The Exchanges

Q Yeah, and so is this something that you go through with any company that you invest in?

A It's the literal first set of questions in the technical review, and it's actually honestly very easy for technical people to answer questions about matter, energy, time, and space. Because I'll go in there and say, hey, how did energy change between the old process and the new process? And they're like, well, in the old process, the reaction requires, you know, 550 joules of input in order to go drive. And in the new process, then it only takes 143 joules in order to go, you know, have the reaction take place. And I'm like, ok. So like, honestly, technical people can answer these questions incredibly crisply. And the, and this is in comparison to when technical people make like business pro formas and, and, you know, these extensive decks. I know that a bunch of that stuff's bullshit, right? Like people draw like the, you know, the asymptote, like the hockey stick curve on all these things. It's like, that's not going to happen. I know we're doing the dance. You need to say it'll happen. I use it to go see how you do business modeling. And that's really all that's happening on this slide. But when it comes to the physical stuff, technical people are very close to the metal. They can typically tell you exactly how much matter has been reduced, how much energy has been reduced, how much time or space has been reduced in the new solution. It's literally the thing they built.

AI assessment note: “It's the literal first set of questions in the technical review”

Q So, even though you're able to do that, What's the point in which you like to invest in them?

A Yeah, absolutely. So there is a specific point that we want to be in the, in, uh, getting into the business, and if you're familiar with the government TRL levels, um, which are basically about technology readiness, um, Then I basically have a version of that for venture, which is a bit simplified because why add extra things for a model if it's not relevant to the particular application space you're, you're applying it to. Uh, but for, for me, you know, in venture, there's kind of six readiness levels, which are of interest. There is early lab bench, mid lab bench, late lab bench, early commercialization, mid commercialization, late commercialization. We're doing all of our investments as a early stage venture, uh, firm in late lab bench, early commercialization. Because what we want to do practically is not take on science risk. We want to take on engineering risk and manufacturing risk. Because, you know, science risk and engineering risk are quite different. Like science risk is, I don't even know if this thing could be invented, and I have no, like, sense of exactly how much time it would take me to invent it, but I have a hunch that it could work. And okay, I mean, there are some investors that want to take on that type of risk. Enormous risk profile. A lot of those things never work, or if they do work, then they take substantially longer than the ten-year fund life to b…

AI assessment note: “We're doing all of our investments as a early stage venture, uh, firm in late lab bench, early commercialization.”

Q So you were mentioning to me before we started to record this athlete mindset. Is this something that you've been working with mentally for a long time, or is this something that during the process of running this specific company that you've forced yourself to adopt?

A I've been operating on this for a very long time at this point. It started when I was about 20 years old. Um, during college, I got obsessed with healthy nutrition and bodybuilding, actually. Arnold Schwarzenegger, I saw his book in the, in the library of the university, and I started to look into it, and the thing that I learned through this sport is, you start as like a twenty-year-old kid, and You put in the work five times a week. It's, it's, it's a balance between work load and recovery. Plus the right actions every single day, six meals, three shakes, everything on the scale. And after three weeks, you see absolutely nothing. After three months, you see absolutely nothing. But you have to stick to the plan and trust the plan to get you to something big. And then suddenly six years later, I look in the mirror and I'm like, oh, this thing actually worked. And bodybuilding taught me that the monotony in certain things that can lead to big outcomes and committing to those things and do them all over again, every single day that taught me the athlete mindset. And then I started to apply that to my time in college where I was like, during exams, if I sit down every single day for six hours, I take a 10 minute break every 90 minutes, and I do that over the course of eight weeks, I'm gonna be the best in my class. So I applied it to this, and then I applied it to my work, and tod…

AI assessment note: “I've been operating on this for a very long time at this point.”

Q Yeah. But now they can have, you know, they have other people that go to the conferences and do those sales and they have, you know, advertising and other sources that make it easier, um, on the founders to not have to do a lot of that hard work. So what has been one of the most challenging things for you about doing this business?

A In the beginning, it took us a while to really build that, uh, you know, that demand generation, right? Like going to the first conferences, getting the first interest, like when you have zero, right? Uh, cause then you, you go to this like giant corporations and then, uh, getting our first reseller initially, uh, like a small, twenty million revenue consulting firm. Um, and then they brought us some big clients like Panasonic, Mitsubishi, and then that Brought us enough credibility to then get our first like mid tier reseller. And then that brought us the first like eight million a year, uh, dollar deal in the pipeline now with Marriott. So that, you know, that, that is, um, that, that all took time and, and we had to kind of build, build up to it. Uh, so if you show up to, to enterprise, you know, it's, um, uh, it, it's hard unless you really have like strong connections. And then the other thing I would say is on the product, which is also similar. I think enterprise is also challenging in terms of the product because the expectations are very high. You know, everything has to work perfectly. Um, especially like we work internationally and for example, the Japanese have like crazy high standards, uh, like they hate any kinds of bugs or anything like that. It's like, you know, it's just unacceptable. You know, here is, here, here is the, the Katana go perform seppuku. If ther…

AI assessment note: “In the beginning, it took us a while to really build that, uh, you know, that demand generation”

Q I was just gonna say in like one sentence for each type, can you explain the difference between a revocable and a, obviously the term revocable and irrevocable are obvious, but what's the difference in the reasons why you would do one versus the other, like in a few sentences?

A So a revocable trust does not really do anything or come into play until you pass away. And all it does is that in some States, when you pass away, if you don't have anything, then a judge goes through this probate process and you're just paying a bunch of legal fees and you're taking six or 12 months where assets, where you wanted them to end up. If you have a revocable trust, when you pass away, it kind of comes to life and simplifies that process and irrevocable trust. As it sounds like it's irrevocable, but it's a much more significant document where, you know, you, Sean, are actually giving money away today. You're putting this trust. You can't control it the same way you used to. You can't get it back the same way you used to. And that might sound terrible. And, you know, people don't like that aspect. What they do like is from a liability perspective. If you suddenly defraud me and I sue you, that's not actually your money anymore. So I can't get that money from you because it's in this trust. And from estate planning purposes, that money is out of your estate today. So if you put an Nvidia share in there today and it's worth one dollar and then 10 years from now it's worth a hundred dollars, you're not, your estate doesn't get taxed on that appreciation. It just, um, gets taxed sort of at the value that you put in that.

AI assessment note: “a revocable trust does not really do anything or come into play until you pass away.”

Q your portfolio, and someone is willing to give you a one and a half million dollar loan, or a two million dollar loan. You kind of mentioned it, but basically, let's say the cost is five percent a year, and you know that you can put all of that money into an eight to 12%, you know, high dividend ETF. Would, would people do that or would they avoid that?

A Some people do it. I would say a key thing you said there is they're borrowing the amount they're borrowing. I think borrowing 10 or 20% of your portfolio is perfectly fine because the way these loans work is let's say you have, for simple math, a million dollar portfolio. You're allowed to have debt depending on the brokerage you're working with of let's call it 50, 60% of that. Um, so let's say it's 60%. You can have 600,000. Now, if your portfolio falls by half, the amount you're allowed to borrow will fall from 600,000 to 300,000 because a consistent ratio. So if you borrowed half in the beginning, you're at a high risk of getting this margin call if it falls. If you only borrowed 10% to start with, so you only borrowed a hundred dollars, the market would have to drop from a million all the way down to just 150,000 if you get margin called. And, you know, even the Great Depression, that would be a sort of surprising scenario. So I think the 10 to 20% There's plenty of people who do that, and that's not particularly aggressive. I think if you get over that for any sustained period of time, people in general don't do that because there's just too much risk from the volatility. Um, in terms of how they use it, some people use it just to juice their returns by a little bit. As you said, okay, I'll borrow 10%, and I'll put 10% more into, maybe it's just a broad index fund, maybe…

AI assessment note: “Some people do it. I would say a key thing you said there is”

Q they see that the profit looks nice, they'll take it out. And then are they taking it out because they have conviction and there's another investment they want to move that money into? Are they taking it out and then looking for an opportunity and sitting on the cash or moving it into something safer while they're looking for that opportunity? Like how do, how do they manage that portfolio?

A Yeah. Again, you know, different people, different approaches, but if I took the median or the modal person, they are probably more trimming a position when it has been too successful and just become an element of their portfolio that's making them nervous. They say, okay, I made this great bet on NVIDIA, but is now half my net worth is in NVIDIA. I still like the company, but I just don't feel comfortable with half my net worth being there. And there could be some black swan event tomorrow that causes that to fall by 50%, and I'm gonna be really unhappy if that happens. I think that's the more common thing of people say, hey, this is just too big, I'm gonna trim it, and I'll look for somewhere else to put it. Um, your most strategic person, who's probably not me, but, you know, there, there are these people out there, is gonna take a little bit more of that disciplined, okay, I now found opportunity number four, which is more attractive than opportunities one, two, and three, so I'm gonna sell a little bit of one, two, and three, and rebalance into four, and, you know, uh, again, improve my kind of, uh, total portfolio composition there. I just wouldn't hold yourself to that standard. You know, maybe you, that's sort of a journey you try and get there over time, But I think a lot of people are more in that just, I'm gonna sell something when either I lose convict, it becomes t…

AI assessment note: “trimming a position when it has been too successful and just become an element”

Q Has AI helped you to run your business more efficiently?

A It certainly has. So we do, we do primary research. We do primary research for ourselves. And we do primary research for clients, and I would say the data analysis capacity when you get, you know, survey responses from, let's say, a thousand or 2000 people, the data analysis capacity is pretty amazing. Of course, it requires oversight because, as we know, this stuff makes mistakes, it hallucinates, it comes up with bizarre conclusions, particularly if you work it a lot. It's like an intern that gets tired easily, I find. It's been really interesting for the data analysis capacity. I would say for us as well, in terms of just being able to go and look up things, let's say, look up what a competitor's been up to, analyze media coverage. It's been very powerful, and one of the more interesting things And I suspect other PR people that you speak to or are listening or hear this will, will also would agree with this. One of the more interesting things that PR has been good for, and any tech founder, regardless of the stage they're at, can do this. It's a really useful media training tool. So you can ask AI, you can feed it a bunch of articles from John Smith, who's a journalist at Magazine X, and you can say to it, Take on the personality of John Smith based upon what you've read. I am a founder who's, you have just raised a Series A round for his robotic company. What questions wou…

AI assessment note: “It certainly has. So we do, we do primary research.”

Q Dialing in their processes. Like, is it something that you can see happening on the call? Is it something that takes time and this is a process based thing that you're talking about?

A Yeah, no, that's, um, yeah, it, it's kind of been an evolution really. Um, cause we, we like to hop on video calls with them at least once a quarter to check in and, uh, and we work with about eight different manufacturers overseas. Most of them are in China. We have one in Bangladesh, one in Vietnam. Um, We've seen their process go from. 20 workers sitting at a table hand filling enamel pieces. Uh, sometimes as many as 50 in like white coats. Um, just sitting there in like these big dust free facilities. Um, cause you don't want like a speck of dust to hit the enamel. It'll create an imperfection. We've seen that go, uh, Move to these. For lack of a better word, like robotic arms to where they fill the enamel. When these machines, they set them all out on a tray, put them in and the machine actually fills it automatically. Um, that evolution watching was in our industry, like, um, a massive game changer over there. Cause. Yeah, you, you're taking 50 workers and now you need five that can do the same process and the level of, there's imperfections with, um, hand filling enamel. It's just the human nature and you can get it to a T with these enamel, enameling machines. That's, that's one piece we've seen. Um, Really, really, uh, really be a game changer over there. So, and I'm excited to see what like the next process is, um, over there for manufacturing.

AI assessment note: “it's kind of been an evolution really. Um, cause we, we like to hop”

Q prove that they can run those businesses. And so they, their concerns were similar where they're like, yeah, you know, they, they didn't have both of the founders hadn't previously opened a business. And I said, You know, how do you, you know, justify buying a business when you don't really have experience running a business? He's like, but my, my PE firm is a business. I'm running a business.

A It is a business. So our venture capital firm is a business. You know, we had to go out and raise capital. We then had to like deploy it into entrepreneurs who we really believed in. It's just a different type of business. If you are fortunate enough to be a venture capitalist, it's the best business model ever. You get paid a fee to manage the money and you get a piece of the upside, typically, 20% after you return your capital. Our buying businesses, that's all our capital. It is, we're responsible for the teams. We feel like we're part of the team. So it's just a different type of business. But if you look at people who've built great venture businesses or PE businesses, they're entrepreneurs. So you can't say that whether it's Devin Parekh at Insight or, you know, Josh Kushner at Thrive, they've Built businesses as an entrepreneur, but they're very unique in their space.

AI assessment note: “It is a business. So our venture capital firm is a business.”

Q What's been the thing that you've enjoyed the most working on? Which brand?

A Man, oh man. I mean, we have a hundred deals on the venture side, both personally and through the fund. And I think the most enjoyable part of that is working with entrepreneurs and seeing them succeed. So there's nothing better than seeing an entrepreneur grind it out, suffer, get to the other side and reach their dreams, whether it's being a public company, which we've, you know, done or, you know, big exit, like the five billion dollar exit. Um, that's scopely one of our seed investments had to Savvy Games. You know, Liquid Death is a really great example of here's a creative director, Mike Cesario, who comes up with an idea to market a wellness product, water, in a very novel, innovative way across social media. Did we think it was going to be a billion dollar plus company? We thought it could be a big company, but seeing him succeed, Has given us a lot of just personal enjoyment since we were there from pre-launch in the beginning. And then on the owning business side, it's really seeing people reach their full potential. So it's all about people. It's all about, you know, where are you today? Where do you want to be? And we've just worked with great people like Dina Uffberg, who's the COO of that business, who came from tech and wanted to run her own business. And, you know, she's just done a phenomenal job. So it's, you know, it's just seeing people succeed and we love t…

AI assessment note: “Liquid Death is a really great example of here's a creative director”

Q lost my sense of purpose in a way, like I don't need to work anymore. Should I? Uh, what should I do? How should I feel? Like, what should I do about this? And, you know, I, I know that you had really large exits. So I was wondering if after one of those exits, you kind of felt lost. You felt disconnected or you felt numb or, you know,

A So yes, I mean, all the above, and I've spent a lot of time with founders and their organizations like chapter X that actually are focused on like founders post exit. I was at one of their events in LA earlier this year, and a very big founder sold the business for, you know, over a billion dollars and made hundreds of millions. He said flat out, I'd give the money back in a second just to get my company back and find my purpose again. I said, Would you really? Let's be serious about this. And what happens is, you know, and you hear about this, but when you experience it, it really hits hard. The money doesn't change you for the most part. You realize that life is not about the money. It's about the passion, the purpose, the waking up in the morning and having a place to go. And we all feel lost. I did. So I haven't talked about this, but after I left Salesforce, we sold to Salesforce close to a billion dollars. I spent close to four years there, loved it, still love the company. And then I'm, I was burned out and I went to Mark Benioff. I said, You know, I'm gonna take some time off, and I got a painting studio in New York City. Cass, my wife, actually got it, and I was just miserable because I was bad at painting. I wasn't doing what I was put on this earth to do. I didn't have any sort of purpose, even though I was working on a series of paintings based on my entrepreneurial…

AI assessment note: “So yes, I mean, all the above”

Q What are some of those variable costs you were talking about?

A So let's take, for the purposes of the audience, separate two different classes of companies, just to make sure that we're not leaving people behind. I talk about, like, the AI foundation companies, so this would be OpenAI, Anthropic, Google with Gemini, These are companies that are very much like the electricity providers. They're selling intelligence as a service. Their pricing models look very much like other infrastructure as a service companies like your AWS computer, Azure, etc. The rest of the world is Consumers of those foundation models in order to adapt these AI capabilities. And so what's happening is say, for example, you're selling a CRM or customer service platform, and you want to use one of these foundation models in order to summarize all of the history that your company has had with a particular account or on a particular Take it so that your salesperson or customer service rep can get up to speed on what the customers dealt with, maybe over multiple reps they've been dealing with over multiple years, multiple product cycles. And so the company is going to get your customers going to click the button to say, Hey, I want to summarize this history. And that's going to have a cost that is going to, you know, an open AI for some amount of processing and the way the AI foundation model companies do it at least traditionally now through their APIs have been on it li…

AI assessment note: “through their APIs have been on it like a per token basis”

Q What kind of AI companies are you using or can people use for that purpose?

A So there's a couple of different things. We, we developed our own AI research tool for us called Cayman data. But on the other side of that, I use things like chat GTP to help with product. Um, you know, research, but also we've created virtual agents inside of our system where we fed it 10 years of information, data, transcripts, our playbook, and, and other information, information about our products and current brands, and then we use that to help curate, uh, information, research, and, uh, even down to policy checking and information to ensure the compliance of the product, the copy itself, uh, and any, you know, any images and graphics will also be tested by AI to ensure that they match the narrative. So there are, uh, we use, uh, I like Claude personally in terms of copywriting. It has a natural language query, uh, and some, you know, syntax to it that feels more humanized in its conversational tonality. So we use that a lot, uh, for Claude particularly. Um, we use Soro for images and image generations, as well as taking and conceptually remixing images to get other ideas or ways to approach both the marketing, as well as the product development, as well as, uh, images and copy. Soro has been amazing. With that as a version of chat GTPs, you know, AI engine for graphics creation, which has been very cool. Um, the marketing team uses Hey Jen a lot, which is actually just g…

AI assessment note: “I use things like chat GTP to help with product... I like Claude personally”

Q cryptocurrencies like Bitcoin, there are these ETF options which essentially allow you to purchase a share without having to own the coin, which means you don't have the potential downside of someone kidnapping you and trying to steal your coins or possibly you losing the keys to your wallet, et cetera. So the ETFs give you the The exposure without the negatives that come with owning cryptocurrencies. Is that right?

A Yeah, that is. It, it comes with negative owning the ETFs comes with negatives as well. So for example, like the argument is that when you really need your Bitcoin, like in the nuclear war type scenario, or like the United States entering bankruptcy type scenario, uh, that's when you really need the physical Bitcoin. And if it's in the ETF, uh, well that you don't have it, you're, you're kind of, your, your, your net worth is still actually Within a whole bunch of regulated institutions that are only giving you exposure to the asset, which can all run into issues and chaos. If the United States government itself is running into chaos and issues, those regular regulated entities that are giving you exposure, they will all run into problems as well. And so then you don't really have the exposure to the asset that you think you do. But I, I find people struggle to believe that I find that's not a very compelling reason. Um, The more reason why you should be holding Bitcoin spot and like, you should be holding it in your own custody. You get access to way more financial products. If you hold the Bitcoin yourself, there's Bitcoin defy. You can make yield on it. You can loan it out. You can borrow against it. There's a whole bunch of things you can do with it that you cannot do. If it is just in an ETF, if you're just getting exposure through owning an ETF. That's aspect one, aspect …

AI assessment note: “Yeah, that is. It, it comes with negative owning the ETFs comes with negatives”

Q sure that their family can get access to their wallets. Especially when, if you work with a lawyer, that lawyer could just Take the coins if they want to, if they have the password, right? So how do you protect that? I know this isn't really your business, but I'm not sure if you've ever thought about this or, um, if anyone you're working with has ever thought about this.

A Yeah. There are several, several services in the market already for this. Um, you can go to the institutional grade custodians like fire blocks. You can go to a solution. Like I was talking about provided by Casa, like they independently cannot access your crypto. It's like, they're going to have part access to it, but it's going to require, um, collaboration with say the person in your will and in your will, you would put in like half of the code and then in a bank deposit pot, Bank deposit box. You'd put in another half of the code, and then the two would need to combine, and then they would go to your custodian, and then the beneficiaries will get access to your crypto. It sounds a bit confusing, but it's actually no less difficult than what you would need to do to pass on your financial assets through your, through your estate. And so the market is actually already solved for these issues. If you were just to Google like crypto, like, uh, Estate solutions. There's, there's so many companies that are solving for this now. So these were issues maybe five, 10 years ago, and people aren't aware to these solutions. So they think it still is an issue. But when you actually have a decent amount of crypto and you want to figure it out, you can just Google for it. And there's quite a few solutions.

AI assessment note: “There are several, several services in the market already for this.”

Q able to know what it can do for them and what their first step should be. So if your message to people is don't hire someone from outside, test it yourself. For someone who may not have the expertise in house or as a CEO in particular who may not have a technical background, how can they take that first step if they don't know what that first step is?

A First off, there's a lot of products to get started with that don't require any technical knowledge at all. Just, uh, using, uh, OpenAI Deep Research, which is available on ChatGPT, um, is a good first step. Developing your own custom GPT is a good first step. And this, uh, this can be done by a twelve-year-old. It can also be done by the CEO of a, of a P firm. Um, on, on the second hand, there's always someone that loves to tinker in almost any business. And okay, they might not be someone that's ready to start adopting an AI product like V-Seven or like many of the other products that are out there, but these companies can usually help you with the first implementation of AI agents, and they, they usually have a small professional services component to it that helps out. And then on a third note, whatever to come in recommend is not to hire an external firm that will effectively, um, replace inefficiency with inefficiency. But rather to adopt software, and then to start considering hiring people that are AI enabled already. Um, I think if you are hiring for paralegals today, you would be much better off hiring a paralegal that already knows how to use AI tools for their own job than someone that is in adept to it. Um, that first person will also be this driving force for change, and they will start to Immediately think, hey, this is a task I can do with AI, and this is a task…

AI assessment note: “First off, there's a lot of products to get started with that don't require”

Q I want to have access to more potential leads, but there's so much time and energy that has to go into prospecting for myself because I'm trying to do a million other things. I don't have, uh, Of any, I don't have a manager. I don't have any of those things. So how can I do this for myself? How can I build my own team of agents like this?

A You wouldn't want to, you'd want to partner with a company like BMG we work with. They offload those activities because as a solopreneur or one or two person firm, super hard to implement on your own. You don't want to do it yourself. You want to leverage a service from a third party. We power those third party partners. Because to bring all this stuff together, it's, it's daunting because you have to understand what the demand side platform is. If you want to run retargeting, you have to understand how to put the meta tag in a single impression ad to activate a, a social audience. You have to understand how to use Pressmaster to get content out. You have to understand how to tie your tag infrastructure into, um, PAT, right? Which is our prospecting activation tag. PAT's responsible for all enrichment and de-anonymization. That's just no way you do it as an entrepreneur. You would come in and say, hey, I want to pay 500 bucks a month for an SDR agent. Here's my CRM. Here's my email system. Here's my tag fire for my website. Call it a day. Two logins, a tag on the website, you're done. That's 15 minutes of setup. That's where it's going to go for the small business. The problem is, do you have enough volume of visitors to make it worthwhile? Or is there enough search volume for IMA in market audiences to go and market to them? My experience with small business, they're going to …

AI assessment note: “You wouldn't want to, you'd want to partner with a company like BMG”

Q my team? And, and I had the same frustration with people that I was mentoring or advising. But as I've gotten older, I've realized that people are just mentally at different places. So maybe you were too afraid to make the move, or maybe you were too lazy to make the move. I don't know. What, what do you think was going on that made you kind of ignore that?

A So I think it touches on two different aspects. One, like you experienced, the messenger matters. You can receive the exact same message from two different people. It's going to resonate coming from one, but not necessarily the other. So one, the messenger matters. Two, the timing matters. Uh, when, when my dad first told me this in 2019, I was not yet at a place confidence wise to think I can do this on my own. I wasn't there yet. Uh, in my, my father passed in 2020, but so fast forward to 20 24, and I still had that advice that he had given me four years earlier, that I was, I was at a place in 2024 where doing this wasn't as daunting anymore. It wasn't as intimidating. So it was a combination of, of those factors. Um, I guess for you, it's, it was the messenger really mattering. For me, my father was the best messenger. Just the timing of it wasn't there, uh, the first time around. But the advice still resonated five years later when, when it did matter and when I was ready to take that big step.

AI assessment note: “in 2019, I was not yet at a place confidence wise to think I can do this”

Q Do you think it was a mistake to try to push that fast, or did you, or did something bad happen in the process of making this move?

A No, it was, it wasn't a mistake to push as quickly. If anything, Uh, with more foresight, I would have started the process earlier and done it somewhat more gradually. Um, but the, the reality with my supplier overseas is that they were just no longer reliable and the things, orders weren't getting produced anywhere nearly on time. Uh, employees weren't getting paid. Uh, taxes weren't getting paid. It was a complete collapse, and I was having to prop them up financially. So I was having to take on all of the financial responsibilities, making sure that Uh, giving them an unsecured line of credit to make sure that employees were getting paid or back pay something so that they wouldn't walk out. Because if they did walk out, well, then I'm really up. Because then there's no one, no one left to produce anything, and I wasn't ready yet. I wasn't at the stage yet where I could start producing myself in North Carolina. So there was an interim period there where it was cheaper for me to take a big financial risk by giving them a blank check, effectively, rather than rolling the dice and them potentially collapsing, and then I don't have A supplier. Until I could bring my own factory online.

AI assessment note: “No, it was, it wasn't a mistake to push as quickly.”

Q it, honestly. Cause I'm like, what? It's like a few hundred euros every year. Like, do I really want to put the, you have to keep the receipts and then you have to show them the receipts. Like, I don't want to deal with that. So what has been the most rewarding part of having your company in the U S being able to say we're made in the USA?

A Over the years, we would, whenever I was on a sales call, a new project, about 50% of the time, maybe even more, customers would say, where's this stuff made? And I would always open with, oh, it's made in Europe. Sounds pretty good. And then if they ask more, okay, where's the, it's made in Lithuania. Doesn't sound as, uh, as appealing as made in Europe, but nevertheless, uh, for a lot of people, for a lot of American customers, it really mattered where it was being made and not necessarily that it being made in Europe was a deal breaker. For some, it was. But at the time there was, there were no alternatives. No one else was going to answer the same call for the same type of product, custom product that they were looking for and say, oh yeah, our doors and windows are made in the US. Didn't, it didn't exist. There weren't any alternatives that could meet that criteria. So, uh, the most, the most exciting parts of it, being able to answer that and being able to answer that, um, with, A lot of pride, uh, because these types of doors and windows that we make have never been made in the U.S. This is a very European-style product, and as you know, most apartments in Europe, whether you're in Eastern Europe, Western Europe, is a steel door With a multi-point lock on it and decorative skins to make them look like nice wooden doors, whether it's painted or stained wood, whatever. Thi…

AI assessment note: “being able to answer that... with, A lot of pride”

Q What are some of the other soft costs besides VAT, tariffs, exchange rates?

A So for manufacturing overseas, one, and this is less even a soft cost, but lack of control. If you don't own The factory overseas where your product is being produced, and 95% of the time, uh, you don't, they may have other interests. You may have, uh, intellectual property issues down the road. Uh, so not being in control of what goes on day to day. That's a huge one, and one that I struggled with a lot over the years. Um, freight. Freight volatility, and we saw this a lot during COVID. Pre-COVID, we, so we brought everything in by air freight, and somehow I earned the title of being the largest air freight exporter out of Lithuania. Never a title I thought I was going to have, but got it, got there. Um, and we paid about a euro a kilo In air freight costs, which pre-COVID was pretty good. At the peak of COVID, that went up to 10 euros a kilo. That was no longer, uh, commercially viable. Couldn't do it when you're transporting doors and windows, each one of which weighs hundreds of kilos. So, That was one of the soft costs that the, the volatility therein, and we also saw that in ocean freight. Um, that was something that you needed to pad your prices because you didn't know where things would be on the day you needed to ship. Time change. When you're working with a supplier overseas, whether it's in Europe, whether it's in Asia, it upends your day. You're waking up early, or …

AI assessment note: “one, and this is less even a soft cost, but lack of control.”

Q What is the greatest value for the customer? To use this. I'm assuming this is designed in a way that it's bolted on to a Shopify store. So the customer doesn't need to download anything specific to be able to use it.

A That's correct. It's the, it's the very first thing they see after they buy on the confirmation page. We are embedded. It just says at a shipping address, apply a discount code that you forgot. Change your size or color. Those types of things will list out to the customer and they engage with them if they need to. And I guess like the most valuable thing for the customer, it depends on the scale of the problem and the merchant that you're dealing with. Our strongest customer advocate is buying from a store like Princess Polly. And that's because with, if you make a mistake on Princess Polly and you reach out to customer service, their response will be, Hey, sorry, we've already processed your order. It's about a ship in like 10 minutes, and we can't make any changes to it, but we do do free returns. So when you return it, just, you know, don't worry about it. And that's awful for the environment, awful for the customer, because they're receiving a package that they don't want. They have to return it, then get a refund. It's a complete waste of time. Yeah. And also they've gone, they've gone through this anxious period where they've sent an email and then they're like, oh, are they going to respond in time? Are they going to do this for me? And then they ultimately get bad news, right? And we're, we're cutting that out. We're letting them, they know they make a mistake at checko…

AI assessment note: “That's correct. It's the, it's the very first thing they see after they buy”

Q in different facets, providing different kinds of services. And every single time it's a massive headache. So my hat's off to you for having a business that's successful in providing a service to the e-commerce industry. I am curious to know about AI. Are you using AI? Did you use AI to build any of your code? Are you using AI in any of your processes? What's your situation there?

A I think when we first built this product, you know, Vibe Coding wasn't a thing. It was the very start of the very start of the year. And, you know, my co-founder was just building this product, I think, off his own chops. For the merchandising stores that we were running. Now somewhere between like 60 to 70% of our software is probably built with AI or in copilot with AI. You know, they're doing the front end of the work, and then my co-founder is tidying it up or finishing it, doing the gloss. Um, and he just raves about it. Candidly, the, the conversation that he says to me, and I'm non, I'm non-technical, though you naturally grow to be technical as you run a software company. He says, if I didn't have cursor, I would be 400% slower. He's never enjoyed coding so much and never felt so empowered and so fast. And, and we feel it too. Like I find he posts publicly on LinkedIn about what he's developing. And I find all of the non-technical folk, i.e. like our clients that we work with, the e-commerce managers, the customer experience people, they're like, whoa, Kara ships so fast. And it's like, yeah, Kara and AI do ship really fast. Like he's, he'll be driving home from work and he'll speak into Curs' voice prompt and saying, Hey, I just got this ticket for this issue. Um, can you solve it or like X, Y, Z and that. And then by the time he gets home after his 30 minute drive to …

AI assessment note: “somewhere between like 60 to 70% of our software is probably built with AI”

Q What are some of the challenges of The work that you're doing?

A I would say my number one challenge is the human capital. So our business is that we are creating software companies for the world of manufacturing. We created 22 in the last four and a half years, and at the end of the day, it's all about having the right human capital, and France is particular because we have really good engineering talent, but they don't have exposure to at scale Um, development. Like, there are very few French engineers that have managed a product with like half a million users. And so bidding for half a million users is very different from doing a cool demo to sell to someone. So that would be my challenge number one. The challenge number two would be product thinking, because I think what we are good at, but that's very hard, is taking very specific challenges of very specific manufacturers and inferring what is the generic solution to that and how tech can help. And so if you are not solving the right issues, well, you don't have a business, but if you are solving the right issues, but you are too specific, you don't scale as a tech company. And so scalability comes from being generic enough in how we can treat the thing. And so that's a constant uphill battle, but when it works, it's really cool. One of our companies, they just signed a very large fundraising In four years, they deployed 800 factories, and their largest client is running 30 K daily user…

AI assessment note: “I would say my number one challenge is the human capital.”

Q What did you take from those learnings to then come up with the next idea, which was then sustainable?

A The next idea was really born of the ashes. So what happened was I said to my team in the Philippines, Specifically one person that, uh, was running the e-com, I said to her, everyone is always fascinated that I found some of the Philippines to fully run a business at the time is doing, I think five and a half million dollars where I was not involved in the operations. Why don't we start an agency where we find people like you? So we don't go basic level, like let's go get someone for five dollars an hour, but let's go up the talent ladder and find highly skilled people in the middle of their career. And convince them to work for smaller companies in the United States for better pay. And that, and she said, we can do that. And that was the start of my staffing business. It just was something I always liked. I got tired of hearing from my friends. They couldn't find the right talent. They were always fascinated that I could find better talent. And I just called 10 people, well, more than 10 people, but I got my first 10 customers out of my network and just pounded the phones and that's how the business started.

AI assessment note: “Why don't we start an agency where we find people like you?”

Q How have you had to change yourself to continue being able to exist in your role as the, the owner of this company?

A One is that I didn't used to need to have salespeople. Because I could do all the sales. And what we found as we grew bigger and I grew older was that I don't always resonate, um, as a proud Gen Xer, I might not resonate with a millennial the way I would hope, and they might not resonate with me. So part of the way to do that is to have a bigger team around you that can support you and be self-aware, hopefully of my own gaps and my own, my own gaps in my knowledge and my own biases and my own personality defects, which I try to be aware. And then surround myself with people that can fill those gaps, and hopefully I can help them fill their gaps as well. So just being aware of what I'm, of what I'm doing and who I am and what my failings are, which I think a lot about. The other part is, it's just very dynamic. When I started doing this, online advertising really meant search keywords on Google, Ask Jeeves, Yahoo, Bing, Seven Search, Dogpile, Lycos. It was all search. Um, and then social came into play and that didn't really work super well in the first two or three years that it existed and having to learn those tasks and, and to understand that the processes I followed 16 or 20 years ago don't work now because of automations and realizing that new things have to unlock. It used to be that if you were a more sophisticated bidding person, if you knew how to game the algorithms i…

AI assessment note: “be self-aware, hopefully of my own gaps and my own, my own gaps”

Q is incredibly expensive, almost prohibitively for some people, depending on, you know, what they're trying to promote. What do you look for in a potential client? What, what's something that they say or do when they come to you that tells you immediately that this is someone who could be successful. And I guess this question is meant to be answered for someone who's looking to grow their own business.

A The biggest thing. That is to me an indicator of the ability to be successful is not revenue targets because everyone's got revenue targets. Um, they might be made up. They might be plotted on a, on a graph that goes up and to the right indefinitely, but not everyone has, has specific goals around new customers, right? This is how many new customers I want this year. If, if, if I'm talking to a prospect, they've all got revenue targets, but if I'm talking to a prospect and in addition to saying, I'm a, 700,000 dollar a year brand, and I want to get to be a five million dollar brand by 20 30. That's a, that's a, or 2029. That's a typical thing that come into our door. Um, if they can tell me how many of those are going to come from, how many of, how much of that revenue is going to come from new customers as opposed to existing customers. I know I'm dealing with a sophisticated person who's thought about this a lot and is probably going to have a leg up in the competition. Their supply chains might not be organized. They might have a bad product market fit. I, I can't judge those things. Um, but, but if they could tell me how many, what percentage of the revenue they want to have come from new customers versus existing customers, I know I'm dealing with someone who's pretty sophisticated and pretty smart and has a really good chance to succeed.

AI assessment note: “not everyone has, has specific goals around new customers”

Q What are some things that people should understand about Middle Eastern cultures and economies beyond the stereotypes you mentioned earlier that would help them better understand if the Middle East is a good opportunity for their niche or their industry?

A You gotta really look into your product. Uh, so for example, I've had a brand come to us where they sell a premium underwear, right? But they didn't have the color white. And as you know, in Saudi and, uh, you know, UAE, GCC as a whole, they all wear, like, the white fob. So if they wear colored underwear, it's gonna clearly show, right? So that's one thing where we had to do a little bit of, you know, product development education based on the cultural norms that are available here. And, uh, this one, again, I believe it's gonna really hit here because the product is really great. It's just that they don't have the localization within the product, right? A lot of people talk about localization on a website when it comes to language, when it comes to local payments, when it comes to shipping times, but when you truly localize within your product development, that's when you really win entering a new region.

AI assessment note: “when you truly localize within your product development, that's when you really win”

Q So if we're focusing on premium, How do Middle Eastern cultures view animals? Because for example, in the US, pets are a hundred and fifty billion dollar per year industry, just in America alone.

A Uh, obviously you've seen the videos where we have, uh, pets here that are, you know, are supposed to be wild animals, but people have them in their house or in their garden. I mean, this is not like a more common thing. I think this is more of the luxury type thing of those people who can afford it. So I think the acceptance here is a bit wider when it comes to the type of pet that you can have, um, but when it comes to specific pets, I mean, there's a religious aspect too, right? Like, uh, Muslims are not allowed to have dogs inside their house, or they're only allowed to have them outside as, uh, you know, guard dogs, but they're allowed to have cats. So cats are very popular here. So you also see, uh, cat Supplement brands or cat food brands do really well in this region, but when it comes to dog brands, it doesn't really pick up as much.

AI assessment note: “when it comes to specific pets, I mean, there's a religious aspect too”