Advice Line: "Strategy Sessions"

0:01 This episode of How I Built This is presented by Engine, the modern travel and spend platform built for businesses that are growing. Book faster, save more, and watch your rewards stack up. Stay tuned later in the episode to hear how Engine is helping thousands of businesses travel smarter. Hello and welcome to the advice line on how I built this lab. I'm Guy Raz. This is the place where we try and help solve your business challenges. And every week I'm joined by a legendary founder, a former guest on the show who will attempt with me To help you.

0:43 And this week our episode is a bit of a mashup, three callers and three different former guests. By the way, if you're building something and you need advice, give us a call. You might just be the next guest on the show and reach all of our listeners. Our number is 1800-433-1298. Leave us a one minute message that tells us a little bit about your business and the issues or questions that you'd like help with. Alright, let's get to it. Our first return guest today is Jeffrey Hollander. He's the co-founder of Seventh Generation, that's the company that specializes in plant-based household cleaning, paper, and personal care products. Jeffrey first came on the show back in 2021 with his co-founder, Alan Newman.

1:24 It was an amazing and intimate conversation about the challenges in being one of the very first green household brands to hit the market back in the early 90s. If you want to hear the whole story, we'll put a link to that episode in the show notes. Anyway, here on the advice line, Jeffrey and I talked to caller through the best way to bring on new business partners. Hi, Jeffrey and Guy. Uh my name is Tony DeRosa. I'm calling in today from Ann Arbor, Michigan. Where I'm the owner of Hearsay Brewing and Theater, which is a two in one company with a microbrewery Offering a full menu of beer, wine, and spirits, and then an adjacent comedy theater that primarily focuses on improv comedy. Cool. Thanks, Antony. So you it's a

2:03 It's a brewery. And theater and it's but they're in different rooms. Yeah, they're kind of adjacent spaces. So the theater is in this contained space sort of within a larger kind of a picture of a big long rectangular brewery, and then in kind of the middle of that, there's a black box theater where we do improv and some stand up comedy. Uh roughly forty events a month, actually.

2:25 I got it. Okay. So you're brewing beer, you've got comedy and uh and do you serve food too? We do. So we own and operate a food truck, but a big update is we're actually gonna be renting the food truck to uh another party who's well known in Ann Arbor, which should help me to kind of alleviate some of the many ball I have in the air at any given time. Yeah. Um so but we currently do operate that food truck and focus on Smash Burgers. So this is a complex business. Um before we dive in, tell me a little bit about your uh the sales. How you guys doing? Financial.

2:56 Last year was our first full year in business. We did six hundred uh sixty seven thousand dollars in revenue, and that's pretty evenly split across the uh the bar and the theater. within food being another kind of hundred K in that equation. Okay. Uh we're growing so far in twenty twenty six about twenty five percent. So we're really getting some good feedback from the community. And I'm working on planning a really large improv comedy festival at the Michigan Theater downtown, which we expect to bring in another three hundred to four hundred thousand over the summer. So I'm projecting us to exceed a million dollars in our in our second full year. Um just based on some of that some of those major growth opportunities. Okay, so now that's and and are you profable?

3:34 We are we took a a small loss last year. I expect us to be profitable this year. Great. Okay. Tell us your question and then we'll we'll dive in further. Yeah, so it can be really hard uh to break out of the pattern of wearing too many hats as a solo founder. How would you evaluate staying the course as the sole owner of all these different business units versus bringing in partners that might have some skin in the game to lead one or more of those business units? Got it. All right. Jeffrey Hollander, I want to bring you in. Um complex business, a brewery, there's food.

4:04 Uh there's theater. Uh is there anything else we're missing, by the way, Tony? A big part of uh my business and actually a huge growth opportunity is workshops for the corporate world. So I worked at Google. before um moving, we were in California and I was doing workshops for teams because I think improv is so helpful for communication and trust. uh with any kind of small group. So I still do a lot of that. And that's even another area where I'm often kind of dividing my time, uh, beyond the other things I've already mentioned. Wow. But yeah, that would be the only other major business unit. Okay, so you've got classes, you've got

4:37 uh shows and you've got hospitality. Okay, Jeffrey, I want to bring you in here. Um Thoughts or questions before we tackle Tony's question. Well, I'll jump right into your question. I mean I think Bringing on partners is a challenging thing to do. It's hard to find the right person and

4:56 Partnering with the wrong person can be very hard. Dangerous. To your business. I would think about what are the things that you do best. Better than anyone else can do.

5:07 And think about how you can focus on where you add the most value to your business. Then hire people that can do the other things that are critical. But not where you can do it better. Do you need capital? Is that why you want a partner? Wha what what's the purpose of having a partner?

5:25 It would certainly help, yeah. And I've I've felt burned a couple of times by bringing in people as employees. kind of key employees that didn't pan out exactly as I hoped. I think I've I felt that being a first time founder, that dynamic of There's just a different feel when somebody is kind of working for A paycheck versus hey, I've got

5:44 you know, a significant amount of either stock options to vest or I've put in capital. I remember from your interview you talked about kind of having more silent partner investors and that could that could probably be, you know, an option for our business as well. Uh, but it's been Largely driven by some of the feedback I've just had working with employees so far at times. I love the idea of having skin in the game and giving your employees a way to participate in your success.

6:09 I think You don't wanna have them controlling the business, but having them be small owners in the business. will be hugely motivational and I think they'll be very different as owners than they would be as employees.

6:23 Yeah, you can or profit sharing. I mean d there's ESOPs, profit sharing is is a great way to start. I think that's a great idea because once someone has skin the game They show up very differently. But you've got three different businesses, right? You've got hospitality. 'Cause you're doing the the food and the and the tap and the beer. And then you've got an entertainment business, which is the shows.

6:44 And it sounds like you've got a whole nother sort of educational like classes kind of business, right? And And so finding like many CEOs for each unit. Like somebody who runs the hospitality, you know, just that that's their portfolio. Somebody whose portfolio is like ticketing and and programming, and then the other person is education. So

7:06 I agree with Jeffrey that finding partners who uh will then be equity partners is Um, it's tricky because that's permanent. It's e it's expensive to give away equity and it's permanent. And I wonder whether you might wanna think about finding or experimenting you're not gonna find the f perfect person, but experimenting with people who could kind of own those different units as paid employees wait maybe who gain a little bit of ownership.

7:32 Over time, the uh where when when they hit uh milestones, but something like that before you bring in full equity partners. Yeah, I love that idea. I think it actually rifts on something that I've identified as maybe a weakness for myself at times. And I think I occasionally just get really excited and tend to see the bright side of People versus maybe having a sharper eye of

7:52 Is this person the perfect fit? Are they really checking all the boxes that we need. And so I've kind of looked at that as I'm bringing in some of these key folks, just getting extra help, because I have had to really figure things out on the fly. with you know food sometimes it's like you're the owner the company and you're flipping burgers one night'cause hey, somebody called out and you've just gotta You know, you gotta make it happen and get it done. Um, and I'm looking for people to come in and and help me. I wouldn't do the interviews alone.

8:16 by having other people with me. They see different things than I see. You might see just the good. But someone else might see challenges that you're not paying attention to. So I never like to have one person make the decision about a new employee. I always think it's good to have more than one person interact with them.

8:37 That's great advice. Also took a look at your website and You know. I l you you open with high there. But I think your message of crafting community through joy and laughter

8:50 is a more powerful place to start the communication than just high there. Appreciate that. Yeah. I'll yeah, I think that Yeah, we could get our mission more. uh front and center because we we are operating at a time when you know, craft beer is actually declining. There's quite a few breweries

9:05 that are closing and sales across the border. are down. So for us to open a brewery at this time, it was really important to us that we're Appealing to people that you know, drink only non non alcoholic beverages and that community building with just the number of partnerships and events we do. was a really important part of our founding.

9:22 So we could make that more front center. I like that. And it's the same happening with wine. Which of these three businesses are you seeing the most growth uh potential right now and and then which one right now is the most profitable. the you know, there there are much better margins selling classes and workshops, obviously, because you're not dealing with cost of food, cost of, you know, the a lot of the labor I'm providing in that, you know, we've run

9:51 them for large companies, small companies, a lot of university teams. That is both growing and the most profitable. So it's just kind of the same part. I would say it's the It's the workshops and we've started to get bigger leads, I I did some competitive analysis and learned I was way underpricing in my workshops compared to competitors like Second City, which has a lot of gravitas and name recognition and the comedy world. So I am I am cognizant of that. But uh I felt that when I looked at what we were charging, I actually got feedback from a client. So just so you know

10:21 Your bid was twenty percent of what Second City had quoted us. And I was like, Okay, it is time to really evaluate that. And um I you know, I I'm looking at that as probably where I could even be spending more of my time uh to you know, benefit companies kind of tell that story of how improv can be a really powerful tool for business. And uh and as you said, have kind of these mini CEOs running some of the More hospitality driven business units.

10:45 You know, y you said something, Tony, about improv and I agree with you. I mean, I I remember interviewing Jason Sudekis and he talked about doing improv in high school. He there were programs that he was part of and Uh improv is so it's such a great skill. For people to gain confidence and presence. And it's a wonderful so I love that that you're doing that. And you bring in a partner, and Jeffrey, I mean Correct me if I'm wrong here, but I think you bring in a a a a partner when they can bring something You know

11:13 uh that you can't bring alone, like capital or or network or real expertise and and somebody who's really aligned with the long term vision here, who's gonna bring real value. That's when you bring in the partner. Yep, I agree. Yeah. Uh the the company's called Hear Say Brewing and Theater in Ann Arbor, Michigan. Uh Tony DeRossa, thanks so much for calling in. Good luck.

11:34 Thank you guys so much, appreciate it. Um, you know, Geoffrey, it's uh I mean well one of the things I love about the thing I love about doing this is just the variety of categories and and brands and ideas that we get and uh and they're But there's always the same core challenges, no matter no matter what there's it it you know, it just puts it all in into perspective. It's hard to start a business.

11:57 But it is the lifeblood of our country, the lifeblood of new jobs. And I think that we need to give these people more support than they get. It's hard to find capital. It's hard to grow a company. And uh because it's such an important part of our economy. I would love to see more support given to those startups.

12:17 So that we can have more of them. We're gonna take a quick break, but when we come back, Sarah LaFleur, founder of the women's clothing brand MM LaFleur, joins me. Stay with us, you're listening to a special mashup episode of the Advice Line right here on how I built this lab. We get support from Engine. A lot of founders start with a product or an idea. But at some point the business becomes something else.

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14:51 Hey, welcome back to the advice line on how I built this lab. I'm Guy Raz, and my next guest is Sarah LaFleur, founder of MM LaFleur. Sarah was first on the show back in 2020 and told us her incredible journey. She was building a career in finance when she realized that just picking out her outfit every day had become completely exhausting. And even though she had no background in clothing or design, she set out to create her own fashion brand for women. We'll put a link to her episode on the show notes. Anyway, when Sarah joined me on the advice line, we helped a caller figure out the best way to build a lifestyle around her brand. Hi, Guy and Sarah. My name is Monica Sony, calling in from London, and I'm the founder and creative director of Dress London. We are a British made quiet luxury kidswear brand with uh design led intentional pieces for the cool modern family. Awesome, welcome to the show, Monica. So Tress London, not Trey London. Yes. Okay. And uh and this is a it's a clothing brand for kids age what Aged six months to eight years. Okay, and what what I mean, um you know, some people might think of like

15:59 Jimbury, I don't know. But but what we're talking about but there's a premium brand of clothing that you're you're making. Yes. So we design very sort of modern minimalist pieces that similar to kind of what Sarah has been able to build with M LaFleur. Um intentional design led. I come from a luxury women's wear background. So my Yeah, I work I went to Parsons. And what I was finding in the kidswear industry when I first had my son back in twenty nineteen was it was

16:30 Very surprising that I couldn't find Kids were brands that spoke to my design aesthetic, which was sort of this modern minimalist. curated wardrobe. Yeah. So you are so you you you're a designer, you've designed this line of clothing and Um, and I see that they're made in the UK. Yes, which means that was that's that's more expensive than making it in a factory in China. Absolutely. That was a huge part of the mission for me because when when I first began to conceive of the brand back in twenty twenty, uh the British

17:01 industry, the manufacturing industry in in England was, you know having a really hard time with Brexit, with COVID, it was all but diminished. And so part of my mission was obviously I want to be able to be right there to see the product, to be able to have quality control on the ground all the time. And to be able to then also support incredible British craftsmanship at the same time, it sort of worked hand in hand. Where are you selling the clothing right now? At the moment we're just D to C. Okay, so not in boutique or anything yet.

17:33 Not in boutique. And and give me a sense of how you're doing with sales. Like how'd you do last year? So We are a very much a limited edition brand, so everything we make is small, small batch. So we are around the the low uh five figure. Mark.

17:50 At this point, which I was very happy because it really gave us proof of concept to say there's clearly a market here. All right, before we dive in further, what is your question? So for a premium niche brand like ours, how would you build real brand heat and word of mouth excitement with a niche audience of style conscious parents that can drive real sales without a marketing budget? Okay.

18:16 That's a challenge and really I mean, I love this. Like You probably right up your alley, Sarah. I'm looking at at these designs with you know, with sort of how you think about um design aesthetic. For sure. And I I mean I I'm speaking both as like a fellow fashion founder. So Monica, so so nice to meet you and um welcome welcome to this business. I you know, I know you've been in it for a long time as a designer and it is not for the faint of heart. Um But the world needs to be. Needs beautiful things that are uh

18:48 You know. ethically manufactured. And so I really commend you for for do for starting this. And um I'm on your website. I mean the aesthetic looks beautiful and really, I think reflects a lot of the training that you've been through. So Um, and now I'm speaking as a mom, I think we know one one challenge that I definitely feel as a parent when I'm shopping for kids' clothes is like, wow, like I really want to buy my kids. beautiful, well made things. And I also know they're gonna get tomato sauce all over it and go out grow out of it. Yeah. In six months.

19:22 And I'm curious how you've thought about that tension and you know, what what do you say to parents who who have that question? Yeah, that's that's a great question, and that's definitely been a point of tension. I think what I tend to usually say to customers. Number one, there is always a way to get out of stain. Yeah. Once you understand a couple of different ways that most of these sort of simple basic ones can be taken out. You really are kind of

19:49 you're stain free. You because I put my kids in in White. And all these beautiful cream colors and a little bit of vinegar and water can go a long way. And I know that ends up being a little bit more work, but when you have a process in place, then being able to buy something that you actually can use for more than say those three four washes that you'll get out of a you know fast fashion brand because these Products really last two, three years, even with your child growing, because we we build in the sizing. They are naturally oversized for the look.

20:25 But also so that they age with the child and you get at least two years out of them, then it becomes an investment piece that's worth having, even for your kid. Monica w when you um When people wear these um uh these items, right? I notice that you've got some, you know, like um uh the the sleeves uh are i really interesting. You notice the the sort of the cut and it reminds me a little I just saw a documentary on Tom Brown. And you know what a Tom Brown item is because it's got that red, white, and blue

20:55 tag or um somewhere on it. And I wonder With like if I saw your pieces on a playground. How would I know it's Uh Trace London. Like do you have you thought about You know, even like a label or something that can be sewn on the outside or a

21:14 something that makes it instantly recognizable. That's a great question. We are actually in development right now for Um, a very simple design for a little Chrysanthemum flower that is actually based off of my mom was named Florang Hill when she was alive, and um she's a huge inspiration for me for this brand as well. And what she represents as of sort of this beautiful being in in my life, but also the when we are kids, I don't know if you guys ever did this as a kid, but we used to always doodle chrysanthemums.

21:48 And I thought it was a great parallel to to look at the beauty of a flower and the be and and also what it means, and then this sort of creativity in childhood and be able to use that as a mark in s in little sort of hidden places. I feel like Monica You were really selling a a lifestyle just even in when you were talking about How Yeah.

22:10 You should care for the garment. And that's like a a slower lifestyle movement, right? That I think a lot of parents are very curious about. Um I think even like you know, busy working moms like myself, like were kind of horrified by the amount of toxins that we use to clean our kids' clothes and And vinegar is like a a much more

22:32 environmentally friendly and and healthy way to to take care of our clothing. But I think the point you're also trying to make is like your kid doesn't need a hundred clothes, a hundred pieces of clothing. Like You only you only really need, you know, a top and a bottom and and how many of those do you actually need? And so where my head went to is like I think I think this is It's a capsule collection for kids. Absolutely. Yeah. Monica, I have a qu quick question for you and also r related to marketing. Have you d have you

23:00 tried influence her marketing. I have in in very small strategic Uh ways. And and success or not m not much or it's been I would say it's been mixed. I think we've had a lot of sort of traffic come to us from a couple of of great influencers, but in terms of conversion, it has it has been mixed. And I think part of that is

23:23 really being able to find that really really find that niche that understands The brand. I I'm not surprised that influencer marketing hasn't really panned out because I'm not convinced that your customer necessarily follows influencers. For kids for kids wear, let's say, right? I think that they're probably noticing like

23:43 The woman in Notting Hill who At school drop off, who's so elegant. You know, or like a creative director type of person, right? And I I would say

23:53 Instead of paying Influencers. I would Try to identify people like that. People that you probably already kind of know or know of or have some kind of a connection with, and just say And do whatever you can to get it on their kids. Say, Can I can I give you a piece because

24:12 That's really where you're gonna find, I think, at least initially. More traction. Yeah, I I that makes a lot of sense. Yeah. I I guy actually when I when you

24:25 first posed your problem, like where my head went to was actually like Trunk shows. And I don't know if you've you've had some a few of those, but I I think it starts with a neighborhood and not on social media. And so I I you know, Monica, I we're we're able to, you know, see your face and uh talk to you here like you're clear like a very

24:46 elegant person and and you have great taste and sensibility, like People will want to emulate you and your style and I think buy from you. And I think you're you're as much of part of the story as as your product. Um so Trunk shows.

25:02 Yeah. Trunk show's a great idea. Uh or pop ups in I mean, I I I imagine, you know, London has so many beautiful boutiques and And Awesome spaces and and you know, a a pop up or maybe a collaboration with a boutique, somewhere where people can

25:19 See. See these articles and touch them because I think and and It really is the kind of thing that the kind of person going to that boutique is gonna be interested in and

25:31 that becomes the flywheel. That's where people like wow, what it look at what that little girl is wearing on the slide. It's just a beautiful cardigan or Or you know, jumper or whatever it is. Yeah. Absolutely. I mean, we have had most of our sales have actually come from our pop-ups because they have been instantly converting when people come and touch and feel the fabric or You know, you can see the the the value. I I'm reminded of s of your episode, Sarah, when you mentioned um about when

26:00 You know, you were able to have the trunk shows and people came and were able to touch and feel the, you know, little black dress and realize, okay, this is why there's a difference between, you know, why I'm paying$198 for a dress. So Yeah. And and Monica, make sure to capture those emails when they buy and and contact. So you can You know, you've got newsletter, you can do newsletter maybe. I don't know if you do one. You may want to do okay, great. And um that you just wanna make sure that you do that purchase.

26:30 results in a relationship, long term relationship. How would you recommend reaching back out and really capturing them again because sometimes I feel like emails You know, just get lost.

26:42 Even when they were very excited about the purchase purchase. Sarah? That's the E mail first of all, I think is just um A declining Uh

26:53 channel and and that's like just the the hard truth. It's not that people don't read emaymore, but it's it's people get so many of them every single day that it's it's impossible to keep in track. Uh I I go back to the lifestyle thing because I think Monica, you're presenting a a unique Point of view. And you have a perspective, and I think for MM A huge

27:14 Uh differentiator for us as a brand was um our blog. It was called the M Dash, and it's a weekly newsletter. And We actually launched the M Dash even before we had the products ready. And it started out as weekly interviews of professional women that I admired. And uh, you know, now it's become a sub stack and it it's still one of our uh most opened uh types of emails. And I think to be able to engage her in content На

27:43 uh in product. Promotion. Yes. I think I think that's the way to really hook her in. I also think, you know, if you're able to build this like small community, like WhatsApp is a channel that we've actually used with with our customers and Um You know, it has to be genuinely uh it it it has to feel um beneficial to her. You can't just, you know, be like saying like fifty percent off, you know, you know, every week. Like that

28:08 or or you know, new launch er you know, every every other day. Like that's that's not really the goal of the WhatsApp, but I think because this is a lifestyle brand at at its heart and there's community that you're trying to build around it and and a consciousness that you're trying to build around it. Um, I think it's it's ripe for that kind of communication. Yeah. Agreed. Uh the brand is called Trace London. Monica Sony, thanks so much for calling and good luck. Thank you so much. It was an honor to speak with you guys. We're gonna take another quick break, but when we come back, another caller with another question for a former guest. Stay with us, you're listening to a special mashup episode of The Advice Line, right here on How I Built This Lab. Hey, welcome back to the advice line on how I built this lab.

28:59 I'm Guy Raz. So our last return guest this week is Shazi Visram, founder of Happy Family Brands. Shazi was the first on the show back in 2020 to tell us the story of building an organic baby food company from scratch and knowing nothing about the industry. And then after her son was diagnosed with autism, Shazi launched Healthy Baby, a non-toxic baby. care brand that she now runs. We'll put a link to her episode on the show notes. Anyway, Shazi joined me on the advice line to help a founder consider different pricing strategies to attract a new type of customer. Hello, my name is Sandy Dinner, I'm calling from Boulder, Colorado.

29:38 And I started brain buffs. which is an adaptive learning platform that unifies standardized test prep. With real time misconception diagnosing. So teachers, principals, and districts are able to kind of understand not just what students are missing.

29:52 but the underlying misconceptions on why they're missing it. Okay, Sandy, welcome to the show. So you've got this test prep this is For for The SAT or or other tests or is from the SAT and It's more about the underlying proficiencies of math and reading.

30:09 So our goal is to kind of expand it to math and reading in general from that. Okay, so so you basically explain how it works. You go on as a student and I've got a a a junior in high school who's done with testing, thank God, but We went through this. You go th you go online, you uh take a practice test, like how how does it work? Yes, so I just graduated college last week actually. So we started kind of in college. Thank you. And

30:34 Looking back We were amazed how separated the SAT is from school. When it matters so much to the students. And we wanted to integrate it back into the school day. So on the student side, they take a diagnostic test, we're able to identify

30:48 what they're missing, why they're missing it based on What wrong answers they're choosing, and things like that. And then on the teacher side, we aggregate that at a class level and can give recommendations like hey, overall. Maybe It would not even was supposed to be taught this year, but your students are missing this. It might be good to go over this again. And then at a district level, they can look overall at their curriculum.

31:10 And say hey look like It seems we're have a large gap in this thing that we think we're hitting. We need to look at why we're not hitting that. Got it. Okay. So you you get a diagnostic and they do diagnostic test and then it tells you where you need help, but it also trains you, it gives you exercises. So it is like an adaptive learning that goes along with you and updates your predicted score as you go as it's Okay. And your customers are not individual students or parents at schools. Schools and school districts, yes. Okay. And so right now, how many schools are you guys in or school districts? So we are in six school districts aiming this year. Obviously it's very cyclical. We're aiming for about twelve this coming year with our current talks.

31:50 And that'll be about six thousand students l last year. We're aiming for around twenty thousand students this year across those districts. Okay. And right now, uh what was your w what were your sales looking like last year? So last year was 120,000. Okay. And so you've got these three six school districts. And uh and they're basically paying they pay per student. Is that how it works? Their their cost? Okay. Yes. And then the teacher can use this in the classroom for I don't know sophomores and juniors. Yeah, seniors as well, if they want. Okay.

32:20 All right, so you've got this going on and and tell me how we you you just graduated from college, so you started this while you were a student at the University of Colorado? Yes. So we all started together, just me and a couple of my friends in college, and it started actually literally just as SAT tutoring. And then from there we're like we want to know exactly what the students are missing and it just kinda stacked on top of each other until we got to where we're at today. Um, all right, before we d dive in further, tell it tell us what your question is for us.

32:45 So my question is Obviously we're aiming for district contracts, which can take six months to a year or two years, especially with piloting programs. But the more students that use our platform, the better we can make it. And our goal is to create a direct to teacher model that we've seen worked in a lot of Ed tech companies.

33:07 where it is a very affordable for a teacher to try it for their class. And we want to make it really cheap and affordable for teacher growth nationwide. With Not anchoring out ourselves of district sales.

33:19 In a sec, but just to clarify. The the model you're talking about is is that you can make it available to teachers at a lower price. So the teachers would would basically use their own money to buy this. Yes.

33:32 Okay. And sometimes like a math department might have a small Got it all right. I wanna I wanna bring Shawzi in. Um I know a little bit about this from A kids company that I have called Tinkercast. We make kids podcasts and science toys and And we have made a uh Ed tech platform and we've tried to sell that. It's Tricky but I'll get into that in a sec. Shawzi, wanna bring you in first of all questions or or ideas or thoughts for Sandy.

33:57 Well, um, I love what you're doing. I think it's really meaningful because it sounds like you're democratizing something that has been a challenge for most people. To get that additional support. I also have a child with special needs and he has an IEP. So I I'm familiar with the way the schools work and the challenge in Even just getting Him

34:18 approved for a certain A Tech device, which is an adaptive tech device to help him communicate. It literally took me like a a year of PPT meetings. And so I love what you're doing. I don't know what the competitive landscape is like. Do um Are there a number of products like yours or similar or and why is yours better? Um, so there are like very tangential products, but how Our product works with like talking to the teacher in their way.

34:48 And we've like very much focused on making it simple. Like the number one thing you hear from teachers, like I don't want another thing to deal with. So we have really focused on making it like extremely easy. There's like one or two clicks a teacher would have to make to do anything, essentially, on our site. And making it really easy for them to navigate and just like how we talk to them in their language has bigger biggest moat in terms of why it's been different.

35:12 Do you have data that shows that the students who take who collectively, let's say in a classroom are taking the program perform better? Yes, yes. Not this past year as we're still waiting for the SAT data. Our first cohorts were the year before and the average student. Increased a hundred forty eight points, and that's about like Point seven five standard deviations above their expected growth.

35:34 For our engaged students. Well. W so what is the um I mean I'm curious about Yeah, there are free SAT prep resources, right? The College Board has one, their own, that the uh con Academy. Um and they have their own stats and seem to suggest that their prep uh really does help improve.

35:52 Outcomes. What is the sort of the value prop here? W what do you say in response? Yes, so that is like that is what almost everyone is using. And the main thing is that is Really talking.

36:05 to the student. Our goal is like a ton of teachers. are annoyed with standardized tests because they don't feel like it tests what they're teaching. So one of our biggest things is essentially speak to the teacher. where we can aggregate this data, but it's not like in relation to an SAT question. It's in relation to a misconception that their students are having, which the teachers that we work with have found like

36:27 a ton of benefit in and I've spent so much time just driving around to all of our schools and talking to teachers. And Although there is so many options, we've never had anyone that isn't frustrated with like the disconnection between it and their normal curriculum.

36:42 I see. So basically this really what you're selling is a data set, right? You are saying to the schools, hey, you can have this data that can then enable you and your teachers to adjust how and what they're teaching. Yes. Exactly. Got it. Okay.

37:00 Now my question is I I mean you you've you're in six school districts, but I'm imagining a pretty small school districts, right? Um we actually have some of the biggest ones in Colorado. Okay. Yes. All right. Tough to get into school districts, as you know. But if you can do it, it's great, cause that can scale, right? Like if you if you've got a contract at the New York City schools or the Los Angeles School District, the two biggest in the country. You're good to go.

37:22 Very hard to do. You know, there's the the RFP process in these big school districts is challenging. So I I guess my question is In addition to trying to reach out to the the public school districts. What about independent schools or consortiums of independent schools, which might be a little easier to deal with, and also independent schools sometimes are more incentivized to say, hey, we have

37:46 The average SAT score of our s graduating seniors is You know, fourteen fifty or something, right? It's it's another way for them to say, Come to our school. Yeah. A couple parts. So first We totally agree on that. It is something we're really considering.

38:02 But we've had great results in our districts and although they're very hard to get into It's a very close knit community. So we've had referrals from one district to another, which has helped us get in that way. But We are looking and partially also with our direct to teacher one into those private schools where they have more autonomy and can move faster.

38:22 Yeah, I'm looking at your um your your dashboard here that you offer you you've got a a sample of what it looks like for the school district or the teacher, which is really impressive, right? You can you can get really granular here, like nonlinear functions or quadratic equations and and and how it sort of maps on on on student outcomes. I mean to me that that is like an interesting approach, right, which is to say Hey, you can and and you may have used this in your in your pitch, but it's like Натоликан імпров.

38:54 outcomes but but you but this is Imagine being the school district with the highest SA average SAT scores. In Colorado. Right. Imagine being able to to show that as a metric. And I wonder, because your question is how do you price this, right? And

39:09 Uh you've gotta price it in a way that um is is is competitive but also is, you know reflects the premium nature of this product, but I wonder whether you try to kind of split this into which is to say You know, in year one We you know, we really want to

39:28 to show you we we we believe that this will improve outcomes like and we will put you know, we're putting our reputations and our money behind this. So we will actually give it to you. for you know a third the price uh in year one I mean it's a risk

39:43 Баница Биффат is transformational. It might be a risk worth taking. Yes. And That is kind of the angle we're going. And I guess like one teacher, right, they could have 120 students. If you're not licensing them per student.

39:59 So it would be like remarkably affordable for the teacher. And I guess Our concern with that is like, how do you give them a really good product? Without it not making sense for district to be able to buy this in the future.

40:13 You're saying that you um you've created something really premium, you wanna Capture the premium price point. Which is the district level And that's more like an enterprise?

40:24 Yeah. And then you're kind of considering the teachers as of individual um licensees. Yes, exactly. And the for the districts it's student licensing.

40:36 But for teachers that are not in our districts, our goal is for someone to just be able to log in and that day. be able to have their students on it for something that a teacher just wouldn't bat an eye on. Typically it's hard to sell the same exact thing for two different prices. Is there a way to differentiate sort of like a channel strategy like in retail, let's say we were selling, I don't know Ten pack of pouches.

41:00 Um Uh maybe at Target. It's On sale for a certain price point and then at Walmart you might have a twenty pack that hits a similar price point so that there's parity. Do you have like a a way that you can tweak the product offering? Yeah. So that that it's better for one way is better for teachers and one way is actually You know, hits the needs of the district.

41:22 And those managers who are reporting back. probably the best way to do it and make it like A parity of Two products. I mean a a f or a freemium model. I mean I think that you need to really collect that data and use that data as evidence to show

41:38 The benefits of this Platform. The challenge with teachers is that they just don't They just don't have the money. I mean I I think They're they're a and they're not

41:48 You know it's hard to ask a teacher to out of pocket, you know, spend a hundred bucks or five hundred bucks whatever a month I mean the Th the one way to to to maybe do it is to identify

42:02 three to five really influential teachers. In uh in math, let's say, for example, in Colorado. uh and you give them the opportunity to use this for a year and you have access to the data And then you can go to those districts and say You know, here's uh here's what this teacher

42:21 H here's what happened the year before, here's what happened the year after. And You know, but that's also a risk'cause you're gonna have to I think give it away to try that in exchange for data. So I that sounds yeah. So like are you saying that like

42:34 You would find teachers obviously that are really like interested in actually engaging and then choose a small subset. Three to five or maybe more if you can afford it, and you give it to them and you say In exchange we're gonna, you know, you we we wanna see we wanna get a sense of overall Test scores from last year, if we can get them, if you can get an average uh math math SAT's test score, let's say, and then you can compare it. So I think

42:58 You need to find a really respected group of teachers, well known in the district. And see if you can experiment and say, Hey We wanna give you this. We want to measure What happens to your students. Yeah.

43:11 Okay. Yeah, I know, and I think I could build kind of like a small community even within those teachers and be able to like You can obviously talk to them directly and stuff a lot more, which is good. Yep. I like freemium too. That's a good one, guy. Because you don't want to cheapen your product by offering deep discounts. It's nicer actually to say I stand behind it so much, I'll give it to you for you or for free. It's not cheapening it.

43:33 And you know, you're gonna consistently, I'm sure, improve the UX and the The product itself. So um And yeah, I I like the idea of having influencers, teacher influencers. And there are ways to really grow this, right? Like you can focus on, of course, the ACT and the AP exams, uh but I I think where where schools are really

43:54 And this is tricky because for many years schools were teaching two tests, which also created problems, but um they get rewarded if if standardized tests are higher, right? If if the math and reading scores of you know eighth and ninth graders uh improve. And that could also be interesting to see if, you know, over time

44:14 you also have the sort of the state and national standardized tests that schools and states take. Yeah. Sandy Tinger brain buffs. Good luck, man. Congrats. Awesome. Thank you guys.

44:26 Good luck. Hey, thanks so much for listening to this special mashup edition of The Advice Line, and special thanks to Jeffrey Hollander, co-founder of Seventh Generation, Sarah LaFleur, founder of MM LaFleur, and Shazi Visram, founder of Happy Family and Healthy Baby. And again, if you haven't heard their original episodes or their full episodes of the advice line, you'll definitely want to check them out. We will have links to them in the show notes. This episode was produced by Carrie Thompson with music composed by Ramtina Rablui. It was edited by John Isabella and our audio engineer was Jimmy Keeley.

44:59 Our production staff also includes Casey Herman, Carla Estevez, JC Howard, Sam Paulson, Catherine Seifer, Chris Massini, Alex Chung, Neva Grant, and Elaine Coates. I'm Guy Roz and you've been listening to The Vice Line right here on How I Build This Lab. Thanks again to Engine for their support. If your business is growing and your team is traveling, Engine makes it simple. and saves you money doing it.

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