The Entrepreneur Podcast
The Entrepreneur Podcast

Episode · 10 months ago

Choosing the right people before the right idea with Rachel Zimmer of Entrepreneur First

ABOUT THIS EPISODE

Rachel Zimmer is the General Manager of Entrepreneur First, a $140M fund that bets on people first, and then coaches them to find their breakthrough ideas. Zimmer understands this process well because it’s exactly how she started her company, 5Crowd (acquired by sgsco).

In this episode, Rachel walks us through her own ideation process, the criteria that she used to filter her business ideas, and the uncomfortable process of leaving her job at Johnson & Johnson to pursue her entrepreneurial dreams with business partner Bram Warshafsky.

Since the acquisition of 5Crowd in 2016, Zimmer has continued to help professionals discover their entrepreneurial potential with the added safety net through her work at Entrepreneur First. She shares what she’s discovered about the qualities, personalities and combinations that make the best entrepreneurial teams.

...thats new Siris of the Ivy entrepreneurpodcast. You're invited to listen in on the guest visits, my hustle and gritglass taking place virtually at the Ivey Business School. Hustling great is,of course, that we created to teach you everything that you didn't learn inbusiness school in business school. In it, we invite world class innovatorsand entrepreneurs to talk about topics like motivation, how toe learn, what toprioritize and even how to be happier. In these episodes, you'll hear liveaudio from my classes because, honestly, there's just something different aboutthe energy, excitement and honesty taking place in a live classroomenvironment. So get comfortable. Grab a seat And don't worry. Unlike my realclass, I won't call value. Enjoy e am Excited toe have one of the hardestworking entrepreneurs I know joining us today. So she's made some time to talkabout a bunch of topics. We're gonna focus on ideation. A swell as makingthe entrepreneurial leap. Please, everybody put your virtual handstogether for one. Rachel Zimmer. Rachel, are you with us? I am. Everybody inhere. Okay, you're having me. Yeah, of course. Happy to have you. But Icanceled the spotlight so you don't have toe. Look at me the whole time,Rachel. They got a bunch of questions pouring in but on we will get to ahandful of those questions, so keep populating. But I think it would makesense if we started with sort of your entrepreneurial story and evenrewinding back to when you were a student and how you sort of made thedecision to do something else before jumping into entrepreneurship. So let'srewind and start with your story. Amazing On DSO I'm happy to be a candidand open as I can be. So any questions feel free toe. Throw them my way, butgoing back to my roots. So I was Queens Commerce grad. Don't hold it against me,Ivy folks. But we, you know at school had a ton of really great opportunitiesto meet other people that were like minded. And so in my fourth year ofschool, landed a job at J and J. And so think it was September October timingthat I had had a job lined up for after school, and my friend at the time,Grandma Osofsky, was like, great, like we both landed jobs. And there's allthese competitions. Do you wanna You wanna maybe enter some of them? And sosome of them were like top ad exact means Marketing Association conferenceamongst a bunch of others And so, you know, very lame and nerdy students. Wewere like, All right, let's let's take Let's take a shot at them. And so westarted entering the competitions and learned that we had an amazing workingdynamic. We challenged each other. We had a ton of fun. We drove each othercrazy. And we just, you know, push each other to the max. I need to walk away.But essentially, what we learned was that we were really powerful andwinning team. So we want cars through top ad. We want a bunch of cash. We wonbig Unilever competition. And so at a certain point where, like, there'sthere's something here. So went on after Queens and we both landed atJohnson and Johnson and kind of interject with your first question,which was, you know, why did we choose the traditional? Why did I choose thetraditional career path? I'm ready to school. And it was hard. Yeah, Francis,we want you should all do it top at exact through and through Mac. Sothere's many different competitions. Once you're in fourth year 30 or evenyou can you can start entering. So, you know, that's where we learned we were areally good team. But in our fourth year, you know, it was a hard choiceThio to take and to choose to pursue a more traditional path and, you know,crazy, delusional millennial. I wanted to travel and go into more debt. Justgo see the world and or do something entrepreneurial and some really goodadvice from some alarm from Queens that were for years older. That just said,Go get, you know, a handful of years in a good traditional, you know, whetherit's the accounting stream or finance stream or marketing stream, just tolearn the basics of the working world. And I'm so appreciative that I did thatbecause there's things that you just don't realize you know how to go on abusiness trip with your co workers, how to write a good email, how toe, youknow, fuck up in a meeting and then how...

...to bounce back from it. All thesedifferent nuances that you learn in your you know, in your first coupleyears of working. And I'm grateful in retrospect that I went thio, you know,a big company that kind of beat some of that into me. But at the time, it waskind of ah, you know, on one hand, privileged to have an opportunity. Onthe other hand, a bit rest, a bit of restlessness of just wanting to startdoing something entrepreneurial on our travel and see the world adventurously,you know, right out. So landed A, J and J and, you know, learned a ton learnedI was fortunate to work on brands like Tylenol of, you know, you know,digestive health acquisition. So some big projects. But while there what wasso great in addition to a great training and learning from reallybrilliant people was getting exposure to a lot of industry problems. And I'dsay that was, you know, the biggest thing that I took away from that time,which was there were so many interesting problems and just waitingto be solved. And so during that time, brand and I would spitball ideas.Weekday evenings, weekends over lunch, at work and we came up with a wholebunch of wacky ideas. And so we ended up choosing this one idea five crowdthat we ended up pursuing. And Aiken, you know, in future questions I couldgo into how we landed at five crowd in this in this business concept. But weended up deciding to launch this company because we felt the painourselves, as you know, as users at J and J. And the pain was thattraditional ad agencies were taking a long time and are very expensive to doreally basic, simple things like it would cost 50 K and take two months.Thio modifies and banner on stuff that now is ludicrous. But back in 2010,when we first entered, the working world was just was just commonplace. Soended up choosing tow Launch, a premium freelance platform targeted in themarketing creative space world. We essentially bootstrapped or revenuefunded our company, and we scaled it to be 20 people at a certain point betweensoftware developers, customer success and Bt. And then we were approached toexit, which we're not for sale, that when we learned about the opportunity,we were approached to exit in 2016. So our whole story startup journey was twoyears and nine months. Very, very, very quick. Andi, I look back at that timewith some of the fondest, fondest memories in in My Life, and then there,after I'll be much quicker on this part, worked for requiring company for aboutthree years and in a variety of leadership roles at our parent company.So lead customer service Suite 800 customer service folks around the world.You know Leadsom of our digital transformation efforts on then. Also onthe side was an entrepreneur in residence of the DNC and coaching andmentoring some tech startups across a variety of industries. So that's a bitabout me in a in a in a nutshell. So that is awesome. But I do want torewind because this class is on. We're focusing on ideation, and so we aregoing to get into how you think about it now as an investor or advisor andentrepreneur first. But I want to rewind how how, if you don't mindspending a little bit more time on, how did you identify that five crowd wasthe thing worth leaving a stable job at J and J for like, where did the initiallike Oh, that's a pain in the butt come from? Yeah, and Eric, I flipped you agraphic. If it's not too much trouble to throw it up, I don't think I'm surethis graphic with anybody so guys don't It's very embarrassing, but it's It's afun one, so we see if I can project it. Perfect. So basically, what we did iswe were spitballing over drinks, different ideas, and on weekends, andessentially we had five different business ideas that we thought werereally great. Some of them were absolutely terrible. I'll tell youabout two of them. So in the far right Dollar Condom Club Club, So there was.It was the rise of Dollar Shave Club and then the dollar ization ofeverything. And we're like, Wait a minute. Imagine there's a box thatshows up at your door. So we thought this was brilliant for a minute. ThankGod we did not perceive that one. And then crazy 22 year olds. The second oneSD is epic snack drawer, so we were constantly hungry at work like imaginethere's a driller of snacks that just automatically refills, which was agreat idea. And, you know, lo and...

...behold, years later there's been therise of like the hello Fresh is and the shops plates, which are more on theconsumer side at the time, were like This is everyone's hungry. This isbrilliant. Will sell into corporate companies. Andi, other to go. I won'tbore you with the details of them, but we spoke called all these differentideas. And then we came up on the left side with our own criteria as to whatwould make an idea and effective. Now, looking back, a 22 year old me, I'dprobably critique some of these questions that we had for ourselves.But this is the raw circa 2011 2012 graphic that I that I pulled. And sosome of the questions just to double click on them, you know, is it aproduct instead of a service? Can it scale easily, you know, do we have agood understanding of what it takes to close the sales final? You know, are wethe right people to actually tackle this problem? And so when we lookedacross these questions at the time. We equally weighted all of them andworkload on the far left now five crowd is what it was. We renamed it, too wasthe highest scoring points. And so once we have gone through this ideationprocess, you know, rated and discuss them all across our criteria. It wasquite methodical, and that's that's when we landed at work load slash fivecrowd, and we brainstormed on it for about a year before we actually wentthrough and quit our jobs on. I had my resignation letter written fun, funfact for almost a year. So it was something that I was coming in high andsaying, like, We just need to do it full time. We're not making attractionthat we need that we need Thio. But there were a couple of things that wecontinue to push ourselves to say. Can we do risk this just a little bit morewhile we're working full time? Can we do a little bit more customer discoveryto validate the problem? Can we, you know, use the competitive platformslike the up works? Five fibers. Crap brings 99 designs of the world tofigure out what's working on them and not so we did spend quite a bit of time.Once we have landed on this concept doing some of that customer discoveryfriends and, you know, strangers that we ask for interest to in the industry.Plus also, you know, really, really doubled down on that competitive piecein getting to know those platforms. So hopefully this is helpful because Ikind of see, you know, it's kind of art with the science, but more just gutbecause you try and apply something scientific to it. And at the end of theday, you know, you need to have crazy conviction around what you're doing andhave a passion for what yourself thing. Awesome. So this is helpful, and Iwanna I wanna double click on a few of these specifically. So workload at thetime came from I'm presumably you were at J and J. And you were the one.Actually, that would go back to these agencies to request these small changes.And we're seeing how much you were getting charged for them. Is that whereworkloads specifically came in? Yeah, you got it. And it's specific to my cofounder Bram. So he had to edit a 62nd video to 15 seconds. And not too longbefore we were scrappy students working on, you know, competitions where wewere hiring people on fiber. And so we knew what was possible there. And thenThio have a quote to get a video edited from 60 seconds to 15 seconds to takemonths instead of hours and then tens of thousands instead of hundreds ofdollars. That was where he was head scratching, pulled me over. I hadscratched, and I mean I at the time I had, like a 12 year olds 13 year oldbrother who could use my movie. I was like, Let's just ask my brother David,you could You could do this for us in 20 minutes versus versus hiring atraditional agency. So? So exactly to your point, we were the customer, andwhen I look across the other ones, I mean some of them were so that otherswill say we were the customer epic snapped or we were absolutely veryhungry. Like that is true by like three o'clock in the afternoon. We were like,this is this is the one this is the concept. We know there's something here.So every day at three o'clock, you were like we have to do. This is the idea.This is the one way should just went to Costco and stuffed our doors. But wayfelt that so So I definitely felt it. But then I will say, Since then, I'vedone other customer discovery where I haven't been the customer, you know,since then in other you know, projects in my life. And so I don't think youhave to be the person that experiences it. But I do think having a right towin and why you from unique exposure or...

...unique learning, is incredibly valuable.Thio Thio actually go to market Cool. So a few that we we've just touched onbefore you join. So does it play in a really big market? We say, is it in abig sandbox? So is there a really big opportunity such that if you needed topivot or change the idea, then it could still be viable? You're still big inthe state market, so that's overlap. So that we talked about Does it leverageyour network? So, um, in at Ivy, we talk about the idea of ineffectualAsian, so sort of using your assets in order to come up with a business ideathat it works. Sort of, given your skill set network assets or whatever.So does it leverage your network? That's you had an unfair advantage andthat you're the right people to do it presumably because you Graham, that waspart of his day job, right? Like he was seeing it. That's cool. Well, expanderjumping in on that one s. So I think that the right to win can come in a lotof ways, right? A right to win. Could be. You're the user yourself. It couldbe a relationship that you have. It could be a technical skill set that youbring an interestingly while a Johnson and Johnson because we felt the painand the pain was so big went viral throughout the organization. And sowhen we actually chose to leave J and J, they actually became first customer.That was how we revenue funded it. So we had an employer that had such strongconviction conviction in the problem we were solving which a validated. It wasa really big problems. We could solve it. And then secondarily, I mean, thatwas an under advantage, right? Anyone else starting didn't have that, youknow, significant sauce revenue that was then pulling us forward. So I justshare that because, you know, if anyone enters the workforce has a great fulltime job, there's no reason why you can't be hate the term, but be anentrepreneur texted out there, and then if it doesn't work internally, you know,bring them along for the journey. How could be a founding clients? Yeah,that's great. And then the last one before we move on is the problem. Areyou passionate about solving the problem? I like your part B, which isCould you see yourselves doing it 10 years in the future? I think anybusiness that's worth doing, you have to think about yourself being in it forprobably a decade. And I like to think about even are these customers that Icould see myself spending time with for the next 10 years, becauserealistically, you're gonna be serving your customers and you're gonna betaking calls from them at 10 PM on a Friday or 2 a.m. On a Monday you know,these are the customers that you're gonna have to spend a bunch of timewith, so we'll talk about passion in the future class. But I'd like to alsothink about are these customers that you could see yourself serving for 10years? Okay, Cool. I noticed that you didn't have any threes here, but two isit is the market problema need versus a one. How did you reconcile that one andend up making the leap? Hmm. So their to to things. So the need peace waswhen we started sharing. Hey, we're feeling this with the other people. Weknew other organizations. Everyone was, you know, having that same ah ha moment.And there was actually a book that came out called Madison Avenue manslaughter,where there were exposes on the ad world and the margins that people weretaking the yacht trips that were happening on weekends. And so there wasa huge industry recognition that was we were just at the cusp of So that wasthe wine that it was part of the Why now, why now was one on the technologyside, the rise of the gig economy and then the second piece, Waas. Theindustry was awakening to it, and the relationships that were at the top totop on the agency and the client side, they were being overridden by the riseof procurement. And, you know, after the 2000 and eight financial crisis,the rise of procurement had really had a huge, huge impact. So I think thatthat's kind of part one to it. And I'm trying to think of if there was a oh,and then and then right and then I'd say the second thing for why leave andactually take a jump in doing it. So I had my resignation letter for letterwritten for 12 months on my desktop. Ready? Oh, you know what I mean? Likethat constant feeling that we were ready, but just not quite ready. And Ihad spoken Teoh, a friend mentor at the time, and he had said, You know, Rachel,sometimes the riskiest thing to do is...

...actually to stay in your current gigbecause you can always go back. And lo and behold, when I did resign from Jand J, they were wonderful and supportive and said, Hey, we're gonnayou know, were brought into your problem. We're interested being acustomer and then secondarily, they had shared. If it doesn't work out, youknow, you're welcome to come back. And so I think, you know, for people thatare high performing and have a drive to win and have delivered in their rolesand, you know, have really shown that. And, you know I know, and I don't thinkwe were special in that I know a number of other entrepreneurs where as theywere leaving, there was that open door. You know, if it doesn't work, feel freeto come back. So just bring that second point up of sometimes The riskiestthing is not to try, because that latter is always there. You can alwayskeep ascending it, but to actually go out, Tinker, fail, try and succeed thatthat's something that, as you go on in your career, the opportunity cost justgets larger and larger and larger. Yeah. And so you dearest it Because you guessyou knew Bram you had worked with him before you piloted. You've worked onprojects with him. You knew that you worked well together. You validated it.It fit all of your criteria. You just knew at some point you wanted to leavelike J and J. You knew in your mind was sort of a shorter term thing. Or wasthere a a version of your life where you could have been A J and J for theyour your entire career? So now it's a great question, and it's getting a bitpersonal now. So in my life, I always feel like I need to have meaningfulrelationships in whatever way they come, great adventure and then to feelinsanely challenged. And those can come in any way, shape or form. So adventurecould have come. I was actually trying to go abroad with J and J and workingin emerging markets. So I was really interested in India or Brazil. So if Iwould say to J and J and had an incredible adventure career wise withthem doing that, that would have been something that would have reallyappealed to me or taking the entrepreneurial path, which both ofthose really would have checked that that adventure slash challenge box. So,to your question, like I think I'm always been the type of person of kindof planting by a bunch of scenes and see which one sprouting one and thenjust being really opportunistic around, you know, always saying yes, listeningto different opportunities, putting myself out there to try and stumbleinto some luck. And then, you know, hopefully hopefully finding Cem Cemgreat and adventures along the way. Cool. So then you left. You said it wasrevenue funded. So J and J was your first one of your first customers? Yeah.Awesome. So had your customers lineup. Had your business partner figured out?Had you said you had started working on it, sort of on the side to try tovalidate it before you ended up leaving. Then how did you know? Like, after youleft, how did you know what to do? First, Like, inevitable. Like there'sinevitably this overwhelm of my gosh. Now I'm no longer collecting a paycheck.How did you know what to focus on? I mean, the reality is we didn't We madea lot of mistakes. Out the gate. One mistake fun fact incorporate ASAP. Sothat's something that's a lot of people wait to dio. But Canadian banks and ourgovernment really value time based on aspects to a company. So grantopportunities, banking opportunities as soon as the clock starts is reallyvaluable. So feel free to incorporate now, even if you're working on a futureidea so you can ride some of those two year to your opportunities. But what itactually say is that J and J taught us a lot about focus identifying a problem,building out a plan that's going to solve that problem. And I think thebiggest thing to know and, you know, working with companies of the Demsafterwards is time is your most precious resource, and it's notinfinite. So how do you really figure out, What are your three things you'regoing to accomplish in a month basis, week basis? Whatever Timeframe makessense for you at that stage of your company and early days, it was, Whatare we doing today? Okay, here are the three things we're gonna get done overtime. It became okay this month. We need to get X y and Z done. But I thinkbeing focused at a strategic level of what are the three things and thenconstantly recognizing when you thio to generate on that s o examples with fivecrowd are three things in year. In our first six months, let's say we're 100%customer satisfaction, so we recognize that we only had one reputation, and atthe end of the day, you're going to...

...screw stuff up, especially in a newcompany. But you have to make sure that you make it right and take care of themand learn from it and make sure that they're, you know, expectations are set,that you are new and you're going to be learning. And then as a family clients,there's pros and cons. You can help infuse, you know, thoughts and ideasinto the product. On the flip side, you're gonna have to fumble with us aswe go. So I think you know, one was 100% customer satisfaction. The secondwas just getting through pipes. So we knew that we just needed to get work tofreelancers so that we could learn what's needed, what features air needed,what features exist in competitive products versus what we think is needed.One example is that if you looked at at the time the lance no up work, if youfactored in exchange rates was about 25% of a currency exchange rates or 25%fees charged if we were a Canadian client working with a Europeanfreelancer. So once you start under and those were just learning that we didn'trealize until we actually just getting through, put onto the platform. So thatwas number two, and then we are Third one was cash is king dollar sign on thecash. And that was this idea. Everyone says, you know, the cash flow is key,but like cash flows really key because you in our world, we were servicingFortune 1000 clients that had not payment terms of 180 days, Right? Soaka from one we're done working together, you're gonna pay us in sixmonths as your you know, putting work with freelancers and are freelancerswere paid in 30 days, and so we had a huge cash, but we re that was like acatastrophic thing. Talking to investors. They're like, you're doingwhat with how many people you're floating, What for who And so I mean atthe end of the day, the throughput allowed us to learn and iterating andsolve that problem in a variety of creative ways, but those three goalsand then figuring out what tactics we needed to dio in the first six monthsand was really, really valuable. And we always have this bucket calledOperational Weeds. And there's all this stuff when you start a company that youdon't realize whether it's finding an office, whether it's getting an HSTnumber, whether it's all these ridiculous things that just come upthat we just knew. Alright, that there's probably 10 to 20 hours a weekthat goes to this annoying stuff, but it's gonna have to get done. Sohopefully that sheds a bit of light thio the ways we thought about it atthe beginning, and then over time, those three goals evolved. And our team,you know, if we stop them in the hall, they'd be able to rattle them offwhether it was a developer or customer success person. Yeah, it seems likeyour team Correct me if I'm wrong. Rachel, if you like this was either adream or a real thing. We shared an office for a while, correct. We did. Sothis is a fun story. Eric and I, we we worked out of Tangerine Bank. Yeah,right. A brilliant. I don't know why Tangerine did this, because they offerbusiness business accounts. But we paid 100 Canadian per month, have our wholeteam in this office at Young and shooter. So that's where yeah, we wegot to know each other quite well, right? It always just struck me thatyour team seemed so organized. It was very early days for me at intelligence,and I just always looked at your team and thought, It just seems like atleast you did a good job of pretending like you knew what you were doing, thatyou had your stuff together. So pretending. Yeah, you did a good job. At least. Well, from the If you say that you felt disorganized, it was trial anderror, at least from an outsider's perspective. It felt like watching youand Bram that it was very calculated and that you had, you know, very clearplan very clear goals, and we're executing on it. So I always looked toyou as to that. Seemed to have it together. Even if it didn't feel likethat in your mind, it seemed like that from the outside. Um okay. So fastForward Company will ultimately was acquired by SGS. What was not the planyou said, like on your criteria Didn't fit the A company. That was easy toexit box. So what happened there? So again, a personal thing. So fun. Profitand scale have always been an impact story. So fun profit, scale and impacthave all been very big personal motivators. And Graham and I oftenwould, you know, pause and assess. How are we doing on the fun part? You know,Is this a slog? Are we waking up every day and dragging our feet is what we'redoing? Profitable? Is it scalable? And...

...then, finally, are we having an impacton the world? And I've always had that, like, social impact piece that's been ahuge part of my personal goals. And so we weren't for sale. We were delusion,millennials that we're building a billion dollar Silicon Valley companywent down to the valley once once a year. So, you know, really immersingourselves there and and essentially what happened was as we learned moreabout SGS, and as they got to know us, we realized how the sum of our parts isgreater than the whole right. So, like, I think that it was very, very clearthat if we brought the two together A we'd be able Thio access their 3000clients, which was huge. We'd be able to bring a huge amount of work tomeaningful freelancers around the world. And that's essentially what happened.Obviously, there were there were learnings and things that, you know,we're tough through an acquisition. But on the flip side, walmart dot com was ahuge customer of SGS, and we brought we I think in our second year, werewriting something like 100,000 copy descriptions for all their products ontheir site. So when you so when you look back at, okay, impact the scalepiece, you know the acquisition Definitely check those boxes and wasableto bring work to freelancers which ultimately was, you know, whichultimately was our vision of what motivated us. So hopefully that helpsThio answer it. Yeah. Okay. So fast forward. You are now at entrepreneur.First, we know a little bit about the organization, but maybe you can wrap itup a little bit. What does it Dio. And then the reason why I thought it wassuper interesting to bring you on is because that you've sort of come upwith the idea and executed on the idea from an entrepreneur's perspective andon entrepreneur First. It's different in that you invest in the people andthen come up with or help them come up with good ideas. So a lot of thequestions that I'm seeing from students are around. How do you figure that out?How do you help them coach them to the right idea? So, big question, What isentrepreneur first and then we'll talk about how you your process and then howyou help them come up with cool ideas. Yeah, great question. And a lot ofpeople thought our founders were crazy back in 2011 when they started, becauseessentially, their idea was we're gonna pay people to quit their jobs. We'regonna put them together and then invest in them. And so, obviously of the gate,you know, there was a lot of like had had turns, and but essentially, whathappened? Waas. They did just that. They brought 50 individuals togethertwice a year, and now Toronto is the sixth location, and these individualsare truly exceptional. So, you know, absolutely extraordinary. And I couldtell you more, but what we look for, but this is the best of the best in thecountry. And we look for people that have insane high potential. So we lookfor folks that are, you know, crazy driven, uh, that have that ability,Thio grow and we can help accelerate it. So what we do is we look for thoseindividuals. We bring them together in a cohort and the cohorts comprised ofCEO profiles and CTO profiles. And then we essentially let the magic unfold. Sowe help to facilitate through a lot of, you know, frameworks which I can sharea bit more about team building. And then essentially everyone pairs up inthe court at the end of 13 weeks. They then pitched to us very much likeDragon's den. And then we may have the decision whether or not we invest. Andour investment terms are 100 K Canadian in exchange for 10% of the company. Sofrom the beginning of the program, you don't have a co founder. You don't havean idea you're getting paid 3500 Canadian per month is a stipend. 13weeks in. You pitch to us and you basically have a million dollarvaluation. Second part of it is at that point, and it's more of a traditionalincubator where we help you go to market and raise institutional funding.So that's it. That's a bit about us. And and the only other thing I'll shareis is maybe why I wanted to join an entrepreneur first. You know, Idefinitely have another Chapter two of being an entrepreneur, and I absolutelybrand, and I at some point we'll well, join forces again and be crazy and havea ton of fun, you know, having impact in some kind of space. But what I lovedabout the F is that when you when you look at Toronto in Canada, we have anincredible, incredible pool of talent.

But we have this profile on stereotypeof being a bit more risk averse. You know, without that structure, it's hardfor us to take the leap. And so what I loved with F is that we can find thebest people that have not yet started companies. Yeah, and help give them atime box and structured way to take a shot on themselves. And if it doesn'twork, no problem. You go back to a J and J, you go back to a bank, you goback to wherever you were before. And so I just thought it was perfect forthe Canadian profile. And it's such a exciting space that we don't reallyhave any other offerings in our market around pre idea pre company pre cofounder. So I just thought I just saw the opportunity and how impactful wouldbe movie for Toronto in Canada. Awesome. Okay, so then what is that process? Howdo you see you? I get how you pick the people you put them together and howthe compensation evaluation works. How do you coach them to the right idea? Doyou offer them criteria or the boot camps? Give us a peer into the E Fprogram? What is what do you do to help them come up with the right idea? So webelieve very strongly and what we've called our edge framework. Soessentially, what that is is we profile four different types of archetypes andwe structure our cohorts toe have these four profile, So it kind of talkthrough them because it's the way that we approach ideation. So the first is atechnical edge. So this is someone who's maybe, you know, 0 to 2 years outof their PhD. They've got really cutting edge forward thinking, research,that game changing industry. So that's, you know, a pretty typical technicaledge. It would likely be a CTO. The second technical person is what we calla catalyst Duer. So this is an individual that can build. They canlead and you know they can command followership. And they likely have somework experience, you know, potentially in a startup or in a lab. And, you know,they maybe don't have the same very deep technical expertise. But they'vegot broad, broad experience from a building perspective, and they're thebest in their field. The other two are more of our CEO profiles, and one iswhat we call a catalyst talker. So it sounds. It sounds kind of funny, but ifsomebody can catalyze the business through customer discovery, operationsales, all that kind of stuff, most of our I'd say almost everyone in thecohort is somewhat technical, so and the technical could be you just read aton of stuff in the tech space. It could be, You know, you've tinkered onprojects outside of work, but there is some. Or maybe your undergrad was inand something technical. But usually we, you know, we find that our CEO's thathave a bit of a technical understanding just perform better from a from aninvestment. In a company standpoint, the final call it edge that we look atis what we call domain expertise. So this could be someone that has years ofexperience in this specific field. Maybe they worked all their for banks,and they know the ins and outs of the you know, the banking system and havethe right to win because of their unique domain expertise. And so when welook at these edges in the composition within our cohort, we we use theanalogy of poker, and we say, You know, everyone probably has, you know, a setof different cards that you could play. But the key is figuring out what's yourhighest card? What's your ace and then what? Someone else's ace. So when youbring them together. You're very, very differentiated and part of what hasattracted such great investors. TF. So we're backed by some of the world'sbest investors, like Greylock Partners Reid Hoffman, the co founder of LikeDinar Fund 140 million. Part of what attracted them is that they've said,huh? You take two very strong people that you've prevented for crazy driveto achieve their ability to commercialize things all thepersonality stuff, inability stuff. And when you bring the two together andit's almost I p in itself, because the two individuals are so competitive thatwhen that comes together and you start talking about your interest, when youstart talking about your experiences because they're so different yetthey're your ace in each of the hands. Quite often the ideation actually comesquite naturally, so we view that ideation and team building or symbioticand actually go hand in hand. Final thing I'll share on this is thatthrough our program in the 13 weeks we...

...believe very I'll use a bad term,whether we believe very strongly in monogamy, like stay with one co founder,go deep and test that relationship like crazy and then break up if it's notworking. So we do not advocate for having, like, five conversations goingon at a time. By the end of the first week of the program, about 90% areactually in their co founder teams, and then it usually takes 4 to 5 formationsand breakup before you actually get to your your strong, the strong winningteam. Interesting thing edge framework. Is that something that's unique to you?Or is that Yeah, so that that is proprietary to E. F. But I'd say thatwe've got a ton of information out there on it. I think our co founder,Matt, just did something on Invest like the best kind of speaking to thatframework and how you know those aces. And when you look at the cards that youpotentially have, how that really becomes the foundation for for yourskill set, the one thing I'll share is we have had people that have I'll pickon one specific story. People that have maybe worked in law for 10 years orhave, you know, worked in a specific industry, and they're like, great, I'min the f. I want nothing to do with law. This is going to be my ticket to getout of law. And what will often say is like, You're crazy, You're competitiveadvantage. And your right toe win is in the legal space. Like you got to doubledown as much as you might want to leave. This is not the avenue. Do it right.And so and that specific example. It ended up being a co founder. That is,you know, one of our most successful companies. I was like, All right, Iguess I'll do my legal thing. I guess I know this space. Uh, but we we reallytry and push and encourage folks toe. Think about why then And why now?Because really, at the end of the day, that z what investors are going to careabout and that's going to be your best chance Success? Yeah. Yeah. Okay. Cool.So I want to get thio. I do wanna leave some time for questions, and I'mlooking at the questions that have been up voted the most here. I'm gonnarewind to something towards the beginning. Martina, if you're oninstead of me trying to paraphrase your question, do you mind coming off muteand asking Rachel your question. Yeah, sure. Thank you for joining us,Rachel. So my question had to do with reading about the Entrepreneur Firstprogram. It's indicated that the end of week eight of form about 80% of thecohort is already found their co founder and then the remaining peoplethat have not been able to find a co founder. They have to leave the program.So I know like looking at the website, it's clear that you select individualsthat are highly ambitious, very qualified to be successful in theprogram. But since they had to leave, could you comment on what processesdifferentiates those that are successful in that form part of theprogram and those that couldn't, uh, advanced to the next stage for sure,Great question. And so well researched this amazing Martina throw that thatthe word of the F is getting out. There s so a couple of things you hit on onething, which is this idea of success who has been successful or not in theprogram. And when I first joined the f, you know, to really understand theprogram, I spoke to a bunch of our past customers who are alumni and both folksthat were successful, not successful to to use your words. And what I learnedwas that most people actually felt like they were successful, whether theyended up getting funded with the F or not. Because it's a transformationallife experience where all of a sudden maybe you were working in anenvironment where some people were okay, some people weren't. And then all of asudden, you know, what I heard from our alumni was they got to be f and waslike, Holy crap, these are my people, you know, you can jam on differentthings. You, you know, potentially have a huge, you know, hard right on whereyou go from your career perspective. So I'll just speak to the fact that thosethat don't end up getting funded or end up having a company that they feel thatthey want to pursue. Many individuals end up joining our alumni companies. Soour alumni actually love our subsequent cohorts because it ends up being atalent final for them. And then since we launched in Toronto, we've hadrecruiters chomping at the bit to say,...

...like can we see your talent. Can we seeyour talent? Because we betted the best and brightest in Canada that want Thio,you know, start companies. So we've already prevented a lot. So I justwanted to get on that idea of success versus not because, you know, I'd saythe majority of people are not going to be funded. It works such about 40% thatend up getting funded by us at our investment committee. But that doesn'tmean it's unsuccessful. So But to answer your question of whatdifferentiates the ones that end up getting funding versus not, I'd saythere's a couple of things. One big mistake that we see a lot of companiesmake is they stay in teams way too long. So maybe they got along really wellwith someone, you know, Maybe, you know, Martina and I repaired up and we had somuch fun together, but at the end of the day, we didn't have a strong enoughright to win, and we didn't actually have some of the tough conversationsthat were that needed to happen. And so what ends up happening is some of thatends up getting back loaded and So you end up realizing that I'll pick on anexample. Our values are super misaligned, and you realize that twoweeks before investment committee and then the team breaks. So that's oneexample of something that maybe goes wrong. I think another example ofpeople choose not to work on their edge. And then what ends up happening is youhave people pitching. And when you ask the question, why you by now, which arenot yet questions? Those were like very common investor questions. You know,those were those were tough to answer. And so, you know, I think it's prettysafe to say when you stick to your edge and when you're really, really honestabout pressure testing the problem that you're working on in a potentialsolution, we use the term your you know, what's your belief based on your edge?And then what's that hunch that you want Thio lean and in test and when youcan do that effectively, You know, I'd say most people have been have beenreally successful in the program. Great question. I'm gonna go to Priya. Do youmind asking your question? Yeah, for sure. Thank you so much. forcoming in. I basically just had a question about your experience being afemale entrepreneur and just understanding, like how you assertyourself in the field that's just so predominantly male dominated. Yeah,great question. And I might answer this one in a less politically correct way.So bear with me as I do that. So we'll edit this out. Rachel, if you in post.Amazing, Amazing post. I love. So So here's what I'd say. And it was neversomething I thought of it. It was something that, you know, I haddelusional naivety to, and I think it was about a year into starting fivecrowd. All this buzz about females and tech. You know what we need to thinkabout it? The table, how we need thio act in different things. I think once Istarted getting that the voice in my head saying like, Okay, I'm the onlyfemale here like how do I act? What do we need to dio? It became a reallynegative a imposter syndrome moment, and then the self fulfilling prophecywhen I was second guessing myself then, therefore, that's what was happening inthose situations, and I think it was Brand who was like a month into thatphase that I was going. He was like, Great, What's going on is like, I don'tknow, but women in Tech and he's like, Okay, here's like Oh, good point. Andso once I got rid of that and kind of got that that that, you know, voicetrack off and actually what we flipped to as the fact that we were co foundersa za profits that U S. Which we laughed at the time. But it's true. He was like,You guys are very lucky. One of you is a female. One of you is a male play toyour strength, and what that meant was that there's lots of female and techexperiences that I was able to go and meet and learn from. And then therewere also lots of boys clubs where I could have gone and I would have beencomfortable. But maybe we just send brand because that's actually probablya better fit. So I think whether or not you have a co founder, that's male. Ithink you can manage without but But I guess my biggest messages. If you putthe spotlight on it. At least in my case, it actually became a selffulfilling prophecy versus just trying to be delusional to it a little bit andhave that bright eyed naivety, Um, and stumbling into it, as you know, thatthat did really happen. So it makes sense. Yeah. No, that makes a lot of sense.Thank you. That's a good question. All right. Zach has a question related toCove it if you wanna go for it. Zack.

Yeah, I was just curious in terms ofnumbers. Um, you know, I think there you can make arguments from both sides,I guess. But, you know, since since Covas started have you seen maybe anincrease or decrease in interest, you know, in entrepreneur first orentrepreneurship in general, if you have any insight on that great questioneso Here's how I answered. So first off on the investor front, I'll start thereand then I'll go to the to the Canada applicant. Friends on the investorfront investments are healthy. You know what I've been seeing, You know, aswe've been launching in Canada as I've been, you know? Sure. Talking Thio. Mycontacts in the Valley investments are still flowing. And so there's obviouslyindustries where that's not true. I'd be a little bit, have trepidationsaround, launching something and travel, for example, or retail, for example.Maybe you've got a huge game changing solution based on the changes but theirindustries that talking to my friends that are VCs in the Valley. Maybethey're writing those things off in their portfolio and doubling down inother areas. So start on that on the investor friend. On the flip side onthe founder front, I would say, is that the most ambitious people seeopportunity in turbulent times, right? They see the changing and economy. Theysee the changing consumer habits. And I think that, you know, when you when yousee those opportunities, you know that's when the mind starts. Racing islike, Oh, wow, this shifting behaviors happening. How do I tap into it? So togive you some specific numbers in Canada, we have close to 1000applications for the 50 spots, so I don't have a barometer for previouscohorts. But I thought that was quite a lot and we did not have heavy marketingup until we had a little bit of press at the end, right as we were closingyour applications. But I was pretty blown away by that because that's 1000very strong people that want to take a leap like this. You know, one thingthat I was seeing was that some people may be a bit more risk averse by way oflooking for leave of absences. So can you. In my world could I have left to Jand J and taken six months and have that security of going back? But, youknow, I just came off of a called part of this, talking to someone who'sinterested in April cohort. And, you know, what she had said was, You know,I'm a strong performer. I could take a leave of absence, or I think I'd havean opportunity like s. So I think there is a bit event, you know, those thosethat have that performance background. There's a bit of confidence that now isthe time. If not now, then one and then I should be able to find an opportunity.Should I need to go back into the workforce. Great. Thank you. Any adviceto your call it 21? 22 year old self. Rachel, would you have done itdifferently? Would you have started earlier? Any advice that you give tothese thes, arguably the most entrepreneurial students at Ivy who aretaking courses? And they're sort of self selecting and saying, I'minterested in learning more about entrepreneurship. Any advice to eitherthem or to your 21 year old self? Stay in touch with me. But that's moreme to putting that out there because hopefully all of you will go into theworkforce and be interested in you have down the road. But that's not That'snot your question. Um, look, I'd say a couple of things right. I think there'sno substitute for hard work, and I think our generation could get areputation of like wanting to be the CEO in 12 months. And at the end of theday, it takes time to learn stuff. So just have some on one hand, have somepatients that it's going to take time to learn, be a sponge on everythingtech as well as on the commercial ality side. On the flip side, I had once beengiven the feedback, constructive feedback A J and J that I'm impatientand I can see that I'm like a sense of urgency. We bought the three goals forfive crowd. Why is it taking six months? Let's do it tomorrow. On the flip side,one of the things we actually see from any perspective is some of ourstrongest founders have an insane sense of urgency, and they have that inpatients. And so what I'd say is that, you know, be a sponge learn. And if Icould go back to that advice that I was given, I think I would have said toignore it. And that in patients is what drives speed. It's what drives impact.And then perhaps, you know, the last piece to it all is be very, veryfocused. You know, Rachel, circa 13,012...

...on just general learning and justalways putting myself in, you know, in situations where you could just soak upa ton and as soon as you feel like you're getting stale, leave dosomething else. Goto go to Brazil, as I was trying to do with J and J. Startsomething go to a different company because our crews air long. But they'renot that long. And the more tools you can assemble in your tool, kid. Youknow, I think the better you'll be longer term. But stay in touch. Stay intouch. The F, sir. Good. Two years from now, you've been listening to the Ivyentrepreneur podcast toe. Ensure that you never miss an episode. Subscribe tothe show in your favorite podcast player or visit ivy dot c a forwardslash entrepreneurship. Thank you so much for listening until next time. Yeah.

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