftentimes are trying to navigate as social entrepreneurs where you’re also kind of trying to figure out where your model fits and where it can work the best.

(01:02:16):

And I think both on the impact and on the social side, and you want those things intentioned, but also aligned as best you can. And that’s not always easy. Yeah. So I definitely think our team keeps us accountable, but ultimately it is a big challenge.

Mark Horoszowski (01:02:32):

Yeah, for sure. Yeah. Okay. So I want to come back to the grant funding, but before we do, you touched about like your internal team holding you accountable. And I think that this is an area where when you are a social entrepreneur, so you’re existing for impact, we’re using the power of the market in order to do it, and then you start to do things like you really manage your negative externalities, you’re making sure that there’s more pay equity across the team, right? You’re going through all these pieces. As soon as you do that, your job actually now becomes harder, right? At least in the short term, right? Because now your employees will hold you accountable to those things as well. And I know from my own experience, I’ve had somebody say something very similar to us of like, “Well, we’re a social enterprise that you’re shortcutting there and that’s not fair.

(01:03:18):

That’s not what we stand for. That’s not for our values.” And I’m like, “Oh, yeah, you’re right. And how do I balance that against the fact that payroll is coming up?” Assuming that’s true for you as well, and how do you navigate those moments when you feel like there’s something that’s the right thing to do for your employees, but the current business environment or your own just economic health doesn’t create an easy way in order to make it happen?

Ella Peinovich (01:03:48):

Yeah. It is such a real story. I think we always say as entrepreneurs, it’s some of the loneliest jobs. I think as a social entrepreneur, it might even be more lonely in some ways, because you’re right, you’re dealing with just the realities of the world. And we’re oftentimes coming from a position of access and privilege to be able to say that we can choose our values every time. I have an interesting story actually. We had a retail partner of ours, actually in Kenya, it was a retail partner in Kenya, not in the US, that we had a real challenge with. Our employees were finding that they were being harassed by this retailer that was a partner of ours, but we had a good dozen of our brands in Kenya that we were working on a program to actually provide them market access and real jobs and livelihoods opportunity.

(01:04:39):

And it got to a point where we actually decided as a company that we were going to exit the partnership and we gave the choice to the brands because we said, “We don’t want to make the choice on their behalf if they want to continue to work with this retailer, but we need to let them know that we’re no longer able to support that access for them.” We had to do that for our team, but I can tell you, all the brands chose to actually continue to work with this retail partner because they didn’t have the luxury of choice. They needed to put food on the table. They needed to continue to have that opportunity. And I said, “You know what? I don’t like her, but I don’t like a lot of people in this world and we can’t always pick who we work with.

(01:05:13):

“ And it was such an eye opener for me that sometimes we do believe that every choice is binary between good and bad. And I think sometimes that’s just naivete as well. These were a lot of people in this situation that also ... I do think that we were valid in making the decision to leave, but I also think it was just as valid for those artisans and maybe people weren’t as understanding of them. I think it was totally valid for them to choose to stay in that engagement if they felt that they needed to. And I think that has also translated in our business. I mean, one of the hardest things I went through as the CEO of this business is that we grew really fast in the early days. Kind of post COVID, there was this massive consolidation of marketplaces. We were the online destination for global supply.

(01:05:58):

It was a very successful business model. And then post COVID, there was logistics challenges, now with tariffs, anti-globalization. I mean, we’re really in a restriction in the retail sector today. So earlier this year, in January, we actually made an entire transition away from our old wholesale business into our new entirely digital no inventory, no customer acquisition cost model. But in that transition over two years really, I had to lay off team members in multiple situations because we could not make payroll if we were going to continue to grow and maintain the scale of the team because the business had changed, the consumer market wasn’t there anymore and that demand just wasn’t coming in. We were entirely success-based revenue model. And so for me, it was so difficult knowing that my biggest pride is in providing people with dignified work. That is why I exist is to

Mark Horoszowski (01:06:52):

Employ

Ella Peinovich (01:06:52):

People and provide them opportunities and, hey, they’ve invested and they believe in my vision and I’m going to go out there in the world and we’re all going to fight this fight together. And it just made you feel like, wow, I let them down, I let myself down. But ultimately at the end of the day, we had to survive because we do work with vulnerable populations. We are solving a problem still today, and I think we will continue to grow into solving this problem for even bigger populations around the world. But if you don’t survive, you have to fill your cup before you can overflow for others. I think that was an Oprah quote at some point.

(01:07:27):

I do think you need to be able to survive as a business and then being able to really continue to make those choices of really the values alignment to kind of your for- profit agenda. It’s a gray zone though, and I think it is challenging. I’m also the first, I’m not the highest paid in the business. So to be honest, it’s also ... I do think that there are things that we can do as leaders that also represent that we can take haircuts on our own salaries before we cut people. I do think you can have those conversations with your team. I think that these are things that are, again, it’s not also black and white on these decisions that they’re entirely made by myself. I do think that we need to engage with our team, but I think that was some of the hardest things that we had to do were really scale back on a team that was incredible and ultimately just to survive.

(01:08:17):

And I think it goes back to the hard decisions between really feeling like you’re living at your mission and those things that are just the realities of the market that you’re in. So

(01:08:27):

I think we’re on a great path now. I think we’re very excited about kind of our growth and being able to get to sustainability with our existing team, but then we’re going to be in a position of strength in order to make those more cut and dry decisions around really, truly just picking our values every time.

Mark Horoszowski (01:08:44):

Yeah. Yeah. And thank you for sharing all that. And yeah, in a conversation with Ed Booty from Reach52, so earlier guests on the show as well, we were talking about that challenge of like how hard that is when like the people side of this, when like we take so much pride in bringing people on, developing people, like helping grow and then go for business reasons. And we’ve actually seen this both anecdotally from other guests and also in the research as well, that the emotional weight, like the mental toll of being a social entrepreneur is actually greater because of the fact that you care and that’s part of your mission, not just the business health. And then being able to move through that then of course is more challenging. Now it also gives us purpose to like come out of the other side. And so maybe I’d love like some lessons learned from you on this one in terms of what was a really valuable lesson you learned or a tip that you would have for anybody who’s going through that, “Hey, sorry, we have to go through some layoffs.” And then on the other side, what’s your tip for then like building up team momentum and that’s both like your own.

(01:09:57):

How did you overcome that individually? And then how did you bring enthusiasm and hope back into the company?

Ella Peinovich (01:10:03):

Yeah. I think success honestly is the only thing that allows us to really replace any of the sort of shared trauma in an organization. I definitely think one, I had to make this big transition and cut an entire arm of our business that was nonprofit making in order to try to give ourselves enough time to prove out the for- profit business model. That wasn’t fully proven out yet when we made this decision, but again, as an entrepreneur, you’re like, “I can feel the data. I can feel the momentum in this. “ And again, you’ve already convinced people of this really big notion, big idea over the last two years, that wasn’t super successful in the end. It was for a period and then it wasn’t. And I have to build back momentum for this new way and admittedly people are like, “Well, you told us that in the past.

(01:10:52):

How do I believe you this time?” And it only comes back to proof. I think ultimately just seeing the business succeed, people have actually said, “Well, you were right. You were right. This was the right decision.” I didn’t like it at the time, but ultimately we had to make this decision in order to get to where we are today. It’s a better business. I feel better in the business, it’s easier, it’s stronger, it’s a better sort of solution. And I think we maybe lost one or two people that felt like they couldn’t make that transition and we tried to part with them in the most amicable way possible. And I think they’re still fans of ours and we’re fans of theirs, but ultimately it is something that you have to make a decision and sometimes not everyone comes along with that decision with you. But the people that do and they see the success and they feel part of that success, I do think that that allows you to then rebuild with enthusiasm.

(01:11:42):

But there was a period there where, to be honest, I don’t think they wanted to see me around. I just wanted to be heads down. I was leading from behind and I’m like, “This is also okay.” But that is sort of the reality of it. I think

(01:11:56):

How do you get back into your power position to be able to sort of feel confident in making these decisions? I think as an entrepreneur sometimes we’re also making our best bet, but we don’t always ... We’re exuding confidence that we don’t always feel. I do think that, again, it comes back to just having the success in hand. And so I always say, don’t worry, just work through it, continue to produce, continue to do the work, and ultimately it will prove out in one form or another.

Mark Horoszowski (01:12:23):

Yeah. Thank you for sharing that. And I’m curious, are you in the midst of that, both during the layoff and then coming out of the backside, how transparent were you with financials, with the layoff, with what was happening next, with the challenges you were encountering and also the wins? How were you keeping employees aware of what was going on so that they could both understand the decision and see the success?

Ella Peinovich (01:12:49):

I think we, in the early days, I just don’t think we have the data infrastructure to be super transparent. We are now. With our current team, we are 100% like the goal you guys is to get to profitability, stick it out with us and this is the goal. And being really clear, we need to get to that million dollar of revenue every single month and we’re covering all of our own salaries. We’re successful as a business. We continue to scale from a position of strength, but I don’t know that we were even clear. We were doing a lot of hedge bets in the early days. We were starting new business lines and trying to serve many customers and we’ve just been shrinking and focusing on what actually worked.

(01:13:27):

And ultimately that was a lot of the reductions were ... We thought we knew the formula, but it wasn’t quite proving out. And when we were forced to actually restrict and constrict the business, it actually forced great discipline. And I think that discipline is where we are today. We have an incredible team. We have incredible customers and partners and we know exactly what we need to do to succeed. It’s just a matter of time now. And so everyone is totally working in the same direction and ultimately they’re able to execute a lot more effectively as well. So we have a company scorecard, we have Metabase, we publish out all the company data from revenue on the business as well. We set targets on profitability. So that’s maybe the level of transparency. We don’t show everyone’s salaries, but people do know burn rates. They have visibility into their own departmental sort of costs and how they’re contributing to revenue.

(01:14:19):

So we try to make sure everyone knows how can they influence the success as well. And I think that’s an important thing.

Mark Horoszowski (01:14:24):

Yeah. That’s quite similar to us as well. And I think it’s the more that I’ve seen, like every time we lean towards more transparency, like the more innovation and creativity I also see from teammates, right? They become like partners

(01:14:39):

In sharing the way, which is really cool to see. I can’t believe how fast time is flying. In a way, I feel like we’re just starting and I’ve got like hours more of questions for you, but I want to get into our lightning impact round where we got some rapid fire questions, but first, or maybe we’ll categorize in the impact round, just insert it earlier, you did make a statement about getting grant capital. So you’ve obtained impact investing capital. Just like, what are Ella’s like really quick tips? We don’t need to go huge here because that could easily be an episode in and of itself. But just really quickly, how did you identify Grant Capital was even available for you all? How did you find some of your grant funders and any tips that you have for entrepreneurs who are thinking and realizing ways to improve their impact and/or de- risk their business model chasing some of that grant or philanthropic capital?

Ella Peinovich (01:15:39):

Yeah. I mean, we, admittedly, we were a little bit lucky, but also I think quite strategic. We do have a blended financing model. So we have traditional technology, VC, Silicon Valley, investment capital, and then we have philanthropic grants from the MasterCard, the Gates Foundation. Where those overlapped actually was in our finance products. So as much as we are a marketplace, we were also monetizing our advances and also our payment terms on that marketplace transaction. And so that cash flow gap is something that we were able to even monetize that

Mark Horoszowski (01:16:13):

Fundraise

Ella Peinovich (01:16:14):

Debt for that. So we also have debt inside our organization where we’re, whenever we had a confirmed order, we were advancing 50% to the maker and then ultimately extending that 60 payment terms to the retailer. We charged for it, but also because of that incredible KYC data, transaction and payment data, that allowed us to actually go back to some of these big philanthropic organizations, which it is all about data and scale. And ultimately they want to know our sector is also primarily focusing on women. We’re over 65% women in our sector, 60% rural populations and a lot of youth. And so it is a way for a lot of these philanthropic organizations aligning to their goals of impacting women based organizations. We align to their economic inclusion through livelihoods creation and growth, but also through financial inclusion through our payments tools. But that’s where our data was.

(01:17:02):

So we actually found that it was quite easy for us to sort of go out with that data set of financial inclusion and all the KYC information that allowed them to track women, youth, rural, all that information that they needed. So that was actually where our alignment came from for our MasterCard grant, also our Gates grant that we are facilitating. So ultimately those things are things we think are super critically important to the success of our business, but I think anyone that’s looking for blended capital, it has to be one, it is 70% of the budget goes towards managing that budget. It is so unfortunate. I think in some ways just how much work it is and just being able to report back, but it is a wealth of information that if you can get more than one funder, it then starts to amortize itself a lot more and you can really see the impact of your organization.

(01:17:52):

So over time it’s worth it. I definitely think it’s setting it up. It’s quite difficult. We are actually now a B Corp certified business because of the level of data. We had that registration last month actually come through and we’re very

Mark Horoszowski (01:18:03):

Proud ofo.

Ella Peinovich (01:18:05):

Yeah. It was because of the robust level of data that we were able to collect on really those that were in our network. And ultimately they’re looking for scale. And so I think if you can find a way to align to that to really a mass application, I think that’s what a lot of these folks are looking for.

Mark Horoszowski (01:18:23):

And that

Ella Peinovich (01:18:23):

Works.

Mark Horoszowski (01:18:25):

Yeah. I think it’s one of these things where it’s hard to do when you’re worried about are we making enough money to cover payroll and operations, to make sure that you’re also taking on that extra cost and weight of measuring and saying like, who are our beneficiaries? Are we actually improving their livelihoods? Are we increasing their earnings? And it’s hard in the short term to justify those investments, I think, but being available to then procure grant capitals and examples is one of the reasons why that’s worth taking that extra workload even when it’s hard. And I think that kind of goes back to a few points of our conversation when it’s like, when you’re optimizing both your business model and your impact model, it’s just extra work that you as CEO have to manage and there’s a lot there. I wish I could just like have your brain.

(01:19:19):

I was going to say pick your brain, but I need more. There’s so much wisdom in your L and I’m just so enjoying all of this, but let’s get into our lightning impact round. What is one mistake that you’ve made that you really hope future entrepreneurs will not make?

Ella Peinovich (01:19:37):

You need to surround yourself with people that want to see you win. I think it all starts with having the right people around you. So I think be ruthless down to the friends that you choose, the partner that you have in life, the investors that you surround yourself, the advisors that you have. You need to make sure that you are surrounding yourselves with people that inspire you, model the type of life that you want to live, and then ultimately want to build you up.

Mark Horoszowski (01:20:05):

Love that. What has been your biggest challenge in fundraising and from that, what is one of the things that you want all impact investors to know? And if you want to scratch the impact word and just say all investors to know, we can do that.

Ella Peinovich (01:20:19):

Yeah. I just personally feel that we, again, went out and built a business that wasn’t based on some sort of talking point that was super popular at the time. I think right now it’s defense into AI. Last season it was climate tech. I think there’s always a season of things. We may have gotten lucky in sort of fitting into a few of those boxes in the past, but I do think that big generational businesses that are solving big problems are not going to fit in a box. And so in a way it allows me to filter out the best investors that can be creative and are creative about that and understand the opportunity there. But oftentimes we’re too often, I think, falling into that trap of, again, limitation of geography, limitation of ... And rather than also saying, “Hey, this is a challenge I have for you.

(01:21:07):

How could you grow in this geography? Or how could you ultimately impact this community more?” And I think that to me is more interesting, right? As investors that actually say, “Hey, I’d love to work with you, but let’s see how we can actually sort of evolve this business together to work from my mandate.”

Mark Horoszowski (01:21:22):

Yeah. Cool. I love that. What is one leadership or manager skill that you wish you could turn on that you think you would make a more effective team leader?

Ella Peinovich (01:21:32):

I always go back to storytelling. I feel that storytelling and your ability ... One, I think we create stories and about ourself. We’re the heroes of our own story or we’re the victims of circumstance. It’s like, how do you make sure that you are, one, building the best narrative for yourself to be successful in whatever moment you’re in, but also to inspire people, to bring people on to really align to what you’re trying to build. I think these are always the things that ... I wish I was better at it. I wish I was more charismatic. When you get me on a topic I love, I can totally nerd out with you on it, Mark, but I think in some ways I maybe am so passionate about my own things that I’d love to be one of those more charismatic storytellers that ultimately can really kind of spin a tail.

(01:22:17):

I would love to be able to

Mark Horoszowski (01:22:19):

Have

Mark Horoszowski (01:22:19):

That

Ella Peinovich (01:22:19):

Skillset in my repertoire and be even better at it,

Ella Peinovich (01:22:22):

I guess.

Mark Horoszowski (01:22:23):

Yeah. Wow. Well, I mean, I think this is a great example of probably an element of your own humility and we are our own toughest critics because I’m listening to you speak this entire time and I’m like, I’m hanging onto your words. I love everything that you’re saying. And funnily enough, earlier when you answered one of the questions with a story about the Kenyan retailer, and I was like, “Oh, people are going to love this part.” Just the tangibility

Ella Peinovich (01:22:48):

Of that is- Well, I’m glad that I’m learning. It is something I’m working on. Let’s say

Mark Horoszowski (01:22:53):

That. Yeah. Well, when you get good at it, air quotes here, if you’re not watching the video, I’m going to be pretty blown away because, yeah, I’ve got nothing but compliments for you so far. Okay. What is the quote ritual or activity that you turn to for strength when things are super hard?

Ella Peinovich (01:23:13):

I think as kind of a former athlete in my younger years, I definitely think it’s about just getting active. I find strength when I’m like physically fit. I can be more mentally fit. I can execute on a plan. So when I’m super stressed, I do find that I play Padel, I’ll walk in the forest. For me, it’s about being, how do you sort of get into more of a competitive fight spirit? So whether in survival mode and you’re just trying to get through something or you actually need to win a contract or you’re ultimately trying to sort of build enthusiasm, momentum in something, I think being kind of in a forward foot, I get in that head space when I’m physically active. And I noticed that when the opposite is true, it’s also true. If I’m not getting out there and I’m not physically taking care of myself, I find that that also affects my mental state, my sleep, all these things.

(01:24:02):

So I think it’s also an easy win. It’s like, okay, I feel like I’m getting a lot of nos in my investment right now. How do I go and win at something? I can go for a walk. I can feel successful in the morning by 8:00. There you go. Okay. I’m winning at something and just kind of changes your mentality. So that’s my way of kind of cheating myself, tricking myself as a life hack into being successful, I guess.

Mark Horoszowski (01:24:23):

Yeah. I’m so with you on that. It’s wild how I can sit there on a day and be like, “There’s no way I can find time to go. I’m so far behind.” And then I go out and go for a run in the forest and come back and I’m like, “Everything’s fine today.” Exactly. Exactly. Not always the case, but yeah. Okay. And then who is another entrepreneur that you admire and think that we should interview on this show?

Ella Peinovich (01:24:54):

There are too many. I feel like if I named someone, then I would get into trouble, but I definitely, I think in the consumer space, one, like I know so many brand owners that I think are doing incredible things, but I really love Smaha from Uncover and I think you should try to get her on the podcast because she’s someone also that believes in really transforming the entire beauty sector with a, it’s a highly technical skincare product and skin health brand, but made for the African consumer. And I think she’s done this in a way that one just builds a new aspirational type of beauty and puts people into their power. So I love how she’s approached it. I think she’s an incredibly brilliant businesswoman, but is also transforming industries and doing good along the way. So not a traditional social entrepreneur in saving lives and delivering clean water, but I think that us in the consumer space, we need to support each other as well because we’re also transforming livelihoods and economic inclusion for populations and transforming what an aspirational beauty and dignified beauty looks like is something that can transform how people feel about themself.

Mark Horoszowski (01:26:03):

Oh, absolutely. Everyday mental health. Yeah.

Ella Peinovich (01:26:06):

Yeah.

Mark Horoszowski (01:26:06):

Cool. It’s

Ella Peinovich (01:26:07):

Important lesson for all of us to have. So checkouts may have. Yeah.

Mark Horoszowski (01:26:10):

Cool. Well, will do. Okay. Very last question. Where can we follow you? How can we support you?

Ella Peinovich (01:26:19):

Well, go out and shop Powered by People. We are on Nordstrom.com. I think you can search for us and we’re part of the fulfillment. But regardless, I think if you can’t shop in the US on Nordstrom, we have a number of other top retailers that supply our goods, but just buy independent brands. Don’t go and try to buy the cheapest product out there. Do support your local brands, support people that are trying to build something that’s a bit of a counter narrative to mass produced product. And I think that supports us in many ways. So go ahead and do that and I’m happy.

Mark Horoszowski (01:26:52):

Cool. Well, we’ll add links to these in the show notes. Ella, thank you so much for your time, your wisdom, your insights, and most importantly for building a business here that really has such a positive impact on so many people on both sides of the marketplace. It was really a joy to learn from you today.

Ella Peinovich (01:27:12):

Thank you for having me, Mark. It’s always great to talk with you and I always learn something as well. So thanks for having me.

Mark Horoszowski (01:27:18):

My pleasure.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit helpingbillions.org

Most health tech founders dream of making billions of dollars. Ed Booty dreams of improving the health of billions of people – 52% of the world to be exact, who do not have access to reliable healthcare and prescriptions.

The Reach 52 founder took his company from a solo venture bootstrapped in Singapore to a multi-country operation distributing essential medicines across Asia and Africa - all while maintaining profitability and sanity. Well, mostly sanity.

Here’s what makes his journey particularly instructive: Ed didn’t follow the typical venture playbook. He bootstrapped for nearly four years, said no to grants (initially), and focused obsessively on revenue before scale. The result? A sustainable social business that’s actually solving the problem it set out to address.

If you’re building in emerging markets, dealing with government partnerships, or trying to make impact profitable, Ed’s playbook offers some hard-won wisdom worth stealing.

[WATCH THE VIDEO: https://youtu.be/cYag85bvfgY]

The Problem: 52% of the World Can’t Access Basic Healthcare

Over half the world’s population cannot access essential medicines, doctor services, or basic diagnostics. But here’s the market failure that caught Ed’s attention early: medicines often cost 20-30 times more in low-income countries than in wealthy ones.

Ed saw this firsthand during an internship at a pharmaceutical company in India when he was 21. That experience planted a seed. But it wasn’t just the visible poverty - it was watching a major pharmaceutical company struggle to serve rural markets despite genuine effort. “They were making money in the cities, going rural is harder... even if you get the products into the market, which they did... due to the low awareness education screening, the products didn’t move.”

Market inefficiency meets mission-critical need. That’s where Reach 52 lives.

Lesson 1: Have Just the Right Amount of Competence and Naivety

Ed saved money working in UK consulting for seven years before quitting with a one-way ticket to Singapore. His philosophy? “I always said I’ve had just the right amount of competence and naivety, and I genuinely mean that. I knew my stuff. I’ve worked in healthcare for six years, but I also didn’t know a bunch of stuff and I tried to do stuff that other people wouldn’t do.”

This balance matters more than you’d think. Research on entrepreneurial success shows that domain expertise can sometimes create blind spots - you become “too wise to try” the unconventional approaches that create breakthroughs.

The practical application: If you’re waiting to know everything before starting, you’ll never start. If you know nothing, you’ll waste years learning what veterans already know. The sweet spot is having enough knowledge to be credible while maintaining enough naivety to challenge assumptions.

Explore first, then exploit.

Ed’s naivety led him to try a tech-heavy, data-driven marketplace model early on. It failed. But that failure - and the willingness to try it - opened doors with pharmaceutical partners that still work with Reach 52 today, even though they’ve completely pivoted the model.

Lesson 2: Revenue Before Venture (Even When It’s Hard)

Here’s where Ed diverged from typical startup advice: “I was very tenacious. We were not going to take any grants because I genuinely believe grants can make you a bit lazy from a business model point of view.”

Reach 52 didn’t raise venture capital until 3.5 years in. They bootstrapped through B2B partnerships, selling health education and screening programs to pharmaceutical companies rather than taking free money from donors.

The discipline this created was critical. Ed had to prove the business model worked before anyone would invest. “We actually didn’t raise any money since 2020,” he notes. “We’ve genuinely been focused on revenue versus just trying to raise investment money.”

Why this matters: Studies on social enterprise sustainability show that earned revenue models tend to scale more sustainably than grant-dependent ones. The market discipline forces you to create something people actually want to pay for.

The practical framework:

* Identify who will pay for impact (B2B partners, governments, end users with ability to pay)

* Start small - prove the model works at micro-scale

* Use early revenue to fund expansion, not grants

* Only raise venture capital when you need to scale something proven

The caveat: “COVID was a hard time. You sometimes need to take grants,” Ed admits. Pragmatism beats purity. But the default should be revenue-generating.

Lesson 3: Map System Friction, Not Just User Friction

Ed’s marketplace model failed spectacularly. The idea was elegant: train community health workers to screen patients AND distribute medicines directly, cutting out expensive middlemen.

But system friction killed it.

Pharma companies worried about “cutting out pharmacy... that actually cuts out their current customers, the doctors and the pharmacies.” Residents didn’t want to pay delivery fees. Quality control was a nightmare. “I mean it would take nine months I think it took to get our first products.”

The lesson extends beyond Ed’s specific failure. While most startups obsess over user experience friction (How many clicks? How many form fields?), social enterprises operating in complex systems need to map ecosystem friction.

Ask yourself:

* Who loses if you win?

* What regulations will you bump against?

* Whose existing business model are you disrupting?

* What cultural practices are you fighting?

As behavioral economist Dan Ariely has documented in his research on market friction, the smallest points of resistance can derail adoption - and in complex systems with multiple stakeholders, friction compounds exponentially.

Ed’s evolved model separated health education (building demand) from medicine distribution (meeting supply), working WITH existing pharmacies rather than around them. More complex. More effective.

Lesson 4: Find the Path of Least Resistance

“My strategy is take the path of least resistance,” Ed says, half-joking. “If you are selling something and it’s selling itself... it is working.”

This sounds obvious until you’re in the weeds. You’ve invested months in a market or product. You’ve told investors you’ll make it work. Admitting defeat feels like failure.

But Ed’s ruthless about following organic traction: “We’ve got distribution in 15 African markets... six are working really well right now. We’re getting decent orders in six. A few of them would be really hard... probably not where we want to start.”

The practical test:

* Throw the net out wide (pilot in multiple markets, test multiple products)

* Watch what sells with minimal effort

* Double down on natural demand

* Kill everything else

When Reach 52 started distributing medicines in Africa in 2023, they didn’t commit equally to all markets. They watched which partnerships generated orders organically and focused there. “If you’ve got 20 things in your basket on your marketplace and people are always buying the nutritionals... focus on the nutritionals.”

The Lean Startup methodology calls this “validated learning” - but Ed’s version is simpler: follow the money and the momentum.

Lesson 5: Learn to Say No (It Takes Experience to Earn)

Early in Reach 52’s journey, Ed was a yes-man. A pharmaceutical company wanted them in Cambodia? Sure! Never mind that it’s a tiny market with limited partner interest.

They launched in Cambodia. It worked for a while. They eventually had to exit.

“I don’t regret doing that at the early stages,” Ed reflects. “You have to get points on the board, you have to learn, you have to grow revenue.”

But today? “I genuinely say we say no to 50% of partnerships now... We know what works. And then it’s just being true to yourself and sticking to the mission and not getting distracted.”

The maturation curve of “no”:

Years 0-3: Say yes to almost everything. You need:

* Points on the board

* Revenue validation

* Market knowledge

* Pattern recognition

Years 3-5: Start filtering with basic criteria:

* Does this align with WHO essential medicines?

* Does it fit government strategy?

* Is it more affordable than current options?

* Can we actually deliver it?

Years 5+: Ruthlessly protect focus:

* Mission alignment becomes non-negotiable

* OKRs determine everything

* Path of least resistance guides choices

* 50%+ of opportunities get declined

Ed’s team heard “it’s absolutely mission aligned, therefore we have to do it” twice in two days before our interview. But they also heard “this won’t move the needle... it’s a no.”

You can’t have this discernment on day one. You earn it through scar tissue.

Lesson 6: Bad Hires Will Decimate Your Company

When I asked Ed about his biggest mistake, he didn’t hesitate: “Hiring the wrong people can decimate your company, early stage, mid stage, late stage. Toxic, bad strategy, wrong - other team members around them quit.”

Harvard Business School research shows that the cost of a bad hire isn’t just their salary - it’s the damage to team morale, the opportunity cost of not having the right person, and the time spent managing problems instead of building.

For social enterprises, the stakes are higher. You’re not just building a business; you’re building a mission. Toxic team members don’t just hurt productivity - they undermine the cultural foundation that keeps people motivated despite lower pay and harder conditions.

Ed’s evolved hiring philosophy:

* Experience matters less than cultural fit, attitude, and drive

* You can’t screen for these things from a CV

* Take time with the process

* When you see red flags, act quickly

You can accelerate it by being methodical: implement structured interviews, do reference checks beyond the list they provide, and use trial projects before full hires.

Lesson 7: Scale Requires Different Rules for Different Teams

Here’s a nuance most leadership advice misses: not every team operates under the same rules.

Ed runs some teams with absolute flexibility: “Do not expect this to be fixed... expect version nine by the end of the year of our credit policy.” He tells them upfront - we’re experimenting, this will change monthly.

Other teams get the opposite treatment: “This plan will not change. We have to deliver this by the end of the year. This is what we’ve committed to our external partners. End of discussion.”

This isn’t inconsistency - it’s sophistication. Some work requires iteration and experimentation (new market entry, product testing, innovation). Other work requires execution discipline (fulfilling commitments, established operations, regulatory compliance).

The key is being explicit about which mode you’re in. Team members need to know if they’re in exploration mode or execution mode. Mixing signals creates confusion and frustration.

As Erin Meyer’s Culture Map framework describes, there are “big D decisions” (slow to make, fully committed) and “little d decisions” (fast, reversible). Jeff Bezos called them one-way doors and two way doors. Ed’s instinct maps perfectly to this: know which decisions are which, and communicate that clearly.

The Geographic Expansion Playbook

Expanding from Philippines to Indonesia to India to 15 African markets sounds daunting. Ed makes it sound almost boring.

“I don’t find market expansion that hard. Everything you’ve said, you used the word challenge - for me, it is just a process.”

His framework:

* Identify market opportunity - Does the “missing middle” exist? (People earning $5-15/day who can’t afford current healthcare costs but aren’t below poverty line)

* Validate partner interest - Will B2B partners pay to reach this segment?

* Test before legal - Find a local partner to pilot before setting up entities

* Do the boring work - Hire local lawyers, file paperwork, register products

* Follow organic traction - Watch which markets generate orders without heavy lifting

The honest assessment: Can you actually win here? Market size and need aren’t enough. You need realistic competitive advantage.

For social entrepreneurs specifically: research on social enterprise internationalization shows that mission-driven organizations often underestimate cultural and regulatory barriers. Ed’s “can we win?” filter prevents wasted effort.

The Mental Health Reality

That beautiful passage Ed wrote in 2021 deserves full recognition. Social entrepreneurship is lonely. The stakes are higher, the resources lower, the problems more complex.

Ed’s honest about it: “You’re running a health company, but your work will make you fundamentally unhealthy through long hours, excessive travel, coffee, alcohol, forgetting to eat and constant pressure.”

His rituals:

* Morning workouts (high-intensity classes before the workday)

* Evening beer in the sun (”You can have the worst day... just sitting out there having a nice hazy IPA”)

* Cooking (”Order from chaos... I just find that quite relaxing”)

* Beach holidays (not city breaks - he’s learned what actually recharges him)

The philosophy behind it all? “Use yourself as your own worst critic. Imagine yourself on your deathbed, looking back at what you’ve achieved and what makes you smile.”

This existential framing - “we’re our temporary existence... trying to find purpose and meaning” - gives Ed permission to work hard AND to walk away when needed.

Self-care isn’t optional - it’s what enables sustainable performance. Ed’s rituals aren’t indulgences; they’re strategic necessities.

The Current State: Profitable Impact at Scale

Today, Reach 52 operates across 15+ markets with 250+ staff. They’ve distributed medicines to 26,000+ pharmacies and clinics. They’re actively expanding in East, West, and Southern Africa.

Most importantly: the medicine distribution business (Reach 52 Access) generates enough margin to self-fund health education programs (Reach 52 Impact). The social mission isn’t grant-dependent - it’s built into the business model.

“A majority of this is actually self-funded from the medicines distribution business. And then some of it is B2B or grant funded.”

This is the holy grail of social enterprise: using market mechanics to fund social impact sustainably.

Three Things to Remember

1. Revenue discipline creates resilience. Grants can make you lazy. Customers keep you honest. Bootstrap as long as possible, raise venture only to scale what’s proven.

2. System friction is more important than user friction. Map the entire ecosystem - who loses if you win? What entrenched interests will resist? Design around reality, not ideal theory.

3. Saying “no” is a skill you earn. Early stage requires saying yes to learn. Growth stage requires saying no to focus. You can’t skip the learning phase, but you must evolve to the discipline phase.

Ed’s journey with Reach 52 proves that social businesses can scale profitably across some of the world’s toughest markets. But it requires equal parts competence and naivety, revenue focus and mission commitment, flexibility and discipline.

The 52% of the world without healthcare access won’t be reached by charity alone. It’ll take entrepreneurs willing to do the hard, boring, essential work of building sustainable businesses in underserved markets.

Want to Learn from Purpose-Driven Founders?

Subscribe to the Helping Billions Podcast.

Have a founder we should interview? Have them apply here, or nominate them here.

Resources and Further Reading:

* Ed Booty on LinkedIn - Connect with Ed directly

* Reach 52 Website - Learn more and sign up for their quarterly newsletter

* Ed’s “Dear Ed” Letter - Raw reflections on the founder journey

* WHO Universal Health Coverage - Context on the 52% problem

* Financial Times: “Low-income countries pay up to 30 times more for medicines” - Market failure documentation

* HBR: The Problem with Nonprofit Business Models - Why earned revenue matters

* Lean Startup Methodology - Framework for validated learning

* The Culture Map by Erin Meyer - Understanding decision-making across cultures

* HBS: The High Cost of a Bad Hire - Why hiring matters more than you think

Transcript

Mark Horoszowski (00:10:55):

Ed, welcome to the Helping Billions podcast. I am so excited to be having this conversation. I’ve been following the Reach 52 story for, I should have this memorized, but it’s years, it’s pre COVID time since we first interacted from work and some of our partners had interacted with your work. So it’s been really, really cool to just see the growth, the expansion. We’ve had the joys of meeting in person, and I just can’t wait to introduce you to this community. So without further ado, ed, tell us what does reach 52 do?

Ed Booty (00:12:00):

Hey, mark. Hey listeners, thanks for tuning in. And yeah, thanks for the invite as well. I’ve definitely enjoyed the conversation, so looking forward to the formal one, if you will. Yeah, so brief intro, I’m Ed, set up an organization called Reach 52. We’re headquartered in Singapore, but operate across Asia and Africa. We take our name from the problem and the mission of the company, which is over 52% of the world actually gone up. It’s now 56% of the world since we named the company Cannot Access Essential Healthcare. So that’s basic medicines, doctor services, diagnostics, and therefore we are trying to reach the 52% of the world that lacks access to these essential health services. According to the World Health Organization, what we do in practice is sort of three main parts of the business. Firstly, we collect a lot of data on community health needs. So we go out, we have a tech platform, we train members of community to understand what medicines are available, how much are they speak to residents, speak to doctors, and at a local level. Generally outside of cities, we don’t do much work in urban areas. It’s generally rural, understand the health needs. We don’t monetize data, we don’t sell data. We just collect that as a deeper understanding of local health gaps and access issues and two main parts of the business.

(00:13:24):

Firstly, we do really data-driven health education and screening campaigns. So based on the understanding of a village or a community, we would train doctors, train nurses, train midwives, and then do actual health education events. 50 people, a hundred people would come. We also do a lot of screening across about 20 health issues. Sometimes that’s B2B funded, so we work with a range of pharma companies, consumer health companies, some grants and donors who sometimes fund that work. But the second part of the business called Ridge 52 access is really focusing on selling, distributing essential medicines, small pharmacies, small clinics. We would supply them with products that’s a mix of products from a range of companies, sometimes generics manufacturers, sometimes multinationals. But we’re looking to bring in the affordable products to these communities. Some if the impact programs aren’t funded, sometimes the reach 52 access margins can self-fund the health education and screening. So a majority of this is actually self-funded from the medicines distribution business. And then some of it is B2B or grant funded, as I said, probably. Oh, sorry. Yeah, just final comment. Yeah, we’re sort of heavy in India pretty much nationwide in India across about 15 states, 250 staff growing really nicely in Eastern and southern Africa. And we’ve just hired our West Africa leads as well. And we’ve got a smaller presence in Indonesia, so started in Southeast Asia and grew India, and now a lot of our growth is really happening on the African continent.

Mark Horoszowski (00:15:07):

It is just amazing to see the continued innovation and growth, and we’re going to dive into that, especially the geographic expansion, an area where we see so many entrepreneurs struggle. But I want to just even come back a little farther in time. I think lots of humans know that healthcare is not granted equally, let alone accessible to a lot of people, but you’re actually doing something about it. Tell us just a little bit of the journey into how did you get started taking on especially such an audacious mission?

Ed Booty (00:15:45):

Yeah, I mean, I’ve been asked this question many times. I think I’ve counted seven reasons that kind of coalesced at the right time, that led me to quit my job in the UK comfortable life and moved to Singapore and sort of solo found with a company. Really? Yeah, I mean, going right back, went to uni, was meant to go straight into consulting after uni. My dad was just like my one big regret is having a bunch of kids going into a normal career and never really seeing the world. So he lent me some money and I traveled around India. So we delayed the offer for a year, took a year plus out, well, at least originally a year plus out to go see the world a bit. Yeah, went to India was where I felt I could stretch my 3000 pound loan from my dad most.

(00:16:29):

And yeah, it really changed my mind, changed my worldview very deeply. I mean, a lot of the, I could talk about this for an hour, but one of the first days in Mumbai, flew into Mumbai, landed from the UK driving down the side of the road and there’s just two plastic chairs, bloke sitting on a plastic chair, empty plastic chair next to him, and then just cardboard ripped cardboard, permanent marker. Dentist, dentist. I was like, holy s**t. Really shocked to the senses. Obviously India sounds, smells normal, just chaos. But know why some of these health things stood out to me, traveled around India for a bunch of time, ended up with not wanting to leave, being fascinated by emerging markets, volunteered at a few NGOs, really coming out of business school. Really didn’t like the NGO model felt. It was sort of like peripheral to change in the actual problem.

(00:17:20):

It’s like a side project to actual markets and the actual way society functions. So volunteer at NGOs really felt grants and donor models are always going to be fiddling at the edges versus systemic seismic change. But yeah, sort third reason ended up volunteering for a pharma company or interning at a pharma company in India. Didn’t want to leave, ran out of money, and this pharma company was trying to make their products available in rural India, and it was just hard for them every step of the way. Internal challenges, they’re making money in the cities, going rural is harder, have to work with small distributors. Finance don’t like it, collections risk, even if you get the products into the market, which they did. They moved so slowly. They actually did a peer review of this, it’s actually published like 15 years ago, and they got this supply chain model working.

(00:18:14):

Affordable medicines were available, but due to the low awareness education screening, the products didn’t move. So saw went traveling, opened my eyes, didn’t think NGOs worked. Ended up interning for a big pharma when I was 21 and saw one of the biggest pharma companies in the world trying to do good, and they were struggling every step of the way. And then, yeah, went back into the uk, went back to the uk, sorry, had the idea for reach 52 when I was 22, still got the original pitch deck, original two pager, still look at it from time to time and it’s changed a lot, but it’s all still there. And then, yeah, saves up money. I was just the whole time from when I was 21, 22, just banking money said When I get to a certain amount of cash, I’ll quit my job and seed the company and do it.

(00:19:04):

So seven years in consulting, banking money the whole time eventually hit the cash that I thought I needed to started it and sort of quit my job on one way flight. And yeah, that’s how it started. And then people often do ask me, how does it actually start? Then you just build a pitch deck and you start pitching people. I mean, that’s it. Go on LinkedIn, find people, document your idea. I was doing a lot of this on my evenings and weekends before I quit my job. Built the website, built all the collaterals, started out reaching people, had the cash and then yeah, we were originally very southeast Asia focused, so therefore here I’m in Singapore.

Mark Horoszowski (00:19:42):

And so let’s go into that time a little bit more. So you’ve got the idea, you’ve got a website, you’ve got some cash, you’re going out and raising. Are you also working on mission delivery or customer acquisition at the same time, or were you first trying to raise investment to then build anything? Talk to me about that stage.

Ed Booty (00:20:01):

No, I was, and to some extent still am quite stubborn on this, so we never really took any grants until COVID was a hard time. You can’t need to take grants. I was very 10. We were not going to take any grants because I genuinely believe grants can make you a bit lazy From a business model point of view. I think it would make me a bit lazy and yeah, we had to be revenue generating. We had to prove the business model before we got investments. So we actually didn’t raise any venture money until three and a half, close to between three and four years in. So yeah, it was straight into customer acquisition. Yeah, small pilot fund it myself, build the team myself using my own cash for this that I’d saved up. And then straight into let’s make money. Yeah, let’s actually build the business model first. Let’s get some actual traction. And then, yeah, we haven’t actually raised any money since 2020.

Mark Horoszowski (00:20:54):

2020. Wow.

Ed Booty (00:20:55):

We’ve genuinely been focused on revenue versus just trying to raise investment money really.

Mark Horoszowski (00:21:04):

So of the three pillars at reach 52, where did the first cash come into the business? Was that on the community data side? Was that the education? Was that on the pill distribution?

Ed Booty (00:21:17):

Yeah, good question. So the health education and screening programs, we call that reach 52 impact. That was the business model up until about mid 2023. So yeah, first cash was health education and screening funded by B2B partners, well with most of the big pharma companies and health companies as well as grant makers, save the children UNICEF a bit. There were more funding us to do service delivery versus free money kind of grants. And then, yeah, the re 52 access side was kind of like a bolt on mid 2023. We evolved. Late 2023, we got our first revenue, and then really just last year was where it grew across India and into Africa. So most of that’s past 12 to 18 months.

Mark Horoszowski (00:22:02):

Yeah. Wow. Yeah, so cool to hear about that growth. So one area that I want to go even deeper on is you mentioned you saw nonprofits working in this space around health education. You had had some of that experience. Knowing you, I know there was a ton of research I’m sure that you were doing, especially with that consulting background, you decided to not do the nonprofit model. You didn’t want to be relying on donations. You said, Hey, there is a way to monetize it, and you were able to draw the connection of, hey, there are companies trying to distribute in this market, but without education, the pills aren’t going to go there. How did you find that bridge where obviously so many people haven’t been able to find that bridge? Did you have contacts from your consulting days? Were you hammering the phones on farmer contacts to figure out how did you actually find out that those business to business buyers would pay you money in order to deliver that health education?

Ed Booty (00:23:03):

Yeah, I’ve never genuinely thought about that. I guess in a way I found out because I was on the inside, so it was working for a pharma company, seeing it firsthand when I was 21 that gave the idea, I saw a pharma company that I was working for trying to do it and struggling. So I guess the deeper understanding of the needs came from being on the inside. But I mean, I could probably challenge even that question actually. I mean, there’s been financial Times articles, world Health Organization reports, inea ad blah, blah, blah. I’ve seen all sorts of stuff online medicines are more expensive due to often parallel imports. Companies don’t launch medicines in smaller markets. It’s not worth it for them. Therefore, the smaller markets buy from bigger markets. So in Kenya, you might have UK packs of medicine. They are literally sold in the uk, exported to Kenya, available in Kenya, and it’ll be more expensive than the UK because you add on the freight, you add on the margin, generally double if not quadruple Financial times article, low-income countries pay 20 to 30 times more for certain medicines than rich countries.

(00:24:11):

When I go from Singapore mature market for which I live to Philippines or Indonesia, medicines are more expensive. You would save money. I would often save money buying my medicines in a rich country, US is different of course. And obviously it’s not uniform, but generally it’s a known problem. The slight challenge is that if you are purely profit driven or a big company, I mean, I don’t blame big companies that are shareholder listed and have to deliver shareholder returns or whatever. What are you going to do launch one more product in the US or launch a bunch of products in a bunch of small markets where regulatory’s hard, the market’s small, there’s comparatively. So I think it’s a known problem, but I think it’s basically having that pure play business focus to go after slightly harder markets which aren’t technically as lucrative, and therefore you have to have that social business blend.

(00:25:08):

I think the other big way that we found out the problem looking back is also just the first, I won’t even go into it now, but the first iterations of Reach 52 impact health education and screening. They were really tech heavy. They were really data heavy. We were talking about AI back then. I remember this pattern market didn’t want that. That was our original proposition. A lot of the companies were just like, we just want to screen more patients. We don’t really care about having all the data and the fancy tech and the fancy tools. So a lot of the learning also came from the early pilots, I’d say. And yeah, we definitely iterated every year to the current model, and that was definitely learned by doing in terms of the actual service that we now have.

Mark Horoszowski (00:25:52):

Yeah, okay. Very, very cool to hear. So if I’m hearing you, you saw from research, again, consulting mindset, but if you just kind of looked at it with a financial hat on, there’s a market inefficiency. There’s big markups going into areas, even if production is elsewhere because of where these products are distributing. So you’re seeing a big market inefficiency. So you’re saying, okay, there’s got to be more effective ways to do this. You’d seen attempts to deliver products in these markets and saw the real friction points. What was keeping users from absorbing products had a hypothesis about how you could get through it. So you went to market, you shipped something. Sounds like you had a very kind of tech heavy, I’d imagine, costly approach to trying to deliver that and saw that the solution was actually simpler. But it wasn’t until you were in market testing that you saw that

Ed Booty (00:26:42):

No. Yeah, yeah, exactly.

Mark Horoszowski (00:26:47):

How do you think about testing, right? I think I speak to entrepreneurs in so many different industries, so many different segments. And testing always looks different. Some people are really structured hypotheses written up on a board somewhere and they’re running a bunch of experiments. Others are saying, Hey, we’re going to go out and try and ship this, and if we get X percent of a population engaging with it, and that’s good for you. When you say testing and learning, what did that process look for you look like for you? How did you know to keep going? How did you know to change?

Ed Booty (00:27:28):

Firstly, I would actually flag this as one of the mistakes actually. I’ve made obviously many, many mistakes in the course of 3 52. One of them was we

Mark Horoszowski (00:27:36):

Love talking about mistakes.

Ed Booty (00:27:38):

I definitely assumed, and even now I sort of assume that what I’m doing right now is the right model. Yet in my heart and my gut, I know that it’s going to evolve again, but we’re sort of scaling this model, and that’s the right mindset. So in a way, we were, first model was very tech heavy, whatever. We tried to scale that. I mean, it was like we got the solution, we scaled it, and then by scaling it, and then we launched in many markets and then within re 52 we’re launching a new business unit and offering, and that would go to the markets. And then the change became months, not days, half years, not days, because doing X and then X didn’t work. But then we’ve got to go to Y and then try to pull the team from X to Y. When we just launched it, definitely, we grew too fast in early years

Caroline (Producer) (00:28:22):

And

Ed Booty (00:28:23):

We tried to scale things too fast. Now,

Mark Horoszowski (00:28:28):

Can I say clarification question there? When did you scale something that wasn’t working too fast? You thought it would work better than it did, so you pumped a lot of resources into it and then it just wasn’t working as fast. So then you were kind of caught and like, ah, we still have to deliver it this thing, but the margins aren’t working, it’s not growing, and so we got to kind of start building something adjacent. Is that accurate or correct? That for me?

Ed Booty (00:28:54):

Yeah, that’s generally accurate. I mean, I could think about it. I mean, if I could just go through the different iterations of read 52. Firstly, it was tech heavy. We were getting the health workers to do health education and screening. We always wanted to do medicine access. Originally we started having the health workers also having a marketplace of products. So you could do the screening, they would also do the distribution. We got partners for that. Pharma companies willing to give us discounts, but it was a compliance nightmare doing the screening and diagnosis support. And the product access was hard. Quality control residents didn’t want to pay delivery fees. If the product was $1, they wanted to pay $1, very limited ability to pay. So then we evolve from that to doing more, trying to be a distributor. But then the margins are pretty hard and there’s a lot of big distributors that have the volumes.

(00:29:42):

So for what we do now, we sort of split it, health, education and screening team one, medicines distribution, sales marketing, supply chain support team two, and then kind of tech sits across the top or underneath, depending on which way you look about it. But then, yeah, the way that we’re sort of thinking about it now, because I’m still very startup minded, but we have got more scale now. We’re at 450 distributors. We distribute 50 60 products, and that’s growing, growing products available in like 26, 20 7,000 pharmacies. So now we do have pharmacies and clinics, sorry. So now we have pretty reasonable scale. I mean, in our field, rural health access or tier two market health access, we’re one of the reasonably scaled players. So I do have this current plan. It’s actually not on the website or anything yet, but I do have it in the decks of reach 52 labs where we’ll have health education and screening. This is just raising awareness, call it marketing, patient engagement, whatever you want to call it. And this is distribution. We can distribute medicines. We absolutely should talk about diagnostics. We absolutely should talk about health insurance. We absolutely should talk about consumer health products. We absolutely could talk about other financial services such as health loans. I mean all of that could be distributed through events and engagement or physical product distribution.

Mark Horoszowski (00:31:07):

And

Ed Booty (00:31:07):

Therefore we will have to have this reach 52 labs concept slash team that would really focus on that pre-market testing. When it works, it would go in this team or it would go in that team. So the way I therefore think about it is scale the basics in a way, scale the foundational thing, but then keep agility on the products. That could be a feature, that could be whatever, but you do have to scale the other just for this, well, I dunno who listens in a way, what sort of companies they’re doing. But for us specifically, if we went to a big pharma company and said, we’d like a discount on medicine for poor people, please, by the way, we can reach 20,000 people in one country, a small subfraction of one country. It was a non-starter. Now we start talking about 15, 16 markets. We’d like to aggregate procurement across a significant scale. We’d like to place this sort of order. The discounts start coming to 30, 40, 50%. So for us, our play, almost the product market fit is having scale. But for other solutions, of course, you’d want to test app, like a real tech heavy solution. You’d want to make sure that was really working with 10 users first. But for anything like aggregation of distribution, aggregation of products, aggregation of people, for us, we really needed scale.

Mark Horoszowski (00:32:38):

I always think that’s such a, well, I’ll use the word brave. I think it’s a very brave, and I think a lot of entrepreneurs do this, right? But it’s very brave to say, okay, this will work when we get to certain levels of volume because reliant on these things like better prices, more efficient distribution, et cetera. In order to justify that, to justify that to your team, to yourself, to investors, did you have crazy financial analysis? Was this gut instinct? How did you come to realize that that model not only had potential to work, but that you could actually deliver on it and it would work for you?

Ed Booty (00:33:31):

The way I processed this, I’ve often said my strategy is take the path of least resistance. And I say that sort of as a joke, but also because if you are selling something and it’s selling itself, hypothetically, any market, you’ve got a new drink and it’s flying off the shelves in a pharmacy or whatever it is working. It tastes good, it smells good, whatever it is working. So I guess within re 52, we’ve often tried some stuff, all the different business models, and it was a hard sell. Sometimes we stuck to our guns, eg. The marketplace. I mean, we lost a bunch of money on that. It did not work. We definitely committed, invested. The first funding we raised was almost to launch this, we burned out money on this. It didn’t work. With hindsight, it was a path of much resistance from the pharma companies, compliance, quality, blah, blah, blah, from the residents.

(00:34:29):

They didn’t want to pay delivery fees, et cetera. We should have pivoted earlier. So yeah, the way I definitely now think about it is even with the, we’ve got distribution in 15 African markets, distribution partners, we could sell medicines within 15 African markets. Six are working really well right now. We’re getting decent orders in six. Two of them would be really hard. We’ve got the partner, but for various whatever, legal, tax, financial partner interest reasons, probably not where we want to start. So yeah, I guess it’s, I think about it as throw the net out wide and then find the path of lease resistance and that kind of is where you should focus effort if it has that sort of organic traction, I think that would be true for anything. If you have an app and people are really using a certain feature, always clicking that button, they seem to love that bit. Focus on that. And if you are

Mark Horoszowski (00:35:21):

Selling

Ed Booty (00:35:21):

Products and you’ve got 20 things in your basket on your marketplace and people are always buying the nutritionals in your multifaceted ePharmacy, focus on the nutritionals, that’s where there seems to be natural traction. So yeah, I’m a big fan of start wide and then work out the organic demand and then filter to where you should focus. And that’s definitely what we’re doing now a lot more.

Mark Horoszowski (00:35:44):

Yeah, very, very interesting. Now, you said something that I really want to come back to, which is like, oh, we should have pivoted earlier with the marketplace going back in time. Wish we could all do that on the entrepreneurial journeys. I know I’ve got many of those. Are there any signs that in retrospect were obvious, right? Almost imagining you’re talking to another entrepreneur here and it’s like, okay, if you see these signs, you got to be having real talk with yourself about the need to pivot. What were those for you?

Ed Booty (00:36:22):

I guess just very low demand if you are convinced of something being a good idea, but the market’s not buying it. For example, with the pharma companies, we want to sell your products, we want to do this way. They were worried about cutting out pharmacy. So they go via our marketplace that actually cuts out their current customers, the doctors and the pharmacies, because going via this decentralized marketplace. So there was a lot of resistance from the big pharma. I mean it would take nine months I think it took to get our first products because we were going through compliance. How are we going to do quality assurance? How are we not going to piss off the existing partners to buy our products? And there was resistance. And then when we were selling it in the communities, they didn’t want to pay this. They didn’t want to pay that. I mean the signs were there. So I guess it’s looking for those points of friction and then it’s like whether you could solve it, I mean possibly it’s like your app’s not working and you can solve it by doing A or B. So you’re looking for that friction point to either revolve, but for us, yeah, there was enough friction points that meant that were not solvable probably at least in the short term with our resources that men should have just pivoted earlier. Yeah,

Mark Horoszowski (00:37:30):

Yeah. I love the mention of friction. We recently did a workshop with Dan Ale. He’s like a behavioral psychologist and economist, and his advice to every effort, pure for-profit and mission-driven is at a very human level do friction mapping. And I think we hear about that a lot from a user perspective. For an individual to use something, map out the points of friction. Do they have to remember something? Do they, do they have to go somewhere? Do they experience any pain when they pull out their wallet at any point of friction? Just get rid of those. Get rid of those, get rid of those. So I love the,

Ed Booty (00:38:16):

And sometimes, I mean that’s what I’ve learned. And then sometimes this is valid, map it out, and then you can either build a great service to remove all those friction points, whatever stripe and payments or whatever it is is a beautiful experience, Uber or whatever. But then, yeah, sometimes just the market’s not ready. I mean, that’s it. This would be one where I’d say perhaps we were like, maybe this will work one day, maybe it won’t. But it was too early for the market. The whole structure there was too much friction to basically bulk you down versus friction that you could solve and build a great service around it.

Mark Horoszowski (00:38:50):

Right? Well, and I think that’s such an interesting thing that in the way that you’re using friction, it’s like system friction, right? It’s because I think so often social entrepreneurs, right? Entrepreneurs that are using the power of the market to address and advance on social and sustainability issues, we are often operating in more complex systems, especially if you have business to business sales motions, customers, international corporations. And so mapping that entire system seems like you got there from an understanding. But if you were, and I’m kind of repeating back, hindsight’s always 2020 on that. But if you had really understood the friction in that entire ecosystem, the importance of local pharmacists in there, the importance of the other

Caroline (Producer) (00:39:42):

Educational

Mark Horoszowski (00:39:42):

Organizations, all of these different players, even though your solution made perfect sense for the end user, because there’s such an entrenched distribution and education channel, the points of friction that you had to get around were in that case, not possible. But in other parts of your business model, you have been able to find ways around that. Does that resonate? I’m curious.

Ed Booty (00:40:08):

Yeah, it does resonate, but then I would also, I mean the way I’m actually processing this in a slightly different way, which is because even if I had a perfect understanding of the market, it is difficult. I always said one of my historic, I haven’t used this phrase for a while, but I always say I started reach 52 and I’ve had just the right amount of competence and naivety, and I genuinely mean that I knew my stuff. I’ve worked in healthcare for six years,

Caroline (Producer) (00:40:34):

I love it,

Ed Booty (00:40:34):

But I also didn’t know a bunch of stuff and I tried to do stuff that other people wouldn’t do. And that became quite good because when you were going to pharma companies, this new solution, it had too much friction. Yes. But from a enthusiastic young person doing something different, a hundred percent got us our first customers, clients, partners. Did it work? No. Do those partners still work with us? Yes. So there’s something about also trying really hard things, not hard things, but trying to do something new. I mean, you shouldn’t just be bogged out, do a bunch of research, it’ll never work. It’ll never work. I could give you still eight to 10 reasons why reach 52 would not work. And I’ve been told many, many times by many people, more senior than I, with more gray hairs than I, that reach 52 won’t work right now. Would if you had a third person on this podcast that was skeptical about rural markets, corruption, fraud, risk, all these problems, there would be somebody that would say RE 52 can’t work. Many people that would say Read 52 can’t work even now. But you have to sometimes do these naive things. It is important to push and try and it’s also how the world changes, I’m sure. Yeah, the Ubers of the world and Canva, is it Canva that design one of those design apps,

(00:41:53):

A hundred VC pitches, everybody said, no, Adobe’s too entrenched. You’re never going to get round, blah, blah, blah. Uber got turned down Airbnb, no one’s ever going to stay in other people’s houses. So many of these big game changing ideas have been counter narrative and have been naive and have had nos, but subsequently pivoted and subsequent or sometimes pivoted, sometimes didn’t, but subsequently became hugely successful industry defining companies.

Mark Horoszowski (00:42:21):

So

Ed Booty (00:42:21):

I don’t regret the naivety, and in a way, I don’t regret not having the knowledge to know it was a bad idea to start, but starting something, you’ve got the knowledge. That

Mark Horoszowski (00:42:32):

Was a

Ed Booty (00:42:32):

Weird sentence, but

Mark Horoszowski (00:42:34):

No, I’m totally tracking. I have this quotes to live by library, and one of them that just came across that I literally just added, it’s the third from the bottom, is that geniuses do all their best work before the age of 30, when people are still brave enough to do the things before they’re too wise to try. And so yeah, I totally hear that. I love that. It’s like the confidence and the naivety. So cool. I want to keep talking about then the growth of your organization. So India was where you were really finding your first real successes, so to say, that’s where your enterprise was growing the most. And you’ll correct me if I’m wrong there, but India was really your first kind of market, correct?

Ed Booty (00:43:24):

Philippines, Indonesia, for the reach 52 impact side, India is where we’ve got more mature pharmaceutical market, slightly easier regulation to actually become a pharma company because it’s a pathway trodden. So yeah, the reach 52 access has taken off in India, but definitely Philippines, Indonesia, were the first sort of impact markets, but the medicine distribution side is a lot harder there just yet, not a path. Well trodden. So yeah, India’s kind of got that recent spike, but yeah.

Mark Horoszowski (00:43:56):

Talk to me a little bit about market identification, right? Indonesia and Philippines, not next door India as well. What analysis did you do? How did you decide to roll out? Obviously it sounds like the India, it makes sense from where you had experience where you firsthand, but yeah, how did you choose Philippines and Indonesia as markets for impact?

Ed Booty (00:44:31):

RE 52 is a social business. We want to make healthcare affordable. We don’t want to work in the richest segment, but we also don’t want to work below poverty line. I mean, we are not a charity. There’s fortunate, there is some segments of society where charity, NGOs, donors, they have to work. It’s absolutely essential, et cetera. But we want this kind of what we’ve often called missing middle, and they need to be somewhat concentrated, missing middle spread out everywhere is difficult. So yeah, it is basically just looking at availability of health services has to be low. So somewhere like Thailand, some of the best universal health coverage in the world, super efficient. I can’t remember the amount they spend per head. They’ve got really good health services. Malaysia is pretty decent. Vietnam is pretty decent. Indonesia, Philippines, still significant gaps in healthcare access, heavily out pocket markets.

(00:45:27):

And then you have these regions often we don’t want to focus on the whole country. We’d have target provinces or districts or states, whatever you would call it, in each market where there is this density of slightly too wealthy for charity and slightly too poor for the current commercial rates for health services. And that’s the missing middle. And these markets, 20, 30 to 40% of the population regions would fit into that category. And that’s where we launch in the market 30, 40, 50 million people or more that would fit that category. And they’re in province 1, 7, 8, 10, and then that becomes our launch strategy. So yeah, basically understanding the income profile, population distribution and overall sort of quantum against the health access barriers basically. Yep.

Mark Horoszowski (00:46:19):

Okay, cool. So as you kind of thought about the different markets you could go into, if I’m summarizing that, you’re saying, okay, within this general part of the world, this is where we’re operating, these are within our time zones, this is easy for us to operate within these places, essentially, where is the biggest market opportunity? This is almost entrepreneurial basics, right? Market

Ed Booty (00:46:42):

Impact. I would say market. Market impact. Market impact, right? I mean, yeah. So these people, yes, they have five to 10 to $15 a day of income. Poverty line is $2. So five to 10 to 15 is reasonable money, but the health services are too expensive. So you can sort of build a purpose built offer for these five, 10, $15 a day people that lower healthcare. So it’s affordable to them in heavily out of pocket markets. So we’re generally working in markets where people have to pay every time they see a doctor. Highly out pocket paid market.

Mark Horoszowski (00:47:17):

Yeah. Okay. Yep. Okay, cool. So you say you had enough market traction to know, okay, that’s where we deliver real value. These are the markets that we can kind of move into, still needed validation, but then you’ve been able to move into those effectively.

Ed Booty (00:47:31):

And then on the other, I wouldn’t call it quite a platform, but on the other side of the platform, companies, businesses, people with products, that’s also a segment they’d be interested in accessing. Can’t be the same price, it’ll have to be a discount. But if we aggregate enough of these missing middle people, it becomes a opportunity. So opportunity on this side of the platform, impact on this side of the platform. They drop prices a bit they can afford, therefore it’s a market and impact opportunity where kind of everybody wins. I’ve thought about this a lot over the years. We are one about our logo is the dots. The dots on the reach 52. Our tagline used to be joining the dots of healthcare access. So we’re trying to work with the companies, with the distributors, with the governments, with the residents where everybody can win. We are genuinely trying to join the dots of health, healthcare access to kind of make

Mark Horoszowski (00:48:23):

This

Ed Booty (00:48:23):

Analogy come to life.

Mark Horoszowski (00:48:27):

And bring me a little bit more in terms of your decision making, because anytime you expand into a new market, there are challenges you have the staffing challenges, delivery challenges, legal challenges, taxation challenges. When you decided to kind of expand, so now you’re kind of operating at least at that time in three different countries. Can I ask, were you fully profitable at that point in time? Were you still operating in the red? And did you make that leap in order in hopes of getting to more impact or to getting to profitability? What led you to make that? Where were you financially health wise, and what led you to then make that decision at that time?

Ed Booty (00:49:13):

Yeah, definitely would’ve been still loss making back in Philippines to Indonesia. India. Indonesia to India would’ve been loss making. So we raised, we got Philippines working and then we raised money and that money was kind of to expand. And so part of raising venture money was to enter markets like India. I mean we entered India early 2020. It was the last trip I did before the COVID lockdowns. I sort of flew back in the borders shut. And we raised money 20 19, 20 20. So we were raising money to scale basically. And that was because we know we needed scale to start talking meaningfully to big pharma. We were getting the conversations, we were getting the FaceTime or Zoom time, but we were just too small. And the problem is if you’re just in one country in the Philippines and they’ll say, go and speak to the Philippines general manager. But we were trying to sort of be above market, regional aggregator, Asia and Africa, new business model so, so we definitely still lost making and raise money to do that. I dunno if it’s just, I don’t find market expansion that hard. Everything you’ve said, you used the word challenge for me, it is just a process. You’ve set up a company. Is it easy? Well kind of, yeah, actually you just find a lawyer, it’s more boring. It’s just genuinely boring.

(00:50:37):

Lots of paperwork and I have to sign an inch of paper or go to the embassy or go to notarize or it’s not hard hiring.

(00:50:48):

You have to speak to a lot of people. Are there lots of awful interviews? Yes. Are there a smaller number of really great interviews? Yes. So it’s just like a process. And I don’t even see it now if said, we know if there was the right opportunity and we had to launch in, I dunno, Mexico a completely new region, a bit daunting, but just understand the market. Does the market work for us? Would there be significant client interest? Are we having business on financial impact? And then research online, ask for recommendations to find a lawyer in Mexico to list a job on LinkedIn, filter the cvs, speak to people. And then yeah, it’s often quite a nice feeling because often when I’m flying to the countries for the first time, it’s obviously companies in a way like ethereal social constructs, they’re not real, right? It’s like a sort of makeup thing where we say read 52 is a company, but it is very interesting on the first flight to a country, I often sit there with, because I try to travel really light.

(00:51:44):

So I’ve got my little backpack and I don’t have my hand. I’ve got my little backpack and I’ve got my laptop in my backpack. And it is often a very weird, I like the touchdown because you’re like, okay, fine, re 52 is not here, it’s not a thing now. But in six to 12 months, re 52 will be a thing. We’ll be selling medicines and doing health education and doing screen. But yeah, market launching and medicine regulation. If you want to launch a medicine in the market, you have to work with the government and you have to register that product to make sure it’s safe and quality and everything else. Is there any shortcut to that? No. Is it fun? No, but it’s just a sort of process. You just have to get on board with it. And it’s not a challenge, it’s just more time and effort and just doing it. But that said, actually, if I was to also just make one comment for a newer entrepreneur, and if that is still effort and often shutting down a company is harder than opening it, it takes two years or filing, putting stuff in newspapers, all sorts of wacky stuff. So if you could find a way to concept test a market, work through a partner, try out before doing that sort of legal legwork would certainly be better. But then after you want to do it, just commit and yeah, it’s a lot of time on the phone basically.

Mark Horoszowski (00:53:02):

Yeah. So then the real thinking, the real analysis, the real doing, is there a market problem? If we solve it, can we create impact are the needs and the opportunity there? And then how can you test that as quickly as possible? And then once you build validation there, then might not be the most fun part. And there might be bureaucracy and there might be lots of steps to take, but there’s local lawyers, find them, they’ll help you walk through the whole process of

Ed Booty (00:53:33):

Recommendations. Yeah, exactly. Yeah. And then it is not easy, but then it’s done. Also, there’s an interesting dimension as well of like, can you win as well? I do. For example, China, there might be a lot of need in China. I don’t speak Mandarin. And China’s obviously going down a huge domestic in a good way, in my view, actually building up their huge domestic capacity, decent industrial strategy, local pharma companies, local distributors and China might have need. China might be huge. We could set up a company in China. Do I think we’d actually win in China as reach 52 as a foreign led entity in the space of collecting health data? No. So it’s also just, I think that’s actually quite important because it’s like that it is a rational gut feel of, and this is similar for many African markets. I mean some are very open to foreign led innovation, et cetera, et cetera. Some are really going down that domestic strength and more protectionist mindset. Even like Indonesia is doing a lot more, Trump is filling the headlines with his tariffs, but many markets put tariffs on foreign made pharmaceutical companies and have done for many, many years, and many international companies are exiting those markets. So you have to kind of look at the friendliness and your ability to win as well, which is

(00:55:01):

Above all that.

Mark Horoszowski (00:55:04):

Now, I’d be curious to know, especially knowing who some of your corporate customers are, your big pharma customers, have you ever had, and you’ve also taken investment money, have you ever gotten pressure to try and move into a market or to sell into a product that you did not think was right or was not good? And then if so, how did you kind of navigate the tension that would come from that?

Ed Booty (00:55:35):

So I’ve obviously got entrepreneurial friends and definitely I’ve heard this many times. So yes, we have had that. Companies want us to go, it’s money. You are excited, it’s growth, et cetera. And therefore we said, yes, a hundred percent that’s happened a hundred percent. We said yes. We’ve subsequently exited some markets because we had one customer and it wasn’t aligned to our strategy and it wasn’t a big enough market to have the missing middle density. And I’ve had, I think there’s another company, I obviously won’t name them, but I think they were in 17 markets pushed around by one of their companies who wanted them everywhere. They’re now M four I think, or three. So serious expansion for one customer and then 16 to three countries when that funding went out. I think my honest view on it would be, again, I don’t regret doing that at the early stages.

(00:56:25):

And this is like we were actually in Cambodia, we launched in Cambodia, we got our first contracts in the Philippines. This partner really wanted us in Cambodia. We launched in Cambodia. Cambodia went quite well for us for a while, but it is a very small market. There’s limited partner interest. We did unfortunately have to exit that market two or three years ago, but it was the right decision at the time because you have to get points on the board, you have to learn, you have to grow revenue. It was absolutely the right decision. I loved working there. Genuinely I miss going there. It’s unfortunate that it didn’t work, but I guess now it’s just being true to you. We have the quasi luxury of being true to our own strategy, and then we’ll just say no. And it’s similar just for products. It’s partly market expansion, but it’s also product.

(00:57:11):

Like if we speak to a pharma company, which I do a lot, and they’re trying to sell a expensive product, that just won’t work. Probably originally I would’ve been like, okay, fine, we have to try at least. But now I’m just like, that’s not going to work. But the early stage, I do think it’s important to get points on the board, even if it is pilots, et cetera. Now it’s just having a pretty clear playbook of the products and markets that we want to operate in and scale. And if it doesn’t work, we have to say no. I would genuinely say we say no to 50% of partnerships

Mark Horoszowski (00:57:50):

Now.

Ed Booty (00:57:51):

Maybe. I mean, I was just checking my emails, obviously morning in Singapore evening for you, but I was checking my emails this morning and I’m like, I want to do this product. And the team in Africa were just like, no, we’re not doing that. So yeah, I genuinely say of the products we get offered of the market opportunities, they want to do A and b, 50%, maybe more actually. I mean, yeah, it’s like significant. And that’s just like we have to go, we have to grow. We know what works. And then it’s just being true to yourself and sticking to the mission and not getting distracted. I mean, I’m a bit hot on this with the team at the moment. Yeah, we

Mark Horoszowski (00:58:32):

Focus,

Ed Booty (00:58:32):

Focus, focus. And I say no to a lot of stuff.

Mark Horoszowski (00:58:35):

Yeah. Now saying no is one of these things that we always kind of hear. As entrepreneurs, you have to get good at in execution, way harder. How do you build the strength? Do you get good at saying no? Is there a mental model that, do you have some type of structured goals of the quarter up on the wall? And if it’s not related to that, bring me actually into the halls. Even the virtual halls of Reach 52 here, how do you build up that muscle for you to get good at saying no and your team members as well?

Ed Booty (00:59:15):

No. Yeah, I guess I’d probably think about it in three ways. So yeah. So firstly, we do have a one slider that I do refer to probably not every month, but frequently where it’s sort of like, here’s a sort of process map. We want to do stuff. Does it align to the World Health Organization definition of universal health coverage? So if you’re trying to get us to do wacky product, that’s not deemed as an essential medicine. It’s generally a no. Does it align to government strategy? Many things we want to help the country. We don’t want to come in and push something that’s not needed. Generally a no if is the product more affordable? So if it’s a yes on WHO list, government likes it, we’re going to increase the price 50% with this partner, it’s generally a no. And then fourthly, can we deliver it?

(01:00:06):

So you might come to me now with a breast cancer product. Absolutely. It could tick yes to all three. We are not strong enough right now to do breast cancer. Oncology is complex new supply chain. We’ve never done breast cancer screening. That would be really complex. New hospital partnerships that we don’t have, et cetera. So we don’t have to have done it before. But even right now, I would say that we’re not quite strong enough to do something that’s complex as cancer screening treatment training oncologists, maybe next year. But right now, I don’t think we’d be strong enough to do that. So yeah, do we do it? Can we do it? Is it within a feasible delivery timeline?

(01:00:51):

I’d often say this to the team. That is a also, I said it yesterday. Yesterday and the day before on two different team calls. Does it align to the mission? I mean, I constantly come back to the mission and generally I will make more effort to say yes in those four categories if it will move the needle on reaching the 52% of the world. And the team know, I mean, they heard it yesterday and the day before. This is tough. This is going to suck, but it’s absolutely mission aligned, therefore we have to do it. But sometimes it’s like, this is tough. It’ll suck, but it’s not going to move the needle. It won’t get scale. It’s probably going to be not worth it materially for the mission of the company, and therefore it’s a no. So our name is often the problem, 50% of the world, the mission, we’re trying to get scale of essential health products and services. And yeah, it does become this sort of guide as well of a yes or no.

(01:01:48):

Yeah, more simply. Yeah, of course we have OKRs. We have a strategy. We actually just the day before yesterday did our H two strategy refresh. Every team, every region has a one slide strategy and plan. And then that maps into OKRs. And even after the team call, one of the teams had a big idea that they wanted to do with me. And I’m just, no, not right now. We’re going to focus on this and this is the six month plan. But I would actually say, I mean, it’s interesting the way, sorry, final thought. It’s interesting the way you asked the question as in it is hard to build up confidence to do it. And I was definitely more of a yes man to start. And that is just experience that is just doing enough stuff to know

(01:02:36):

The market well enough to know that A or B won’t work, but C might be an absolute winner. And that is kind of coming from trialing a lot of stuff, failing a lot of times, launching in markets that didn’t work, launching products that didn’t work, hiring people that were awful on a spectrum of awful to toxic. You start to build a gut feel or a knowledge or a experience base that allows you to have the confidence. I mean, yeah, now you could come to me with an idea and I’d be able to critically evaluate it. And that’s, I’ve been doing this for the last seven years and you don’t have that overnight. And that’s why I do think pilot test, learn, say yes more do stuff is actually a very good strategy for the first 2, 3, 4 years. But then after a while, you have that knowledge to double click on something and commit to it.

Mark Horoszowski (01:03:27):

Yeah, so as long as you’re testing and really learning from it. I mean, I’ve read, in fact, we’ll get there pretty shortly here. I’ve read some of the things that you’ve posted about your entrepreneurial journey, which we’re going to share in the notes, in the show notes because fantastic reading. But there’s a level of introspection that I think you do to accompany all your failures experiments. And so it seems like you’re really, really internalizing the learnings from that by virtue of what I do via my work at Moving Worlds, by virtue of this podcast, I get to talk to a lot of entrepreneurs by virtue of my own curiosity and the opportunities that I have to get on stages. I get to talk to a lot of entrepreneurs.

(01:04:08):

Your level of introspection is inspiring, right? It is aspirational. And it seems like you’ve really kind of brought that in into your work. But very structurally here, I think what I want to pull out and what I want to make sure of is as you operate your organization, now you have a very, very clear mission. And it seems like everybody across the organization, including investors, including partners, is indoctrinated in that you have very clear OKRs in terms of this is what we’re doing. And you said six months. So you’ve got a very clear goal statement over the six months. And then it seems to some degree, there’s a one page ish plan slash priorities. So you have these different assets within your organization. And so as new opportunities come up, if somebody else in the organization is bringing these opportunities up, you’re able to quickly say like, okay, is it mission aligned check? Is it okay R aligned? Okay, is it plan aligned? No, hey, we can’t do that. And now you actually have the experience and the reach and so to say the revenues to sport saying you don’t have to chase that in order to stay in business or learn because you’ve learned from that. Yeah. Would you correct anything that I’ve said? Would you nudge, would you add anything to that?

Ed Booty (01:05:33):

I’d say it’s correct in terms of process, but as you were talking, I also know that if a big opportunity came along, we’d scrap the plan. So it’s a fixed focus mindset with a genuine open ability. I mean, we’ve got some huge funding proposals out at the moment,

(01:05:50):

Big, big stuff. If that happens, all bets are off and we’re doing a new plan. So it is absolutely true. And I think that’s actually where I think I’ve talked to a lot of entrepreneurs in general as well. Cause I do try to introspect only speak to other entrepreneurs and share failures. We used to do founder fishing trips in Singapore that was organized. I’ve always enjoyed chatting to people and as well, and it’s interesting because often the biggest opportunities come along when you least expect and you have to maintain that openness and low ego. If I met someone I really respected and they said, your plan is off, you’ve missed this. In the next six months, you might be spinning your wheels. You have to also have that low ego ability to change and be wrong. But yeah, 90% of the time I’d say our plans are fixed. But I could also think of times where someone like, well, yeah, that’s a way better idea. Someone quits. I mean, do you Then you’ve got your perfect, you’ve got seven teams. What if somebody quits? I mean that slide is keep alive the team versus talk about scaling it. So yeah, you’ve got to do that. But also ability and willingness to change due to critical feedback, but also curve ball, left field stuff that within the next six months, our plan will not be perfect or 100% golf track. And certain times we’ll have to replan and do,

(01:07:13):

But I hope 80% of it’s correct, at least.

Mark Horoszowski (01:07:16):

Yeah. Well, I think that’s something where really mission-driven entrepreneurs and here in this context on this show, when we say mission-driven entrepreneurs, entrepreneurs with their entrepreneurial vision, that is absolutely and inarguably existing here to make life better for people. And when you have that mission and purpose, so front and center, I do think it creates a really nice north star for an organization and says, yeah, we can pivot from the plan because it’s still really in line with our mission. I’d be curious from a management perspective, so you’ve built alignment with people, presumably they’re on board with the mission, they’re on board with the OKRs, they’re on board with the plan, and then this new big opportunity comes in general, my experience we see many others is once a team or once employees are working on a plan, trying to then move set resources, move set people to then focus on this new opportunity. Sometimes that’s challenging, but it seems like you’ve done that a couple times. Any tips from your experience in terms of, Hey, I know we’ve all kind of agreed to this plan, but we’re shifting, right? How do you quickly mobilize the team? What’s worked well for you in order to help many people on your team change direction?

Caroline (Producer) (01:08:54):

I think,

Ed Booty (01:08:59):

Well, we’re doing this now. I mean, yes, it’s a funny time to ask the question. We did all of our, my QQ three OKR sessions were yesterday 12 hours of calls day before with the Q3 kickoff with the whole team, the whole team kickoff. And then okay FI think for some of the teams, we know it’s fixed, the team’s quite mature, we just have to do A or B lives improved revenue or products available. That’s that kind of metric. So it’s just like clean. Some of the teams are in, some of the projects within the OKRs are likely to change, and then it’s just being really explicit. So some of these OK R emails I was doing yesterday was just, so we got a lot of people joining this team recently. Some of ‘em have come from big companies. I said it very explicitly, do not expect this policy. We said policy about giving credit to distributors in Africa. So we’re launching in Africa, how do we give credit? How do we think about credit scoring? How do we think about assessing financial risk and liabilities and how do we issue and allocate credit, but a limited pool of cash that we have across a technically unlimited opportunity. I’ve said to them, expect version. I think I said version five, but my colleague said version nine by the end of the year of our credit policy.

(01:10:12):

So we just aligned our expectations up front. So I know that’s going to change. We’ve done V one, V two. I openly said to the team, get your mindset that into the game that this will probably be V three next month and it’ll probably be V five or V eight depending on if you speak to me or my colleague by the end of the year. So I think it’s just like, and I do and I do this within the team in general, genuinely. And I’ve done this before, wrongly, incorrectly, where we have implied or it has been a sort of implicit subtext that something is more fixed. And then when you try and change, they’re like, eh, I thought we were doing the marketplace, now we’re doing this. But if you just double click on double underline something and just say, this is a pilot, it might not go well, we might be changing this as soon as next month.

(01:11:02):

You voice that upfront I think is how I think about it. And for us, as I say in the future, we have this read 52 labs concept where we do health education and screening. We do product distribution and everything that’s new gets tested here. And that’s also a statement of having that agile mindset for us, I want us to scale and I want us to be a startup and therefore having this innovation unit kind of thing is sort of trying to make sure it’s always clear that we’re always learning and we’re always testing, learning, failing, et cetera. So having a team or a person dedicated is sort of the statement of needing that mindset.

Mark Horoszowski (01:11:41):

Yeah. Okay. That’s really helpful to hear. So it seems just even culturally within the organization, there is an understanding that we are going to be evolving when you’re onboarding team members, you’re talking about that when there’s a plan, you’re talking about this is the plan today, it will change multiple times between now and now, so let’s go.

Ed Booty (01:12:00):

Yeah. But then for other teams, I would be the opposite. I’d be like, this plan is not O OK R calls yesterday, some calls the last one, last end, late night last night. It will not change. We have to deliver this by the end of the year. This is what we’ve committed to our external partners. End of discussion. This is your goal and it will not change. It’s like so set in stone, go and do it. And there’s no discussion anymore. Some behaviors, yeah, we’re going to be on version two next month.

Mark Horoszowski (01:12:26):

Yeah, I think that’s really interesting and that’s really helpful to hear even specifics within different teams. Yeah,

Ed Booty (01:12:34):

I read a book once, is it Culture map? You have the culture map that NC professor, Erin, somebody, but that talked about decision making in different cultures and there’s big decisions, capital D decisions and little D decisions like capital D and I like that framework, like Japanese and German companies. I think it was, I read this book five or 10 years ago, have capital D decisions, slow to commit consensual, blah, blah, blah, decision making structures. But then if they do it, they commit to it for the long haul and they invest

Mark Horoszowski (01:13:03):

Interesting

Ed Booty (01:13:04):

Silicon Valley startups, much more empowering, much more decentralized. But it can be a decision in meeting one Tesla and pivot fail, and it can be a different decision in meeting two. And some of that’s cultural, but some of it country specific cultural traits, some of it is company specific cultural trait, but this is concept of big D and little D decisions, which I’ve

Mark Horoszowski (01:13:28):

Always

Ed Booty (01:13:28):

Liked as well. Similar

Mark Horoszowski (01:13:30):

Concept, similar. And there’s another analogy in West coast United States, it’s kind of big along the tech scene, which is one way doors in two-way doors. It’s kind of, if it’s a one-way door, you’re putting a lot of thought and analysis. If it’s a two-way door and you can back out of it easy, let’s move quickly. But I think that that’s often something, at least from my experience, that tends to be seen at later stage. Like more mature organizations, I think earlier stage startups, almost culturally, everything is just, I mean you probably shouldn’t reference Facebook. There’s just move fast and break things. It almost seems like they didn’t care and then seen other startups where they’re just obsess about everything and culturally it really embeds within the organization. In some cases it slows experimentation. I can tell you from my own experience, that was one of my big learnings. So anyway, I think it’s very mature and astute of you to really be looking at that and communicating that clearly with team members.

(01:14:33):

And this time is flying, but we’re about to get to what I call our inspiring impact round where I’m going to ask you a few quick questions. But before I do that, I want to read something that you wrote and then I just kind of want to have a quick conversation around it because, and as a setup for this, one of the things that we cover in this show is for social entrepreneurs. So for entrepreneurs that are going to impact, first, we are pursuing purpose and impact above profits, and there’s data beyond anecdotal that we’ve encountered. There’s data that supports this as well, that there is more mental pressure, more mental health challenges, more stress, more anxiety, right? Because you don’t just care about the sale, you care about, did I make life better? You don’t just care about having people you care about, did I enrich the lives of my employees?

(01:15:37):

You care about the communities that you operate in. And so every decision that you make has more gravitas. It’s not just profit. It’s like you really care about humans alongside of lines. And I know that some of the things that you’ve kind of encountered in your work have created a heavy mental load. And so I want to read a passage and then what I want to talk about with you briefly before our impact round here is what are the things that have really helped you move through the really mentally challenging areas of social entrepreneurship? So this is from a great article that you wrote in 2021 called Dear Ed. So I hope you don’t mind putting on the spot here. I won’t read the whole thing, but I read one paragraph that really jumped out to me. So the ironies of life you’ve chosen are stark.

(01:16:28):

You make progress yet feel more behind. You’ll hit your goals than increase them. You have complete flexibility in your work schedule, but end up with no free time. You’re running a health company, but your work will make you fundamentally and healthy through long hours, excessive travel, coffee, alcohol, forgetting to eat and constant pressure because you’re seen as strong people will check in on you less. You raise money and grow expecting that will reduce pressure, but it’ll just get more complex. Hiring people are the right fit will be the number one challenge, not fundraising. You’ll realize that experience is nothing compared to cultural fit attitude and drive, but you can’t screen that from a cb. You’ll have the best and worst job in the company you created. And although you feel fine going solo, you’ll come to regret not looking for co-founders upfront. You won’t pay yourself for over two years, but you’ll pride yourself that the team is never paid late. You’ll be surrounded by supporters and colleagues and good people trying to help personally and professionally, but often they just don’t get it. And you feel more isolated. You can see the big picture. You often feel so burnt out that you won’t notice the obvious smaller things. First off, fantastic writing. The post is awesome. We’ll be in the show notes for you.

(01:17:36):

What it’s like helped you, if there’s rituals, if there’s a mental belief, if there’s something spiritual, what has helped you find the kind of mental fortitude to keep going and to stay focused on mission when things have gotten so hard and so isolating?

Ed Booty (01:17:57):

Yeah, it’s funny actually, that is 2021. I remember writing that. That was COVID time, COVID free time, led to a wild era writing led to a brief spell into blogging and whatever, writing stuff like that. It slipped out habit. Actually now I actually want to do it. I’m taking a holiday next month for my birthday and I’m going to try and take 10 days off or a week off and write some stuff again.

Mark Horoszowski (01:18:18):

Oh good. Well, I would love to see what you write.

Ed Booty (01:18:20):

It was not heard that for send out for a while. So it was reminiscent, but probably also quite true. Yeah, probably still quite true and given it’s four years ago, actually, probably more true in a funny sort of way. No, I mean a lot of it is startups are hard. I’ve mentored or been part of some really early stage startups, and I do say to them, I mean you have to not be doing it for the money. You have to really care about the mission. It is a tough path in life and it’s three times harder than you expect, and you need three times more money than you realized. And so I think a lot of it is just like having the right foundations of why we’re doing the company. I do have various rituals. I mean, I’m not spiritual, but I do believe we have temporary time on this earth.

(01:19:07):

Do something useful with your time, like existential kind of stuff. But translating that into doing something that the purpose is more important to me. Not the most happy topic, but I had said it to a colleague last week as well. Imagine yourself on your deathbed, looking back at what you’ve achieved and what makes you smile. I think we’re our own worst critics and I judge myself for stuff I’ve done in the past. Therefore, if I imagine myself in the future, looking back on my current self, it becomes a bit of a moral compass person. Hypothetically, if I was in a job I hate with people, I hate getting out of bed every morning to do something. I hate if I look back on my life in 50 years, I don’t think I’d be happy about the decisions I made now. So yeah, do it for the right reasons and commit and know it’s going to be hard.

(01:19:56):

Use yourself as your own worst critic. I do that quite a lot and I think everything is true. I mean, it is obviously isolating and you can’t talk to people about it. Even now, I was chatting to someone yesterday about problems we’re facing and it was well-intentioned advice and it was just so frustrating from obviously I’ve thought that obviously I’ve thought about that. That doesn’t work. God. Yeah, it’s like, but I do have some very good, so in terms of rituals, I am get outside more, take a walk. I love a beer in the sun at sunset. You can have the worst day, but especially in Singapore with the humid weather, just sitting out there having a nice hazy IPA. So I invest a little bit in decent beers from America, work out, try and work out every morning. I mean, yeah, this is obviously early morning for me, just done my high intensity class.

(01:20:48):

But yeah, just try and get into a routine that works for you and for me it is work out every morning, have a sucky day. Generally it’s pressured and difficult. Sit there in the evening, cook, I like to cook, have a beer, get back to work after holidays on the beach. I’ve learned actually that I don’t like going to Tokyo or something like active city based holiday is the worst way for me to unwind. So try and do a decent stint on the beach just to read sun. Yeah, unwind work out every day. So yeah, I think ultimately it’s commit for the right reasons. Use yourself as a moral compass and just work out a routine that relaxes you. I mean, yeah, I’ve got mine and I absolutely guarantee it’d be different for someone else, but work out how you unwind and do that regularly. Make time to do that. Could be whatever, crochet or whatever, but just do that. Make sure you have time to do that on a daily basis.

Mark Horoszowski (01:21:49):

Yeah, very cool. Well, thanks for sharing and giving us a little peer into the personal side of your life as well. And okay, we, time is flying. I can’t believe it, but I know you’ve got a day ahead, I imagine our listeners do as well. And so I want to jump into four quick questions and we call this our inspiring impact round. Just a couple of quick, short, punchy answers, and we’ll start with the first one. What is the mistake you’ve made that you hope future entrepreneurs won’t make?

Ed Booty (01:22:27):

Hiring the wrong people can decimate your company, early stage, mid stage, late stage, toxic, bad strategy, wrong other team around them quit. So yeah, hiring genuinely bad or toxic people can kill your company at worst and significantly harm at worst, at best. Sorry, but yeah, hiring wrong, people

Mark Horoszowski (01:22:54):

Especially

Ed Booty (01:22:54):

Felt really bad or really toxic, dodgy, whatever.

Mark Horoszowski (01:22:57):

Yeah, the toxic piece came up a couple times there. So yeah, that topic alone could be a whole podcast in and of itself. Okay. Talk to me, what is one thing that you wish all impact investors would know and really internalize when they’re working with impact entrepreneurs such as yourself?

Ed Booty (01:23:22):

That there is opportunity. Medicines are more expensive. You could actually launch, hypothetically if you came to me with an investment, we could launch medicines in Singapore. It’s actually Well’s, a saturated market with cheap pricing, hypothetically, right? Going over here. It is less saturated and the prices are higher and you can drop the prices and have a not uncompetitive market. So yeah, there is opportunity and there’s more opportunity, more greenfield, more innovation. That’s definitely key. I think for some as well. Obviously venture funds generally, generally have a 10 year fund life, which I’m sort of on board with. That’s how the venture model works. But I do think impact and actually impact, I think health takes longer. I think if you are doing something with hospitals in America, it’s hard to do that within a 10 year period because it’s so bloody structured. It’s a huge market, profitable, et cetera, et cetera. But a 10 year fund life to deliver execute and on down with all that sort of structural systemic stuff is hard. So yeah, I guess health slash impact is kind of hard and slow compared to B2B, SaaS, Silicon Valley chap GT Hypergrowth kind of stuff. So yeah, a bit of patients I think is key. And that’s not actually about impact. I genuinely think that’s about certain sectors that are heavily regulated basically.

Mark Horoszowski (01:24:38):

Cool. Yep. Resonates. Now, maybe on a more personal note here, what is one leadership or manager skill that you wish yourself you could turn on in yourself more that would make you more effective than you are today?

Ed Booty (01:24:58):

Time management. I think I’ve got better at giving critical feedback, having hard conversations, making tough decisions if somebody has to go there. Over the last two years I’ve built the, it’s a brick where sort of a conflict averse, polite types, and that’s

(01:25:17):

A skill that, yeah, you Americans tend to have more than aspir. But I think I’ve got a lot of that stuff, but I’m still not good enough at magic time. I feel like I need, when I get up in the morning, I do my workout, I want to answer emails to make sure people are set for the day, but that’s usually my most active brain time to do something. I could do half asleep at 9:00 PM So yeah, time management and really ruthless prioritization and sort of sticking to that. I think I’d be more effective. And I’m actually trying to work on that a lot at the moment. Do stuff that I can do half asleep at night and do the stuff that requires most brainpower first, which is yet in all sorts of management textbooks, but it’s harder than it sounds to actually do. Oh yeah.

Mark Horoszowski (01:25:59):

Way easier to talk about than to execute in a day to day. Yeah. Cool. Okay, last question is, and maybe you even covered this already, so fine if you’re redundant here, but what is a quote ritual or activity that you turn to for strength when things are super hard?

Caroline (Producer) (01:26:23):

That’s

Ed Booty (01:26:23):

A good one. Yeah, I mean I talked about some of the rituals, right? I like cooking. I mean, the simple one is just like I find it quite relaxing. Order from chaos, this pile of vegetables, methodically do it clean up. I just find that quite a nice sort of ritual. So yeah, I’ve got my things that help me unwind and I try to do that, working out, beer in the sun, cooking generally, walking, hiking, whatever wise, I’ve got a tattooed on me. I like the word matter, the sort of the link between physical matter being atoms, quarks, universe, big physics, small physics, quantum mechanics, right up to astrophysics. I’ve always liked this concept of matter being temporary and we’re all made up of carbon effect, whatever. But then also finding purpose. So yeah, I often reorient it often actually, probably daily around the word matter, which is our temporary existence and our sort of physical construct that is finite and trying to find purpose and meaning and having a life that matters within the finite matter, the time that we have with our physical matter. So yeah, that’s not a very good way of explaining that tattoo. But

Mark Horoszowski (01:27:40):

Yeah, I think it’s an excellent, I’m like,

Ed Booty (01:27:42):

I do really like the word matter, smallest things within us, but also when we lie in our deathbed, whether or not we found purpose. So

Mark Horoszowski (01:27:50):

Yeah. Yeah. No, I kind of love it. What a great way to kind of wrap us up here. And I’m actually holding myself back. I feel like we could go another 90 minutes just on what’s behind that, but I think that that’s a powerful way to leave us. And I really, really want to thank you for your time. I really want to thank you for the work that you’re doing. I know, like I said, I know some of the partners that I know, some of your customers, and they’ve all said just incredible things about you. So it’s really fun to dive deeper into conversation with you. And yeah, I’m excited to share you to the community, share some of your readings as well. We’ll include all those things in the show notes. So thanks so much for joining us today and just keep up the incredible work.

Ed Booty (01:28:38):

No problem. Yeah, genuinely thanks for the invite. Enjoy doing these things. Makes me reflect a bit as well. And yeah, thanks for listening. If you come this far and definitely reach out. I’m happy to talk about health access stuff or startup stuff, so feel free to reach out to me on LinkedIn or whatever. There’s only two echo booties, both in Singapore. I’m not the marketing guy, I’m the reach 52 guy. Sometimes people get mixed up.

Mark Horoszowski (01:28:59):

I’m so glad you said this and I’m kicking myself because this is in my script and I missed it. And how should we follow you? So the Reach 52 website, Edward Booty on LinkedIn.

Ed Booty (01:29:10):

And we do try to do a pretty interesting, if you go to the website, we do try and do a quarterly newsletter where we share, not marketing these stuff. I try to do quite, here’s some data we’ve collected, here’s some real projects, some real learnings, here’s some real partnerships. So we do try and do a quarterly newsletter that’s not marketing stuff, more like real data stuff. So yeah, that’s also something we’re keen to promote.

Mark Horoszowski (01:29:35):

Cool. We will get that in the show notes and we will sing your praises from the social media channels. And thank you so much for joining us today.

Ed Booty (01:29:45):

Thanks so much. Have a good day ahead.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit helpingbillions.org

The 5-Minute Version: Manuel Rosemberg built Ana.care into Latin America’s leading caregiving platform by doing the opposite of the Silicon Valley playbook. Instead of building “Uber for caregivers,” he picked up workers at subway stations, sat in customers’ homes, and asked one transformative question that changed his entire business model. His journey from bootstrapping with customer money to saying no to VCs to building government partnerships offers a masterclass in sustainable impact entrepreneurship. Here’s how caring about humans first built a company now serving millions – with aspirations for billions.

When Life Punches You Three Times, Build Something That Matters

August 2015 should have broken Manuel Rosemberg. His father was diagnosed with cancer. His grandmother with Alzheimer’s. His father-in-law suffered a stroke. All within the same month.

Suddenly, Manuel found himself navigating the chaos of Latin America’s caregiving industry—or rather, the lack of one. Finding reliable help was nearly impossible. The sector was completely informal, fragmented beyond recognition. Caregivers would cancel last minute. Quality varied wildly. Training was non-existent.

Most people would have just struggled through. Manuel saw a systemic problem worth solving.

“It made me realize just how difficult it was to get reliable help, how informal the sector was, how fragmented the industry was—if there was an industry at all,” Manuel told us. But instead of building another tech platform from a distance, he did something radical: he became the service.

For months, Manuel literally picked up caregivers at subway stations and drove them to patients’ homes. Not as a temporary measure—as a business strategy. “When you’re starting a business, you need to make sure everything goes right. You don’t have much margin for error because you’re starting to build a reputation.”

This wasn’t just customer service. It was intelligence gathering. Sitting in those homes, watching the interactions, understanding the friction points—this proximity to pain created insights no amount of user surveys could have revealed.

The lesson: Your first 100 customers should know your cell phone number. The insights from being uncomfortably close to the problem will shape everything that comes next. Every entrepreneur thinks they understand their customer’s pain. The ones who succeed live it.

The $10 Million Question That Cost Nothing to Ask

Manuel’s company, initially called PazMental (”Peace of Mind”), started by exclusively serving dementia patients—the ones every other agency turned away. The medical establishment said there was nothing to be done for these patients except wait it out. Manuel disagreed.

They incorporated creative therapies, built specialized training, created detailed care protocols. But the real breakthrough came from their makeshift reporting system—a white-label Indian chatbot Manuel programmed himself with simple decision trees.

Each day, when caregivers arrived at patients’ homes, the chatbot would check in. But instead of immediately asking about the patient’s condition, medications, or symptoms, Manuel added one simple question at the beginning:

“How are you feeling?”

Not “How is the patient?” Not “Did you complete the care tasks?” But “How are YOU?”

The responses changed everything. Caregivers opened up: “Underappreciated.” “Tired.” “Burned out.” “Alone.” “Overwhelmed.” “Scared I’ll make a mistake.”

This wasn’t just data—it was a revelation. The entire industry had been focused on the wrong problem. Everyone was trying to optimize patient care while ignoring the humans delivering it. Unhappy, stressed, untrained caregivers led to poor patient outcomes, high turnover, and spiraling costs.

“It seems obvious in retrospect,” Manuel admits. “But it wasn’t obvious to us what hardships caregivers go through.” The company’s slogan evolved from “Happy caregivers, happy patients” to its current version: “We care for those who care.”

This pivot transformed Anna from a dementia-focused agency into a caregiver support platform—a market that includes not just professional caregivers but anyone caring for a family member. Suddenly, they weren’t serving thousands. They were serving millions.

The data validates this approach: Well-trained, supported caregivers reduce healthcare costs by 30% through fewer emergency room visits and avoidable hospitalizations.

Sunday Morning Training: The Experiment That Revealed Everything

Here’s something that would never happen in Silicon Valley: Manuel started offering free training sessions on Sunday mornings. Physical rehabilitation techniques. Injection procedures. Medication management.

Think about that. These caregivers worked five or six days a week, often in physically and emotionally demanding conditions. Sunday was their only free day. And they showed up. In droves.

“I was like, wow. This is their only free day, and we asked them to be there on a Sunday morning. And all of them are avid to learn more.”

But here’s where it gets interesting. The most popular courses weren’t the technical ones. They weren’t about lifting techniques or wound care. The courses with the highest attendance? Meditation. Breathing exercises. Stress management. Self-care.

These caregivers weren’t just looking for better pay (though that mattered). They were looking for dignity, support, and recognition. They wanted to be seen as professionals, not just pairs of hands.

This insight shaped everything that came next. Anna’s platform now includes both professional development and personal wellbeing content. It’s not just about making better caregivers—it’s about supporting better lives for the people doing this essential work.

The Anti-Silicon Valley Funding Playbook That Actually Works

While his peers were perfecting pitch decks and chasing Sand Hill Road VCs, Manuel was raising money from the most unlikely sources: his customers.

“A lot of our funders are ex-customers or customers. They’d say, ‘You helped me so much with my husband. Your company is so great. Let me know how I can help.’ And I’d say, ‘Well, if you want to be part of this company, you can invest.’”

No pitch decks. No hockey stick projections. No TAM/SAM/SOM analysis. Just proof that the business solved a real problem for real people willing to pay for it.

This wasn’t some romantic notion of customer-funded growth. It was strategic. These investors understood the problem intimately. They had realistic expectations. They weren’t pushing for 100x returns in five years. They were investing in a solution they wanted to exist in the world.

“We always told them: do not invest anything that you need in your life or that you’re counting on. Just invest something that... we later found out there’s a name for this: venture philanthropy.”

The progression was deliberate:

* Customer capital ($40,000 from four angels at $10K each to start)

* Continued customer investment as proof points accumulated

* Inter-American Development Bank funding (contingent loans with 0% interest)

* European impact accelerators (Norrsken in Sweden)

* Only then, institutional investors

When the Inter-American Development Bank (IDB) promotted their Silver Economy Challenge, Manuel was ready. But the IDB didn’t offer traditional investment. They offered something better: contingent loans. Zero percent interest. No collateral. Only pay back if you hit your goals. Eight-year repayment terms.

“It’s technically debt, but it feels like a grant,” Manuel explains. More importantly, the IDB’s endorsement opened doors. “When the IDB says, ‘If you’re interested in the caregiving sector, you should really talk to these guys,’ everyone listens.”

This is the thing about impact entrepreneurship that not enough entrepreneurs know: there are more ways to fund your business and big experiments than you realize. If your organization exists to really make the world better, there is financing beyond the profit-maximizing VC world that you can access.

The Mexico City government partnership? That came through an IDB introduction. The expanded regional presence? IDB forums and connections. The credibility with other investors? The IDB seal of approval.

The framework for impact entrepreneurs:

* Start with people who understand the problem (customers, affected families)

* Graduate to development banks, foundations, government programs, philanthropists and other innovative financiers with impact metrics

* Use that credibility to access impact accelerators

* Only then approach institutional capital, and only from investors that are legally and financially committed to impact

* At each stage, use the credibility from the previous stage as leverage

How to Not Get Eaten Alive by VCs (A Practical Guide)

Manuel watched peers raise $10 million from Y Combinator and prestigious Silicon Valley VCs. Within a year, they were bankrupt. The pattern was always the same: pressure for hypergrowth, burn through capital acquiring users at a loss, fail to find product-market fit, die.

“I know a lot of entrepreneurs that got YC funding, raised $10 million, and then went bankrupt a year later. We didn’t want to be one of those.”

His example hits hard: a YC-backed electric scooter company in Mexico went from zero to unicorn valuation to selling for $1 in less than a year. Why? When the market shifted from “growth at all costs” to profitability in 2022, companies with negative unit economics collapsed overnight.

So Manuel developed a rigorous investor vetting process that flips the traditional power dynamic:

The Manuel Method for Investor Due Diligence:

* Read their thesis first. “Some of them will lay out their thesis day one, saying ‘We want to show investors you can invest in impact and have the exact same financial returns.’ So they’re very honest about it.” If impact isn’t mentioned in their thesis, they’re not aligned with your mission.

* Ask for references. “Talk to other entrepreneurs they’ve invested in.”

* Go off-script in meetings. “I always like to go off on tangents…I talk about my kid or I talk about my hobbies. I try to suss out what kind of people they are…The kind of jokes they make will let you know if they’re sexist, racist.”

* Watch how they react to your boundaries. “When we said we weren’t interested in hypergrowth, some VCs literally laughed. Others said, ‘That’s refreshing.’ Guess which ones we kept talking to?”

* Be patient. “Be very slow to hire, very fast to fire. That works for funders, too. The first person that gives you money is not necessarily the person you want to grow with.”

The key insight: “It’s important to understand that they also need you. They just raised a lot of capital from LPs, and they need to place it somewhere…You can ask as many questions as you want.”

Manuel now looks at his cap table with zero regrets. Every investor understands the mission, respects the pace of growth, and contributes beyond capital. That’s worth more than any unicorn valuation.

The Cofounder Dance: When Dreamer Meets Doer

Manuel’s cofounder Ariel operates at a different frequency. “He has a million ideas per minute. It’s amazing. He’s a dreamer.” Manuel, by contrast, is “very much a doer, present-focused.”

This could be a recipe for disaster. Instead, they’ve turned it into their superpower through specific collaboration protocols:

The Idea Management System:

When Ariel comes with a new idea (which happens daily), Manuel doesn’t shoot it down. Instead, he uses what they call the “sandwich method”:

* Start with what’s good about the idea

* Address concerns or limitations in the middle

* End with a positive or possibility, and a move to run an experiment

“I never turn down an idea. I always suggest a way we might test it out.”

But here’s the crucial part: they’ve learned that ideas have natural lifespans. “Some ideas just die out on their own. He might not even like them the next day.” The ideas that survive a week of Ariel’s mental filtering? Those get tested.

The MVP Philosophy:

When Ariel wanted to immediately integrate AI into everything, Manuel didn’t say no. He said, “What would be a good MVP?”

Ariel: “It’s AI! We can’t MVP this thing. We gotta invest!”

Manuel: “You can totally MVP AI. We can have an intern answering everything and just see if that kind of response works with patients.”

This isn’t about being cheap. It’s about validating demand before building supply. “I’m convinced that everything is MVP-able. Even very sophisticated AI. It’s very fast at doing what humans can do slower, but humans can do it. If you start out with a small enough MVP, you can get a human to do what you want the AI to do later.”

They’ve tested dozens of ideas this way. Online support groups? Everyone said they’d love them. Would they pay? Absolutely not. Killed. AI-powered care recommendations? Tested with human “AI” first. Worked. Built. Scaled.

The Balance:

“It’s kind of like a rubber band. He stretches it, and I pull it back.” But it only works because of mutual respect. “I think he appreciates that out of those thousand ideas that come up every minute, I can cherry-pick the ones that might work and actually make something with them.”

The Numbers That Actually Matter (And How Often to Check Them)

Forget monthly active users. Forget growth rate. Manuel obsesses over two metrics:

1. Runway (checked twice monthly) “We’re looking at our runway twice a month. Did anything happen that derailed this? Did we lose an important client? Another expense? People can lose track very fast of what the runway is.”

The discipline is religious: “We still have ten months to go at this rate of burn. Yes? Okay. Because things happen.”

2. Caregiver happiness (which drives everything else) Not patient satisfaction. Not revenue per user. Caregiver happiness. Because everything flows from there. Happy caregivers → better patient care → lower healthcare costs → sustainable growth.

But here’s what most entrepreneurs miss: Manuel also maintains what he calls the “always be raising” infrastructure:

* Monthly investor updates go to current investors, potential investors, and anyone who’s expressed interest

* Financial reporting discipline forced by IDB requirements (”It’s a muscle we had to build”)

* A finance committee that meets monthly with board members

* Clear documentation even when it wasn’t legally required

“Financial reporting is a lot more complex than one would think. It sounds like income versus expenses, but it’s so much more complex than that. It really takes a while for a startup to build that muscle.”

When It Gets Heavy: The Founder’s Escape Valve

Running a caregiving company after watching three family members struggle with illness? The emotional weight is crushing. Manuel’s response isn’t what you’d expect from a mission-driven founder.

“I’m an avid hiker and nature enthusiast. It’s just disconnecting. Just disconnecting from phone, computer for a while.”

Not meditation apps. Not executive coaches. Not founder therapy groups. Complete disconnection.

“If you don’t give yourself those spaces, problems become a lot bigger than they are. Just letting some problems rest for a while and coming back to them a week later really puts them in perspective.”

He recalls times he was “hysterical about a problem that a week later was... that wasn’t really worth the trouble, was it?”

His cofounder is the opposite—thinks through problems constantly until solutions emerge. “The more he thinks about things, the more possibilities come up in his head. For me, it’s the other way around. The more I think about issues, the bigger the problems become.”

Know your style. Honor it. Build your life around it.

The Grandmother Test That Changes Everything

Manuel’s 99-year-old grandmother, a Holocaust survivor, isn’t just on Anna’s website. She’s a user. She’s a tester. She’s the quality bar.

“I’m not just the director, I’m also a member,” he jokes, referencing the old Hair Club for Men ads. But the joke contains profound wisdom.

When you build something you’d trust with your grandmother’s care, everything changes:

* You can’t cut corners on safety

* You can’t compromise on dignity

* You can’t optimize for metrics that don’t matter

* You can’t sell something you wouldn’t use yourself

This isn’t sentimentality. It’s strategy. When government officials ask about Anna’s quality standards, Manuel doesn’t show certifications. He shows them his grandmother’s profile on the platform.

“A lot of people in my family, unfortunately, have been clients or users of Anna over the past ten years.”

The proximity to the problem isn’t just about understanding it. It’s about being unable to accept substandard solutions.

What Silicon Valley Gets Wrong About Impact

Manuel’s witnessed multiple “unicorn” failures up close. The pattern is always identical:

* Impressive YC pedigree or Valley backing

* Massive fundraise on aggressive growth projections

* Burn capital acquiring users at negative unit economics

* Celebrate vanity metrics while ignoring fundamentals

* Collapse when market sentiment shifts

His example: “This electric scooter company, they were YC and Silicon Valley golden boys. Their valuation grew by the minute. Three months later, I asked how they’re doing. ‘Oh, we’re broke. We had to sell the company for $1.’”

From unicorn to nothing. Why? “Every new user cost them more money. When the market changed from growth at all costs to profitability in 2022, they didn’t make it through.”

The alternative Manuel proposes:

Sustainable impact growth:

* Revenue from day one (even if small)

* Customers who’d be devastated if you disappeared

* Investors who understand the mission takes time

* Growth that doesn’t require constant capital infusions

* Unit economics that work at small scale

“Impact takes time,” he reminds investors. And the ones worth having understand that.

The Three Meta-Lessons That Actually Matter

1. Your customers aren’t just your market—they’re your first investors, best advisors, and quality control

Manuel’s angel investors weren’t angels in the traditional sense. They were families he’d helped. They understood the problem intimately, had realistic expectations, and wanted the solution to exist more than they wanted returns.

This isn’t just about capital. It’s about building with the people you’re building for. When your customers are your investors, you can’t b******t your way through board meetings. The accountability is real, immediate, and impossible to game.

2. The best pivots come from listening to humans at their most vulnerable

No algorithm would have suggested asking caregivers how they feel. No market analysis would have revealed that self-care courses would outdraw technical training. No competitor analysis would have shown that supporting caregivers was more valuable than optimizing patient care.

But one question—”How are you feeling?”—revealed a billion-dollar insight. The lesson isn’t just to talk to users. It’s to ask questions that let them be human, not just customers.

3. Growing slower with aligned partners beats growing faster with misaligned ones

Every unicorn Manuel knows that optimized for growth is now dead or sold for parts. Meanwhile, Anna has:

* Government contracts

* Sustainable unit economics

* Investors who understand the mission

* A team that isn’t burned out

* His grandmother’s approval

“We didn’t want to explode or bust. We really believed in what we were doing, and we said if it takes us a bit longer, it takes us a bit longer.”

In impact entrepreneurship, patience isn’t just a virtue. It’s a strategy.

Watch the Full Interview

Manuel goes even deeper on fundraising mechanics, managing cofounder tension, and building in Latin America in our full conversation.

Three moments you can’t miss:

* 32:15 - The role-play where Manuel shows exactly how he handles cofounder disagreements

* 48:22 - Breaking down the Inter-American Development Bank funding process

* 1:02:30 - Why he checks runway twice monthly (and what happened when he didn’t)

About Ana: The platform now serves thousands of caregivers across Latin America, with AI-powered training, marketplace connections, and wellbeing support. They’ve partnered with Mexico City’s government and are expanding regionally. Learn more at ana.care.

For Investors: Manuel is currently raising institutional funding to build out C-suite leadership and expand marketing. Reach out through LinkedIn (the only social platform he uses—”the others are terrible for your mental health”).

Want to Learn from Purpose-Driven Founders?

Transcript

Mark Horoszowski (00:01:05):

My name is Mark Horoszowski. I’m the host of how to help a few billion people, a podcast where we profile and dive deep with social entrepreneurs who are putting the pursuit of impact and purpose above their profits. In this episode, we talked to Manuel from Anna, a groundbreaking technology platform with AI augmented tool that helps caregivers around the world provide better care to those in need, particularly in aging population. I’m actually looking at their website right now, and it’s so fun to look at because front and center is their aspirations for the future to create over 100 million formal jobs to help save over 30% in terms of cost of care for those people that need care at home, and to positively impact the lives of 1 billion people. So when you say 1 billion people here, we’re talking about particularly an aging population. So what Anna does is it helps people that are aging and are aging at home.

(00:02:06):

Some of them with very acute conditions, say dementia to others that just are slowly losing the ability to live fully on their own, and they need somebody in the home that can help care for their mental and physical health. Now, a lot of the people that provide that care are what we would call the informal economy. Maybe they’re not formally employed, but they are being paid to some degree in order to help this population. But especially in informal settings, these people then do not necessarily have formal training, and they also maybe don’t have their support because let’s be honest, caring for somebody that is sick, whether that’s physically or mentally, is really exhausting and can be really challenging. And what Anna has done is built a platform to not only help the matching of these folks, the people that need her at home with caregivers that can provide that care, but it also provides training and support to both parties and even provides real time guidance and support using AI as an additional tool.

(00:03:06):

Now, it also provides training. There’s real humans behind the scenes here that help provide support, but most importantly, it is helping care for those who care. In my conversation with Manel, we go into how the organization started, which is a touching and inspiring story in and of itself, how he’s capitalized the business. So how we raised funding to pivot from a manual matchmaking model to this technology platform, some tips in terms of where to look for funding and how he’s done that. We also dive pretty deep for a little bit into some actual legal language around different financial and funding instruments. So some of you might love that, some of you might fast forward through that section. But then ultimately we also get to the personal side of things is how do you really create a human-centered focus, not only for your team, your co-founder, your employees, your customers, your other stakeholders, your investors, but also for yourself. So this conversation with Manuel left me fired up, left me energized. It also left me smarter, and I really hope you have the same takeaway from this awesome, awesome conversation with Manwell. So without further ado, let’s jump in. Manwell, welcome to the Helping Billions podcast. I am so excited for our conversation. Thank you so much for taking the time out of your schedule to find time to speak with us.

Manuel Rosemberg (00:04:29):

It’s great to be here. Thanks for the invitation.

Mark Horoszowski (00:04:32):

So man, I love your story. I love how this organization that you’ve been now developing and growing has come to be. I think it’s incredible how you’ve identified this market that literally has the ability to positively impact the lives of not only tens of thousands of workers, but also millions and eventually billions of people that receive care at home, usually through informally employed workers. So that’s what Anna is doing as a company, right? You are developing a place so that people care, workers, caretakers, that are in people’s homes, in locations around the world, have access to knowledge, to training, to everything. You’re using AI to improve training. You’re using marketplaces, you’re doing so much. But bring us back to the inception. How did you even come up with this idea in the first place?

Manuel Rosemberg (00:05:39):

Well, the idea has been evolving, as I’ll tell you over the next hour. But originally 2015, they say that when it rains, it pours and it poured hard. In August, 2015, my father was diagnosed with cancer. My grandmother was diagnosed with Alzheimer’s, and my father-in-law had a stroke. This all happened August, 2015, and it forced us to start getting help. All three of them needed some kind of support, and it made me realize just how difficult it was to get reliable help, how informal the sector was, how fragmented the industry was, if there was an industry at all. And just by sheer coincidence, I was finishing up a project. I was looking for something new to do. So fixing the caregiving industry seemed like a big enough challenge that I would want to take on.

Mark Horoszowski (00:06:40):

I love that. How hard could it be? Tell me a little bit more about how that came to be though, and ultimately why you decided on pursuing a social enterprise, a business model solution to this problem as opposed to say, a philanthropic or a legislative solution to it.

Manuel Rosemberg (00:06:58):

Yeah. So we realized there was a big gap between the needs of millions of families and what the market was offering. And that gap was training caregivers, supporting caregivers, giving caregivers tools to make their job less stressful and more impactful. We decided instead of just coming up with a technology that we wouldn’t understand to start with a caregiving agency, and we call that caregiving agency, al, which translates to peace of mind. Part of the reason for that is that at first we decided to only accept patients with dementia or Alzheimer’s or cognitive decline, and we decided to do that because those were the patients that everyone else was turning down. And because we thought there was a paradigm to break there, because when a patient is diagnosed with dementia, doctors usually say there’s nothing to do, but wait it out. And we thought there was a lot more to do. And although we don’t have the cure for dementia, I think we’ve been very creative in incorporating or we were at that time because we’re not solely focused on dementia anymore. But we were very creative in finding therapies that would at least reduce the rate of decline. But I, going on to tell this story, I said at first that the concept has been evolving. So at first we were focused on the patients, specifically on dementia patients, but that led us to understand that the woes of the caregivers were much greater.

(00:08:40):

And so over time, we began switching our focus from patients to caregivers. And caregivers comprise a pretty large sector of the population depending on how you count them, but some people count all mothers as caregivers, some fathers as caregivers, anyone who’s taking care of a family member, professional or unprofessional, paid or unpaid is technically a caregiver. And that’s what makes it so appealing. It’s not a niche for a certain kind of profession. It’s a responsibility that most of us at one point in our lives will be faced with. And that’s why it’s so relatable to your specific question. It’s just I think my nature to believe more in social enterprises than it is to believe in NGOs. Part of it, I guess is my nature. Part of it is the states has done an amazing job at creating a whole ecosystem for non-for-profits. I don’t feel it’s the same way for Latin America.

(00:09:46):

They’re greatly underfunded. In fact, governments make it hard to start an NGO because there’s this longstanding idea that social work is supposed to be done by governments and not by private individuals. So it’s a difficult, I mean, I consider heroes the people who go into the non-for-profit sector in Latin America, but it’s surprisingly easier to navigate and the for-profit sector. And it also just feels like it’s more sustainable. I just didn’t want to spend all of my life fundraising. A bit of irony there, because as an entrepreneur, you pretty much spend half of your life fundraising at least. But I didn’t expect it to be that way. At least there’s some income that doesn’t rely on constant fundraising. But yeah, it is just my nature. It’s just I think my definition of success personally for me includes some sort of a financial success. And I thought there was a way of putting it all together.

Mark Horoszowski (00:10:51):

So tell me more about then this evolution. So you were experiencing this problem really, really firsthand. I mean, to your point about it pouring, I can’t imagine what that would’ve been like. And I’m really grateful for you kind of sharing the genesis of this. But how did you come out of that work and the mental load of the time to then actually start with pace to start the very first business model here? How did you take those very first steps? How did you get to first customer?

Manuel Rosemberg (00:11:28):

Well, first of all, I was grateful to find a business partner that was going through a very similar situation as mine, and we compliment each other very well. And that he’s a dreamer and he thinks big and he’s always looking for the future. And I’m very much a doer present. And so I think that’s been a very complimentary relationship. And I think that dynamic still stands today. And so we kind of together dreamt up this idea that we would be the go-to brand for anyone in need of caregiving. And we decided to bootstrap it pretty much. We had literally four angel investors investing $10,000 each. So really pretty much bootstrapping in. And I was literally the salesperson, the recruiter.

(00:12:25):

I think the only salary we had was curiously enough or that goes on to tell the story. Anna and Anna did a bit of everything. She helped with recruiting, she helped with customer support, she helped with training, medical reporting. She did a bit of everything. And I mean, I’m jumping to a story down the line, but that’s why the platform is called Anna. She was so great at everything. We wanted to reproduce her a billion times. The way to do that was to create a software. So yeah, she was helping out put out, we went to talk to all of the doctors we could find that that had dementia patients. We told them what we were trying to do, and they thought it was refreshing that someone was putting an optimistic spin on what can be done with dementia patients.

(00:13:19):

And so they took a chance on us and started recommending patients. And some, I wouldn’t say the patients, but family members took a chance on us and said, at least you’re trying, at least you’re promising me not such a dire outcome. So we’ll give it a shot. And Mexico, Latin America, again, is so informal caregivers, they’re angels, but they also know they’re in high demand so they can cancel from one minute to the other. There’s a lot of informality. So I would literally pick the caregivers up at a nearby subway station, take them to the patient’s home. When you’re starting a business, you need to make sure that everything goes right. You don’t have much margin for error because you’re starting to build a reputation. So it was pretty exhausting, but I think it was incredibly valuable. And I would go on to say that I recommend all entrepreneurs do something like that because that’s when you really get to understand your customer’s needs. I mean, I was literally inside my customer’s homes understanding what they were going through. And so it would constantly give me new ideas when I talked to them and when I understood where they lived and what they were going through. So I found that it was exhausting, but extremely valuable. And I really can’t emphasize how much I think entrepreneurs should go out there and meet their customers if possible, literally in their homes.

Mark Horoszowski (00:14:46):

Yeah, so that’s fascinating to me. So when you were starting here, so before Anna became the Anna that it is today, right, the big tech platform that’s AI enabled, you were really more of a manual service. You were matching patients in homes who were your customers to caregivers, usually from informal sector, and you were picking them up, you were spending time in the homes, you were monitoring, you were observing, you had that proximity to not only the sales process, but also it sounds like the delivery aspect as well.

Manuel Rosemberg (00:15:16):

We had our first version of ANA was a white label chatbot that I found, and it was one you could program, but it was very easy to program. I think it was an Indian company and it was a web app, so we didn’t have to be experts at it. We just created the decision tree pretty much. And caregivers would report what was going on, and then we would get to see that in an Excel spreadsheet. It was very unsophisticated, but at least it gave customers a lot of confidence that we were actually following up with what was going on. And so that was an iteration 1.0 is letting our customers know that we knew what was happening, that we knew at what time our caregivers got there, that we knew how caregivers were feeling, what they were reporting. And then at first it was just calling our customers and talking to them about it and just being close to them.

(00:16:12):

But an has evolved along those lines, letting family members know that someone is out there watching for their loved ones and someone is out there supporting caregivers in whatever they might need. So that’s how the evolution started because we incorporated one question and that started making all the difference. That one question at the beginning of the day when caregivers made it to the patient’s house, we would ask them, how are you feeling? We wouldn’t ask ‘em about the patients. How are you feeling? And that became, I mean, that gave us so much information, underappreciated, tired, burned out, alone. And so that’s what first opened our eyes to the real challenge being the caregivers. And at first our slogan was like, happy caregivers, happy patients. It evolved to the current slogan, which is we care for those who care. But they’re kind of similar. But I mean, it seems obvious in retrospect, and when I talk about it, it may be obvious, but it wasn’t obvious to us what the hardships that caregivers go through. And so when we decided to move out of just the dementia space and into caregiving for whatever patient needed some kind of support, that’s when we switched our focus to saying, you know what? We’re not going to become experts in all of these diseases and all the causes for caregiving, but we can become an expert in supporting caregivers. And so that’s when we changed our focus.

Mark Horoszowski (00:17:47):

It’s so interesting, and this is why I love talking to social entrepreneurs because, so I’m based in the states, the Silicon Valley solution to this problem probably would’ve been more uber inspired, which is create some, I dunno, maybe carrots, but primarily sticks caregivers, if you don’t show up on time, you don’t get paid.

(00:18:06):

And what you did was different. So when you started with almost like a manual matching of like, Hey, if you are a family member that has a family member that needs care, or if you just need care directly, we’re going to help you find a good caregiver. We’re going to help make sure that caregiver gets there on time. And in doing that, you were looking at this problem very holistically, systematically what’s going on, but also very humanly, you were picking these, this is what you said earlier. You were picking these caregivers up and you were taking, and in so doing, you learned that they didn’t need sticks in order to show up time, they needed care, they needed empathy, they needed. And so you started to then develop a solution for them, the caregivers, and that’s what really became Anna, the platform that you have today.

Manuel Rosemberg (00:18:56):

Yeah. The other thing that happened along those lines, we started offering free training Sunday mornings, like the caregivers work five, six days a week. And then we said, if you make it Sunday morning, we’ll give you free training on physical rehabilitation or how to inject the patient. And so many of them started showing up. I mean like, wow, this is our only free day. And we asked them to be there on a Sunday morning, and all of them are avid to learn more. So another big component of Anna is training. That’s why I mentioned it. And it’s not that we had the idea firsthand. We started offering training to whoever wanted it. And so many of them showed up. We said, this is another need that the market isn’t covering.

Mark Horoszowski (00:19:40):

Interesting. So then that’s really what Anna’s doing today. It’s not only helping caregivers find work and not only helping people that need care find caregivers, but you’re also providing, it seems like assurance to those that need care. And you’re also providing training to these caregivers so that they can move through the day with less stress and be more effective. And I would imagine probably earn more in the process as well. And

Manuel Rosemberg (00:20:04):

Yeah, exactly. Exactly. Improving the livelihoods of caregivers is essential. So all these training inevitably leads to that. But also one thing we noticed is the courses where most people showed up or self-help were like self-care. So meditations, there was a course on meditation or breathing exercises or stress release. And so a lot of the educational content that we have is actually self-care. So it’s not all it designed for better pay, it’s designed for better life, better living.

Mark Horoszowski (00:20:42):

So I want to continue on this journey then of how then this app continued to grow, how you’re integrating ai, how you funded it, et cetera. I want to get into that, but before I lose this one kind of thread, you mentioned something earlier related to your co-founder dynamic that I thought was really interesting where you have a different kind of skillset, but it seems like you’re really complimentary with each other. Emphasize for me again, your differences. And then I want to follow up with the question, which is with those differences, how do you collaborate so well together? Because oftentimes that difference can really lead to founder tension.

Manuel Rosemberg (00:21:29):

I’ll answer that second one first. I think it’s the recognition that the other person has skills that you don’t, and being fine with that, not pretending to be the perfect entrepreneur with a hundred percent of the skills. So I think he recognized that I can, he has a million ideas per minute. It’s amazing because he’s a dreamer and I appreciate that about him because for instance, we wouldn’t have become an AI company if he hadn’t spotted so fast so early on, as soon as AI was a thing we need to be. And I was more, well, right now I can’t see where we would be applying it. But I think he appreciates on the other hand that out of those a thousand ideas that come up every minute, I can cherry pick the ones that might work and actually make something with them. So he appreciates my skills, I appreciate his skills, and it’s been a good balance say in how we spend our money because he’s always thinking of the investments we need to make for future success. And I’m always balancing it with like, well, what’s our runway? How much income are we making? And so it’s kind of like a rubber band. He stretches it and I pull it back.

(00:22:51):

And I think, but it’s all, it works because of the recognition that we appreciate each other’s assets. And it’s been I think a pretty good balance. And when we talk to investors, when we talk to clients, it is very evident. Our personalities are extremely different. And I think investors have recognized that we make a good team, that we compliment each other, that the fact that we’re not the same is an asset for the company.

Mark Horoszowski (00:23:18):

Yeah, I want to spend just a little bit more time here because I think it’s interesting, and from my own experience, having a co-founder also that was ideas and still have a great relationship with my co-founder of Moving Worlds, even though he is not operationally involved anymore, but during the times when it was stressful, it was stressful. When he was coming forward with a bunch of ideas and I was looking at the finances, I’d love to be in the room. So can we experiment here? Can we do a quick role play? I’m curious to see how you do it. Okay, so time of the business, we are stressed out. Work is hard. We’re a little bit below target. We’re looking at runway problems. And I’m your co-founder and sorry, remind me your co-founder’s name.

Manuel Rosemberg (00:24:12):

Ariel.

Mark Horoszowski (00:24:13):

Ariel. So I’m Ariel. I come in and I say, Manuel, I’ve been tinkering with this A on the side. It’s in incredible. We need to incorporate it into Anna, and we needed to do it yesterday. We’re ready. Falling behind. The way that I think it could help is save a bunch of time in terms of patients that give them faster response. I think it could help caregivers almost as natural therapy. And I’m going to keep going here. There’s so many AI ideas that I have.

Manuel Rosemberg (00:24:42):

I would say I like the idea. Unfortunately we don’t have the money to do what you’re thinking right now, but why don’t we think up together of an MVP where we could test out the idea without having to make a big investment? What would be a good mvp?

Mark Horoszowski (00:24:57):

Well, it’s ai. We can’t MVP, this thing. We got to go. We got to invest.

Manuel Rosemberg (00:25:05):

You can total the MVP ai. I mean, if you think of a large language model, we can have an intern answering everything that and just seeing if that kind of response works with patients. But I mean, I would distill all of the answers and he does the same. And this is pretty much in the open, the way we react to ideas. I think they call it the sandwich theory, where first you say something positive about the idea and in the middle you pack in what you don’t think is going to work, but then you finish it up with another piece of bread. And so it is bad news, but wrapped up in something soft. So I never turned down an idea. I always suggest a way we might test it out and work it out. And

Mark Horoszowski (00:25:57):

I think that’s it. That’s what I loved hearing you say. You’re like, Hey, we could MVP this. How does it go forward from there? How do you go from who designs the experiment? Did that transfer to you? Did that stay with him? Did you put that to

Manuel Rosemberg (00:26:16):

A product lead? It depends. So I think what happens often is some ideas just die out on their own. He might not even like them the next day, but I say this in really admiring way. His idea, his ability to come up with no ideas is amazing. And so if he’s still at it the next day and a week later, he’s probably going to try to convince me or think up of an MVP, that’s option A. Option B is that I love one of his ideas and that I come up with the MVP and I say, let’s test this right away. We can do this and this and this and that. So one of the two will happen. It’ll be a good idea. It’ll be an idea that he loves so much that it’s not going to disappear or it’ll

Manuel Rosemberg (00:27:02):

Idea that I love. And we both decided to test it out. And I mean, I’ll tell you over the past 10 years, we’ve tested out so many ideas and some of them have stuck and become part of the platform and others, even though we think are great ideas, just like we couldn’t make them happen in the market. There’s a lot of things, I think this happens in every industry, but clients say they really love, they would love to have, but when you ask them if they’re willing to pay for it, that’s a whole different question. So things like we started online forum to support groups and everyone said, I would love that. Yes, it’s so important for me. Would you be willing to pay for a support group? Absolutely not. It’s not that important for you. But there are a lot of things that you don’t realize that you don’t know if people are going to be willing to pay for unless you put ‘em out there and you start testing them out.

(00:28:01):

But back to your question, when you were role playing, I think I’m completely convinced that everything is MV Pable, even very sophisticated ai, it just AI does. It’s very fast at doing what humans can do slower, but humans can do it. So if you started with a small enough MVP, you can get a human to do what you want the AI to do later and see if that’s something that the clients would love, that the process makes sense. I don’t believe in just testing things with AI without having an idea of what the AI is going to do. So everything’s MV Pable, and I think everything’s MV pable with a pretty small budget.

Mark Horoszowski (00:28:50):

It resonates a lot. And I even think about the biggest challenge is not can you build an AI enabled chat bot? Even years ago, we knew that you could, right? The biggest challenge is would people use it, right? And so I think it’s also what it sounds like here is that you’re really looking at these ideas less of a technical feasibility perspective. We can figure those things out. It’s like you’re really looking at it from a human perspective. Will our users want it? And then is it

Manuel Rosemberg (00:29:19):

Well, users want it and pay for it. And yeah, that’s really the only question you have to answer because I mean, if you can, I know we’re not talking about investment yet, but any investor, if you say, I’ve tested this out and these are the results, now I need the money to actually build something that is professional looking, then it’ll be very easy to raise the money. But the other way around is harder is like, I have all these great engineers and we can build this thing and we don’t have no idea if it’s going to work. It’s much harder to raise money that way.

Mark Horoszowski (00:29:52):

Yeah, yeah, yeah. The startup history books are filled with the failures of the latter one and they keep coming. Look, I think that’s a great segue. My mind was going there, so let’s go there. You’re starting then to build Anna. You’re building then technology in order to do that. Are you bootstrapping with free cashflow from the manual matching service? Did you go raise money for it right away? At what point did you say we’re switching from the pays to Anna and we’re going really all in on building the technology platform?

Manuel Rosemberg (00:30:36):

No, we fund raise to too. We’ve been fundraising all the time, but we’ve just fundraised in a very non-conventional way. So a lot of our funders are customers or customers like, oh, you helped me so much with my husband, it was so great. Your company is so great. I’m so grateful for you. Let me know how I can help. And she said, if you would want to be a part of this company, you can invest. And so a lot of our funders were family members of patients we cared for. And so it’s like nonconventional because we didn’t have to pitch anything. It took us a while before we ever came up with a deck. It was just like, well, you know, us personally, if you want to be part of this dream, then you can invest. And so we took the friends and family to friends, family and customers, and a lot of our fundraising was done like that.

(00:31:36):

Up until we started working with Inter-American Development Bank, we really had no need to have all these Excel spreadsheets and decks and investment memorandums. It was just, well, you know what we’re trying to do. We think it’s worth this. We were not sure. We were very honest about it. And it was positive because it was very low stress investors. They were investing in an idea and a dream, and we always told them, do not invest anything that you need in your life or that you’re counting on. Just invest something that we later found out there’s a space for this called venture philanthropy. But at that point, it was just people who wanted to, they thought we were doing, had a lot of future and there was no method to it to valuations. There was no method at all. It was just, we think it’s worth this. Why? Because our last customer, because six months ago we said it was worth less.

Mark Horoszowski (00:32:34):

Tell me a little bit more then about the mechanics of this. So let’s call these people angels. Were they giving donations? Was it a safe or was it even more flexible? It was just like, here’s money at some point in the future, it’ll be worth something. Come back to

Manuel Rosemberg (00:32:51):

Me. No, no, no. We did establish a valuation and then we just, once a year, we took on money at different valuations and we capitalized it formally later on because the safe figure is not so clean cut in Mexico as it is in the states.

Manuel Rosemberg (00:33:11):

On, when we went to an impact venture accelerator, we incorporated a Delaware LLC, and then when we got the money from the Inter-American Development Bank, and then we started using saves, but before that, we agreed on evaluation, and then we just capitalized all those once a year. And so like I said, on the upside, it was low stress because none of the investors were expecting 10 x over five years or a hundred x. The downside has been that our cap table is kind of dirty, and now that we’re trying to become more institutional is there’s some work eventually we had to put ‘em on in an SPV and find a way for more institutional investors for it to be cleaner. But I think being able to grow without the stress that more institutional investors put on a business has been positive in general. I mean, I do recognize there’s some value in having a little pressure, but we put so much pressure on ourselves. We didn’t need the external pressure, really.

Mark Horoszowski (00:34:26):

Pressure. Yeah. Okay, cool. I want to recap this a little bit and then also just define some of the acronyms that we use in case some of the listeners here aren’t familiar with some of those. So you were incorporated in Mexico, you took on some money from investors. It seems like there was some formal documentation and formal annual valuation so that they understood probably what percentage of the business that they owned, et cetera. But you weren’t in a more formal, at least, I’m going to say more formal, at least in the us, you weren’t following a traditional safe or convertible note structure. And then as you grew and you needed to then incorporate, it seems like in the us, in order to take bigger institutional fundings included from the Inter-American Development Bank, and we’ll get into that, then you incorporated as an LLC in Delaware at that point. Some of that, probably that cap table formalized a little bit more. And then you did raise on a safe, so simple agreement for future equity. This was an instrument popularized, I believe, by Y Combinator. And then you also mentioned an SPV. So a special purpose vehicle essentially, where you can aggregate a few individual angels into just one entity. So they’re taking up one line on your cap tables, so that’s easier to manage. Okay, so you’ve done that, you’re growing, and it seems at some point you said, okay, I need probably bigger checks and I need to become more efficient in managing investors. And you saw an opportunity, if other steps happen first, please correct me. But then you saw an opportunity with the Inter-American Development Bank.

(00:36:14):

How did that come to be?

Manuel Rosemberg (00:36:16):

There’s this organization called Tech for Good, and we were trying to work with Tech for Good, and we were asking them for their help to help us make introductions to potential clients. We weren’t thinking about fundraising. We were more concerned with fine clients. And they said, have you seen what you’re trying to do? I think would fit really nicely with this, the silver economy challenge that the Inter-American Development Bank has come up with. And it basically said, we are looking for Latin American tech companies that have found and ingenious solution to the challenge of caring for our elders in the region. And that pretty much sounds like us, spot on. So we presented Anna. And so Anna, as I said, the original name was because of our first employee who did everything well. But when the Inter-American Development Bank asked me what Anna meant, I don’t know why at that moment, it just came to me.

(00:37:17):

And I said, it’s automated nursing assistant. And they thought, oh, that’s pretty good. And so that’s why a lot of people refer to N-S-A-N-A, because we always use caps, the acronym. So both are true. It is an automated nursing and assistant, and it is in honor of ana. And so we presented this as a technology that could help the entire region formalize the caregiving industry, and in doing so, earning caregivers better wages, just a better livelihood in general. And also helping reduce the costs of elder care. Because one thing that is, I mean, it’s evident now, but there are a lot of studies that support it, is that people with chronic conditions that are cared for by well-trained caregivers will have costs of 30% less than people who are not cared for by trained caregivers. And that’s primarily due to avoidable hospitalizations. Avoidable emergency room visits is a major driver for high costs.

(00:38:22):

And so investing in caregivers can help reduce the costs of the healthcare systems in general and help support one of the only jobs that won’t be displaced by ai, I mean, not in Latin America. I know AI is doing that job in Japan and Korea, but it seems very distant, if ever, that it’ll happen in this region. So yeah, the Inter-American Development Bank forced us to clean up our finances. I mean, we were formal in that we paid our taxes and things were clean, but we really didn’t have the muscle to present our financials in a way that a bank would want to see them. So it was great that they forced us to build that muscle. Six months later from getting the grant, we also got accepted or someone recommended that we go to an impact, a startup, a venture, not a venture builder, but what do they call ‘em?

Mark Horoszowski (00:39:24):

Like an accelerator?

Manuel Rosemberg (00:39:25):

Yeah, accelerator. Accelerator. And there was this one in Sweden called Norkin, and apparently at least it was positioning itself as the main impact accelerator in Europe. And we thought that Europeans would be, especially for our industry, a lot more in tune, they would understand the need because Europe is much ahead of the curve in terms of aging. And so they would understand the problem very well, and they would see how inevitable it was that it was going to reach Latin America. And so we got accepted to this impact accelerator and also, and that forced us to clean up our financial, I want to say our financial act, but our financial reporting at least. And it’s something that if you haven’t never done it, financial reporting is a lot more complex than one would think. It sounds like income versus expenses. Yeah, this is how we’re doing, but it’s so much more complex than that. And it really takes a while for an organization, a startup, especially, to build that muscle because as a startup, you’re just thinking of selling the operation clients actually, you never have the time to organize your reporting, but it’s a very important muscle to build. If you want to keep growing,

Mark Horoszowski (00:40:48):

It resonates so much. Total side note, I have a master’s in accounting. I know my way around spreadsheets, financial models, all the things.

Mark Horoszowski (00:40:56):

And I still feel as the organization’s continued to grow increasingly less equipped and time starved in order to look at it and use it as a more strategic tool. Actually, one of our other guests, our episode with a niche from AYA slash without talks a lot about finance. We talked a lot about how much he was in model. So your point I think is really resonant with him, and it’s a lot of work to really be in there. So anyway, side note, but please, please continue

Manuel Rosemberg (00:41:28):

Also because it combines that part of a model where you combine your history into your projections, and that needs to be congruent, but at the same time, it can’t be that congruent because as a startup, you’re trying to show that really rapid growth is going to start happening. And so saying, well, how are you projecting this in the future? Well, because things start accelerating. So I don’t know. Someone once made the joke, they said what the Microsoft application is where most fiction is written, and it’s like, if you’re an entrepreneur, the answer is Excel very much. I love it. But yeah, learning how to play with numbers so that you’re being truthful about your history, but also laying out the possibilities of the future that don’t look like your past is an art form.

Mark Horoszowski (00:42:30):

So can I ask, are you the finance guy then? Do you have a CFO? Do you have an interim CFO or a fractional? Do you have an advisor that helps with that? Have you just learned it over time?

Manuel Rosemberg (00:42:44):

Yeah, I think I’ve just learned it over time, and my partner also participates in this. And what we have now is a monthly finance committee where we do invite some board members, and it’s ahead me. And also again, the Inter-American Development Banks guidelines about what they expect to see has also been kind of a good north star of what we’re supposed to look like. So like I said, it’s a muscle that we’re building. When you’re fundraising, I’m always, it just never, it’s never a priority to have a CFO because you want to bring people in who can help grow the income. And so we always like, well, yeah, we need A CFO, we know we need ‘em, but we’ll push that down the line a little bit more. I think though, in our next round, it’s going to be become a priority. I think the organization is big enough and complex enough that we can’t hack it anymore. We’ve been doing so far,

Mark Horoszowski (00:43:48):

Yeah. Yep. Hitting very close to home. We just onboarded our first fractional CFO and yeah, we’re unlocking value there. And again, it’s like I thought I could do it for the longest time. So you raised money from the Inner American Development Bank, and I think for our listeners, it’s important to know that these institutions exist. So I’ll try and explain it a little bit, but you can layer on because you’re more intimate with them than I am. But a lot of regions around the world, there’s a European Development Bank, there’s an Asian, et cetera, and they are banks that have essentially received financial contributions and capital from a number of countries in that region. And then they deploy that capital. Some of it they do via grants, some of it actually as equity investments or some of them either in debt instruments and they have, some of these development banks are massive, and they come up with lots of different ways of deploying capital. So you received grant capital from the Inter-American Development Bank, is that correct or

Manuel Rosemberg (00:44:48):

No? We received what they call a contingent loan.

Mark Horoszowski (00:44:52):

Oh, okay. Tell us more.

Manuel Rosemberg (00:44:53):

So it’s a loan with 0% interest and contingent upon achieving the goals that the loan was given out for,

Manuel Rosemberg (00:45:04):

There’s no collateral. And so we set out, we negotiated, what are you going to do with this money? Well, we are going to create this platform and we’re going to license it to a hundred companies, and I think this is what’s going to happen. And they said, all right, so if you achieve these goals, then you can pay back the money over an eight year period. So it’s very, very, very generous terms. And if you don’t, and so it is technically debt, but it feels like a grant

Manuel Rosemberg (00:45:40):

It’s such a generous form of debt. And this instrument is kind of a, it’s a division of the IDB called IDB lab. And so the amounts, well, I mean relative to what, they were pretty big for us. But I mean, for an Inter-American Development bank, there’s small amounts.

(00:46:04):

And so they’re willing to lose that because out of maybe a hundred companies that they make these loans to X number will succeed, and then they will need bigger loans, and then they could start doing either equity investments or more structured loans. So it’s kind of a way for them to find which companies are worth investing in, but companies that match their goals. So the IDB and silver economy, silver economy, I mean, it’s obvious, but maybe not to everyone. It is everything that relates to aging silver because of the silver hair. And so silver economy is a big priority of the bank nowadays. I would say caregiving specifically is a big issue around the bank. They came up with a whole division called quida, the IDB cares or CARES for, and it’s become a very important priority for the region. So they gave out these loans or grants to companies that are fulfilling their mission as a bank.

(00:47:10):

But now that you’ve opened up the conversation, I can’t stress enough how it’s, I think for impact companies, for social enterprises, it’s I think the best form of financing because they aren’t b**********g. They’re very honest about their mission. They’re very mission driven, and if you’re fulfilling that mission, they’ll be very supportive and generous with the kind of financing that you get. So we’ve had an amazing experience. And the other benefit of getting money like that is that they’re very influential. So the IDB has these forums and they can bring a lot of attention to your company. We’ve been fortunate enough to have licensed our platform to the Mexico City government, which have never happened. If the IDB wouldn’t have presented us with the government at a forum and said we were backing this company up and we love them. And in the Inter-American development banking specific, they have a lot of clout in Latin America because they lend money to all of the national governments.

(00:48:25):

And it’s not just the money. They’re also trusted as an institution with a lot of expertise. They do a lot of research. And so when the IDB says, oh, if you’re interested in the caregiving sector, you should really talk to these guys, then everyone is willing to listen. It gets a very powerful recommendation. So it’s not just the money, it’s the cloud, it’s the influence, it’s the connections that they have. And I know funders usually always put this on the table how influential they are, and some of them are, but these multilateral institutions, development banks are incredibly, incredibly

Mark Horoszowski (00:49:06):

Influential. Yeah, that’s really interesting. So then as you received that capital, that kind of helped you grow a little bit more, then I’m sure there was like, okay, now we probably need follow on financing. Where have you continued to look for funding? Did you look at private equity? Did you look at traditional VC money? Tell us a little bit more about the fundraising journey.

Manuel Rosemberg (00:49:31):

So we’ve spoken to a lot of VCs, and I don’t think up until recently, and by recently, I mean the past month, we hadn’t found VCs that we felt comfortable working with. It is just, we know we’re in a very interesting space and it’s growing. We don’t know if it’s growing at the pace that VCs want yet, or we didn’t know. I think we’re feeling more comfortable about it now, but when we were just growing the business, it just felt like the kind of pressure that we didn’t want. We know a lot of entrepreneurs that got even YC funding and they raised $10 million and then went bankrupt a year later.

Mark Horoszowski (00:50:25):

I’ve seen

Manuel Rosemberg (00:50:25):

That so much, and it’s because, yeah, and we didn’t want to be one of those, we didn’t want to explode or bust example. We really believed in what we were doing, and we said, if it takes us a bit longer, it takes us a bit longer. And so we’ve had to find the kind of investors that really connect with our mission. And like I said at the beginning, so many people have had to dealt with taking care of a loved one that so many people understand the problem,

(00:50:53):

That we’ve been fortunate that we’ve found a lot of investors that were more aligned with the mission than with the returns. I think recently we’ve had a number of breakthroughs and the kind of clients that we found that make our story more appealing. For VCs specifically, we work with what’s called Impact VCs. So Impact VCs theoretically put a lot of value on impact. Some of them do. Some of them want the same returns as a usual VC and the added impact. So it’s just like they’re not very appealing for you as an entrepreneur because you’re not getting much value, but some of them are truthful about the value that they place on Impact. And over the past few months, we have found some matching impact VCs that we’re working with and we feel comfortable with. But there are intermediate funding actors. There are a lot of foundations that have an impact like a venture branch.

(00:52:01):

So they have venture money, but not in the same sense as we understand venture money in Silicon Valley in that they’re not expecting these a hundred x returns. They’re venture in that they’re adventuring their money, but they want moderate returns. And so especially in Europe, there’s a lot of these kind of venture foundations, and I was saying some of them call themselves venture philanthropy where they do want their money back, but they understand it’s more the philanthropy than it is a venture. So I mean, there’s a pretty huge array of potential funders, and I think depends on what you’re doing, which ones you’ll find more attuned with. I think if you’re coming up with a microfinance app, then you’ll find a lot of resonance in VCs because they understand that. They understand that industry very well. But if you’re in caregiving, it’s just going to make, they don’t know it very well. There haven’t been many ventures in this industry, so they find it hard to relate. So it’s just a matter for each entrepreneur in each industry finding the right match. I don’t think there’s one better than the other. It’s what works for us.

Mark Horoszowski (00:53:27):

It

Manuel Rosemberg (00:53:28):

Has been other sorts of funding. Yeah,

Mark Horoszowski (00:53:31):

I want to talk about this more because, so you mentioned of people that went into yc, raised a lot of money and went bankrupt, right? I’ve seen the same thing, and I’ve seen a lot of entrepreneurs kind of get on this venture capital conveyor belt. It’s like they raise the safe, and then as soon as you have the safe, it’s like, well, you don’t technically have to go raise VC money, but the pressure is kind of there for you in order to do that. So you’re just advancing to the next round. You’re advancing to the next round. And you said something that I think was interesting. You said theoretically they care about impact. And so it seems like you were kind of picky. You were having conversations because you knew funding was important, and that’s a very common path for people to pursue. But it feels like you were doing diligence on these investors to say, we really need to ensure there’s alignment with our mission too, and we’re willing to take slower growth in order for that to happen. How did you suss that out? How did you know that, especially now, the funders that you’re talking to, how do you know that they’re not just saying it, but they really are willing to better balance the need for purpose alongside the financial returns?

Manuel Rosemberg (00:54:40):

I think it becomes evident pretty fast once you’re having a conversation. Some of them will lay out their thesis. Day one, they’re saying, we want to show to investors that you can invest in impact and have the exact same financial returns. So they’re very honest about it, but I dunno, you vibe, you feel the vibe of people and you hear their personal stories, you see what other companies they’ve invested in. And then one thing I would always recommend is that you say, who else have you invested in? Can I talk to them? And that you ask that you talk to other entrepreneurs, if I’ve invested in it and you said, wait, wow, what’s your experience been? So it’s important to understand, I think as entrepreneurs, I know a lot of people who put themselves with the position or I need money, so I’ll do whatever the money.

(00:55:37):

And it’s important to understand that they also need you. They just raised a lot of capital from LPs and they need to place it somewhere. And so they need you as much as you need them. So you can ask from them, what are you, it’s not just you answering their questions. You can ask as many questions as you want, and they have to answer and they have to be appealing to you too. I think in Mexico, I don’t know, I think Silicon Valley, a lot of investors are better trained for this, but in Mexico, I see that entrepreneurs laid down at the investor’s feet and what do you need? What do you need? What do you need? Instead of understanding that investors need them as much as they need the other one, but sussing people out is something that you think you always do, right? You don’t always do. It’s like hiring people.

Manuel Rosemberg (00:56:32):

At interviews are like, oh, this is going to be a great employee. He’s going to lead the text. And then three months later, I made a mistake. So that can happen too. And it’s just something you get better and better at the more people you talk to.

Mark Horoszowski (00:56:44):

Yeah. Okay. So I want to add just a quick kind of educational element just because you use an acronym in there

Manuel Rosemberg (00:56:54):

From

Mark Horoszowski (00:56:54):

An LPs. And I think that’s important to also think about as entrepreneurs. So a venture capital group, if they’re formal, will raise a fund and they’ll raise that fund from LPs limited partners. Those limited partners put money into the fund and the VC then operating that fund is trying to deploy that capital within a set period of time. And they’re probably also making some commitment into the time at which there will be a return back to their LPs. So they’re actually, they put themselves in a position that they need to make a lot of investments quickly, and they need those to be very, very high growth. So it’s not that VCs individually are necessarily bad people, but they’re operating in a system that is really prioritizing fast deployment of capital and really trying to put pressure then on entrepreneurs for high growth. And most likely those LPs in the system is forcing financial returns.

(00:57:47):

It’s not promising impact unless of course the investors, the VC formalize it in some way. And one way of doing that is with an investment thesis, which you mentioned. So most VCs, most funds should have a investment thesis or a fund thesis or a VC thesis, which really clearly articulates what they want to invest in, who they want to invest in, and what’s going to happen in there. And I do think that is a way to really suss out some of these VCs. If you look at their thesis and there’s nothing impact related who you’re talking to. And if you’re that high growth of an organization and you’re pursuing billions of dollars, the writing, so to say, is literally on the wall there. Your diligence is more though, and I like it. You’re checking for impact, but you’re also checking, it sounds for entrepreneur friendliness. And I love how you are talking about really recognizing the dynamics of, Hey, you need me. Let’s figure out if we’re the right fit. And so you’re doing diligence, you’re talking to other people that they’ve invested in, you’re reading about their thesis, you’re getting more involved. Anything else that you do to due diligence on the investors?

Manuel Rosemberg (00:59:00):

No, just things come out in a conversation. I always like to go off on tangents and diverge a bit in conversations and go into my personal life and see if they do it, because you learn a lot from people. When I talk about my kids often in these interviews or my kid or I talk about my hobbies and I try to suss out what kind of people they are, what they’re into, and that often tells you a lot more than what they say in a business format. The kind of jokes they make will let you know if they’re sexist, racist. So understanding them as people often tells me a lot more than as the business performance they want to sell. So I do it on purpose that I start talking about other things and see if they follow along, and I get to see that the human dimension of them, and that’s been very important for me.

Mark Horoszowski (01:00:00):

Mango, the number of times that you’ve kind of brought up the human side of things is really interesting to me, right? It’s like the human side of the patient, the human side of the caregiver, the human side of your co-founder. Speaking of tangents, I’d love to go on this. Where does that come from for you, just having this attunement with the human side of really everybody that you’re working with?

Manuel Rosemberg (01:00:25):

Yeah, A lot of people have noticed that about me, how often I talk about it. So my mother was a hippie, my dad was a go-getter entrepreneur, and I think I have a bit of both, but my mother, she’s now a family therapist, so a lot of her conversations are about people dynamics and what families work and how they understand each other. And empathy is a word very often used in my house. And so I think it is just, you can’t deny where you come from. The apple doesn’t fall far from the tree. And so I think it is that side, and I am always very in tune to that.

(01:01:14):

Yeah, I think in the US they use the term granola. I’m very granola. So yeah, when people describe me as an entrepreneur, I think a social impact entrepreneur, I think I do stress that out because I don’t think I would be satisfied if I would’ve created something that creates no social value and a lot of money. I think it wouldn’t have felt right. I don’t think I would’ve been successful, even, to be honest, I don’t think I would’ve ever been successful because I wouldn’t have had the drive. But to fully answer, yeah, I think it comes from my mother’s side, and I think my grandparents were Holocaust survivors, and that’s always put a lot of things in perspective for me. But yeah, a lot of people said it’s not a coincidence that you ended up in the caregiving field because you’re always looking out for people so much. That’s your nature. It was a natural fit for you. And I didn’t think about it until recently that someone pointed that out, that I did end up looking for a space, it would be about caring for people because that comes naturally to me.

Mark Horoszowski (01:02:32):

Yeah. Wow. You shared a lot in there that I really appreciate you opening up about. And just on a very personal thread, my dad’s parents, so grandparents on my dad’s side, also Holocaust survivors out of Poland, and it’s always struck me how much attunement with the human condition comes from him. And so that’s interesting to just hear you say that. I haven’t talked to another entrepreneur who’s had that experience directly, so that’s fascinating to hear.

Manuel Rosemberg (01:03:11):

Yeah. Actually, if you go to anna.care website, the picture on the website is my 99-year-old grandmother.

Mark Horoszowski (01:03:20):

Whoa.

Manuel Rosemberg (01:03:21):

Yeah. She’s one of the people that we’ve care for and that we’ve tested a lot of the technology and the platform with, wow. I don’t know what company was that said, I’m not just the director, I’m also a member. I think it was the hair club for men, CEO or something like that. And so I’ve had, as I told you the story, I started because of all these issues with my family. So a lot of people in my family unfortunately, have been clients or users of Anna over the past 10 years.

Mark Horoszowski (01:03:56):

Wow. I had one of my friends who also went down the entrepreneur journey. He had something that he called the grandmother test is like, I won’t build anything. I wouldn’t be proud to sell to my grandmother. So interesting to hear. There’s just such a proximal solution here and how that must feel to just be building something is making your family’s lives better and that for so many, coming back then to what’s next for you as you’re continuing to grow here. So you are raising some institutional funding then as your next stage of growth. Can I ask, are you expanding internationally? Are you investing that all in technology? Can I ask, what’s the primary use of funds there?

Manuel Rosemberg (01:04:52):

I think about one third is building a stronger tech team. One third is being a C-level team. I was saying we’re going to start bringing a CFO and a CMO. A lot of these jobs that we’ve as funders that we’ve had to do and we’re our own bottleneck. We can’t do these jobs very well, but we’ve done, and so we’re bringing in a C level team. And the other third of the money is marketing and advertising and stronger growth.

Mark Horoszowski (01:05:23):

Just on the bottleneck comment, what signs really showed up where you’re like, I’m the bottleneck and the bottlenecking will only get worse. What really made that real to you and said our way through this is bringing in the right expensive talent.

Manuel Rosemberg (01:05:43):

I don’t know. I don’t know if I can pinpoint to an exact moment. It just becomes evident where you have your to-do list and then you’re not finishing every week. You’re like, I didn’t get through half of my to-do list. And it just keeps getting longer and longer and longer. And one day you realize, yeah, I’m the bottleneck.

(01:06:06):

I’m the one making things slower here because I put so much on myself and some things you let go and you say, well, they’re just not that important. But other things, the conclusion is I need to fundraise more money. I need to get more money because I’m growing. Generations ago people didn’t have people think of my father’s generation. You grow a business and then you reinvest the earnings and then that keeps on growing. But nowadays things are happening so fast that even if you have a successful growing business, you need a lot more capital than what you can bring in to grow at the speed that is required nowadays with tech and with worldwide competition and with so many opportunities. So having to fundraise money doesn’t mean you’re not doing well. Some people ask me, why are you always looking for money? Always growing faster, especially older adults find that difficult to understand.

(01:07:07):

It’s like if your business is doing well, why are you always looking for money? Well, because it is doing well and I want it to do a lot better. So even though I sometimes criticize this Silicon Valley ethos of more stronger, I understand it and I am empathize, I just sometimes realize how destructive it can be. I have this one specific company, they did the electric scooters. Remember when that was a whole thing? And they were the kings of the electric scooters in Mexico. And so they were YC and Silicon Valley golden Boys. And their valuation grew by the minute, by the minute, and then at some point they fundraised so much money and they made it, they were a unicorn. And I talked to them three months later, how are you doing now? Oh, we’re broke. We had to sell the company for $1.

(01:08:11):

They had made it to Unicorn because at some time, 2022, the market changed from growth at all costs to profitability, to profit to profitability. And so those companies that were growing and growing and growing and growing and growing, but every new user I have, it cost me more money. They didn’t make it through that schism that happened somewhere in 2022. And so that’s the part that I think is destructive. But the reason they were growing at that pace and without thinking about their finances is because that’s what the market was pushing them to do. It’s not like they were bad entrepreneurs, it was just the market was forcing them to grow at that rate. And that’s the kind of destructive hypergrowth that I’ve wanted to distance myself from.

Mark Horoszowski (01:09:03):

Well, and as an observation, and also I remember from a conversation when you and I had the chance to meet in person is when you center impact into the story, it’s like, well, if I can grow there, I can serve that many more people. I can serve that many more patients, I can serve that many more caregivers. And so there’s just an extra pull. And if that’s the motivation and that’s pulling you into it, you see capital as a necessary ingredient in order to do that, but find the right capital. And it seems like you’ve been very diligent in doing that.

Manuel Rosemberg (01:09:36):

Yeah, we try to do the same. My partner came up with this mantra, it is more about recruiting people, but it works the same way for recruiting funders. And it’s like be very slow to hire, be very fast to fire. Once you realize something is not working, don’t stretch it out longer than you have to, but take your time in hiring. And I think that works for funders too. The second part doesn’t work the same way with funders, obviously. Yeah,

Mark Horoszowski (01:10:09):

Once they’re in their end,

Manuel Rosemberg (01:10:10):

Once they’re in the end, but take your time to really choose them. The first person that gives you the money is not necessarily the person that you want to grow with. And so yeah, being very patient there has been key for us and I think we’ve done a very good job. I look at my cap table, I don’t regret anything,

Mark Horoszowski (01:10:31):

Any tips, because I want to agree with you in theory, it sounds so great. Like, hey, every entrepreneur, be patient. Don’t be desperate for capital. And then many entrepreneurs get into a position where they are desperate for capital. So they don’t have that maybe luxury that you do. What helped you have that luxury? What’s the insight? What’s the wisdom that you could pass on that would help entrepreneurs think far enough in advance or be prepared so that they can actually take a long time to find the right capital?

Manuel Rosemberg (01:11:03):

But I guess two things. I mean, one of them, and this is not, I’m not saying anything new. A lot of funders will tell you this is always be raising capital, not when you need it. But that has to be always go to these impact or investment forums and everything. Always be out there and always be attracted to investors and always be in a round somehow or another, even though it doesn’t have to be a formal round, but always in conversations where you’re always interested in people who would want to invest so that when you actually need the money, you already have a lot of people that you’ve had a pre-discussion with about investing.

(01:11:43):

And the other thing is always be very mindful of what your runway is and never let it catch you off guard. Like, oh s**t, we only have three months left. We were looking at our runway twice a month. We’re still on track. Did anything happen that derail this? No. The runway still that we still have 10 months to go at this rate of burn. Yes. Okay. Because things happen, you lose an important client, another expense, and then people can lose track very fast of what the runway is. And so we’re always obsessed with how is this going to change our runway? Alright, we still have 10 months. It’s a safe investment.

Mark Horoszowski (01:12:28):

Yeah. Wow. Yeah, that’s really helpful. And even just to hear those numbers of, it seems like you’re looking at that very analytically every two weeks. Earlier you mentioned you have a monthly finance committee, so yeah, there’s a lot of diligence and rigor around that process, so that’s really interesting.

Manuel Rosemberg (01:12:48):

In the eighties, no, they used to call it the Rolodex, like the people you can call. We don’t have that anymore, but we are always building these contacts of who was really interested when I spoke about their business, this guy, this guy, this guy also said, I met this guy at a forum and always, so what we do is we send these bulletins about how the company’s doing and we send them to people we met who, and we said to all investors, friends and interested people, if they’re always in the loop, then when you ask for money, they’re like, oh yeah, I know that. You’re very diligent in reporting and very So yeah.

Mark Horoszowski (01:13:25):

How often do you send those bulletins?

Manuel Rosemberg (01:13:26):

Monthly. Monthly.

Mark Horoszowski (01:13:27):

Monthly. Very cool. I’m on a couple and I tend to see more quarterly, so that’s interesting that you do that monthly. But yeah, I’m trying to remember the movie. I’m pretty sure Leonardo DiCaprio is the actor. The Wall Streets. Yeah. Always be closing. Always be closing. Always be closing. Always be closing. Always be closing. Okay. Mariel, we are getting to what I like to call our lightning impact round. So I get to ask a few questions in rapid succession here. So shorter answers, really just looking for the golden nuggets here. And so I’ll start here. What is one mistake that you’ve made that you really hope future entrepreneurs will not make?

Manuel Rosemberg (01:14:15):

Overdoing it with the bootstrapping. Some initial capital is important.

Mark Horoszowski (01:14:22):

Go. I love it. What is one thing you want all impact investors to know?

Manuel Rosemberg (01:14:33):

Impact companies are always looking at the long-term, the long-term impact. So if you’re an impact investor, your timeframe should be a lot longer than if you’re a regular investor. Impact takes time,

Mark Horoszowski (01:14:49):

Impact takes time heard. What is the one leadership or managerial skill that you wish you could turn on, and if you could, it would make you a more effective team leader?

Manuel Rosemberg (01:15:08):

I think discipline sometimes vary. The methodologies I use with weekly or monthly meetings and the way I follow up on what happened the last meeting, I’m changing that all the time. And if I would’ve kept discipline form of tracking progress and tracking what was agreed upon on last meeting of how I follow up with that, I think I would’ve been more effective. I think I’m doing that much better now, but for a long time, every meeting was like, all right, so what are we going to talk about today? And I forgot to follow up on, well, what did we talk about last week that we need to keep discussing? So that sort of discipline in terms of how meetings are kept and how we follow up on agreements. I could have done a much better job at that.

Mark Horoszowski (01:16:00):

Yeah. Yeah. You, me and everybody. That’s actually, I just finished my own CEO 360 and one of the things that came out of it was rigor, but rigor. The core concept. Very, very, very similar. Yep.

Manuel Rosemberg (01:16:12):

Yeah. Yeah. I think that’s what I meant by discipline. Yeah.

Mark Horoszowski (01:16:15):

Yep. So this question, and I know I kind of said short one, but I want to deviate on just a little bit here and almost pay homage a little bit to earlier of our conversation. I think a couple times in this conversation you opened up a little bit more about, Hey, these were the things that happened to me that led to the creation of the business, or this is the story of my grandparents. And knowing that you are very human focused and you’re working in the pursuit of impact, I would just imagine that there’s a lot of emotional weight and gravitas to your work that probably also sits on you, and you’re in the stressful role of being an entrepreneur, so you so clearly care for others and you see them. I’m curious for you, what is a quote or a ritual or inactivity that you turn to for strength when things are really weighing on you?

Manuel Rosemberg (01:17:26):

I mean, this doesn’t have to do with the business, but I’m an avid hiker and a nature enthusiast and just disconnecting, just disconnecting from phone computer for a while. I gain a lot of perspective. I think if you don’t give yourself those spaces, those times problems become a lot bigger than they are. And so just letting some problems rest for a while and just coming back to them a week later really puts a lot of them in perspective. I mean, I also wish, back to your earlier question, I wish I would’ve done that a lot more than I have. I remember really exploding or being hysterical about a problem that a week later it was like, that wasn’t really worth the trouble, was it? So yeah, taking time off from work and really, really not thinking about it works for me personally. I know going back to my partner, he’s very different. He’s like, Keith is the more he thinks about things, the more possibilities come up in his head and the more like, oh, I thought about it all weekend and the light shine on this problem. And just for me, it’s the other way around. The more I think about the issues, the bigger the problems become, but it is just, we’re wired differently. So

(01:18:55):

That’s just what works for me.

Mark Horoszowski (01:18:56):

Yeah, cool. To have that attunement, who is another entrepreneur that you admire and you follow and you feel like you’ve learned a lot from,

Manuel Rosemberg (01:19:08):

You might have met him at the conference too, but Adi baler,

Mark Horoszowski (01:19:14):

He

Manuel Rosemberg (01:19:15):

Started needless, I am very much in awe of him also because he never loses his, sometimes I forget, this is a journey you’re on and you can make it fun too. Not everything has to be dead serious and like, oh, I’m so mission driven. The experience of an entrepreneur can be as should be fun. And so I think he’s very good at keeping things fun while really not losing focus, being very committed to the mission and also being an extraordinary entrepreneur. So I really like the way he operates.

Mark Horoszowski (01:19:55):

Yeah, very cool. I just had an interview with Claire from Farm to Feed, and she was talking about that bringing more joy into the workplace, more fun in the workplace. That’s cool. Who is somebody else that we should interview for the show?

Manuel Rosemberg (01:20:11):

Oh, if you haven’t interviewed him, I would consider him. I met this other person at DAVO called Madeline Ballard, who I was very impressed with how she organizes community workers around health, community workers in Africa, and I was very, very impressed with her.

Mark Horoszowski (01:20:38):

Very cool. We’ll have to follow up.

Manuel Rosemberg (01:20:40):

And

Mark Horoszowski (01:20:41):

My last question here, Mariel, how can we follow you? How can listeners support you? Where can we subscribe for updates to the incredible work that you’re doing?

Manuel Rosemberg (01:20:57):

The only social network I have nowadays is LinkedIn. I’m convinced that the others are terrible for your mental health. I mean, I used to be in all of them, but I dropped Twitter, I dropped Instagram, and now I’m only in LinkedIn. And I think it’s good because LinkedIn, whenever I post things about that’s happening to the business, whereas in Instagram, I would just post about other stuff. But if you want to be in the newsletter, you want to learn about things. I think if you, anna.care, if you contact us and say, I’m just interested in following you and learning about it, I’ll happily add you to that list.

Mark Horoszowski (01:21:41):

Cool. Amazing. Mariel, thank you so much for joining us today. This was fascinating. I loved all the different threads here that we followed, and I think kudos to you and your co-founder and your team for doing really incredible work. It was really, really an honor to have you here.

Manuel Rosemberg (01:21:57):

Thank you. Thank you for the interview. I enjoyed it a lot as

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit helpingbillions.org

Picture this: You’ve built a network of 700+ IoT-enabled water ATMs serving 2 million people daily. Your biggest customer is the government. Then one day, that government collapses, the prime minister flees the country, and authorities shut down the entire internet—including the mobile networks your water ATMs need to function.

This isn’t a thought experiment. It’s exactly what happened to Minhaj Chowdhury and his team at Drinkwell in Bangladesh last year.

While most entrepreneurs worry about product-market fit, Minhaj had to figure out country-market fit—in real time, during a revolution.

The story of how Drinkwell not only survived but emerged stronger offers three lessons every social enterprise needs to hear. These aren’t the usual “be resilient” platitudes. They’re battle-tested strategies from someone who’s literally had to give away free water during government collapse while still making payroll for hundreds of employees.

Check out the video interview embedded below, or on youtube here. Keep reading below for our highlights of this conversation:

Lesson 1: Sell Aspirations, Not Fear

The water in rural Bangladesh contains arsenic levels 20x above safe limits. The WHO calls it “the largest mass poisoning in human history.” You’d think fear-based marketing would be a slam dunk. In fact, most nonprofits and governments were trying to help people drink clean water and avoid poisoning by sharing this information and communicating the danger of their water. For something as clear as avoiding poison, you’d think this would work.

You’d be wrong.

“We all know we have to floss,” Minhaj explains. “But how many people actually do it? Now, if I knew that flossing tonight would give me pearly whites immediately, I’d probably be more inclined.”

By working in and listening in communities, Minhaj found there were more effective ways to sell clean water.

The female entrepreneurs who inspired Drinkwell’s model didn’t pitch clean water to prevent cholera. They sold it by promising:

* Whiter whites after laundry

* Smoother hair before weddings

* Less briny fish and whiter rice for family gatherings

The data backs this up: Approach-oriented messaging (focusing on gains) consistently outperforms avoidance-oriented messaging (focusing on losses) for behavior change, especially in lower-income segments. In a live-coaching series I led with world-renowned behavioral psychologist at MovingWorlds, Dan Ariely, we also talked about ways to help people move through “predictably irrational” tendencies.

Your takeaway: Stop selling the problem. Start selling the dream. Map out your customer’s aspirational moments—weddings, festivals, family gatherings— and help them realize it though short-term gains, and then position your solution as the path to shine in those moments.

Lesson 2: Make Your First Customer Famous (Not Yourself)

When Drinkwell got their first governmental utility customer through unexpected BBC coverage, most founders would have doubled down on PR for themselves. Minhaj did the opposite.

“You need to optimize for local government buy-in,” he says. “They don’t get a salary bonus for taking a risk with a startup. But what you can do is show that if this succeeds, they take the spotlight.”

His playbook:

* Submit the government partner (not Drinkwell) for international water innovation awards

* Arrange for them to speak at conferences abroad

* Have chambers of commerce honor them during state visits

* Position Drinkwell as “Intel inside”—a small logo in the corner

The results: From one inbound lead, Drinkwell expanded to every utility in Bangladesh and eight in India.

Your takeaway: Create a “customer glory” checklist for every government or institutional sale (the same also translated well to B2B and even B2C business models):

* What award can they win because of your partnership?

* What conference can they speak at?

* What press release makes them the hero?

* What metric makes their boss promote them?

Lesson 3: Persistence in Building Human Connections will Payoff

At every stage of Minhaj’s journey, there is a similar theme: Find a bunch of people, get in front of them, build a relationship, find ways for mutual value. Then do it again.

“One of my favorite sayings is people invest in lines and not dots. So when you first meet someone, that is a dot in time at which they interacted with you. Next meeting is another dot. Over time, those dots became a linear line of trust, and people will ‘I can see that you’re committed, and you are staying true to your word.’ ”

His playbook:

* Build a tracking system to find all your ideal contacts

* Follow them on the internet, go to where they are going, get introduced via connections – and try multiple methods when the contacts are especially important

* Treat them as people, inspire them with your vision, and understand their needs – along the way, have human conversations to connect as more than business partners

* Stay in touch – build enough dots to create a line of trust

* Recognize them, reward them, and help them reach their goals – earn your way to their contributions

Lesson 4: Proactively Build a Better Board – they will get you through crises

During the Bangladesh crisis, Minhaj created a WhatsApp group with board members within hours of the government falling. When a utility threatened to cancel contracts with one week’s notice, a board member wired emergency funding within 12 hours.

But this only works because of how he built board culture from day one:

“I stayed at my board member’s house in San Francisco,” Minhaj shares. “One investor had a rule: you have to stay with my family for a night before we invest. During COVID, when my dad passed away, a board member would meditate with me over Zoom and step in to run management reviews while I grieved.”

The framework:

* First board member = 9 months of diligence and demonstrated commitment

* Institutional investors see this culture and can’t help but participate

* Weekly board member-led training for local staff during COVID

* Board meetings focus on vulnerability, not just metrics

Research from Stanford shows that boards with high interpersonal trust make decisions 3x faster during crises.

Your takeaway: Stop optimizing for board expertise. Start optimizing for board culture. Your first board member sets the tone for every crisis you’ll face. Take 9 months to get it right.

The Meta-Lesson: Survive Long Enough to Get Lucky, Work Hard Enough to Earn It

From 2012 to 2017, Drinkwell tried everything:

* Household filters (97% failure rate after 2 years)

* Female entrepreneur kiosks (unbankable at scale)

* Multiple pivots and near-death experiences

Then BBC randomly featured them. A utility MD saw it. Everything changed.

“You have to survive long enough to find that route,” Minhaj reflects. “For us, that route wasn’t until five years after we started.”

But here’s what “getting lucky” actually looked like:

* Applying to 50+ pitch competitions (winning maybe 10%)

* Meeting his first investor on a dance floor at 11pm (after meeting the investor’s wife first)

* Cold-emailing professors with Nobel-adjacent prizes

* Flying to conferences where target ministers would be—not to get meetings, but to get 20 seconds for a card handoff

* Waking up early ever Saturday morning for 9 months to meet a potential investor and Board member

The compound effect: Today, Drinkwell operates 700+ water ATMs, employs 700+ people (all local except Minhaj), and has weathered currency devaluations, COVID-19, and literal government collapse.

How to Help a Few Billion People

* Learn the psychology behind what it takes to make customer’s lives better

* Foster human relationships with the people that can help you scale - like investors, Board members, and key customers

* Build the foundation to survive any crisis - personal, political, social, or economic

* Hire local, and invest in their development

The most profound insight from Minhaj might be his crisis management mantra: “Will this matter in five years?” During his first five years, everything felt like a fire. Today, running a company through government collapse, he can only remember two things that actually kept him up at night.

Maybe the path to helping billions isn’t about avoiding crisis. It’s about building the relationships, culture, and patience to dance with it.

Want to Learn from Purpose-Driven Founders?

Have a founder we should interview? Have them apply here.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit helpingbillions.org

When COVID hit Kenya in 2020, Claire was on sabbatical from consulting, reconsidering her career after her second child. Within 24 hours of lockdown, she launched a GoFundMe called “Farm to Feed” to buy vegetables from farmers who’d lost market access and donate them to families who’d lost income.

Then she stumbled on a statistic that changed everything: 50% of fruits and vegetables in sub-Saharan Africa never reach the market. Half. Gone. While one in three Kenyans faces food insecurity.

“I thought there has to be more awareness about this problem,” Claire recalls. “I consider myself quite an educated person. I didn’t know that globally 10% of greenhouse gas emissions are due to food loss and waste.”

Today, Farm to Feed is a tech-enabled marketplace processing 130 SKUs through their Nairobi warehouse. Her path from charity to commercial venture offers crucial lessons for any social entrepreneur trying to scale impact.

Lesson 1: The Problem You Start Solving Might Not Be the Real Problem

Claire’s team distributed food for five months during COVID before realizing they were treating symptoms, not the disease. The real issue wasn’t temporary market disruption—it was systemic inefficiency that existed long before the pandemic.

The takeaway: Early-stage social enterprises often discover their true mission through action, not planning. Research from MIT shows that successful pivots typically happen within the first 18 months when founders have enough data but aren’t too committed to their original model.

“If I really want to solve this problem sustainably, we have to think of a sustainable solution,” Claire realized. By 2021, they’d pivoted to a for-profit model.

Lesson 2: Customer Obsession Isn’t Optional—It’s Oxygen

Claire’s transformation as a CEO centers on one realization: she wasn’t customer-obsessed enough. Even when she thought she was at 100%, she needed to be at 150%.

“If we miss one item for that customer, that’s a really big deal. For us, one item on this big volume is small, but for that customer, it’s a really big deal.”

Practical application: Claire’s team tracks every customer request in their CRM—even products they can’t yet supply. This data drives their innovation team’s decisions about which of their “rescue grade” produce to process into new products like pre-cut fries or tomato puree.

Lesson 3: Grants Are Leverage, Not Crutches

Farm to Feed’s funding journey breaks conventional wisdom. They deliberately pursued a blended finance model: grants to der-isk innovation, equity for growth, and now exploring debt for working capital.

Claire’s co-founder Zara taught her a critical lesson: “It’s a numbers game. Do 20 [grant applications], win one.”

But here’s the counterintuitive part—grants actually helped them raise equity. “If you have a startup that in their DNA, they’re really commercially oriented, but they’re able to get grants to stretch longer, have more runway, create more value... grants are really a great way.”

The strategic framework:

* Use grants to de-risk untested aspects of your model

* Match grants often require equity co-investment (forcing you to raise both)

* Grant validation from respected organizations (like Mercy Corps AgriFin) signals credibility to equity investors

Lesson 4: Your Role Must Evolve or Your Company Won’t

At 20 people, Claire could collaborate peer-to-peer with everyone. At 50 people, that broke down.

“I realized the problem is not the company, it’s me at the moment. I need to change,” she says, crediting an INSEAD program for this insight. “In two years, my role will be different again.”

Claire’s evolution framework:

* Identify what’s blocking each team member (capability, capacity, or team dynamics)

* Participate in big decisions without micromanaging execution

* Accept that hierarchy becomes necessary (even if it feels uncomfortable)

* Trade being liked for being effective

Lesson 5: Innovation Requires Intentional Separation

With just 50 employees, Farm to Feed has an innovation team. Not because it’s fashionable, but because mixing future-focused work with daily operations kills both.

“I do try to separate very much anything that is like a dream from the rest of the team,” Claire explains. “Our mandate now is delivering on the here and now.”

The innovation team operates in phases:

* Exploration (kept separate): Answer fundamental questions about new products/markets

* Integration (selective involvement): Bring in ops, tech, and finance teams once concept is proven

* Operationalization (full integration): New products enter standard processes

This mirrors Google’s 70-20-10 rule but adapted for a resource-constrained startup: 90% on core business, 10% on adjacent innovation.

The Uncomfortable Truth About Bias

Claire doesn’t mince words about fundraising as a female founder: “I do believe there’s a huge bias towards women entrepreneurs, right? And even though we all think there isn’t.”

But her insight goes deeper. It’s not about empowering women to fundraise better—it’s about addressing systemic bias at the source.

“I’m super feminist, but I have biases towards women... As an example, when I’m flying, when I hear a woman is our pilot, I’m always surprised, like is this going to go the right way.”

The data backs this up: Women receive only 2% of venture funding despite generating twice the revenue per dollar invested compared to male-founded companies.

Her call to action: Stop putting the burden on women to “lean in” harder. Start addressing the biases in the room where investment decisions are made.

The Mindset That Matters: Bring More Joy

When asked about staying strong during hard times, Claire offers something unexpected: “In order to do this long term, we need to have fun doing it.”

This isn’t toxic positivity. It’s strategic resilience.

“I started this because I was passionate about the problem. I started this because I thought it was going to be an amazing journey building this startup.”

The research agrees: A study of 6,000 startups found that founder passion—specifically passion for developing the venture, not just solving the problem—was the strongest predictor of success.

The Bottom Line

Farm to Feed’s journey from COVID relief to climate tech reveals a truth many social entrepreneurs miss: sustainable impact requires commercial discipline.

But it also requires something more—the ability to evolve continuously while maintaining joy in the work. As Claire puts it: “Let’s work super hard and be super smart, but let’s not take ourselves too seriously.”

The food system contributes 25% of global greenhouse emissions. If we can make it sustainable—reduce waste, improve distribution, support farmers—we’re not just feeding people. We’re potentially reversing climate change.

That’s a problem worth having fun solving.

Want to Learn from Purpose-Driven Founders? Subscribe to the Helping Billions Podcast.

Have a founder we should interview? Have them apply here, or nominate them here.

Resources Mentioned

Farm to Feed: https://www.farmtofeedkenya.com/

Bayer Foundation Women Entrepreneurs Award: https://bayerfoundation-wea.com/

Mercycorps Agrofin: https://mercycorpsagrifin.org/

Catalyst Fund: https://www.thecatalystfund.com/

Transcript

Mark Horoszowski (00:01:06):

Welcome to how to help a few billion people. My name is Mark Osky and I’m the host of this podcast. In this next episode, I am beyond excited to dive into a inspiring social enterprise called Farm to Feed. Farm to Feed was co-founded by Claire in the depths of COVID. Originally as a nonprofit. She saw that because of lockdowns in Kenya where she was born and living, there was a massive number of farmers who had produced food and then weren’t going to be able to distribute that. And then on the other side, she saw a lot of people who would not have access to not only not fresh food, but just food in general. So she started to GoFundMe. She raised money and used that money to help buy food from farmers that otherwise would go to waste and then distribute that to people who didn’t have the means to pay for and even access food.

(00:02:03):

Months into the process, she saw that this wasn’t just a one-time need that would be gone as soon as COVID was gone. She learned that one of the biggest contributors to climate change is actually food. Food that is grown and then goes to waste or is never distributed or never finds a home in products or in people’s bellies. Now, similarly, she lived in a place where there was a lot of food insecurity where on one side you have all this food going to waste, and on this other side you have people not able to access food and she thought there must be a way to make this work. So Farm Defeat is doing that. It’s now an organization of 50 employees started in Kenya. It’s now expanding across the continent and soon internationally, and they pay fantastic wages to farmers to improve livelihoods. They give farmers data on the types of crops that will actually give them even more potential to have higher earnings in the future.

(00:03:03):

Once there, they have a ERP software that essentially creates a lot of efficiency across the distribution chain of food to distributors, to then consumers of that. And then she also has a web platform and e-commerce platform that’s meant for B2B buyers like restaurants, hotels, and other manufacturers of packaged foods who will need ingredients. And they even have a factory where they do some sorting and semi processing of these food materials. So in this really far ranging podcast, we learn not only about her really innovative business model, but also how they continue to fund and support innovation even as they’re delivering on over 130 different products. In addition, we’re going to talk about what it’s like to manage people, how to manage people more efficiently. We’re going to talk about how Claire used blended finance, a combination of philanthropic grants as well as equity investment and soon to be debt investment to keep growing her enterprise.

(00:04:08):

And we’re also going to talk about how do you just listen to customers and then listen more and then listen even more. And then when you think you’re listening enough to realize you still probably need to listen more in all of these, you’re going to hear other tips for what it takes to just create impact as a growing enterprise. And for those impact investors in the audience, you’re also going to get some really great inputs on how you can be more friendly to support incredible social entrepreneurs like Claire. I am beyond excited. I think everybody said that, but I’m beyond excited for you to listen to this episode. Claire is inspiring, she’s fun to listen to, and you’ll see that she also brings joy into conversations and do her workplace. So without further ado, let’s dive into our podcast with Claire from Farm to Feed. Claire, welcome to the Helping Billions podcast. I am so excited to have this time together. Thank you so much for being here.

Claire Van Enk (00:05:05):

Oh, thank you, mark. I’m really excited. Thank you for doing this podcast. I think it’s so cool you’re doing this and thanks for featuring

Mark Horoszowski (00:05:12):

This. Yeah, well, thank you. Thank you. So I want to jump in. So I’ve been following the Farm to Feed journey for years now, and we even had the opportunity to meet last year where I feel like I got even more insights and what it was like to build this organization. But one thing that always stuck out to me about your story is that you came upon to quote your own words, right? You came upon this idea by accident. Can you tell me a little bit more about the inception story of how you decided to take this path into social entrepreneurship?

Claire Van Enk (00:05:50):

Yeah, it was really interesting. So I come from a more corporate world. I was a consultant before I was on a sabbatical, just had my second child actually and need to sort of rethink my career, but working really hard, not really thinking about what do I really want to do? And I think having children sometimes does change a person in terms of you want to do something more meaningful, something more impactful because you’re away from your children for a long day. So I was really on this sabbatical and this journey, what my next step would be. And while I was on my sabbatical, COVID hit and I was living. So background, I grew up in Kenya, I have Dutch origins. I moved back to Kenya almost after university, so I was living in Kenya. So COVID hit and COVID hit Kenya in a very different way.

(00:06:45):

It wasn’t like there were a lot of six people, but there was also a fear for what is going to happen to the economy. So from one day to the next, there was a lockdown. It was almost immediate. People couldn’t leave Nairobi. And you can imagine in a economy like this, it means people lose access to income and there’s no net that they can fall into. At the same time, because transportation was prohibited, farmers lost access to markets. So basically the day after I started a GoFundMe page called Farm to Feed, and I had some connections in the agricultural sector, and I called and I said, well, how are you moving transporting fruits and vegetables? And it was sort of like the real fear of a standstill and what would happen to individual livelihoods. So farm to feed the GoFundMe page, the idea was we’re going to fundraise for me to buy vegetables from these farmers that lost access to income and sell this and donate this, not sell, donate this to people who lost access to income. And that’s how Farm to Feed started. So that’s why the name is Farm to Feed. And then while we were doing this, we raised more funding than expected. So we continued this journey for 3, 4, 5 months. And that’s when we stumbled upon this huge problem that we thought we were solving because of COVID. But actually that’s when we learned 50% of fruits and vegetables in Sub-Saharan Africa does not reach the market for consumption. 50%, that’s half that is insane. And we think about food insecurity, that there’s a lack of food.

(00:08:31):

There’s a huge amount of food being grown in Kenya particular. And secondly, I didn’t know that globally 10% of greenhouse gas emissions are due to food loss and food waste. I didn’t know this and I consider myself quite an educated person. I thought there has to be more awareness about this problem. And then lastly, of course, the devastating paradox is that one out of three Kenyans faces food insecurity. So putting these three things together, I realized that coming from a consultancy background, more private sector orientated, I thought, I’m doing this because of COVID emergency relief, and we’re doing this because things need to happen now, but if I really want to solve this problem sustainably, we have to. And we had built a team by then, so I think more people were in agreement on the team. We have to think of a sustainable solution for this. And that’s when we pivoted to commercial. It took some time, some back and forth, some thinking. We had raised some money for the non-for-profit, and then in 2021 we pivoted to a for-profit organization really looking at this particular problem. So that’s the impact.

Mark Horoszowski (00:09:38):

Yeah, no, it’s an incredible story. And when we think about climate change, we think about natural, the usage of natural resources, right? Oil, gas, we think about airplanes, we think about cars with you, about manufacturing, all these things. And the amount of contributions from the agricultural sector and just the waste from the agricultural sector is really mind blowing. And then paired with that food insecurity element in the place that you’re living. So

Claire Van Enk (00:10:06):

25% of greenhouse gas emissions come from the food system, 25%.

Mark Horoszowski (00:10:11):

25%,

Claire Van Enk (00:10:11):

Which is wow. Yeah. So it’s also the problem. I don’t think it’s the problem of climate change. It’s there That lies the solution to reverse climate change.

Claire Van Enk (00:10:24):

If we

Claire Van Enk (00:10:25):

Can get food system sustain sustainable, reduce the waste, think about how we grow things, make sure we don’t work towards soil degradation and really transform the food system, really think because it’s complex, really think about all the different elements in terms of how can we make it more sustainable. I think the food system holds a lot of what we want to reverse in terms of climate change.

Mark Horoszowski (00:10:52):

Well, and I think as the episode goes on here, we will dive into these elements because I think looking at these different challenges, I think in the past, philanthropy or even social entrepreneurship has taken a single issue like climate or food access or farmer poverty. And I think one of the things that’s just really inspired me about your business model is how you’ve woven all those elements together, where tackling food insecurity also is going to have a positive impact on climate, which is also going to have a positive impact on farmer livelihoods, provided we can make connections across that system. That’s really what Farm to Feed does now. So I want to come back in a moment to how you pivoted from a philanthropic to a commercial model. But bring us to current day, then talk to us a little bit more about how exactly, how are you sustainable now? How do you generate revenue now and what does your current platform look like today?

Claire Van Enk (00:11:55):

Yeah, yeah. So I mean we did quite a few pivots. We evolved. I always say we also

Mark Horoszowski (00:12:02):

Evolved. We evolved.

Claire Van Enk (00:12:04):

We didn’t go from one to 10, it just went from one to one and a half and then anyway, but we are very different than we initially started. So now what it is, we are a tech enabled business focused on climate resilience of the food system. And what we do now in a nutshell is that we’ve built this tech. It’s three products. It’s the farmer app, it’s our internal ERP system, and it’s an e-commerce platform. And with this tech, we are able to aggregate the full harvest from farmers. So grade one, grade two, and grade three and internally processes and sell this to B2B customers. And with processing, I mean sorting and grading, but we’re also actually doing some processing of the products. And there’s a couple of things maybe that we’ve discovered is there are two problems that we’re trying to solve for the farmers and the customers.

(00:13:06):

On the farmer side, it’s a hugely fragmented market. So they’re dealing with multiple different brokers. It’s quite unreliable pricing, fluctuating, they don’t have access to capital. It’s not consistent, not reliable. So what we’re doing is consistent, reliable offtake for farmers and really good payment terms. So the payment terms are really important for a cash tight farmer. A small farmer are usually very cash tight. So the payment terms are really important. So we try to do that rigorously. And then on the customer side, they’re also dealing with this fragmented market. They’re also dealing with 10 different brokers, one for the tomatoes, one for their potatoes, one for your salad, one for your herbs, one for your fruits. So it’s very fragmented. Everything comes in different times. You have physical delivery notes that are not making sense. You have to reconcile, you have to pay, you can’t pay. Did you get this? Did you reject it? It’s very confusing also for the customer. So we’re solving those two to just have a very organized platform for these two groups. One where it’s just really consistent, transparent offtake and where farmers can give us grade one and grade two. But we’re also expanding. We have 130 SKUs. So farmers who have only regrowing tomatoes for example, can also go to higher margin products, for example, because it’s also really about increasing income from farmers.

Mark Horoszowski (00:14:27):

So that’s insight that you give to the farmers. They start working you with tomatoes, and then you might say, Hey, here’s data about what else the market is really interested in. Here are opportunities to potentially increase your earnings just based on the data that you and the relationships that you have with them already.

Claire Van Enk (00:14:44):

And we’re really eager for them to be able to do a crop rotation for them to grow different, a variety of crops. And as we grow, we can offer them to more and more customers. It’s also about how much demand can you unlock. The more demand we can unlock, the better for the farmer. And that’s why we’re also very much commercially driven. We strongly believe customer is key. And because if the customer is happy and we’re unlocking demand and we’re growing, the benefit is for the farmer.

Mark Horoszowski (00:15:16):

And talk to us a little bit more then about the customer side of this, and maybe you can mentioned tomatoes, so I dunno if that’s the most popular product that you process here or help farmers sell into the market. But maybe take us on a journey of one of these products, like farmer grows it, you get it, you do some processing, some sorting, some grading, and then it goes to a B2B. Who are these B two Bs? What do they do with it? And then what ultimately do consumers eat as a result of the marketplace that you’re helping facilitate here?

Claire Van Enk (00:15:49):

Yeah, yeah. I mean, in my view, if we simplify it, it’s very complex because we’re in this market where there’s such a fragmentation and unreliable information. But the process is very straightforward. So we know what orders are coming in. We place that with our farmers, and our farmers also can forecast with us. Of course, we collect that from the farmers or they bring it to their warehouse, but not all farmers have access to infrastructure to bring it to Nairobi. So we can either collect or they drop off in our warehouse. It’s then sorted and graded. So it’s sorted in grade one and sorted in grade rescue. And then we also have certain products that we do processing. So for example, if you peel a tomato, you don’t see there were slashes on the tomato because here in Kenya’s still very much using traditional harvesting it.

(00:16:45):

So slash potatoes is a sort of a natural byproduct. So we’re trying to be more innovative on these kinds of products to make the imperfect looking standardized. So that’s what happens in our warehouse. And then we have last mile deliveries delivered to our customer. We are 24 hours. Most of the products have to leave the warehouse by 5:00 AM because our customers, you can imagine there are hotels, restaurants, food schools, feeding programs. We have a variety of customers. They all need their products first thing in the morning. So everything actually is out the door by 6:00 AM by 12, the deliveries are done and we start the day over again.

Mark Horoszowski (00:17:30):

Wow. Wow. And so some of your buyers here might be getting, so to say, fresh ingredients like fresh tomatoes. Others might be getting those ingredients and then processing them into something like a chips or a sauce or something like that. So you’re serving both of these customer segments

Claire Van Enk (00:17:48):

And we’re really mean, the semi processing we call it. It’s what we’re launching now more and more. So we have about, I think six products now that we’ve launched that are semi-pro. So you think about peel, potato chips, fries, sauces, minced products, but that’s a new market here. It doesn’t really exist. There exists some of it, but we’re really pushing that as sort of a new product. So that’s different than more of the western countries where those things are much more common. Those things are still quite new here. Not everyone buys as products. So those is really new. Those are the products that we’re currently launching. And we see there’s a huge benefit there because also for us to increase our margins to become financially sustainable, which is important because we’re dealing with raw products, which, so those products are really interesting and we can get more into how you think about your business model, things like that. But yeah, that’s really important, but also allows us to offtake more from the farmers and more imperfect looking products.

Mark Horoszowski (00:18:55):

That’s interesting. Then that’s also where you have the real time insights, so to say, from all these B2B buyers, both processors and restaurants and hotels that you mentioned, they’re telling you essentially what you want, so you’re able to help say, yes, we have that, or No, we don’t. You’re aggregating more data. You’re able to pass on that information back via your farmer’s app.

Claire Van Enk (00:19:17):

And we have a innovative innovation team that is constantly looking at, okay, what products can we make? So we’re getting these products in, for example, there’s a lot of rescue products and potatoes. What can we make with potatoes? What products are there that we, that’s realistic, that our customers want and that we can help farmers with? So those products, but it seems easier, and once you get in the detail, you’re like, okay, there’s small stuff like fries have to be a certain length. And if you’re a commercial kitchen and you fry your fries and you have one small one, that’s the one that burns in the pot and ruins the taste of everything. So it’s quite a challenge, but I do believe we can get there, but it’s a challenge and it’s an interesting challenge. Yeah,

Mark Horoszowski (00:20:02):

Yeah, yeah. Devil in the detail on this stuff. Right. Wow.

(00:20:06):

Okay. I want to click into something that you just said. So we have an innovation team. And so tell me a little bit more about how big is the team now and how did an innovation team come to be? Because I think especially for an organization your size, having an innovation team isn’t probably as common. You think about that as a big corporate, they have RD teams or innovation teams, but it seems like this is so integral to your expansion and growth. So yeah, how many people are you right now, and then how did this innovation team come to be?

Claire Van Enk (00:20:41):

Yeah, so we’re about 50 people right now. And yeah, I call it the innovation team. It’s the product development team. But they are the ones, and they are on the ones thinking about these new products. So we already have this e-commerce platform. And what’s really interesting about the e-commerce platform is that now you have the sales channel. What else can you put on your e-commerce platform that customers really want? So you have your 130 SKUs, but now you can do other types of products, and they really think about that. What other products, what other products can we make? What other products are out there that would be interesting? How do we position that it has to fit in our mission? It has to be commercially interesting, and it has to be really interesting for our customers, but it also has to help our mission. So really focused on new types of products or new types of markets. For example, what is our next, is the next six months, what does the six months plus look like? Very small part of our business. Whereas I think 90% of the business is focused on the here and now and the core business.

Mark Horoszowski (00:21:52):

Gotcha. Okay. So yeah, not like a separate team and a separate little office making things up. They’re very integrated into the core business of figuring out where are we going? But really looking at, I would imagine combination of market analysis, customer interviews, some tests, some experiments, et cetera, to figure out what can go to market.

Claire Van Enk (00:22:11):

It’s launching something and making sure it becomes operational.

Mark Horoszowski (00:22:15):

I’d love to get in your mind even into the workings of your organization a little bit, because one thing that I’ve seen so often that entrepreneurs struggle with is, I need to deliver this thing yesterday. I’m just in full execution mode, but I also need to keep growing, and so I need to invest in that product team and that innovation team to keep growing. How do you, as leader of this organization, how does the product slash innovation team, how do they work with you? How do they present ideas to you? How do they build the case that we should go to market with a new SKU or not? Can you bring me a little bit more into just what that process looks like and how do you all collaborate? How do you end up making decisions? How do they present that information to you? The more detail you can get into here, I think would be really fascinating.

Claire Van Enk (00:23:10):

Yeah, yeah. So one thing, I mean, back to what you said. I mean, I do try to, as much as the whole team was working together, I do try to separate very much anything that is a dream from the rest of the team. As much as I realize the rest of the team also finds it intriguing. I mean, strategy, innovation sounds interesting, but our mandate now is delivering on the here and now, our business model as it is. So the team really has it. So it’s all about, it’s really important that the team focuses on delivering and executing quickly. So that’s one thing. So the innovation team was initially when I started it, or when we started as a company, it was really separate. I mean, I didn’t really mix it because we were having initial conversations. I didn’t want it to be a distraction for other people.

(00:24:02):

They just needed to really think about what was that product? What does the demand look like? What does this team look like? We wanted to go into international markets. So it was really focused on not the Kenyan market. So there wasn’t really that overlap needed. But once it becomes more, once the initial questions are answered, it becomes more interesting, okay, how do we now deliver on this? What needs to change on the tech? What needs to change on the operations side? What processes need to change? What needs to change commercially? What needs to change financially? It was really a process of trying to answer the questions. And once you’ve answered, okay, this is the product, this is the target market, these are the partners who are going to help us with the product, then it becomes more concrete. So then you can start involving your team members on the specific subjects.

(00:24:55):

You also, you need buy-in from the team. I really believe that it’s that balance, and you can never really get it right, to be honest. Some people want to be more involved, some people don’t want to be involved. So it’s striking that balance. So just making sure you have a workshop at the end of three months, this is what we achieve, this is what we’re going to do. And then integrating it more and more for the people who don’t want to be distracted. It’s a distracted, and for people who are easily distracted, it can be a distraction. I really have to box it in a way. But now the team, what they do now, it’s very different than six months ago, is we decide as a team together with the sales team, what are those products that are interesting? Then the product team, the new product team or the innovation team, they develop the products and we do workshops after workshops, and the devil is in the detail, and then we launch the product, but then it needs to be operationalized. So then we’re heavy operational company. So then it needs to go in the standard processes and understand, okay, when an order comes in, when is it processed? What is the processing method? What are the commercials, all those things.

Mark Horoszowski (00:26:03):

So let’s say it’s french fries. So sales team starts hearing like, oh, customers are saying, Hey, do you have pre-cut potatoes within these sides? Right? Innovation team kind of learns of this. They probably do some research. They start figuring out some of these devil in the detail things like french fries must be of a certain size, otherwise they’ll burn in the oil and ruin the whole batch as you were sharing earlier. And so then they’ll do analysis. They’ll say, yes, we could actually do this at scale. And then at some point you’re looking really to the core delivery team, like your day-to-day operations team and saying, okay, let’s get more input here. Where can things go wrong? Where can they go? How can we actually do this and standardize this and get to any level of scale? So if I’m tracking all that, one thing I’m curious about is when do you as founder and CEO look at this and then look at the finances of it and do some analysis? Is it more intuition? I think the market’s growing, let’s just go for it. Finances be damned? Or you’ve got a consulting background. Are you in a spreadsheet doing modeling? What is that like for you?

Claire Van Enk (00:27:13):

Yeah, so I’m heavily involved from the beginning. So what products are we going to make next? Because everything that’s working, I’m expecting to work. So that’s like managing check-ins, making sure it works and escalating and solving and unblocking. Whereas this is like, okay, are we going to go for tomato puree or are we going to go for banana puree? Are we, where is the market? What is it? And to be honest, I think it’s a lot of gut. There’s also, we go to restaurants, we know this market, what they use. It’s more the question, are they ready for it? Are they ready to stop making it themselves and buy it readymade? So I’m quite involved in that decision making, but I have a really good team. Now also, this is quite recent, but we closed the fundraising February, so I now have incredibly talented people on the team.

(00:28:12):

So who prepared the workshop front and end? So I attend. So before we decide on which products, we do that as a team. The team then prepares the workshop. We attend the workshop. It’s all really well organized, but in the workshop, we actually touch on everything. So from operational to the tasting to the finances. So we touch on everything, and I now have really good people who dig in the details. So I don’t have to do that anymore necessarily. I’m basically involved in every step. So once we decide on the price, yes, we decide on the price, and sometimes I do say, I trust you on the price, or I trust you on the operator, or I trust it’s also which products, how unclear is it? How much ambiguity is there? Yeah, sometimes it’s more straightforward and sometimes it’s more fake, but I’m quite involved. Yeah, yeah.

Mark Horoszowski (00:29:09):

Okay. So there’s a little bit of, so to say, let’s call it founder intuition or just human intuition based on the different, when customers are asking for some things before you’re even investing, and then the next phase, so to say, of that, which is it sounds like this more research and workshop process, you’re working with a team, you’re saying, okay, I hear customers wanting that, but I’m pretty skeptical, but this one makes a lot of sense. Let’s do that one first. That goes through a bigger process. That’s when you’ll pull things in more years of research, more team input, also look at finances, some projections on the products. You kind of go through that process, and if it meets certain criteria, then you’re passing it on and then operationalizing it. Am I tracking? Does that sound right?

Claire Van Enk (00:29:51):

Yeah, yeah. I mean definitely what we also do, the sales team does a really good job at tracking the products that customers find interesting. So we do have a template like crm, product CRM basically, where they really say, okay, these customers have asked for these products. And there is a lot of intuition from the team, not just my, but from the team. I really see as a team, a effort. There’s a lot of intuition, but it is definitely informed by the team having these conversations,

Mark Horoszowski (00:30:25):

Having the power of that kind of data backbone too. So you are in the sales theme is probably rigorous about putting in what requests are coming in, even if you can’t serve them yet, so that you’re cataloging this information over time. Yeah, very smart. Very smart. Okay. Earlier I mentioned that we were going to come back to questions. So I want to go way back earlier in the journey. I know we’re jumping around here, but you started as a nonprofit, right? You got philanthropic donations, you used that to buy produce and then deliver it. At some point you switch to a commercial model. Let’s start with what led you to, because I’ve seen so many people just start on the philanthropic path and then just stay there. What for you made it clear that yeah, we need to switch this model and create a commercial model here, and most importantly, how then did you get your first customer?

Claire Van Enk (00:31:24):

Yeah, well, I think the team that I had was all more from private sector. That orientation, it felt more natural with the team and myself. I’ve been consulting for businesses, so that’s one really I think with every choice we make now, I also look, is our team, does that fit with our team, DNA or the affinity with the team because then it will work. So that’s a huge big driver, and I strongly believe that solving something at scale or ingrained in society is through a sustainable, financially sustainable. I also think fundraising in general is hard, but fundraising for a non-for-profit is really hard and it’s quite scary because you don’t know, you get funding once, but you don’t know if you’re going to get the funding next year. So working to more financial sustainable financially, sustainability is, for me feels like a much more safer

Claire Van Enk (00:32:31):

Bit.

Claire Van Enk (00:32:31):

I also think this problem of food loss in particular has been people have attempted to solve it through charities, and I think there’s so much you can do, but I think it just now just needs something very sustainable, entrenched in people actually buying it. It’s a huge commercial opportunity. It’s a huge commercial opportunity that people are utilizing. They’re seeing it as waste, they’re discarding it, they’re not seeing it as valuable. I think we really need to change that. I think there’s huge value in imperfect produce. It’s cheaper, but you can make anything from it. So there’s a huge margin potential there. It can really transform the food system. It can decrease greenhouse gas emissions. So there was a huge drive for that sustainability piece that it can outlast us as a team.

Mark Horoszowski (00:33:25):

So you switched to commercial model, you’re growing, you’re proving market traction, and then you set out to go raise money. And if I understand it, you just closed around and it’s a blended, you have some grant capital in there, but then you also have some, can I ask, are they debt investors? Are they equity investors, or is it a blend?

Claire Van Enk (00:33:48):

Equity

Mark Horoszowski (00:33:49):

Equity investors? Yep. How did you decide that equity was the right way for you to grow here at this particular round?

Claire Van Enk (00:33:58):

So we raised a pre-seed round, which was equity and grants, and we were lucky. We were able to get quite a few really, really amazing grants, sort of de-risk the business as well. We realized, okay, we’re doing something new, we’re doing something that people really see as impact only, whereas I see it as, I see it as a commercial opportunity, so we need to de-risk. And grants are really good to de-risk certain aspects of your business. You can develop projects around grants, but I really think this is a commercial opportunity. So for me, equity was not a question, and I really see an opportunity for this e-commerce platform that customers want. So for me, definitely it equity. I know also in the ag space in Kenya, there’s a huge opportunity, but it’s complex. It will take time building a supply chain, also investors that were commercial, but also really understand the fabric of the African Ag space. So equity was definitely there, and I think we’re now looking at debt as well, because now we’re increasing revenue, meaning that we can look, we’re not profitable yet, but there’s a pathway to profitability. So I feel more comfortable raising debt.

Mark Horoszowski (00:35:27):

I think having that blended mix of you’re looking at grants to really support that the business model creates impact. You see that the impact is there, and then the commercialization model, you’re using equity then take over that higher risk phase of growth, and then you’re shifting to debt when you then are validating that you have consistent ongoing revenues and can support the cost of interest there. I’d love to go into all of these topics just a little bit. How did you find some of your first grants in order to de-risk your business model and impact model? How did you find grants like grant givers? How did you get in the door? How did you convince them?

Claire Van Enk (00:36:10):

Yeah, I mean, I can thank this to my co-founder. Her name is Zara. She comes from this world, so she taught me everything about grants. So she was in the beginning when she wasn’t on board yet, it was really a spray and pray approach. So I was just applying to everything and we didn’t win anything. It’s winning. So you need to do, and I was also deeply discouraged. Every time we lost, I felt my heart was sinking. So she came on board and said, well, it’s also a bit of a numbers game. We have to be really good and targeted, but you also need enough applications to win one. So whatever your chances are, and as you get better at it, the numbers get better as well. That’s what I’ve realized. But in the beginning, do 20 win one. And it’s also about, there’s some applications that you just get, but there’s some grant providers that are looking for really good solutions.

(00:37:11):

So is that combination? So I think the first grant that we got is prize money, the Bayer Foundation, the Women Empowerment Award. So that is doing the application and just hoping you can win the prize. But the second one we got was Mercy Corps, and that was also very, very catalytic for us. So they funded our first version of our tech platform and they de-risked us a lot. Once you get a name like that, it’s the second grant provider that feels, aha, you got Mercy Corps afin, alright, I mean, that must be tough. So now I trust that you have something good, so I will fund you as well. So it’s really, I do think getting someone on your team or working with someone that understands this world really well, if you don’t, even though you think I thought I understood it, but speaking the language, knowing how the financial streams go, all those things. And that’s I think thanks to Zara, she really brought that to me, especially from that we got prize money and then we got our first grant, and once you get your first grant from that size, it makes it easier to convince other grant providers that you’re for real

Mark Horoszowski (00:38:24):

To go. Okay. Yeah, it’s a great piece of insight. And then one challenge that I’ve seen when folks move from Grant to then equity or honestly even debt, there’s almost this anchoring of like, wait, are you a nonprofit? How did you The judgment. The judgment, yeah. How did you kind of work through that? How did you find investors that would be open to it? How did you convince them that you really had a commercial model when your prior funding was maybe more what felt like philanthropic?

Claire Van Enk (00:38:58):

Yeah, I mean, I have to be careful of course what I say, but there’s a lot of bias of course, that you have to, which is natural, which is normal, but you have to be really aware of it and understand with every bias, okay, how do I respond to it? I do think a lot of people told me, don’t raise too much grants because then VCs don’t find you interesting anymore. I think that’s maybe true for one or two, but it is non-dilutive, capital, capital. So for an investor, it’s also really good if you have a startup that in their DNA, they’re really commercially orientated, but they’re trying to also do something and able to get grants. So be able to stretch longer, have more runway, great, more value. I think grants are really a great way, and grants really make a difference, can really de-risk certain things that investors aren’t not ready to invest in for you to make certain choices before you put it in your business model. Things that they’re really good. And I think grant providers are really, really important, especially in this market. So I’m really thankful for all our funders and they bring great ta and they’ve been in this space for a very long time.

(00:40:21):

And there are also commercial, A lot of the grant providers, they also say, we are going to give you this grant, but you have to match, fund it with equity, for example. So if you get a hundred K from a grant provider, they say you need a hundred K equity. So these grant providers are just giving free money how people say they are also cognizant of these solutions have to be sustainable. They’re not. They’re smart people and they’ve thought about what they do.

Mark Horoszowski (00:40:48):

It’s really interesting to hear that some of the grants are saying almost use me as leverage to then go get more investors. I was even talking to entrepreneur once who found a lead angel investor and I think the investor, this was a number of years ago, but said, y’all invest like $50,000 and I’ll write you the check today. It was ready to go and the entrepreneur said, I’ll make you a deal. I want you to invest $75,000. But only after I bring two other investors to the table at equal amounts and was then able to go to other investors and say, I already have one investor at $75,000 that will commit if you commit, and was able to actually use that as leverage. It was actually quite an interesting approach. And what about finding investors for you? Did you network? Did you get those intros from the grant givers? Were you using AngelList? How did you go out and actually find your equity investors

Claire Van Enk (00:41:48):

Was tough because that’s when you’re starting. You have a little bit of traction a tiny bit. You have this, we’re going to take the waste from farmers and we’re going to make this commercial story. You have no idea. Also, another thing, you have no idea about the jargon. You don’t know you’re going in, you’re not entirely sure what they’re looking for. I think looking back at three years ago when we did that, and now it’s a world of a difference for first time founders. So our first investor, I’m eternally grateful for Catalyst Fund, and I will say that on every interview because they believed in us. That is the first stamp of validation for a founder is it moves you, it does change. It changes everything. It changes everything. So they were the first, and I don’t even know how I convinced them to do this, because we’re getting, everyone was sort of not even taking my calls or I was doing pitches, and then they would ghost me afterwards and we were really trying. And then I got an advisor on board also eternally grateful. His name is Greg, if he’s listening to this. Also a staff validation that you had someone who was going to spend time with you, who believed in the model, believed in you. And what he also said was, let me demystify what’s happening here. And giving you the jargon and the language, and it’s a certain speak that you have to learn what are the numbers that they’re really looking for, how to make sure it’s always snappy and it’s always quick.

(00:43:31):

So I think those two were really important. And it was in the funding winter, so it was in general. We started fundraising right after everything collapsed. And here in Kenya it was really hard. So I mean, that’s also part of it, but also taught me a lot of resilience. And that’s also the reason we went after more grants because we heard how hard it was and it was hard. And grants were there. The seed round, still make sure you always have, well, for me, I made sure I had someone next to me who was really good at strategic finance, who had seen multiple startups, who understand investors who are quick and turnaround. So it’s those people next to you that really help you. And the second fundraise were much more organized is preparing the data room before preparing the model, before having the list of investors, having a really good intro email, sending that out, having your top 50 investors that you want to reach out, having a long list, having a short list, sending it out, having a closing date, having quick turnaround with questions. So learned a lot from the first round. How not to do it. It is a third language. I do think that you have to learn as you fundraise. There’s something in on the way you pitch, the way you deliver, the way you talk about your number, the way you talk about the market size, the way you talk about your team.

(00:45:05):

You have to be punchy and you have to know what are those things that you need to say to tell your story.

Mark Horoszowski (00:45:13):

Yeah. Well, I know if we had more time, or maybe this will be in a follow-up episode, maybe we can do this again at some point in time. But I think there’s one thing that maybe you haven’t said as explicitly, but I’ve just kind of been hearing you mention a couple times and I just want to shine a light on it because I probably think it speaks to a superpower and an innate talent that you have. I hope I’m right on this one. But it also seems like in every one of these challenges that you’ve worked through, it’s always telling that you’re finding other people who also have talent and expertise in that area. And it seems like you’re creating a really collaborative relationship with them in order to then say, okay, this is what the business needs, this is the expertise that you have and let’s combine these. And I think that was, you mentioned Zara from a co-founder and a grant perspective, the way it sounds like you’re involved with operations and your innovation team and your sales team. So I think there’s also something, there’s a takeaway there that I think if we have more time, I’d love to get into more of how do you kind of build and build that strong collaboration as a founder without feeling like you’re up in everybody’s things, right? But you’re also really a collaborative thought partner and problem solver.

Claire Van Enk (00:46:34):

One thing I really like is working with people. I really like when, and I really like it when people are better than me at what they’re doing. Because there’s one thing I know, I don’t know how to, now I know, but fundraising, I didn’t know how to do it or the contracting of fundraising. What does this mean in this term and this clause and this or how to build a tech platform or all those things. So I’m heavily reliant on making sure that whoever’s doing it is completely comfortable and is unblocked of whatever is blocking them. So I think that’s my role mainly. It’s like how do I unblock whatever? Is it team dynamics? Is it capacity? Is its capability? So identifying that and making sure that that works. I don’t always intervene in, okay, I am always there in the big meetings when I work in a way that they call for the meeting and say, these are the big decisions we have to make.

(00:47:33):

I’m in those meetings. I support the decisions or not so that we’re all in one place aligned. But I think I don’t do a lot of micromanaging necessarily. I think I’m more peer to peer collaboration than sitting on top and understanding what everyone’s doing. In the end. Everyone has their KPIs and everyone knows what they’re supposed to do, but having those good relationship with the team is really important. But that being said, I know sometimes I also disagree with something, for example. So as much as you want to be completely collaborative, I also had to learn as a CEO, and that was tough for me. I’m a people pleaser, and that’s also been tough for me. That’s been my growth in the past year is I cannot please everyone. And sometimes that means I’m making tough decisions or having tough conversations. That’s been my growth area in the past year because going from 20 people to 50 people is a different organization and requires a different collaboration and requires also a little bit more hierarchy and less buddy buddy. It’s more we’re organized. This is what you’re doing, this is what you’re doing, this is what you’re doing. You’re responsible for this. There’s ownership on your end and not getting muddled in the day to day.

Mark Horoszowski (00:48:57):

Is there a mental model? You said you had prior experience in consulting. Is there a framework? Is there a book that you’ve read? Is there something that you feel has really helped you kind of make that shift from being in the details of everything to shifting to people having more autonomy, more clear KPIs, you being able to elevate and have more time for strategy? I’m curious, what has helped you make that shift?

Claire Van Enk (00:49:21):

What really came at the right time was, so I got the cart award and there was a four day NCI program, and it was really about, we were all 33 companies that were selected all exactly in the same phase. So it was really interesting when the INCI course professor showed the curve of a growing company and the different challenges as a founder, CEO, and that resonated a lot with me, and I realized I really need to change something here for the sake of this company. So that was one critical point that made me realize the problem is not the company, it’s me at the moment. I need to change.

(00:50:05):

So having that self-reflection of I really need to change and I need to own this role in a different way, and in two years my role will be different again. So I need to change with every phase of the company, and that requires flexibility and understanding the needs of the company. And then there are many books on entrepreneurship and I love them. And sometimes I also get insights from interviews from people like, oh, that’s so true, how relentless you have to be on the customer. That is, you have to be so committed to the customer. I always thought I was committed to the customer and I realized I need to be 120% in. And then when I was 120% in, I was like, I need to be 150% in, and that’s not me talking to the customers, but my head of growth again on my sales team, it’s really about, yeah, if we miss one item for that customer, that’s a really big deal.

(00:51:08):

And for us, one item on this big volume is small, but for that customer, it’s a really big deal. So it has to be, there cannot be any error in terms of our deliveries or our growth that cannot be slow, even if it’s three seconds, all those little things. So just has to be perfect. And I’m sure that now I am still not, I think I’m super committed. I’m quite sure I’m still not as committed as I can be. So that’s another phase growth. You just have to be super committed because the customer is key to all the impact we want to unlock. And you have people on the team also reminding you about that. The customer is key to unlocking everything we want. Everything we want for this company is actually in the behold of this customer. So we can just get that absolutely perfect investment will roll in. If we can get that good farmers will have the impact, we can grow this company, we’ll create employment, we’ll create impact on the food system, all those things.

Mark Horoszowski (00:52:20):

Yeah. Yeah, there’s a quote there, right? Product market fit solves all problems, but to get to product market fit, you need that customer obsession. Yeah, that’s great. Claire, I know that you have kids at home. I know that you’re leading an enterprise, it’s growing, so I could go with you. I’m confident with the right amount of coffee and bathroom breaks probably all day. In terms of conversation here, I feel like we’ve already gotten so much. I want to jump into what we call our lightning impact round. So it’s just a few quick answers to a few questions to just trigger some ideas hopefully for our listeners. So what is one mistake that you’ve made that you really hope future entrepreneurs won’t make?

Claire Van Enk (00:53:11):

Not onboarding a customer quick enough,

Mark Horoszowski (00:53:15):

Love it.

Claire Van Enk (00:53:16):

Focusing.

Mark Horoszowski (00:53:16):

Okay.

Claire Van Enk (00:53:17):

Yeah, focusing on the product too much before getting a customer.

Mark Horoszowski (00:53:21):

Okay, love it. Tell me about your biggest challenges in fundraising and what is one thing you want all impact investors to know or embody more

Claire Van Enk (00:53:33):

Is such a good question. So much frustration.

Mark Horoszowski (00:53:37):

It’s a hard process. Yeah,

Claire Van Enk (00:53:40):

Hold on. It’s like, no, no, I love all my investors now. No, I think what I want investors to know is you are on founder’s time, and I know investors think that they know it, but the same as I don’t know enough about the customer is that they still don’t know enough about that. And one thing also starting a company, and that’s maybe for investors, but across, and there are many investors who started companies, but I do see starting a company as a little bit is having children. You just don’t know until you do it. It is so much more and so much more complicated. One decision has impact on everything. So giving advice on one thing without knowing what’s going on there or, yeah. So that’s one thing. And I think another one, and you can choose which one you’re going to do is I get a lot of this, don’t listen to all these investors advice. You’re going to get so much advice. And once they say this, they give you advice.

(00:54:59):

And I think what I would really like investors is more of this. What is it? Like walk with me for three days and understand what’s coming, coming at me on a day to day, what problems I’m solving, how my time is spent, how I get pulled into things, what the team is experiencing. That’s one thing. And another one you can choose, one is specifically on women. I find that really important is be aware of your bias. I do believe there’s a huge bias towards women entrepreneurs, and even though we all think there isn’t, I think for women and men alike, there’s a bias. I am super feminist, but I have biases towards women and I am fighting for women. But I know in me, I’ve been brought up with that a man can be a pilot and a woman, even though I was never explicitly said in that way, but it was in our youth. That was the thinking. And that’s hard for me sometimes to get it. When I hear a woman pilot, I am always surprised, is this going to go the right way? So even if I have this, everyone just has to be so aware that they have these biases.

(00:56:25):

When I talk to an investor who has this bias, I feel it. I hear it in the questions. My questions aren’t good enough, they’re a bit challenging. There’s a different speak. So I don’t think it’s about empowering women necessarily on how to fundraise. It’s really can we for once have the conversation about how we’re going to address these biases? Because it starts at origination phase. If we don’t get that first memo right, then women stand a chance to ever raise that 2%.

Mark Horoszowski (00:57:01):

Yeah, no, thank you. Yeah, and it’s wild, right? Because the data is very clear. There’s rampant bias in the process. And you made me think of a non Gerhard book in his book, winner’s Take All, and he actually talks about Sheryl Sandberg and the book Lean In. He’s like, we spent all this time saying, oh, women need to lean in more and do this. He’s like, how about men just shut up for a moment and create space and understand that the answer to everything is not, oh, let’s put more weight on others trying to educate them or do this for them. It’s like, no, address your own biases. And yeah, I think there’s a big challenge there, and a lot are resistant saying like, oh, no, I am not. And I think it’s really cool of you to say, no, even I have bias, right?

Claire Van Enk (00:57:56):

Yeah, exactly. I have bias and we have bias. And one thing that I’m missing is we can never address it. I’ve had investors where I knew clearly knew as bias, and I was thinking, I should actually write them an email saying, think your feedback is maybe not the type of feedback you would give like a male entrepreneur, for example. And then I’m concerned because then am I going to be ousted? Or what are they going to, whereas I want to open up this conversation more in a what do about this bias lives in all of us, and especially here in this continent. So you have to imagine, I still have the privilege of being a white woman, and we don’t discuss how is it to be a black woman and fundraise?

Claire Van Enk (00:58:46):

What

Claire Van Enk (00:58:46):

Chances do you have up against, if I can stereotype a 60-year-old white male in wherever they’re from? How do you overcome those biases? And I do think there has to be some more self-reflection on the investor side.

Mark Horoszowski (00:59:07):

We’ll drop in the show notes, but there’s some good organizations both doing some work around that and also presenting data. So some of the pieces that we’re talking about for listeners, we’ll drop that in the show notes. I think it’s a super important topic

Claire Van Enk (00:59:19):

Just to say there are a lot of good investors that don’t have this and that really actively work on that and that are very aware of it. So that’s not to say at all, but we just have to have it as it needs to be more of a conversation. That’s what I’m saying.

Mark Horoszowski (00:59:33):

Yeah. Yep. Fully agree and more onus, and I think responsibility for those with capital, especially if we’re trying to solve problems here and support entrepreneurship, there’s work to be done there. Absolutely. Okay. Shifting gears a little bit on the lightning round question, and I love that we went deeper there, but bringing us into your head a little bit more, what is a quote ritual or activity that you turn to yourself for strength? When things get super hard?

Claire Van Enk (01:00:06):

The quote is, in order to do this, we need to have fun doing it. It sounds so stupid, but what I really get, it sounds so simple. Sorry, I’m so cliche, but I love it. I said that to my team as well. If there’s on the brink of burnout or they can’t see through the woods anymore and they’re coming to me and I think, I can’t do this anymore. The pressure’s too much. I really try to take the pressure down. I mean, just guys, we’re really trying to do something that didn’t exist before. We’re trying to do something that’s really good, right?

(01:00:47):

I’m having fun doing this, but I need you to have fun, and when I’m not having fun, then I also say, well, I would never say let’s or any of that. Let’s give up. No. It’s like, okay, am I really stressed right now? I started this because I was passionate about the problem. I started this because I thought it is going to be an amazing journey building this startup. I started this because I wanted to work with these people that I was really admiring in terms of how good or passionate they were or committed they were. Those are the reasons why I started this, so I really try to say to myself, I need to enjoy and have fun.

Mark Horoszowski (01:01:32):

Three more questions here. Who is an entrepreneur you admire?

Claire Van Enk (01:01:37):

Okay. One founder I admire is she was in my che. She’s going to be so chuffed that I’m going to say this. She was in the CHE group and I mean all the women there. I admire really, I would love to see, I hope we can do yearly reunions. I think there was such a bond that we created, but the one that I admire, all of them I admire. The one that I would feature here is Laura Harnett. She’s the founder of ceep. I think her product is really cool, so she’s making sustainable products, things like sponges and stuff like that. I think her mindset on this is sort of similar to me is also work really hard, but also laughing while you’re doing it and the ridiculous stuff that while building this startup or looking back and can you believe that we built it with this or that, or we had no talent or we have this, I think that mindset, I really enjoy that mindset of let’s work super hard and be super smart, but let’s all, let’s not take ourselves too seriously.

Mark Horoszowski (01:02:56):

Sure. No, it resonates. Well, this next question might even be the same answer, but who else do you think we should interview for this show?

Claire Van Enk (01:03:05):

Ah, yeah, you should interview her. Yeah, for sure. Perfect. Yeah, I can get you a list of all these great women from the cartoon. They’re all super aligned with what you do. So all impact focused, all great personalities have stuff to say, so I can give you, I’ve seen some.

Mark Horoszowski (01:03:30):

Yeah, well, I’ll have to take you up on that. I’ve seen some wonderful entrepreneurs come through that program. And you inclusive, so last question. Where can we follow you? How can we support you?

Claire Van Enk (01:03:43):

Yeah, LinkedIn, Instagram, those are places that we’re active and I mean any connections partners that you think will be useful from investors, but also potential international clients that are interested in our value added products that are interested to make food products with us. We’re looking at powders and purees, so anything that you think, okay, this might be an interesting market for you or someone that would be able to give us some more information. Market insights. I really strongly believe in partnerships and collaborating to make this work.

Mark Horoszowski (01:04:26):

Perfect. Well, we’ll put those links and more information down in the show notes. Claire, we could continue for so long, but I just want to say, I think you’re an absolute inspiration. I think the way that when the world was shutting down during COVID, the fact that you went to How can I contribute to the community that I am from and that I live in, ability to see the writing on the wall, that this could be more sustainable as a commercial enterprise. The path that you’ve taken and the fact that you’ve done all of that with kids in the house. I have a 2-year-old at the time of recording this in the house. I know how much extra work that is and I know that the mothers bear even more weight and responsibility in that process. So I think it’s absolutely incredible what you’ve done here. We so look forward to following along, but thank you so much for taking the time out of your very, very full life and demanding work and family to share your insights here. I know it’s going to be huge value to our listeners.

Claire Van Enk (01:05:27):

No, thank you so much. Oh my God, thank you, mark, for highlighting all these founders and entrepreneurs and all the people around the world trying to build something that matters. So thank you so much for doing this and highlighting us, and I also hope it’s not too much editing this interview for you. Not at all.

Mark Horoszowski (01:05:47):

Not at all.

Claire Van Enk (01:05:47):

This

Mark Horoszowski (01:05:48):

Was excellent.

Claire Van Enk (01:05:49):

Thank you so much. Really appreciate it and see you next time. Hopefully somewhere on an event or the next podcast.

Mark Horoszowski (01:06:00):

Yeah, here’s hoping! Thank you, Claire.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit helpingbillions.org

From making big bucks on Wall Street to turning trash into treasure in India 🚀 Anish Malpani quit his cushy finance job, spent 5 years preparing across 3 continents, and built a business that does the "impossible" - turning un-recyclable chip packets into usable plastic while creating dignified jobs for India's waste pickers.

This isn't your typical "follow your passion" story. It's a masterclass in patient entrepreneurship, operational excellence, and why 90% of startups fail (and how to be in the 10% that don't).

In this episode, Anish reveals:

- Why he tells people "Do NOT be an entrepreneur"

- How he competed against companies with 2x cheaper labor costs

- The pivot everyone said was "idiotic" that saved his company

- Why mastering finance is non-negotiable for social entrepreneurs

- The real cost of choosing purpose over profit

Subscribe on Substack: https://helpingbillions.org/

📍 KEY TIMESTAMPS:

00:00 - Introduction & Why He Left Wall Street

04:32 - "I had this perfect job. I was depressed" 08:15 - The 5-Year Preparation Journey (Guatemala, Kenya, India)

12:45 - Finding the Problem Nobody Wanted to Solve

18:30 - Multi-Layered Plastic: The "Black Sheep" of Recycling 23:00 - Hiring a Chemist with Two Desks and a Packet of Chips

27:15 - "With my budget, I could hire 30 people. I hired 15."

32:00 - The Economics Reality Check ("$8 to make $1") 36:45 - The Pivot: From B2B Material to Sunglasses

41:20 - Why Finance Knowledge Can't Be Outsourced 45:30 - "The Answer is in the Details" - Operational Excellence

49:00 - Getting Advice: "Nobody Really Knows Anything for Sure" 53:15 - Building Anti-Fragility Into Your Business

57:00 - The Next Chapter: Pilot Plant & Scaling

1:01:30 - "I don't have a life outside work, but I'm very content"

1:04:00 - Final Advice for Social Entrepreneurs

🔗 Resources & Mentions: - WITHOUT -- https://without.live/ - Sunglasses Made From “Unrecyclable” Plastic -- https://shop.without.live/collections/eyewear - Jagriti Yatra (Entrepreneurship train journey) -- https://www.jagritiyatra.com/index - The Blue Sweater by Jacqueline Novogratz - Grit by Angela Duckworth - Flow by Mihaly Csikszentmihalyi - Antifragile by Nassim Taleb - Thinking in Systems by Donella Meadows - Living Wage Calculator: livingwage.mit.edu

📱 CONNECT WITH ASHAYA: Instagram: @shop.without LinkedIn: Ashaya Without

🎯 ABOUT HELPING BILLIONS PODCAST: We feature purpose-driven founders who are building businesses that balance profit with people and planet. Real lessons, real challenges, real impact.

Want to Learn from Purpose-Driven Founders? Subscribe to the Helping Billions Podcast.

https://helpingbillions.org

#socialenterprise #ImpactInvesting #Entrepreneurship #Sustainability #CircularEconomy #StartupJourney #SocialBusiness #PlasticRecycling #India #PurposeDriven

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit helpingbillions.org

How to Help a Few Billion People kicks off with host Mark Horoszowski explaining why most entrepreneurial advice pushes founders onto a “grow-at-all-costs” conveyor belt, and what it looks like to build world-positive companies instead: choosing financing that preserves mission, managing negative externalities, and prioritizing employee wellbeing without abandoning growth. We talk alternatives to traditional VC (grants, fiscal sponsors, PRI, debt, revenue-based financing), the role of systems and incentives, and the kinds of founders we’ll feature—leaders who would rather help billions of people than make billions of dollars. If you’re a social entrepreneur, an impact-curious builder, or an investor seeking better-aligned returns, this is your roadmap (and your pep talk).

Resources:

MovingWorlds — https://movingworlds.org/

“Founders” podcast by David Senra — https://www.youtube.com/@founderspodcast1

Predictably Irrational by Dan Ariely — https://predictablyirrational.com/

Stumbling on Happiness by Daniel Gilbert — https://www.randomhouse.com/kvpa/gilbert/buy.html

Adventure Finance by Aunnie Patton Power — https://www.adventure.finance/

Ashaya / WITHOUT (recycling multilayer chip bags) — https://without.live/

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit helpingbillions.org