Speaker 1: I'm with Lucas and this is black tech, Green money.
Speaker 1: Christopher Gray is the CEO and founder of Path in
Speaker 1: AI power platform transforming the way students and professionals prepare
Speaker 1: for critical exams. Before Path, Christopher co founded Scolli and
Speaker 1: That to help students find scholarships for college and pay
Speaker 1: off student debt. Scolly gained national attention on ABC Shark Tank,
Speaker 1: securing a deal with Damie John and Lord Grinder and
Speaker 1: sparking the biggest debate and shows history. With over five
Speaker 1: million users, Skolly helps students secure over one hundred million
Speaker 1: in scholarships and was ultimately acquired by Sally May. So
Speaker 1: you are already a successful founder. You've already built, you know,
Speaker 1: one amazing company in Scollie. And I wonder, you know,
Speaker 1: before we talk about what you're doing now, I wonder.
Speaker 2: Like, what did you learn?
Speaker 1: Like what is the hardest lesson you learned while scaling
Speaker 1: that company?
Speaker 3: I think that you know, the thing I learned about
Speaker 3: scaling that organization is really really being mindful of having
Speaker 3: the right business model from the start. I think that
Speaker 3: you know and thinking about that. I launched the company
Speaker 3: on charting. So I was in college and three months
Speaker 3: where I graduated, So I really honestly didn't know what
Speaker 3: I was doing. I half my co founder and if
Speaker 3: you developers in a room, we were just getting all
Speaker 3: that traffic, so really thinking, you know, and that was
Speaker 3: like really the biggest one of the biggest high traffic
Speaker 3: moments from the start, you know, since we've had so
Speaker 3: I think, you know, reallyant and our at was nine
Speaker 3: and nine since so and we yeah, exactly, so I
Speaker 3: think you kind of give off going to see who
Speaker 3: I want to go for right.
Speaker 2: I was like, I'm going to be get super apported
Speaker 2: for everyone and that would be good.
Speaker 3: And the time when we literally got probably one hundred
Speaker 3: plus style and light down within two months, you know,
Speaker 3: you know, that would have been a lot more if
Speaker 3: you know, you know, if you know, had the right
Speaker 3: business model. So I think they can know a lot
Speaker 3: of right businessmaller from the start is important, and I
Speaker 3: think a lot of founders actually don't do that at all.
Speaker 3: You have these companies that oh, I'm make my up
Speaker 3: free and and figure it out in five years and
Speaker 3: then they run out of money and then you know
Speaker 3: all that. So I do think having the right thinking
Speaker 3: about the right business and all of them to start
Speaker 3: with something that I did.
Speaker 2: I was really young.
Speaker 3: I was twenty two when I was doing it, so
Speaker 3: now that it's not the here there, but that was
Speaker 3: something that I.
Speaker 2: Think was something that I would.
Speaker 3: I learned that that now I'm doing at day one
Speaker 3: with this new company.
Speaker 1: Yeah, and I think about something that you know, which
Speaker 1: I'm you're obviously aware of, and that you know, business
Speaker 1: is designed to sell, like whether you I PO, whether
Speaker 1: you sell it to somebody else it's acquired, or you're
Speaker 1: you become an acquirer of other businesses. That's what it's
Speaker 1: designed for. And I'm curious in how you think about
Speaker 1: your thinking going into Skye Like is this someonody, Oh,
Speaker 1: I wanted to do this forever and then you just realize, okay,
Speaker 1: you have to sell this thing at some point. And
Speaker 1: how you think now about you said, you know, starting
Speaker 1: things from the beginning, How do you think about going
Speaker 1: into a new company that that.
Speaker 2: Kind of mindset.
Speaker 3: Yeah, So I think that when I started Skylle, it
Speaker 3: was literally like a few years right after like Instagram
Speaker 3: sold for a billion dollars and it was just it
Speaker 3: was still the series of a lot of these acquisitions
Speaker 3: were still new it was actually right before there was
Speaker 3: a lot of wave of excess. It was more like
Speaker 3: that big funding period where everyone was getting raising a
Speaker 3: lot of money as more.
Speaker 2: So before with a lot of exits.
Speaker 3: Right, So when I was thinking about Scholar, I was
Speaker 3: just thinking, Okay, I'm gonna You're gonna just build this,
Speaker 3: and you want to get to everyone had this, get
Speaker 3: to a million users and all that stuff. So I
Speaker 3: would say thinking about that in mind. Actually when I
Speaker 3: build the company, to be completely honest, I wasn't thinking
Speaker 3: about Okay, how can I build this, you know, to
Speaker 3: sell the company.
Speaker 2: I was really more self and.
Speaker 3: How I was going to build a business, how I
Speaker 3: was going to make it grow again, you know, and
Speaker 3: also just being at that point in my career, which
Speaker 3: again that being literally my first job. I think that
Speaker 3: was something I was thinking through. However, in hindsight, when
Speaker 3: I went through the exit process when we got acquired
Speaker 3: by Sally May, you went through the diligence process and
Speaker 3: you went through you know, it just also just and
Speaker 3: even Scholar is actually possible. I only raised four hundred K,
Speaker 3: so I was I had a majority of equitumic company
Speaker 3: and I have deal boards. That was all well for me,
Speaker 3: and it was ultimately my decision to sell. But I
Speaker 3: think when you go through that exit process, you really go.
Speaker 3: But one, you have to give them all these documents
Speaker 3: from the time of the things of your business, all
Speaker 3: your metrics, and I think that you go, you look
Speaker 3: back and press reset and you will oh, now I
Speaker 3: see how you know? These venture backed companies build a
Speaker 3: company from the exit right. And that goes back to
Speaker 3: my question, your question about about the business model.
Speaker 2: You think about every little piece of the right and
Speaker 2: the product.
Speaker 3: Who can be like right now, like with this new
Speaker 3: company path, already I already have thought about who could
Speaker 3: the potential requires be What is the right business model?
Speaker 3: Because when you think about getting acquired, people just think, oh,
Speaker 3: I'm going to build something and someone's just gonna Facebook
Speaker 3: is gonna like buy your business, not necessarily like why
Speaker 3: would Facebook want your business?
Speaker 2: Right?
Speaker 3: So you really have to start thinking about that and
Speaker 3: even all way down toward grain your level. Hey, where
Speaker 3: financially you want to be when you sell? Right, is
Speaker 3: it twenty million revenue? It's a thirty million in revenue, right,
Speaker 3: what could the multipleon on that be?
Speaker 2: Right? So understanding that because the thing is even if
Speaker 2: you are not doing.
Speaker 3: That, the vcs who are investing you are gonna do that, right,
Speaker 3: They're not gonna they're investing you with the exit. They
Speaker 3: have analysts who are doing that. These exercises says how
Speaker 3: big can this business be? And all that. So I
Speaker 3: grew the profitable route and grew styled to be that.
Speaker 3: But I have seen now starting this venture route that
Speaker 3: even if you're not doing that, those vcs are doing it.
Speaker 3: So you really it's good for you to assessicize an
Speaker 3: opportunity because to your point, if you are a lot
Speaker 3: of there's a lot of conversation the Black commedy. When
Speaker 3: I sold a salad made people are like you sold
Speaker 3: out and all the stuff that people don't understand if
Speaker 3: you take someone US's money. We took a little bit
Speaker 3: of money, but the sharks and other people, when you
Speaker 3: take someone else's money, they have to get it back,
Speaker 3: and nine times out of ten they.
Speaker 2: Have to get that back through an exit. And that's
Speaker 2: something that.
Speaker 3: Isn't well known in the black in the mainstream Black community,
Speaker 3: that capital cannot be taken without it being returned and
Speaker 3: the exod is the way to do that. So thinking
Speaker 3: about what an extra strategy could look like is really
Speaker 3: important to think about in the beginning of their journey.
Speaker 3: It's not being transactional, it's just understanding the reality of
Speaker 3: growing up business and and the and and and the
Speaker 3: liquidity events that.
Speaker 2: Have to come with them.
Speaker 1: What pulls you to the education space, you know, it
Speaker 1: seems like that's like your Yeah, that's your thing.
Speaker 3: I think that you know, for me, I I like
Speaker 3: to solve problems that you know that are really relevant.
Speaker 3: So I'm originally for Birmingham, Alabama. I actually only a
Speaker 3: a small fraction of the students who in Alabama who
Speaker 3: graduate high school are reading.
Speaker 2: At a third grade level. That's very well known.
Speaker 3: Testing isn't grade and you know that's in federal I
Speaker 3: mean it's just been a whole wasn't but it's yeah.
Speaker 3: So like I went to a Magne High school, so
Speaker 3: I was fortunate where the students, but the think that high
Speaker 3: school went to college. But the master of the system,
Speaker 3: I think probably around ten percent of people go to
Speaker 3: college five even way way less than I even graduate.
Speaker 3: And they're all are going to a lot of which
Speaker 3: are going to college at third graae level. So I
Speaker 3: saw the disparity of education and I saw that it
Speaker 3: wasn't you know, and I and I saw two things
Speaker 3: out of those environments. I saw access to paying for
Speaker 3: college and access to resources to prepare for exams and
Speaker 3: other things to get you into to get you into college,
Speaker 3: and also just being able to have, you know, things
Speaker 3: outside of maybe your school environment to be able to
Speaker 3: do so.
Speaker 2: For me, I look at you know, I was likely
Speaker 2: to do test well.
Speaker 3: I was, I was likely to do do well in school,
Speaker 3: but I saw the I saw other people just just didn't.
Speaker 3: So for me, those those were pain points that were
Speaker 3: really important to me. And I see, I saw the
Speaker 3: impact of education happening in my life. I'm a first
Speaker 3: generation college student, you know, obviously, and as you can
Speaker 3: see with starting a company, selling a company, having wealth
Speaker 3: and all that stuff like that is my family well
Speaker 3: like like that that's completely a foreign concept to them.
Speaker 3: So I still and all that was due because I
Speaker 3: got scholarship to go to college.
Speaker 2: So I saw how transformer that can be.
Speaker 3: And I and also as a businessman, I have learned
Speaker 3: that anything anything that can impact someone's life, anything that
Speaker 3: can provide value to a to a personal organization, you
Speaker 3: can wrap a business model around it. So it doesn't
Speaker 3: have to be mutually exclusive, so I can help a
Speaker 3: lot of people and then and still be able to
Speaker 3: do it in a way that scales. Because I was
Speaker 3: when I started Scholar, I was thinking about the nonprofit stuff,
Speaker 3: and I'm like, I don't want to be someone literally
Speaker 3: every day hosting found raisers and asking people begging people
Speaker 3: for money.
Speaker 2: I want people to be able to give me.
Speaker 3: I want to be able to raise money through revenue
Speaker 3: and being able to turn someone's investment. So education has
Speaker 3: just been so pivotal to my life. So it's something
Speaker 3: that's really really important for me to do. Even with
Speaker 3: Scholar and now what I'm dealing with.
Speaker 1: Path, yeah and now and I want to get into
Speaker 1: that and I think about that in talking about path,
Speaker 1: what is what is that eureka moment we said, this
Speaker 1: is the idea. And here's why I asked this question
Speaker 1: is because I think sometimes we just have in doing scholar,
Speaker 1: you might have said, oh, there's this other vertical that
Speaker 1: one day I'm going to touch that thing this because
Speaker 1: there's a problem there, Or you can just be purely opportunistic,
Speaker 1: like I see a gap. Ain't nobody doing this or
Speaker 1: any nobody doing it how I can do it, or
Speaker 1: something you're really really passionate about, like what is that
Speaker 1: thing for a path for you? And then we'll talk
Speaker 1: about what it is.
Speaker 3: Yeah, so I think that is it was. It's really
Speaker 3: three things, right, I think one one exactly. So one
Speaker 3: of the biggest things I actually wanted to try to
Speaker 3: get into into SKALI if we grew and expanded was
Speaker 3: test prep. So one of the biggest things that I
Speaker 3: had challenges with was being able to pay for the expensive.
Speaker 2: Example, so when I was when I was going to college.
Speaker 3: In twenty ten, it was Princeton Review Kaplan all their
Speaker 3: courses like twelve hundred dollars. Like I just told you,
Speaker 3: I was first generation student like my mom, we could
Speaker 3: validate our bills for like fifty dollars, So that just
Speaker 3: wasn't even their question, right.
Speaker 2: So you would see all the you know, the white kids.
Speaker 3: From the more upper middle class schools or Wether school
Speaker 3: doing really well on these tests. But then you would
Speaker 3: find out when you go through these different programs, their
Speaker 3: parents are paying thousands of dollars to prep them for
Speaker 3: these exams, right then, just they just prepare for that, right,
Speaker 3: And I think that you know, AI and I think
Speaker 3: so was it was kind of a perfect you know,
Speaker 3: I can't a perfect trinity of things. Were Okay, here's
Speaker 3: this thing, but you know you have to create all
Speaker 3: this content.
Speaker 2: Oh look at your AI and you see that.
Speaker 3: Now this is this moment of opportunistic I can do
Speaker 3: this Princeton Review needs to do because they need to
Speaker 3: pay all these instructors. They need to go out through
Speaker 3: this content manually. A I can really do that. But
Speaker 3: I didn't want to. Just think about college admission, all
Speaker 3: those exams and things that you know, those students who
Speaker 3: are reading at the third grade level in Alabama, we
Speaker 3: have an AI model that can generate those exams as well.
Speaker 3: And actually if people are not doing well on them,
Speaker 3: we can actually help them generate too, you know, tutoring
Speaker 3: and step by steff solutions to help them learn. So
Speaker 3: I thought about, you know, when I was growing up, Okay,
Speaker 3: what are these barriers?
Speaker 2: Right?
Speaker 3: One, it was, you know, being able to get into
Speaker 3: college or do well, to get the rights, all the
Speaker 3: all the scholarship you want because of this bearer.
Speaker 2: That's things.
Speaker 3: And as you know, with the current administration, there was
Speaker 3: just a letter they just sent out a month or
Speaker 3: two ago called deer to call deer colleague, which is
Speaker 3: to all universities telling them that they have that them
Speaker 3: them not requiring standardized tests of ATT and ATT would
Speaker 3: be considered would be considered discrimination, meaning that they took
Speaker 3: their saying that they took those tests away in order
Speaker 3: for DEI purposes, So they have to bring them back.
Speaker 3: So now actually we're gonna we're now our business is
Speaker 3: gonna be great for our business. So yeah, So then
Speaker 3: so it was definitely opportunities. It's like, hey, generally I
Speaker 3: can do this thing really well and I can create
Speaker 3: a good business all around it because now I can
Speaker 3: use this make it more affordable and you know, and
Speaker 3: it's just really being an issue that I was really
Speaker 3: passionate about because that was the big thing because I
Speaker 3: don't believe, you know, I think it's really hard to
Speaker 3: instill ambition and students and family and really go and
Speaker 3: change a lot. But I do believe that there are
Speaker 3: a lot of students, especially students of color, who are motivated,
Speaker 3: who are belittled and called dumb simply because they can't
Speaker 3: afford tutors.
Speaker 2: They can't afford these things.
Speaker 3: And I think AI has presented a really, really dope
Speaker 3: opportunity to put that in front of them, make it
Speaker 3: affordable and be able to help them level the playing field.
Speaker 3: And I think the era in this political environment that
Speaker 3: we're in right now where everything goes back to the states,
Speaker 3: that means that states can determine any you know, all
Speaker 3: of them. They can say, you know what, your kid
Speaker 3: can't graduate if they don't make a thirty on MS.
Speaker 3: But it was not realistic a thirty on AC. What
Speaker 3: did we go to that kind of environment, kind of discriminatory,
Speaker 3: inequitable environment. You know, I think Path is positioned to
Speaker 3: do to jump in there and be a solution for that.
Speaker 1: Yeah, you just said something that I found really interesting,
Speaker 1: and it makes me think about Rama Manuel. I remember saying,
Speaker 1: I'm sure he wasn't the first person to say it,
Speaker 1: and this was during Obama's term. He said, you know,
Speaker 1: never let a good crisis go to waste, And that
Speaker 1: is always stuck with me because even I've had there
Speaker 1: was opportunities that I got that I could not have
Speaker 1: gotten other than COVID happened. And I recognized that COVID
Speaker 1: was as devastating as it was, but there it created
Speaker 1: a landscape for opportunity in some ways.
Speaker 2: For me.
Speaker 1: I can tell you, you know, there was some real
Speaker 1: estate I bought that it wouldn't have been on the
Speaker 1: market at the price it was had COVID I happened,
Speaker 1: and other things. And you just mentioned like you know,
Speaker 1: this new thing legislation will create opportunities for your business.
Speaker 1: And I'm curious in how you think we as founders
Speaker 1: should be thinking or creators innovators should think about opportunity
Speaker 1: when we could just walk around with hair on fire,
Speaker 1: but instead look for opportunities.
Speaker 3: Yeah, I think that when whether the stock market is down,
Speaker 3: whether there's a COVID COVID ninety pac, whether we have
Speaker 3: a new lolical administration, there's always money been made in chaos,
Speaker 3: and most of the people who are creating the chaos
Speaker 3: are doing it with they intend to make money in someone.
Speaker 2: Right, That's just life, right.
Speaker 3: I think when you're younger, and I think when you're
Speaker 3: in your vot, I don't. But now, as a as
Speaker 3: a person that has tend a decade, over a decade
Speaker 3: and text based met a lot of wealthy people and
Speaker 3: many of my peers and friends and things like that,
Speaker 3: I know how the game works, right, Like it's like
Speaker 3: they create chaos of course, you know, I mean look
Speaker 3: at bitcoin, right, Oh my god, bitcoin is horrible. It's
Speaker 3: the death, it's the devil, and blah blah blah. Nah,
Speaker 3: it goes down superlow, everyone low key buys it all suddenly.
Speaker 3: Now without now we have federal Now we have federal
Speaker 3: you know, legislation around it, and now it's going to
Speaker 3: go up. Right, stock market dropping and the president of
Speaker 3: when in any any former time with the President of
Speaker 3: the United States, as they'll say, oh, I'm not gonna
Speaker 3: really out of a recession. Stock markets drop, and then
Speaker 3: I guess what. Then all my friends in hedge funds
Speaker 3: and then banking are talking about what they're buying up like.
Speaker 2: This stuff is like a game. Right.
Speaker 3: So for us, you know, I think that look at
Speaker 3: that chaos, find their opportunity buying industries that are being affected.
Speaker 3: And like you did, you know, real estate, Like look
Speaker 3: at d C if I would say somebody in dc
Speaker 3: W with all these layoffs happen, and I'd be looking
Speaker 3: at buying real estate up in the d MD because
Speaker 3: it's about to be a ghost town there, right, So
Speaker 3: so I think of that, and then I think for us,
Speaker 3: you know, education, right, he really wants to really they
Speaker 3: really want to jump and harp on education. But in
Speaker 3: a way we're using things that are historically embarrassed to
Speaker 3: people of color, which is standardized testing. Right if you
Speaker 3: put and say okay, kids can't get into a college
Speaker 3: or get scholarships for their art testing, less of us
Speaker 3: are going to go. If you say, oh, your kids
Speaker 3: can't graduate grade is they don't pass this state exam
Speaker 3: in Florida or where I'm from, Alabama, you would have
Speaker 3: black kids or literally just stuck and the ultimately giving
Speaker 3: up and doing that.
Speaker 2: Right, So I do think in that chaos there's.
Speaker 3: An opportunity, but there's always opportunity, and there's always orchestrated
Speaker 3: the chaos, and those people who are orchestrating their chaos
Speaker 3: are creating their chaos to make money for themselves.
Speaker 1: It's so interesting. So let's talk about what path is
Speaker 1: for people you know, assigned from you know, touching on
Speaker 1: you know what it does? How much you either give
Speaker 1: the elevator pitch for a path.
Speaker 2: If you would.
Speaker 3: Yeah, So, so path is we're in Jerrybody platform simply
Speaker 3: around exam prep. So we created an AI model very
Speaker 3: specifically around helping students prepare for exams and also predict
Speaker 3: whether they're going to make on the exam.
Speaker 2: Before they take it.
Speaker 3: So we cover exams from KT twelve exams, so like
Speaker 3: the exams that every student in the state has to take,
Speaker 3: like for them, the New York Regents or New York
Speaker 3: State Exam, the Texas Star Exam, TSA Exam, et cetera.
Speaker 3: We also we also cover college admissions exams like ACT
Speaker 3: SAT and p SAT, and then we cover grad school
Speaker 3: exams like GMATT lsad GRE and even professional certifications like
Speaker 3: come to your INCLUX.
Speaker 2: And what we do is provide you. We use general
Speaker 2: AI to prisee.
Speaker 3: You unlimited practice exams, unlimited practice, and then we then
Speaker 3: take that data and then be able to predict whether
Speaker 3: you're going to pass the tests or not.
Speaker 2: So most of these so and we're all in because we're.
Speaker 3: Able to use general of AI, we're able to be
Speaker 3: able to provide that for like just like sixty dollars
Speaker 3: right versus you paying and everything runner one subscription and
Speaker 3: not instead of being able to pay twelve going to
Speaker 3: caplan and paying twenty five hundred dollars for GMAT prep,
Speaker 3: So we're able to give you better.
Speaker 2: We get it.
Speaker 3: We're able to give you premium quality content, unlimited practice,
Speaker 3: predict whether you're going to make what you're gonna make
Speaker 3: on the test where you take it, which means that
Speaker 3: you don't have to score and spend money until your shit.
Speaker 3: You're gonna make the score you're going to make, and
Speaker 3: we're able to and we're able to do it for
Speaker 3: a super affordable rate, which makes it accessible. So going
Speaker 3: back to my earlier point when this pandemonium happens where
Speaker 3: everyone's freaking out because now I need to make a
Speaker 3: certain score or I need to pass or a certain
Speaker 3: score to make that s you to graduate or do this.
Speaker 3: Now we can swoop in and be able to say, okay,
Speaker 3: now we have that we can give you that make
Speaker 3: it more affordable, predict what you're going to make for
Speaker 3: you taking that, not.
Speaker 2: Just saying oh, here's a bunch of practice.
Speaker 3: We can actually predict it you're going to make and
Speaker 3: Benity do that so and doing that through a super
Speaker 3: boat user interface.
Speaker 2: So that's what kind of what we're doing.
Speaker 3: Focusing on exam across the ward from literally third grade
Speaker 3: all the way up until you go to grad school.
Speaker 3: And mean even if you need professional certifications like inclex
Speaker 3: healthcare and it exams like a your comet, et cetera.
Speaker 1: You know, you've got your finger on the pulse of
Speaker 1: what's happening with AI and education. And I wonder there
Speaker 1: are a lot of parents, a lot of folks who
Speaker 1: still believe there's no place for AI in education. It's
Speaker 1: it's you know, a crutch or you know, we'll do
Speaker 1: it for you. Is that shifting number one into how should.
Speaker 2: We think about it?
Speaker 3: I think that I think that what's happening is a
Speaker 3: lot of a lot of students who are in gen
Speaker 3: X are using JEND, are using or using AI in
Speaker 3: any way right, and a lot of parents are now
Speaker 3: seeing that their students are using these tools.
Speaker 2: I don't know, you guys.
Speaker 3: There was actually a parent suing actually now suing the
Speaker 3: school because her daughter actually graduated and was illiterate, but
Speaker 3: she was passing all her doing, passing all her tests
Speaker 3: exam because she's use the text of speech and AI
Speaker 3: to do to do all her work for so and
Speaker 3: her and her friends. So now she graduated completely literate,
Speaker 3: and she couldn't but she graduates, she couldn't do well
Speaker 3: in college. So you saw, so you see that even
Speaker 3: happening when you know that, right, So, I think you're
Speaker 3: going to see people. It's all happening so fast that
Speaker 3: I think it's creating a cultural amount of cognitive dissonance
Speaker 3: in our community. But I think it's going to be
Speaker 3: ubiqulous because it's going to be these students who are
Speaker 3: growing up with this technology now is going to be
Speaker 3: just commonplace for them, and we're going to have to
Speaker 3: adapt to that.
Speaker 2: But I do think it's moving so so fast.
Speaker 3: There was a there was an AI image of two actors,
Speaker 3: like two male actors pertaining like they were in a couple,
Speaker 3: and I'm like, I'm thinking of myself.
Speaker 2: That's mortifying, right, Like, So that stuff prevents fear.
Speaker 3: But I do think for education, I do think it
Speaker 3: provides a way where we can equalize things because if
Speaker 3: everyone had access to the same quality tutors and education
Speaker 3: at an affordable rate, I think that does within an
Speaker 3: opportunity for for us to really be able to take
Speaker 3: advantage of that and and be able to kind of
Speaker 3: close some of the gaps rather than focusing on all
Speaker 3: the terminator or AI and matrix kind of scenarios.
Speaker 1: You know, there's an unfortunate trend that there's a lot
Speaker 1: of founders who do exit and don't even make any
Speaker 1: money in the exit. Maybe they were just too diluted,
Speaker 1: or they didn't know how to structure deals or et cetera.
Speaker 1: How did what wealth building lessons did you you learn
Speaker 1: in your journey.
Speaker 2: As a founder? Yeah, so that was really unique.
Speaker 3: So one of my first investors was, you know, like
Speaker 3: first Round Capital with Josh coffin First On Capital and
Speaker 3: and the and some others, And I was kind.
Speaker 2: Of I was a part of Dorman from one of
Speaker 2: their first their first actually team in.
Speaker 3: Philly and I and we and we knew a lot
Speaker 3: of the investors in company their first round investment. I've
Speaker 3: had the opportunity over the years to see friends sell
Speaker 3: their companies and you're hundre percent right, sometimes like these exits.
Speaker 2: What they are are not what they seem.
Speaker 3: And a lot of times people don't talk about liquidation
Speaker 3: preferences and dilution and all the terms that founders accept
Speaker 3: like I have. Like there are people that will sell
Speaker 3: their companies that people don't know. Some in some instances
Speaker 3: they were forced to sell by their board to return
Speaker 3: their front and the founders made nothing like there was
Speaker 3: actually a recent examples in tech Crunch this real estate
Speaker 3: a company sold for a billion dollars. Founders and early
Speaker 3: employees made nothing, right, so people don't talk about that.
Speaker 3: I think it's important. I think it's I think it's
Speaker 3: so for me. I group scholarly profitly. But through that
Speaker 3: process of selling the company, I inadvertently learned, oh my god,
Speaker 3: Like I know, I seen X by a person sell
Speaker 3: their company for thisbi or whatever. I made infinitely more
Speaker 3: take home money in my pocket than they made.
Speaker 2: Like you you got.
Speaker 3: I'm talking about people selling their comfort of two hundred
Speaker 3: and fifty million and walking away with two million dollars
Speaker 3: right like like just like after ten years of work,
Speaker 3: right where so like that is just something that is
Speaker 3: really really really important. And I think that I think
Speaker 3: it's important for founders, and I think AI has presented
Speaker 3: an opportunity where you are able to build things faster
Speaker 3: for much cheaper. I suggest a lot of founders lean
Speaker 3: into that great and do milestone based fundraising that so
Speaker 3: you can get to key milestones, so you can have
Speaker 3: virgin these negotiations because you have the other end. What
Speaker 3: happened in twenty twenty one, especially a lot of black founders.
Speaker 3: They all that money poured into the space, and a
Speaker 3: lot of them, and some of them are friends, I
Speaker 3: won't name names. You know, some of them just got
Speaker 3: huge valuations that they now struggling to get to the
Speaker 3: revenue point to even sell board. So a lot of them,
Speaker 3: like a now are stressed out because they're like I
Speaker 3: may have a profitable, good business, but I may have
Speaker 3: to wait another five to ten years just to get
Speaker 3: enough revenue to be able to even justify my.
Speaker 2: Current valuation, yet alone a larger valuation.
Speaker 3: So those companies become zombie companies right where they are
Speaker 3: just exists, but they really can't exit, and where if
Speaker 3: they do exit, the founders essentially make nothing. So now
Speaker 3: the founders aren't even working to generate wealth for themselves.
Speaker 3: They're working to return somebody's fund, right, So that's the
Speaker 3: So I through my process and what I've done, I
Speaker 3: have I learned, and I went through I talked to bankers,
Speaker 3: and I even talked to people at other vcs or
Speaker 3: they were like, they were like you are you're so
Speaker 3: I mean, they like most people don't build a company
Speaker 3: for ten years and get to like, you know, thirty
Speaker 3: forty million revenue like you did with like not raising capital,
Speaker 3: but this since you did that, you don't know just
Speaker 3: how economically like in better off you are than.
Speaker 2: Some other founders.
Speaker 3: So I think a lot of founders need to understand
Speaker 3: the falticitim bargain you are sometimes signing up for when
Speaker 3: you raise capital, especially once you get past that a
Speaker 3: round and the terms that.
Speaker 2: You are greeed to.
Speaker 3: And also people think that, oh, you lose control of
Speaker 3: your company when you dilute yourself to a point. No no,
Speaker 3: no, no no, you lose your company. And the minute you
Speaker 3: get aboard, the minute you have a board and there
Speaker 3: are more people that are not you the outvote you,
Speaker 3: you've lost control of your company. And people don't get that.
Speaker 3: Like that's something people don't get there that your boy
Speaker 3: can literally not only fire you, your boor can change
Speaker 3: the structured organization. Your boy can force you to give
Speaker 3: equity to someone you don't want to get to it
Speaker 3: like your bor can force you to high Like people
Speaker 3: don't get that.
Speaker 2: So they're founders who really just hate.
Speaker 3: Their board where like they fell out with this investor
Speaker 3: this and whatever, and you know now they pigeonholed their
Speaker 3: company and that board can also say, you know what,
Speaker 3: we have a deal on the table.
Speaker 2: We agree, we now want you to sell the company.
Speaker 3: And depending on the terms of the deal, if it
Speaker 3: doesn't require unanimous shareholder approval, you have to sell the.
Speaker 2: Company even if you make nothing from the deal. Well,
Speaker 2: it's unfortunate.
Speaker 1: You know, there's a conversation that's been happening for years
Speaker 1: and it's grown steam, and that is about the value
Speaker 1: of a college education, college degree. And I wonder your
Speaker 1: thoughts on you know, there's at least in Ohio where
Speaker 1: I'm at, like there's this emphasis on you know, technical fields,
Speaker 1: whether you're going to be, you know, an IT professional
Speaker 1: and just get a certificate, whether you're going to be
Speaker 1: in the trades, whether you're going to be in those
Speaker 1: sorts of things. And I wonder, how how do you
Speaker 1: think about that in the landscape of the future of education.
Speaker 3: Yeah, I mean I feel like running Skolarly for ten years,
Speaker 3: helping people pay for college. You almost felt like it's
Speaker 3: like the you know, the parable of civisis push in
Speaker 3: the rock up the mountain, like you continue to just
Speaker 3: keep it rolls right back.
Speaker 2: Now.
Speaker 3: It was literally a problem I felt, a problem that
Speaker 3: could never actually be solved. You could just only solve
Speaker 3: it a little for as many people as you can.
Speaker 3: I think too, I think college is valuable. College just
Speaker 3: cost you that much. I mean, and it's just that's
Speaker 3: just what it is.
Speaker 2: I don't think that.
Speaker 3: I don't think college the value of college with if
Speaker 3: we look at the amount of friends, close relationships, co founders,
Speaker 3: investor in the things that we get from that experience.
Speaker 3: When you look at me, a first and rich college student,
Speaker 3: people who come from like the hood, college is not
Speaker 3: just going to get an education, it's their first time
Speaker 3: being out of an environment where they are able to
Speaker 3: be around other likelines and people, safe environments, like you know,
Speaker 3: sometimes their families are sending them to college to protect
Speaker 3: them literally, like you know, our friends from New York'sige
Speaker 3: College where I'm from, where college were the first time
Speaker 3: where they were able to like feel safe, be able
Speaker 3: to get an education, be around like minded people, and
Speaker 3: and have life changing opportunities and spaces you know, you know,
Speaker 3: there were there were just different.
Speaker 2: So I think that so I and I and I think.
Speaker 3: That colleges have massive endowments, and I think that AI
Speaker 3: is absolutely going to disrupt colleges I think I see
Speaker 3: I foresee AI colleges happening where it's going to be.
Speaker 2: Like where you're going to be able to get like
Speaker 2: you know that I see.
Speaker 3: And so I think what colleges are going to do
Speaker 3: as shrink or or or liverge their endowments to create
Speaker 3: programs like smaller programs you know that you can do
Speaker 3: because colleges, if you look at the economics, colleges like
Speaker 3: are some of the most profitable businesses you can never
Speaker 3: name because you because their revenue every years federal student loans, right,
Speaker 3: so they know they can charge you whatever they want
Speaker 3: and they know you're going to you're going to get
Speaker 3: it from a source, right. And this new administration that
Speaker 3: you can see what happened this week, they just said, no,
Speaker 3: you won't be doing that.
Speaker 2: So I think that I think that there's going to.
Speaker 3: Be forced adoption of things that make it more for
Speaker 3: it because even they even said they want to actually
Speaker 3: change where pill grants can be used for workforce bloot
Speaker 3: camps and vocational schools now, so they're saying yeah. So
Speaker 3: I think once that happens, I think college enrollment is
Speaker 3: going to stop outside of the Ivy.
Speaker 2: League schools who pay for you to go anyway.
Speaker 3: And I think that there's going to be a real,
Speaker 3: a real exodus, and I think there's going to be
Speaker 3: a college on have to correct themselves because because some
Speaker 3: college have been predatory where they'll say, hey, oh you
Speaker 3: can our accepted three will be eighty five percent. They
Speaker 3: know they're accepting students who are remedial, who can't do
Speaker 3: who's going to drop out, but they don't care because
Speaker 3: they get that first year student loan revenue, right, so
Speaker 3: they let you in. So they're The argument to be
Speaker 3: had of putting some sort of barrier between a student
Speaker 3: and college is to really make sure college are accepting
Speaker 3: students who can actually read in right, not just accepting
Speaker 3: them because they want them to take out a student
Speaker 3: loan and they want to get that twenty five thousand
Speaker 3: dollars in revenue from that student student a year because
Speaker 3: they're enrollment over the past few years have been dropping.
Speaker 1: Yeah, what is in Chris's E d C Your every
Speaker 1: day Carrie? What are those things that you've always got
Speaker 1: to have like close by And it can't be your phone,
Speaker 1: It's got to be like, what are the things that
Speaker 1: whether you're in the car on the train or walking.
Speaker 1: You got to have these things to function as an
Speaker 1: entrepreneur as as as a person.
Speaker 3: Uh all the time. But been in a car, I
Speaker 3: say as an entrepreneur, I don't. I mean like again,
Speaker 3: outside of your phone, if you say, your laptop or anything.
Speaker 3: But I think that for me, yeah, I mean you
Speaker 3: took all the technical stuff out. I mean that's like
Speaker 3: like when you're in a college, think about anything you're doing.
Speaker 3: I think, I think something you know that I always
Speaker 3: kind of have access to. It may not be every
Speaker 3: with me, but I think every auctionneur at least. I
Speaker 3: mean when you are working every day and the business
Speaker 3: and now doing that again and from like day one
Speaker 3: starting off, you you need something that puts you on
Speaker 3: a world that's outside of work, like and where work
Speaker 3: is not involved.
Speaker 2: And for me, I actually love anime. So anime. A
Speaker 2: lot of people don't know that.
Speaker 3: So I literally love anime and uh, and that actually
Speaker 3: is one of the few things where I immerse myself
Speaker 3: in something that's fantasy, something that is not related to work.
Speaker 3: And it's also something that is actually if you know,
Speaker 3: anime is actually intellectual day.
Speaker 2: It's actually for adults.
Speaker 3: It's not like it's not Powerpuff Girls, it's actually like
Speaker 3: really deep stuff and that that allows me to kind of.
Speaker 2: Unplug a bit and be able to do that.
Speaker 3: Yeah, and just really just outside of like technology and
Speaker 3: uh you know a cocktail here and there that that helps.
Speaker 3: I think that, you know, being able to have those
Speaker 3: things around me even and even as on screen tabs
Speaker 3: around me, just I think access to that has been
Speaker 3: something that is that that has been just you know,
Speaker 3: giving me a place to place my brain when I
Speaker 3: when I'm done or not do not want to think
Speaker 3: about work.
Speaker 1: Yeah. Finally, you know, how do you decide which problems
Speaker 1: are worth solving? As an entrepreneur and as a founder.
Speaker 3: I think that problems I think you we're all, we
Speaker 3: all are better suited to solve problem that we want.
Speaker 3: Have domain expertise too, where you have a background of
Speaker 3: solving that problem at another company or your life or
Speaker 3: some other entpreneurial venture or something that's close to home, right,
Speaker 3: And I think that people are a better positioned and
Speaker 3: frankly going to be more passionate about solving problems that
Speaker 3: they know. Like for example, like when I when I
Speaker 3: talk to investor about path and they see what I
Speaker 3: did with SCOTL. They're like no brainer, right, Like, Okay,
Speaker 3: you are the right person because you you did it
Speaker 3: one you built the company, but you also are passionate
Speaker 3: about this and also there's also I have connections now
Speaker 3: and all that, so we can accelerate the So but
Speaker 3: even just from a fiduche perspective, you will have you
Speaker 3: will grow a bigger and better business just simply being
Speaker 3: have it solving a problem that you know very well
Speaker 3: because you're not because there's less iterations like scholarly, I
Speaker 3: didn't have to iterate the problem.
Speaker 2: I'm like, I want a million dollars scholarships.
Speaker 3: I knew, I knew what it took to find scholarships, right,
Speaker 3: I knew exactly on the from ground your level. Versus
Speaker 3: if I said I'm going to start a biotech company
Speaker 3: to turn frog into rodents, right like right like that
Speaker 3: that you know, that sort of thing wouldn't be there.
Speaker 3: So I do think solving problems that are close to home,
Speaker 3: or solving problems what you spent, or solving problems that
Speaker 3: are extension of something you did professionally really working. You see,
Speaker 3: even in the venture market, those are the people that
Speaker 3: get funded, right Like like investors want to see, okay
Speaker 3: that you are solving this problem because you have to
Speaker 3: be and frankly, just from a risk a risk profile perspective,
Speaker 3: who's less risky of the person that needs to spend
Speaker 3: three four years learning this industry or learning what this
Speaker 3: understand is problem album or a group of people or
Speaker 3: spend or or who can or who.
Speaker 2: Knows that from the start.
Speaker 3: I'll take, for example, if you know the company frank
Speaker 3: that was actually a scholar competitor, the girl got arrested
Speaker 3: for fraud and she's getting convicted all that, and one
Speaker 3: of the biggest flaws of her product is that she
Speaker 3: was saying they were really scholar, but she was saying
Speaker 3: that they could do the faster for people in the
Speaker 3: faster for people in like minutes. Come to find out
Speaker 3: they were doing that by omitting key questions that students needed,
Speaker 3: especially low income students to get all day. So of course,
Speaker 3: when you look at a rich white girl who's from
Speaker 3: from like West, from all way, a wealthy.
Speaker 2: New York try to solve a problem for.
Speaker 3: Low income students who she had net related to, she
Speaker 3: would create a problem. Oh this is great, that doesn't
Speaker 3: that literally hurts this far more than you and then
Speaker 3: it ends up being fraud and all that. So I
Speaker 3: think that that's kind of you know, those are a
Speaker 3: gay even though she a problems general. But I think
Speaker 3: even from a product perspective, it informs what you deal
Speaker 3: and how you build it.
Speaker 1: Black Tech Green Money is a production of Blavity Afro
Speaker 1: Tech on the Black Effect podcast Networking Night Hied Media.
Speaker 1: It's produced by Morgan Debonne and me Well Lucas, with
Speaker 1: the digital production support by Kate McDonald s, Ergan and
Speaker 1: Jada McGee. Special thank you to Michael Davis and Love Beach.
Speaker 1: Learn more about my guessing other Tech. This shop is
Speaker 1: an innovators at afrotech dot com. The video version this
Speaker 1: episode will drop to Black Tech Green Money on YouTube,
Speaker 1: So tap in, enjoy your Black Tech Green Money, share
Speaker 1: us to somebody, go get your money.
Speaker 2: Piece in Love